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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Arena Events Group Plc | LSE:ARE | London | Ordinary Share | GB00BF0HYJ24 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 20.75 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMARE
RNS Number : 5491C
Arena Events Group PLC
11 February 2020
11 February 2020
Arena Events Group plc
("the Company" or "the Group")
Unaudited Interim Results for the six-months ended 31 December 2019
Arena Events Group plc (AIM: ARE) announces its unaudited Interim Results for the six-months ended 31 December 2019. As announced on 10 April 2019, to better reflect the seasonality of the business, the Group changed its year end to 31 March. As a result, the next set of audited results will be for the fifteen-month period to 31 March 2020.
Financial Highlights
Six months
-- Revenue increased by 16% to GBP92.7m (6m Dec 18: GBP80.1m) -- Gross profit increased to GBP30.2m (6m Dec 18: GBP25.1m) -- Adjusted EBITDA* increased by 56% to GBP13.4m (6m Dec 18: GBP8.6m) -- Operating profit of GBP5.3m (6m Dec 18: loss of GBP0.3m)
Twelve months
-- Revenue increased by 21% to GBP162.7m (12m Dec 18: GBP135.0m) -- Adjusted EBITDA* increased by 37% to GBP16.6m (12m Dec 18: GBP12.1m) -- Operating profit of GBP4.5m (12m Dec 18: GBPnil)
IFRS 16
-- The full impact of IFRS16 has been reflected in these results, resulting in an increase of GBP2.1m EBITDA in the six-months ended 31 December 2019 (GBP4.1m 12m Dec 19) and additional depreciation of GBP2.0m in the six-months (GBP3.9m 12m Dec 19). IFRS 16 is excluded from all 2018 comparative results.
Six-month operational highlights
-- In the UK - the delivery of structures, seating and furniture at major events including the Open Golf at Royal Portrush, the BMW PGA Championship at Wentworth and the Wimbledon Tennis Championships; the installation of over twenty ice rinks around the UK including new venues such as Cathedral Gardens Manchester and the Royal Museums Greenwich; and the successful delivery of the players' training facilities and hospitality venue for the 2019 Nitto ATP Finals.
-- In the US - major activations included the Chicago Marathon, the Experimental Aircraft Aviation (EAA) AirVenture show and a major software vendor conference; in addition, a major cost reduction exercise was undertaken in September to re-shape the business.
-- In the Middle East & Asia - completed two very significant contracts in Saudi Arabia, including a temporary 15,000 seat stadium and 3,000 guest VIP hospitality structure for the Joshua-Ruiz boxing match; delivered a number of temporary hospitality structures for the 2019 Rugby World Cup in Japan and the Abu Dhabi F1 Grand Prix; and provided temporary exhibition space for ADIPEC, the world's largest oil and gas show.
Post period highlights
-- Secured a multi-year contract with the owners of the London Stadium, to develop, install and maintain new seating systems in the north and south of the stadium.
-- Signed a multi-million pound contract to deliver a number of pavilions and kiosks for Expo 2020 Dubai.
* Adjusted EBITDA is defined as earnings before interest, tax, depreciation, intangible amortisation, exceptional items share option costs and acquisition costs.
Greg Lawless, CEO, commented:
"For the Group as a whole, trading for the six-months to December has been solid. In the Middle East & Asia, the successful delivery of several large, high-profile projects in Saudi Arabia and at the Rugby World Cup in Japan have more than offset weakness in the Hong Kong and Dubai markets. Whilst these large projects required additional investment in equipment and working capital, impacting overall debt levels, it has positioned the business well to support planned future growth in the region. During the period we also reset the cost base in the US and in the UK, to ensure that we continue to deliver an acceptable return on our asset base, whilst ensuring we deliver to the Arena standard in all regions. The London events market remains soft, but it is pleasing to note that major Tier 1 events continue to grow with robust attendance levels in all regions.
As previously announced, the Group is changing its year end to March and expects the seasonally quiet calendar Q1 period in 2020 to be broadly in line with that of the prior year with cost savings offsetting any market weakness. Looking further forward, despite some concerns about the general trading environment in a number of markets, the Group still expects to see revenue growth in the year ended March 2021 with the return of the US Open, the Ryder Cup, the Dubai Expo 2020 and further projects in Saudi Arabia.
Audited results and the dividend declaration for the fifteen-month period ending March 2020 will be released in early July 2020."
Enquiries:
Arena Events Group plc
Greg Lawless, CEO (contact via Alma)
Steve Trowbridge, CFO
Cenkos Securities (Nomad & Broker)
Max Hartley (Corporate Finance) 0207 397 8900
Julian Morse (Sales)
Alma PR (Financial PR)
John Coles, Josh Royston, Helena Bogle 0203 405 0205
About Arena Events Group plc
Arena Events Group plc (www.arenagroup.com) is a provider of temporary physical structures, seating, ice rinks furniture and interiors. The Group has operations across the UK, the US, the Middle East, and Asia and current clients include Wimbledon Tennis Championships, The Open, the PGA European Tour and Ryder Cup.
The Group services major sporting, outdoor and leisure events, providing a managed solution from concept and design through to the construction and integration of the final structure and interior. Contracts range in size and complexity from simple equipment rental for a local outdoor event, to an integrated solution of multiple structures and interiors for a major international sporting event.
Arena Events Group plc
Chief Executive's Review
Introduction
The Group delivered a solid performance in a challenging six-months ended December 2019. Revenue growth of 16% delivered Adjusted EBITDA of GBP13.4m, as headwinds from weaker markets in Hong Kong and Dubai, were broadly offset by growth in Saudi Arabia. Meanwhile both the UK and US markets were less buoyant than in previous years and we have taken measures to offset this.
Overall the Group reported a gross margin percentage of 32.6% in the six-months compared to 31.3% in the same period in 2018, with regional mix playing a large role in this outturn. Cost pressures continue in both the US and UK from "tighter" labour markets leading to an increase in staff costs, particularly among hourly paid colleagues. To counter this, steps were taken part way through the period to reset the cost base in all regions to ensure that profit margins could be maintained, without compromising the Arena Standard. As reported at the first six-months results, the London event market has been softer than prior years due to the general level of economic nervousness and political uncertainty. This trend has continued and as a result we have seen a reduction in revenues and profit in our Well Dressed Tables division versus last year.
This year we have seen an even greater concentration of activity into the final calendar quarter. This put significant pressure on a number of the business units, particularly in the Middle East, but I am pleased how all teams have yet again delivered exceptionally well. One example of this was the design and installation of the temporary 15,000 seat Diriyah Arena and 3,500 square metre temporary hospitality structure in Saudi Arabia for the Joshua v Ruiz II boxing "Clash on the Dunes". This project was delivered at short notice by resources from across the Group and was a fantastic demonstration of cross-Division cooperation. This was the single largest temporary seating structure that the company has built since the London 2012 Olympics and was highly praised by the promoter.
Operational Highlights
UK & Europe Division
During the six-months to December 2019, the UK Division delivered solutions to a range of summer and autumn events, including the Wimbledon Championships, The Open at Royal Portrush, the Women's Open, the Newmarket Races, the Major League Baseball London Series and the Goodwood Revival, followed by the Nitto ATP Finals in early November. From late October onwards attention also turned to winter activities, with the group delivering over 20 ice rink venues across the country, of which nine were on a fully managed basis. The UK Seating division also benefitted from supplying some UK-based equipment to the Middle East & Asia managed projects as well as the delivery of seats to Japan for the upcoming Tokyo 2020 Olympics.
All acquisitions made in 2018 have been fully integrated into the Division, with ongoing work to optimise the operating model and geographic footprint, whilst reducing overheads. All this is under the leadership of Chris Morris who joined the business as CEO UK & Europe in March.
US Division
The six-months ended December 2019 were weaker in revenue terms for the US Division than in previous years. This was primarily due to less disaster relief work than the prior year (2018: GBP2.4m revenue) and the shift in venue of the Fortnite World Cup (to a permanent stadium). The Division's attention is now, and has been for some months, on detailed planning for the three major golf events in 2020 (US Open, the PGA Championship and the Ryder Cup). Nevertheless, major projects delivered during the period included the Chicago Marathon, the Experimental Aircraft Aviation (EAA) AirVenture show, a major software vendor conference and the construction of a temporary venue in New York for the launch of a new TV series. The outlook for the region remains robust, boosted by recent contract wins to deliver the US Senior Golf Open through to 2024 and renewed the USGA contract for a further five years.
The Stuart Event Rentals business acquired at the end of 2018, continued to make progress, driving reported revenue growth in the region. Whilst still trading under the Stuart banner, the business has delivered a number of events in conjunction with the Arena Americas Division and will work closely to support the 2020 pipeline on the West Coast.
During the six-month period a wide-ranging cost transformation programme was executed in Arena Americas to streamline the overall structure and improve efficiency across the national tenting business unit. This review will help reduce the reliance on "late-notice/one-off" projects in order to deliver a sustained level of profitability moving forward.
Middle East & Asia Division
Activity in the Middle East during the six months ended December 2019, was heavily dominated by the 'mega' projects in Saudi Arabia delivered in the final calendar quarter of the year. This comprised six temporary high-end restaurants for the Riyadh Festival, and a temporary 15,000 seat stadium and a 3,000 guest VIP hospitality structure built primarily for the Joshua-Ruiz boxing match but also used for the Diriyah Tennis and the Saudia Diriyah E-Prix. Both these projects required additional capital expenditure, which has expanded the regional inventory base and will be used to support new project wins which are due to be delivered in 2020 as well as the establishment of a full-scale permanent base in Saudi Arabia later this year.
Elsewhere in the Middle East, the Group delivered its regular events including temporary exhibition space for ADIPEC, the world's largest oil and gas show, the Abu Dhabi Formula 1 Grand Prix and the Dubai Beach Soccer. However, this was against a backdrop of a generally soft Dubai market, especially in the area of events and exhibitions. While this freed up resources to help deliver the projects in Saudi Arabia, we still have further work to do to fully integrate TGP into the Arena business. This business unit was rebranded Arena Exhibitions & Event Services at the end of the year.
Across Asia the picture was also mixed with tough trading in Malaysia and Hong Kong, due to broader economic and political issues. In Korea the CJ Cup was the key project, while in Japan the Group delivered a number of temporary hospitality structures for the 2019 Rugby World Cup and dispatched seating to Tokyo for three venues at the 2020 Olympics.
Current trading and outlook
The Group is now in the traditionally quiet, loss-making quarter of the year. In the UK, the key focus is on finalising operational and property changes ahead of the Easter start to the season. In the US, planning continues for the large golf projects later in the year, including the fabrication and purchase of equipment needed to deliver them. Whilst in the Middle East, activity on normal seasonal work has progressed and additional assignments in Saudi Arabia are underway offsetting a weak Asian market. We expect this to lead to a broadly flat year on year result in the first calendar quarter, which completes the reporting period for the fifteen-months ending 31 March 2020.
Looking further forward, despite some concerns about the general trading environment in a number of markets including the UK and Hong Kong, the Group expects to see further revenue growth in the year to March 2021 as a result of several major events already secured. These include the return of the US Open, the Ryder Cup, the Dubai Expo 2020 and further work for the Tokyo Olympics. Further progress year on year is also expected in Saudi Arabia on the back of the significant events delivered in 2019.
Alongside the revenue opportunities, improvements in operational efficiency in every region continues to be a major priority as we seek to deliver continuous improvements across the global platform.
Greg Lawless
Chief Executive Officer
10 February 2020
Financial Review
Revenue and gross margin
The Group delivered GBP92.7m of revenue in the six-months ended December 2019 (6m Dec 18: GBP80.1m), representing a total increase of 16% compared to the prior period in 2018. Excluding the impact of the annualisation of acquisitions made in H2 2018, revenue growth was GBP1.9m. This organic growth was driven largely by the Middle East & Asia, where new projects were won in Saudi Arabia and Japan. By contrast the UK was slightly down, while the US saw a larger decline due to fewer "late notice/one-off" projects, such as disaster relief assignments.
The purchase of Stuart Event Rentals in the US and TGP in Dubai accounted for all of the acquisition-led growth in the six-months ended December 2019, contributing GBP2.8m and GBP9.6m respectively. Revenue from Ironmonger, based in Hong Kong, fell year on year due to several event cancellations, attributable to the local political uncertainty.
Gross margins across the Group increased from 31.3% to 32.6% due in part to mix, as the Middle East & Asia delivered the most revenue growth at an average 32.2% margin. The UK reported improved gross margins at 26.9% (6m Dec 2018: 20.3%) as the overtrading issues in 2018 were not repeated and the Seating division provided equipment to support the large Middle East & Asia managed projects. The US saw gross margins fall slightly to 39.7% (6m Dec 2018: 40.9%) due to fewer late notice/one off projects, which typically deliver higher margins.
Administrative expenses
Administrative expenses were GBP25.0m in the six-months ended December 2019, compared to GBP25.4m in the same period in 2018. Despite inflationary pressures, particularly in salary costs, this GBP0.4m reduction was mainly due to carefully targeted plans to reset the cost base across all regions by reassessing headcount levels and consolidating the property portfolio.
Adjusted EBITDA
Adjusted EBITDA is defined as earnings before interest, tax, depreciation, amortisation, exceptional items and acquisition costs. The Group's Adjusted EBITDA increased to GBP13.4m in the six-months ended December 2019, compared to GBP8.6m in the same period last year.
IFRS 16
These results include the adoption of IFRS 16 (Leases) as described in more detail in note 6 of these results. The main impact of the adoption of IFRS 16 is the change in accounting treatment for operating leases, to remove the rental payments from Adjusted EBITDA, but then to account for additional depreciation on the new Right of Use asset and additional interest charges. Without the impact of IFRS 16 on the six-months ended December 2019, reported Adjusted EBITDA would have been GBP2.1m lower and the depreciation charge would have been GBP2.0m less. IFRS 16 is excluded from all 2018 comparative results.
Operating profit and loss after tax
The Group generated an operating profit of GBP5.3m for the six-months ended December 2019 compared to a loss of GBP0.3m in the same period in 2018. Excluding the effects of IFRS 16, this outturn reflects the higher underlying Adjusted EBITDA described above, offset by GBP1.1m of additional depreciation year on year due to the increased asset base following the acquisitions made in 2018 and equipment investment in 2019. Exceptional costs were GBP1.9m in the six-month period, lower than the GBP5.1m charge in the same period in 2018. In 2019 these reflected restructuring activities in: the US Arena operation; the UK Structures and Well-Dressed Tables business units; the Arena Exhibitions & Events Services division in Dubai; and, operations in a number of Asian markets. There were no acquisition costs in the period and intangible amortisation was broadly consistent with prior periods.
Interest expense of GBP0.9m in the six-months ended December 2019 relates to the interest costs of the Group's bank debt and finance leases, with higher average drawings partly driving the year on year increase in cost. Other finance costs include the amortisation of debt arrangement fees paid in previous periods and the imputed interest on the deferred consideration balance which is shown at its discounted value on the balance sheet, with notional interest accruing at a rate of 10% per annum. In addition, with the implementation of IFRS 16 (see note 6) there is an additional finance interest charge of GBP0.3m relating to the new Right of Use asset.
After a tax charge of GBP15k (6m Dec 2018: GBP0.3m), the Group's profit after tax for the period was GBP4.1m (6m Dec 2018: loss of GBP1.7m).
Earnings per share
Basic earnings per share (EPS) for the six-months ended December 2019 was 2.7p per share. The figure for the comparative period in 2018 was a loss of 1.5p per share.
Dividends
At the results for the six-months ended June 2019, the Board declared an interim dividend of 0.25 pence per share (2018: 0.5 pence). This was paid on 1 November 2019. Consideration of the level of final dividend will be announced at the results for the fifteen-month period to 31 March 2020.
Cash flow
The Group generated operating cash flow of GBP6.2m in the six-months ended December 2019 compared to GBP4.4m in the same period in 2018. Increased operating profit in the 2019 period was in part offset by a higher working capital balance, as the timing of several large projects resulted in some customer receipts remaining outstanding at the end of the year.
Capital expenditure
Net capital expenditure (additions less proceeds from disposals) in the six-months ended December 2019 was GBP6.1m, compared to GBP5.3m in the same period in 2018. This level of spend reflects continued investment in rental equipment, mainly growth-related in the Middle East, to support key projects in new markets such as Saudi Arabia. The net capital expenditure in the twelve-months ended December 2019 of GBP11.5m, is only slightly higher year on year (12m Dec 2018: GBP10.8m), despite the increased size of the Group following the acquisitions made in 2018 and the contract wins to be delivered during 2020.
Balance sheet
At end of December 2019, goodwill and other intangibles stood at GBP55.7m. No reassessment has been made of the carrying values of any intangible assets during the six-month period. Property, plant and equipment at December 2019 of GBP51.5m was GBP4.2m higher than at December 2018.
Cash at December 2019 was GBP8.1m, giving a net debt position of GBP31.5m and a twelve-month Adjusted EBITDA to net debt ratio of 1.9x (2.5x pre IFRS 16). At the end of December 2019, the Group's drawn senior debt facility remained at GBP35m, in line with the June position, supported by overdraft and guarantee facilities in the US and Middle East. An additional GBP2m short-term financing facility with Lombard Odier Investment Management (LOIM) was agreed and announced in November, of which GBP2m was drawn at the period end.
During the six-month period the Group paid GBP1.9m of dividends, being the 2018 final dividend of GBP1.5m and the interim dividend of GBP0.4m in respect of the first six-month period. In addition, GBP0.6m of deferred consideration payments were made in respect of acquisitions made in 2018.
Post balance sheet events
There are no material post balance sheet events.
Exchange rates
The reported figures use an average US$ rate of $1.26 for the period (2018: $1.30) and a period end rate of $1.29 (2018 $1.33).
Condensed Consolidated Income Statement
For the six-months ended 31 December 2019
Hot Features
Premium
6 months 6 months 12 months
ended 31 ended 31 ended 31
December December December
2019 2018 2019
(unaudited) (unaudited) (unaudited)
GBPm GBPm GBPm
------------ ------------ ------------
Revenue 92.7 80.1 162.7
Cost of sales (62.5) (55.0) (112.7)
-------------------------------- ------------ ------------ ------------
Gross profit 30.2 25.1 50.0
Administrative expenses (25.0) (25.4) (45.5)
-------------------------------- ------------ ------------ ------------
Operating profit/(loss) 5.3 (0.3) 4.5
Analysed as:
Adjusted EBITDA 13.4 8.6 16.6
Depreciation (5.7) (2.6) (11.0)
Exceptional costs (1.9) (5.1) (0.3)
Acquisition costs (0.0) (0.6) (0.1)
Share option costs (0.1) (0.2) (0.1)
Intangible amortisation (0.3) (0.4) (0.7)
-------------------------------- ------------ ------------ ------------
Interest expense (0.9) (0.6) (1.5)
Other finance costs (0.3) (0.5) (1.1)
-------------------------------- ------------ ------------ ------------
Profit/(loss) before taxation 4.1 (1.4) 1.8
Tax on profit/(loss) on
ordinary activities (0.0) (0.3) (0.1)
Profit/(loss) after taxation 4.1 (1.7) 1.7
-------------------------------- ------------ ------------ ------------
Adjusted EBITDA reflects earnings before interest, taxation, depreciation, exceptional items, acquisition costs, share option costs and intangible amortisation
Loss per share
For the six-months ended 31 December 2019
6 months 6 months 12 months
ended 31 ended 31 ended 31
December December December
2019 2018 2019
(unaudited) (unaudited) (unaudited)
------------ ------------ ------------
Basic profit/(loss)
per share - pence 2.7 (1.5) 1.1
Diluted profit/(loss)
per share - pence 2.7 (1.5) 1.1
Statement of comprehensive income
For the six-months ended 31 December 2019
6 months 6 months 12 months
ended 31 ended 31 ended 31
December December December
2019 2018 2019
(unaudited) (unaudited) (unaudited)
GBPm GBPm GBPm
------------ ------------ ------------
Profit/(loss) for the
period 4.1 (1.7) 1.7
Items that may be reclassified
subsequently to profit
or loss:
Exchange differences on
translation of foreign
subsidiaries (0.6) 0.2 (0.5)
------------ ------------ ------------
Other comprehensive income
for the period net of
tax (0.6) 0.2 (0.5)
Total comprehensive profit/(loss)
for the period 3.5 (1.5) 1.2
------------ ------------ ------------
Total comprehensive profit/(loss)
attributable:
Owners of the company 3.5 (1.5) 1.2
3.5 (1.5) 1.2
------------ ------------ ------------
Condensed Consolidated Balance Sheet
As at 31 December 2019
31 December 31 December
Notes 2019 2018
(Unaudited)
GBPm GBPm
--------------------------------------- ------ ------------ ------------
Non-current assets
Goodwill and other intangibles 55.7 57.9
Property, plant and equipment 51.5 47.3
Right of use asset 20.6 -
Trade and other receivables
due after one year 0.9 0.5
--------------------------------------- ------ ------------ ------------
128.6 105.7
Current assets
Inventories and WIP 6.2 5.9
Trade and other receivables 43.1 27.7
Cash and cash equivalents 8.1 7.5
--------------------------------------- ------ ------------ ------------
57.5 41.1
Current liabilities
Trade and other payables (14.3) (14.9)
Current tax liabilities (0.0) (0.2)
Net obligations under finance
leases (0.2) (0.7)
Net obligations under right
of use (2.9) -
Borrowings (5.2) -
Other creditors (5.0) (3.6)
Accruals and deferred revenue (27.7) (17.4)
Deferred consideration 4 (1.2) (2.3)
--------------------------------------- ------ ------------ ------------
(56.6) (39.1)
Net current assets 0.8 2.0
Total assets less current liabilities 129.4 107.7
Non-current liabilities
Borrowings (34.4) (26.7)
Net obligations under finance
leases (0.0) (0.1)
Net obligations under right
of use (18.2) -
Other creditors (2.2) (3.4)
Deferred consideration 4 (1.2) (4.0)
Deferred tax liabilities (1.7) (1.5)
(57.7) (35.7)
------------
Net assets 71.7 72.0
--------------------------------------- ------ ------------ ------------
Condensed Consolidated Group Cash Flow Statement
6 months 6 months 12 months
ended 31 ended 31 ended 31
December December December
2019 2018 2019
(unaudited) (unaudited) (unaudited)
GBPm GBPm GBPm
--------------------------------------- ------------ ------------ ------------
Cash flow from operating activities
Operating profit/(loss) for the
period 5.3 (0.3) 4.5
Adjustments for the period:
Depreciation of property, plant
and equipment 5.8 2.6 11.0
Amortisation of intangibles 0.3 0.4 0.7
Gain on disposal of property,
plant and equipment (0.2) (0.0) (0.3)
Share option costs 0.1 0.2 0.1
Increase in provisions - 3.4 -
(Increase)/decrease in inventories 3.6 2.2 (0.9)
(Increase)/decrease in trade and
other receivables (9.5) 2.6 (15.8)
Increase/(decrease) in trade and
other payables 0.7 (6.6) 5.4
--------------------------------------- ------------ ------------ ------------
Cash generated by operations 6.2 4.4 4.7
--------------------------------------- ------------ ------------ ------------
Interest paid (0.7) (0.5) (1.3)
Other finance charges (0.0) (0.5) (0.1)
Corporation tax (0.1) (0.2) (0.1)
--------------------------------------- ------------ ------------ ------------
Net cash inflow from operating
activities 5.4 3.2 3.2
--------------------------------------- ------------ ------------ ------------
Cash flow from investing activities
Investment in business combination, - (15.9) -
net of cash acquired
Deferred consideration paid (0.6) (0.1) (2.2)
Proceeds on disposal of property,
plant and equipment 0.2 0.4 0.4
Purchases of property, plant and
equipment (6.3) (5.7) (11.9)
Net cash used in investing activities (6.7) (21.3) (13.7)
Cash flow from financing activities
Increase in borrowings 5.1 1.7 13.0
Principal repayments under finance
lease (0.2) (0.3) (0.6)
Proceeds on issue of shares net
of costs 0.0 19.5 0.3
Payment of loan note interest - (0.0) -
Dividend paid (1.9) (1.8) (1.9)
------------ ------------
Net cash generated from financing
activities 2.9 19.0 10.8
--------------------------------------- ------------ ------------ ------------
Net increase in cash and cash
equivalents 1.6 0.9 0.3
Cash and cash equivalents at the
beginning of the period 6.2 6.5 7.5
Effect of foreign exchange rate
changes 0.3 0.1 0.3
--------------------------------------- ------------ ------------ ------------
Cash and cash equivalents at the
end of the period 8.1 7.5 8.1
--------------------------------------- ------------ ------------ ------------
Notes to the Interim Report
1. General information
Arena Events Group plc (the "Company" or "the Group") is a public company limited by shares incorporated in the United Kingdom under the Companies Act 2006 (registration number 10799086) and is registered in England & Wales. The registered address is 4 Deer Park Road, London, SW19 3GY.
Copies of this Interim Report may be obtained from the registered address or on the Corporate (Investor Relations) section of the Company's website at www.arenagroup.com.
Statement of compliance and basis of preparation
The condensed consolidated financial information presented in this Interim Report has been prepared in accordance with applicable IFRS including standards and interpretations issued by the International Accounting Standards Board as adopted by the EU and in accordance with Article 4 of the IAS Regulation. The financial information has been prepared using the historical cost convention and on a going concern basis.
The Annual Financial Report for the year ended 31 December 2018 was audited and has been filed with the Registrar of Companies. The Independent Auditors' Report on the Annual Report and Accounts for the year ended 31 December 2018 was not qualified and did not contain statements under s498(2) or (3) of the Companies Act 2006.
The financial information for the six-months ended 31 December 2019 and 30 June 2019 is unaudited and has not been reviewed by the Company's auditors. Likewise the comparative information for the six-months ended 31 December 2018 is also deemed unaudited as it has been extracted from the year ended 31 December 2018 results by deducting the unaudited financial information for the six-months ended 30 June 2018. The Group has previously announced a change in its year end from December to March and will be publishing the next audited results for the fifteen-month period ended 31 March 2020 in July 2020.
The Interim financial statements are presented in sterling and all values are rounded to the nearest hundred thousand pounds (GBP0.1m) except where otherwise indicated.
Changes in accounting policies
The financial information presented in this Interim Report includes the adoption of IFRS 16 Leases.
IFRS 16 Leases
IFRS 16 came into effect for the Group's financial year commencing 1 January 2019 and requires lessees to recognise all leases on balance sheet with the exception of short-term leases and leases of low value assets.
The Group has opted to apply the transition approach which does not require the restatement of comparative information. 2018 figures have therefore not been restated and the impact of applying IFRS 16 is reflected from 1 January 2019. On 1 January 2019 the Group recognised right of use assets and corresponding lease liabilities. As a result of the adoption of IFRS 16 the Group no longer records a rental expense within its operating costs but instead records a depreciation charge in respect of the right of use assets within operating costs and an interest charge on the lease liabilities within its finance costs.
Detail on the impact of the implementation of IFRS 16 on the interim results ended 31 December 2019 is show in note 6.
2. Segmental analysis
6 months ended 31 December 2019
(unaudited)
UK&E ME&A US Total
GBPm GBPm GBPm GBPm
Revenue
Rental 26.7 38.4 23.8 88.8
Capital sales 2.3 0.1 1.4 3.8
-------- -------- -------- --------
Total revenue 29.0 38.5 25.2 92.7
Gross profit
Rental 7.3 12.4 8.9 28.6
Capital sales 0.5 0.1 1.1 1.6
-------- -------- -------- --------
Total gross profit 7.8 12.4 10.0 30.2
Administration expenses (4.6) (5.7) (6.5) (16.8)
-------- -------- -------- --------
Segment result 3.2 6.8 3.5 13.5
Central administrative expenses (0.0)
--------
Adjusted EBITDA 13.4
Reconciliation of segment
result to profit before tax:
Depreciation & amortisation (6.1)
Exceptional costs (1.9)
Acquisition costs (0.0)
Share option costs (0.1)
Net finance expense (1.2)
--------
Profit before tax 4.1
6 months ended 31 December 2018
(unaudited)
UK&E ME&A US Total
GBPm GBPm GBPm GBPm
Revenue
Rental 29.4 17.0 28.7 75.1
Capital sales 1.6 1.8 1.6 5.0
-------- -------- -------- --------
Total revenue 31.0 18.7 30.3 80.1
Gross profit
Rental 5.8 6.2 11.1 23.1
Capital sales 0.5 0.2 1.3 2.0
-------- -------- -------- --------
Total gross profit 6.3 6.4 12.4 25.1
Administration expenses (5.6) (4.1) (6.5) (16.2)
-------- -------- -------- --------
Segment result 0.7 2.3 5.9 8.8
Central administrative expenses (0.2)
--------
Adjusted EBITDA 8.6
Reconciliation of segment
result to loss before tax:
Depreciation & amortisation (3.0)
Exceptional costs (5.1)
Acquisition costs (0.6)
Share option costs (0.2)
Net finance expense (1.0)
--------
Loss before tax (1.4)
12 months ended 31 December 2019
(unaudited)
UK&E ME&A US Total
GBPm GBPm GBPm GBPm
Revenue
Rental 49.9 53.4 52.8 156.1
Capital sales 3.3 0.5 2.7 6.6
--------- -------- -------- --------
Total revenue 53.2 54.0 55.5 162.7
Gross profit
Rental 13.8 16.9 16.3 47.0
Capital sales 0.8 0.2 2.0 3.0
--------- -------- -------- --------
Total gross profit 14.6 17.2 18.3 50.0
Administration expenses (9.3) (10.2) (12.9) (32.4)
--------- -------- -------- --------
Segment result 5.3 6.9 5.4 17.6
Central administrative expenses (1.0)
--------
Adjusted EBITDA 16.6
Reconciliation of segment
result to profit before tax:
Depreciation & amortisation (11.7)
Exceptional costs (0.3)
Acquisition costs (0.1)
Share option costs (0.1)
Net finance expense (2.7)
--------
Profit before tax 1.8
12 months ended 31 December 2018
(audited)
UK&E ME&A US Total
GBPm GBPm GBPm GBPm
Revenue
Rental 52.2 26.4 49.4 128.0
Capital sales 2.0 2.1 2.9 7.0
--------- -------- -------- --------
Total revenue 54.2 28.5 52.3 135.0
Gross profit
Rental 12.6 9.9 16.1 38.6
Capital sales 0.6 0.4 2.2 3.2
--------- -------- -------- --------
Total gross profit 13.2 10.3 18.3 41.8
Administration expenses (10.5) (7.0) (11.1) (28.6)
--------- -------- -------- --------
Segment result 2.7 3.3 7.2 13.2
Central administrative expenses (1.1)
--------
Adjusted EBITDA 12.1
Reconciliation of segment
result to loss before tax:
Depreciation & amortisation (5.7)
Exceptional costs (5.4)
Acquisition costs (0.8)
Share option costs (0.2)
Net finance expense (1.6)
--------
Loss before tax (1.6)
3. Earnings and Profit/(Loss) per share
6 months 6 months 12 months
ended ended ended
31 December 31 December 31 December
(Unaudited) 2019 2018 2019
------- ---------------- ------ ---------------- ------- ----------------
Weighted Weighted Weighted
Profit average number Loss average number Profit average number
GBPm of shares GBPm of shares GBPm of shares
4.1 152,074,121 (1.7) 115,950,490 1.7 152,474,121
Basic profit/(loss)
per share - pence 2.7 (1.5) 1.1
Diluted average Diluted average Diluted average
Profit number of Loss number of Profit number of
GBPm shares GBPm shares GBPm shares
4.1 152,383,395 (1.7) 115,950,490 1.7 153,731,606
Diluted profit/(loss)
per share - pence 2.7 (1.5) 1.1
4. Deferred consideration
Future deferred consideration falls due as follows: GBP1.2m in the next twelve-months, GBP1.0m in 2021 and GBP0.3m in 2022. Deferred consideration payments due in relation to Arena Stuart Rentals and TGP Holdings are linked to future profitability. Management has made an estimate of the deferred consideration due based on expected future profitability of these entities. There are no employment related obligations attached to future deferred consideration.
5. Dividends
An interim dividend of 0.25p per share was paid on 1 November 2019 to shareholders on the register on 4 October 2019. The declaration of any final dividend will accompany the results for the fifteen-month period to 31 March 2020, scheduled for release in July 2020.
6. IFRS 16
The application of IFRS 16 from 1 January had the following impact on the income statement and balance sheet.
Income Statement 6 months ended 31 December 2019 (unaudited)
UK&E ME&A US Total
GBPm GBPm GBPm GBPm
Adjusted EBITDA 0.8 0.5 0.8 2.1
Depreciation (0.7) (0.4) (0.9) (2.0)
----------- ----------- ----------- ------------
Operating profit/(loss) 0.1 0.1 (0.1) 0.1
Interest (0.1) 0.0 (0.2) (0.3)
----------- ----------- ----------- ------------
Profit/(loss)
before tax 0.0 0.1 (0.3) (0.2)
12 months ended 31 December 2019 (unaudited)
UK&E ME&A US Total
GBPm GBPm GBPm GBPm
Adjusted EBITDA 1.4 1.0 1.7 4.1
Depreciation (1.2) (0.9) (1.8) (3.9)
----------- ----------- ----------- ------------
Operating profit/(loss) 0.2 0.1 (0.1) 0.2
Interest (0.3) (0.1) (0.4) (0.8)
----------- ----------- ----------- ------------
Loss before tax (0.1) (0.0) (0.5) (0.6)
Balance Sheet 31 December 2019 (unaudited)
GBPm
Right of use
assets 20.6
Current lease
liabilities (2.9)
Non-current lease
liabilities (18.2)
------------
Net assets (0.6) 7. Post balance sheet events
There are no material post balance sheet events.
Ends.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
IR SFAFASESSELE
(END) Dow Jones Newswires
February 11, 2020 02:00 ET (07:00 GMT)
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