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SpaceandPeople (LSE:SAL) joined the AIM market in December 2004. It sold 600,000 shares at 50p each (MCap of £5.7m). These shares rose to £2.20 in 2008, then fell to around the issue price 2009-2012, rising to £1.52 in 2014. Now they trade at 19p – 22p. This volatility reflects intermittent optimism about the potential of the business of organising the renting of space in high footfall areas, and the subsequent loss of optimism when some of the directors’ ideas for advancing the business failed to pay off.
The two founding directors, Matthew Bending and Nancy Cullen, started the firm four years earlier to “ (i) fulfil a perceived business need from property investors to maximise revenues from shopping centres and other high footfall locations and (ii) provide a facility for brand owners and other potentially interested parties such as public relations agencies, field marketing agencies and sales promotions companies who use such locations to promote their clients’ products. SpaceandPeople has developed what the Directors believe to be a unique dynamic web-based system that allows promotional space to be valued and sold online. The sales process is permission based allowing the venues to retain control of their space throughout the process.” (Admission Document)
They grew turnover from £0.36m in 2002 to £1m in 2004, and moved into a profit (before tax) of £0.2m.
The business model is based on the assertion that by: “1. Providing a database of information for utilising mall space for promotional purposes; (2) Removing the hurdles to booking; and (3) Facilitating a transparent charging policy, new advertisers would be drawn to the media and the revenues from mall income would be enhanced. This centralised function also enables the Company to provide an instant nationwide picture of promotional sites available on its service to advertisers. This was previously time consuming and difficult to access….. SpaceandPeople has developed what the Directors believe to be a unique dynamic web-based system that allows promotional space to be valued and sold online. The sales process is permission based allowing the venues to accept or reject all requests for space put before them. The venues retain control of their space throughout the process. The website contains a database of shopping centre reference material that will enable any brand owner or agency wishing to utilise shopping centre space to access the details of each site. The database will describe a shopping centre and typically provide the following information:
- Geographical location;
- Key tenants;
- Demographics (customer types and percentage of ABC1 customers within a catchment area);
- Footfall traffic (unaudited);
- Site dimensions;
- Site location and digital imagery of the location;
- Prices; and
- Technical data (power, ISDN availability etc).
SpaceandPeople offer the following sales and administrative services to owners and operators of shopping centres and similar venues:
- Site consultancy and advice this service involves an audit of a particular venue and assistance in establishing a mall income strategy. This would include income forecasts, venue evaluations, infrastructure requirements and on-site training;
- Management information analysing sales, customer satisfaction and venue occupancy rates to maximise tariffs and occupancy;
- Benchmarking sales by venue type this service provides an in-depth consultancy as to a venue’s potential mall income; and
- Cash management invoicing and cash collection services.” (Admission Document)
So that was the vision Bending and Cullen set out with in in 2000. Much of it remains, but they have found a growing tendency toward shorter-term promotions and pop-up shops, resulting in more effort for their team at a site.
Also, a major offering they are pushing today was not available back then: the Mobile Promotional Kiosk (a box with four video screens in the middle of the mall, airport, railway station, etc.)
It seems to me – but this may be beyond my circle of competence – that a nationwide service offering advertisers and retailers hundreds of potential sites (and help with set-up) is a useful economic function, and therefore likely to be sustainable. What I don’t know is whether they have a significant competitor. I’ve found some by doing a quick Google search. Does anyone know anything about the following?
- Promotional Space, based in London. Seems to be offering sites for short term promotional campaigns particularly in Tesco stores. Incorporated 2008. Net liabilities £0.2….………………To read more subscribe to my premium newsletter Deep Value Shares – click here http://newsletters.advfn.com/deepvalueshares/subscribe-1
