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SpaceandPeople PLC   -  SAL   

Interim Results

Released 07:00 28-Sep-2018

RNS Number : 2438C
SpaceandPeople PLC
28 September 2018
 

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). Upon the publication of this announcement via Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain.

28 September 2018

 

SpaceandPeople plc

("SpaceandPeople" or the "Group")

 

Interim Results for the 6 months to 30 June 2018

 

SpaceandPeople (AIM:SAL), the retail, promotional and brand experience specialist which facilitates and manages the sale of promotional and retail merchandising space in shopping centres and other high footfall venues, announces interim results for the six months ended 30 June 2018.

 

 

Highlights

Consolidated net revenue £3.85m (2017: £4.80m) - Down £0.95m - 20%

 

Retail division (UK and Germany) revenue fell £0.38m but contribution before tax increased £0.09m to £0.28m

 

Promotions division (UK and Germany) revenue fell £0.57m and contribution before tax fell £0.47m to £0.04m

 

Group loss before taxation £0.09m (2017: profit £0.17m) - Down £0.26m.  However, new revenue strategies and cost savings actioned in the first half, together with the Group's activities being second half weighted, mean the Board expects to generate a profit of not less than £0.2m for the full year

 

Net cash outflow from operating activities £1.72m (2017: inflow £0.49m)

 

Net cash of £0.51m (2017: £0.78m)

 

Basic earnings per share (0.40)p (2017: 0.73p)


 

Contact details:

SpaceandPeople Plc

0845 241 8215

Matthew Bending, Gregor Dunlay


Cantor Fitzgerald Europe

020 7894 7000

David Foreman, Will Goode




Chief Executive's Interim Operating Statement

We went into 2018 on the back of a strong performance in 2017 with the key objective of winning new clients following the recruitment of additional client and venue focused resources. We also had the aim of extending our PopUp concept into new venues during 2018. I am happy to report that we are making progress on both of these objectives with momentum now being established. However, progress, although positive, has not occurred as quickly as we had originally anticipated. I remain confident that we will be on plan for new business and kiosks by the end of this year.

As I mentioned in my report for the year to December 2017, experiential sales in the UK had been slower than expected at the start of 2018. Unfortunately, this trend continued with adverse weather conditions in two quarters and the diversion of the World Cup. These events have had an adverse effect on footfall in Germany and the UK and a reduction of advertising spend in the UK, that said we have seen sales return to anticipated sales levels in Q3.

Revenue has reduced by 20% in the first half of 2018 compared with the previous year. Some of this reduction was anticipated in the UK retail and German promotional divisions, however the fall in UK promotional and German retail revenue was disappointing.

Divisional review

The UK

As I mentioned above, promotional revenue in the UK was lower in the first half of 2018 compared with the previous year. The 19% reduction was predominantly in the Brand Experience department. Two significant campaigns that we enabled in 2017 rebooked at significantly lower volumes in 2018 plus tactical advertising spend was diverted away from Experiential campaigns up to and during the World cup.

Revenue in the retail and MPK division was 12% lower than in 2017 due to the removal of a number of units from venues and a lower sales volume for MPK's. Although revenue fell, the contribution margin of this division increased significantly from 6% to 25%, as several of the units that were removed had not been making a profit.

Germany

The retail division saw a reduction in the number of RMUs from 94 units at the start of 2018 to 53 at the end of June. This reduction in units was as a result of the agreement with ECE for the extension of the contract into 2018, where an agreed number of RMUs were removed from some centres during the first quarter of 2018. This reduction happened earlier in the year than had been anticipated and an element of forecasted revenue was lost as a result. Additionally, average occupancy of the RMUs in the first half of the year was poorer than had been expected. The cause of this has been identified and we are putting in place new contracts with operators to address this going forward. Overall, the German RMU division made a loss of £0.08m in the first half year (2017: profit of £0.09m). The team in Germany are working hard to deliver POP Up units in the second half of the year and they are also trialling units with potential new venues.

The promotions division saw revenue fall to £0.20m (2017: £0.43m) and profitability drop to a loss of £0.1m (2017: profit of £0.02m). This was as a result of the remaining long-term contracts with ECE coming to an end with no new long-term contracts being concluded to replace them. As stated previously, we were aware of the impending loss of this revenue stream and the size of the team in this division has now been reduced substantially while they seek new opportunities.

Outlook

The focus during the second half of 2018 is to get back on track with UK promotional revenue and continue to develop the PopUp business in both the UK and Germany. We are currently having positive conversations with multiple venue owners both in the UK and Germany and we feel that although the reduced revenue in 2018 is a setback, it does not structurally undermine our strategy of new venue acquisition and product solutions to our venue owners.

There have been a number of cost savings achieved in the year so far, mostly through a decrease in headcount. This will result in a like for like reduction in overheads of £0.3m in 2019 compared with 2018. The group is now properly resourced for the scale of the current business, but also has the ability to develop new business opportunities for the future.

As a result of the slower than expected first half year along with the reduced expectations for Popup units in the second half of the year, the Board has revised market expectations for the full year to being an operating profit of £0.2m, down from the previous expectation of £1.0 million.

We are confident that we can regain sales momentum for next year which combined with the costs savings already identified. Our 2019 forecasts being unchanged despite the lower than anticipated 2018 outturn.

 The group will generate a profit this year and it is the Board's intention to maintain our dividend policy.

 

Matthew Bending

27 September 2018

 

 

Independent Review Report to SpaceandPeople plc

 

Introduction

 

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2018 which comprises, the consolidated statement of comprehensive income, the consolidated statement of financial position, the consolidated statement of cash flows, the consolidated statement of changes in equity and the related explanatory notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

 

This report is made solely to the company in accordance with the terms of our engagement. Our review has been undertaken so that we might state to the company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company for our review work, for this report, or for the conclusions we have reached.

 

Directors' Responsibilities

 

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the AIM Rules for Companies.

 

As disclosed in note 2, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting, as adopted by the European Union.

 

Our Responsibility

 

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

 

Scope of review

 

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity, issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 

Conclusion

 

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2018 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the AIM Rules for Companies.

 

 

 

 

Campbell Dallas Audit Services

Chartered Accountants

Statutory Auditors

Titanium 1

King's Inch Place

Renfrew

PA4 8WF

 

Date:  27 September 2018

 

 

Consolidated Group Statement of Comprehensive Income

For the 6 months ended 30 June 2018

 

 

               

Notes


6 months to   30 June '18

(Unaudited)

£'000


6 months to 30 June '17

(Unaudited)

£'000


12 months to   31 December '17

(Audited)

£'000









Revenue

5


3,851


4,804


9,995









Cost of sales



(1,276)


(1,743)


(3,389)

 

Gross profit

 

Administration expenses



 

2,575

 

(2,733)


 

3,061

 

(2,979)


 

6,606

 

(5,640)

Other operating income



69


110


210









Operating (loss) / profit before non-recurring costs



(89)


192


1,176









Operating (loss) / profit

 



(89)


192


1,176

Finance income

Finance costs



1

-


-

(19)


12

(35)









(Loss) / profit before taxation



(88)


173


1,153









Taxation



-


(36)


(237)









(Loss) / profit after taxation from continuing operations



(88)


137

 


916

















(Loss) / profit after taxation

 

 

Other comprehensive income



(88)


137


916

Foreign exchange differences on translation of foreign operations



8


21


3

Total comprehensive income for the period



(80)


158


919

 

(Loss) / profit attributable to:








Owners of the Company

Non-controlling interests



(77)

(11)


143

(6)


930

(14)




(88)


137


916

 

Total comprehensive income for the period attributable to:








Owners of the Company

Non-controlling interests



(69)

(11)


164

(6)


933

(14)




(80)


158


919

 

Earnings per share

13















Basic

 

Diluted



(0.40)p

 

(0.35)p


0.73p

 

0.67p


4.8p

 

4.3p

















 

 

Consolidated Group Statement of Financial Position

At 30 June 2018

 


Notes


30 June '18

(Unaudited)

£'000


30 June '17

(Unaudited)

£'000


31 December '17

 (Audited)

£'000

Assets








Non-current assets:








Goodwill

6


8,225


8,225


8,225

Other intangible assets

7


9


21


15

Property, plant & equipment

8


1,026


1,431


1,147




9,260


9,677


9,387

Current assets:








Trade & other receivables



3,180


3,067


3,367

Cash & cash equivalents

9


512


1,781


2,661




3,692


4,848


6,028









Total assets



12,952


14,525


15,415









Liabilities








Current liabilities:








Trade & other payables



3,095


4,060


5,120

Current tax receivable



(111)


(111)


(46)




2,984


3,949


5,074

Non-current liabilities:








Deferred tax liabilities



91


90


91

Long term loan

10


-


1,000


-




91


1,090


91









Total liabilities



3,075


5,039


5,165

 

 








Net assets



9,877


9,486


10,250

 

 








Equity








Share capital

12


195


195


195

Share premium



4,868


4,868


4,868

Special reserve



233


233


233

Retained earnings



4,336


3,926


4,698









Equity attributable to owners of the Company



9,632


9,222


9,994

Non-controlling Interest



245


264


256

Total equity



9,877


9,486


10,250

 

 

Consolidated Group Statement of Cash Flows

For the 6 months ended 30 June 2018

 


Notes


6 months to   30 June '18

(Unaudited)

£'000


6 months to   30 June '17

(Unaudited)

£'000


12 months to                31 December '17

(Audited)

£'000

Cash flows from operating activities








Cash inflow / (outflow) from operations



(1,660)


509


2,559

Interest received



1


-


12

Interest paid



-


(19)


(35)

Taxation



(65)


(1)


(136)

Net cash inflow / (outflow) from operating activities



(1,724)


489


2,400









Cash flows from investing activities






 

 


Purchase of intangible assets



-


(8)


(12)

Purchase of property, plant & equipment

8


(132)


(84)


(111)

Net cash outflow from investing activities



(132)


(92)


(123)









Cash flows from financing activities








Bank facility (repaid) / received

10


-


(200)


(1,200)

Dividends paid

12


(293)


-


-

Net cash outflow from financing activities



(293)


(200)


(1,200)

















Increase / (decrease) in cash and cash equivalents



(2,149)


197


1,077

Cash at beginning of period



2,661


1,584


1,584

Cash at end of period

9


512


1,781


2,661

 

 

Reconciliation of operating profit to net cash flow from operating activities








Operating (loss) / profit



(89)


192


1,176

 

Amortisation of intangible assets



 

6


 

8


 

18

Depreciation of property, plant & equipment



253


211


522

Effect of foreign exchange rate moves



8


21


6

(Increase) / decrease in receivables



187


283


(17)

Increase / (decrease) in payables



(2,025)


(206)


854

Cash flow from operating activities



(1,660)


509


2,559

 

Consolidated Group Statement of Changes in Equity

For the 6 months ended 30 June 2018

 

 

6 months to 30 June '18

Share capital

 

£'000


Share premium

 

£'000


Special reserve 

 

£'000


Retained earnings

 

£'000


Non-controlling

Interest

£'000


Total equity

 

£'000













At 1 January '18

195


4,868


233


4,698


256


10,250

Foreign currency translation

          -


-


-


8


-


8

Dividends

          -


-


-


(293)


-


(293)

Profit / (loss) for the period

          -


-


-


(77)


(11)


(88)

At 30 June '18

195


4,868


233


4,336


245


9,877

 

 

 

6 months to 30 June '17

Share capital

 

£'000


Share premium

 

£'000


Special reserve 

 

£'000


Retained earnings

 

£'000


Non-controlling

Interest

£'000


Total equity

 

£'000













At 1 January '17

195


4,868


233


3,762


270


9,328

Foreign currency translation

-


-


-


21


-


21

Profit / (loss) for the period

-


-


-


143


(6)


137

At 30 June '17

195


4,868


233


3,926


264


9,486

 

 

 

12 months to 31 December '17

Share capital

 

£'000


Share premium

 

£'000


Special reserve 

 

£'000


Retained earnings

 

£'000


Non-controlling

Interest

£'000


Total equity

 

£'000













At 1 January '17

195


4,868


233


3,762


270


9,328

Foreign currency translation

         -


-


-


3


-


3

Profit / (loss) for the period

          -


-


-


933


(14)


919

At 31 December '17

195


4,868


233


4,698


256


10,250

 

 

Notes to the financial statements

For the 6 months ended 30 June 2018

 

 

SpaceandPeople plc is a limited liability company incorporated and domiciled in Scotland (registered number SC212277) which is listed on AIM (ticker: SAL).

This condensed consolidated interim financial information has been reviewed, but not audited, by the auditors, and their independent review is set out earlier in this report. It does not constitute statutory accounts as defined by Section 434 of the Companies Act 2006. The financial information for the 12 months to 31 December 2017 has been extracted from the statutory accounts for that period. These published accounts were reported on by the auditors without qualification or an emphasis of matter reference, and did not include a statement under section 498 of the Companies Act 2006, and have been delivered to the Registrar of Companies.

 

This condensed consolidated interim financial information was approved by the board on 27 September 2018.  

 

 

This condensed consolidated interim financial information for the 6 months ended 30 June 2018 has been prepared in accordance with IAS 34 'Interim financial reporting'. The condensed consolidated interim financial information should be read in conjunction with the financial statements of the Group for the period ending 31 December 2017 which were prepared on a going concern basis under the historical cost convention in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union, and those parts of the Companies Act 2006 applicable to companies reporting under IFRS.

 

3.          Accounting policies

 

The accounting policies adopted in the preparation of the condensed consolidated interim financial information are consistent with those applied in the financial statements of the Group for the year ended 31 December 2017.

 

 

4.          Seasonality of operations

 

Due to the seasonal nature of the retail business, higher revenues and operating profits are usually expected in the second half of the year than in the first six months, particularly for subsidiary companies POP Retail Limited and Retail Profile Europe GmbH.



 

5.         Segmental reporting

 

The Group maintains its head office in Glasgow and an office in Hamburg, Germany. These are reported separately. The Group operates both Promotional Sales and Retail businesses in both the UK and Germany. The Group has determined that these are the principal operating segments as the performance of these segments is monitored separately and reviewed by the board.

 

The following table presents revenue and profit and loss information regarding the Group's two business segments - Promotional Sales and Retail, split by geographic area. Other segment represents the Groups investments in SpaceandPeople India.


Promotions

UK

 

£'000

Promotions Germany

 

£'000

Retail

 UK

 

£'000

Retail

Germany

 

£'000

Head

Office

 

£'000

Other

 

 

£'000

Group

 

 

£'000

6 months to

30 June '18








Revenue

1,465

199

1,447

722

-

18

3,851

Segment profit/(loss) before tax

156

(107)

361

(77)

(394)

(27)

(88)









6 months to

30 June '17








Revenue

1,802

429

1,652

900

-

21

4,804

Segment  profit/(loss) before

tax

489

16

106

90

(513)

(15)

173









12 months to        31 December '17








Revenue

3,695

807

3,438

1,993

-

62

9,995

Segment  profit/(loss) before tax

1,950

(19)

401

163

(1,307)

(35)

1,153









 

 

6.         Goodwill

 

 

Net book value

6 months to

30 June '18

£'000

6 months to

30 June '17

£'000

12 months to

31 December '17

£'000

Opening balance

8,225

8,225

8,225

Closing balance

8,225

8,225

8,225

 

 

 

7. Other intangible assets

 

 

Net book value

6 months to

30 June '18

£'000

6 months to

30 June '17

£'000

12 months to

31 December '17

£'000

Opening balance

15

21

21

Additions

-

8

12

Amortisation

(6)

(8)

(18)

Closing balance

9

21

15

8.         Property, plant and equipment

 

Net book value

6 months to

30 June '18

£'000

6 months to

30 June '17

£'000

12 months to

31 December '17

£'000

Opening balance

1,147

1,558

                            1,558

Additions

132

84

111

Disposals

-

                                -

-

Depreciation

(253)

(211)

(522)

Closing balance

1,026

1,431

1,147

 

 

9.         Cash & cash equivalents

 

 

30 June '18

£'000

30 June '17

£'000

31 December '17

£'000





Cash at bank and on hand

512

1,781

2,661


512

1,781

2,661

 

10.       Non-current liabilities

As at 30 June 2018, SpaceandPeople had not drawn down any (June 2017: £1.0m) of its agreed long-term revolving credit facility of £1 million (2017: £1 million) which is repayable by 31 July 2019.

 

 

11.       Dividends

 

 

30 June '18

£'000

30 June '17

£'000

31 December '17

£'000





Paid during the period

293

-

-





 

 

12.       Called up share capital

 

Allotted, issued and fully paid

30 June '18

 

30 June '17

 

31 December '17

 

Class

Nominal value





Ordinary

1p

£

195,196

195,196

195,196



Number

19,519,563

19,519,563

19,519,563

 

 

 

13.       Earnings per share

 

Earnings per share has been calculated using the profit / (loss) after taxation attributable to owners of the company for the period and the weighted average number of shares in issue.

 


30 June '18

£'000

30 June '17

£'000

31 December '17

£'000

Profit / (loss) after taxation attributable to owners of the company

(77)

143

930





 

 

 

Weighted average number of shares in issue during the period

 

'000

 

'000

 

'000

-       1p ordinary shares

19,520

19,520

19,520

-       Share options

2,550

1,858

2,320

-       Diluted ordinary shares

22,070

21,378

21,840

 

 

                                    




SpaceandPeople plc

2nd Floor

100 West Regent Street

Glasgow

G2 2QD

Telephone:            0845 2418215

Email:                     help@spaceandpeople.com

 

 

www.spaceandpeople.com

 

 


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Interim Results - RNS