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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Live Company Group Plc | LSE:LVCG | London | Ordinary Share | GB00BGSGT481 | 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% | 0.30 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Jul 2021 to Jul 2024
TIDMLVCG
RNS Number : 7234Q
Live Company Group PLC
30 June 2022
30 June 2022
LIVE COMPANY GROUP PLC
("LVCG", the "Company" or the "Group")
2021 Full Year Results
Live Company Group PLC (AIM: LVCG) is pleased to announce its audited results for the year ended 31 December 2021, extracts from which are set out below - will be made available on the Company's web-site www.livecompanygroup.com shortly.
Chairman's Review
2021 was a tough year for everyone on a personal level. From a business perspective many industries were hard hit - events being one of them - with several companies closing their doors forever. Restrictions in place continued to impact LVCG's opportunity for growth. In fact, as an events based company we were fortunate to still be operational during the second half of 2021. In spite of this LVCG was able to announce in December 2021 a new revenue stream for 2022 onwards - KPOP.Flex.
KPOP.Flex
In December 2021 after a year of negotiations I was delighted to finally be able to launch KPOP.Flex - Europe's largest KPOP multi-artist festival which took place in May 2022 in the iconic DB Frankfurt Stadium and two artists were announced prior to the year end.
In February 2022 we announced that the tickets for 14 May 2022 were completely sold out and we announced the second day adding two additional artists to the roster. The final artists included: ENHyphen, NCT-dream and Kai.
We then partnered with KTO-Korean Tourism Office to host a Korean culture festival as a part of the fan festival.
Revenue from KPOP.Flex is derived from several sources: ticket sales, merchandising, sponsorship and streaming. We await the final reconciliation, however it is expected that there will be a positive contribution to our 2022 Group results.
LVCG's strategy going forward is to extend the KPOP.Flex concept into other cities in Europe and globally. The Frankfurt festival is a five-year contract, and all future contracts are envisaged to be long term with multiple revenue streams in place. Frankfurt 2023 and London 2023 dates have been announced.
BRICKLIVE
In 2021, our business in Q1 and Q2 was still impacted by continued COVID-19 restrictions. The majority of the previously postponed events from 2020 largely took place in 2021 with a handful occurring in 2022. Several new events with first time customers also went ahead.
In Q1 we signed a contract within our corporate build division representing a Climate Change Environment with a branch of the UK Environment Agency.
In March 2021 a contract for BRICKLIVE Supersized with John Ball Zoo (USA) was signed and ran from May 2021 until September 2021.
BRICKLIVE Supersized popularity was confirmed with a further booking for Naples Zoo that was secured in April 2021 and followed on from John Ball Zoo in October 2021. The sunshine strategy (using assets all year round in 'summer' states) continued to bear fruit for the Group in 2021.
Q3 saw bookings with Wolverhampton Art Gallery (BRICKLIVE Fantasy Kingdom), McArthur Glen Italy (Nick Jr) and an additional USA booking with Capron Zoo in Massachusetts for BRICKLIVE Animal Paradise.
Q4 saw a variety of Christmas bookings and further USA and European events, including Les Grands Prés Shopping de Wallonie, Mons, Belgium; Les Automnales, Geneva, Switzerland; and Naples Zoo, Florida, USA.
One event we are extremely proud of is the inaugural BRICKLIVE Brickosaurs Tour at Singapore Zoo which ran from November 2021 until May 2022. It represented a return to business in Asia despite extremely challenging COVID-19 restrictions which continue to hamper further growth in the region. Singapore Zoo is one of the most iconic zoos in the world and it was a privilege to work with the team there. BRICKLIVE received a lot of positive social media exposure thanks to Singapore Zoo.
During 2021 BRICKLIVE continued its building program which culminated in Brickosaurs Evolution, which launched at Marwell Zoo at the end of March 2022. We also saw an increased demand in consumer sets and corporate builds including a bespoke kit for Ineos.
Trading has remained extremely difficult for much of 2021 with COVID-19 restrictions limiting the number and size of events and as a result the Division has continued to make losses in the trading period. However, I am encouraged by the return to close to full operational capacity with 42 events taking place in 2021 (down from a high of 71 in 2019) and 40 already scheduled for 2022.
LCSE
In December 2020 we announced the creation of a new Sports and Entertainment division - Live Company Sports and Entertainment ('LCSE'). The division focuses on live sports, entertainment, and music events.
Due to the ongoing effects of COVID-19 there were no events for most of 2021 however The Cape Town Cycle Tour finally took place on 10 October 2021, which was a great success.
A number of events have been confirmed for 2022 and 2023 including, the 2022 and 2023 editions of The Cape Town Cycle Tour, Pick n Pay Wine Festivals and the Cape Town stopover of the Global Ocean Race (confirmed for February 2023).
Formula E
With the acquisition of E Movement Holdings Limited. ('EMHL') in December 2020 LVCG acquired the right to sell sponsorship and the management for the upcoming Formula E race in Cape Town planned for the February 2023, (postponed from February 2022 due to ongoing COVID-19 restrictions in South Africa).
E Movement (Pty) Limited ('EMPL'), the South African based promoter of Formula E, Cape Town, has signed a contract with Formula E Holdings for the rights to promote the Cape Town Formula E race for a 10-year period beginning 2023.
In March 2021 I met with Formula E and its major sponsors for the Cape Town track reveal. There will be several additional related events in 2022 as we prepare for the inaugural Cape Town race.
StART Art Global Limited Investment
In May 2021 we announced the subscription for a minority interest of 18.6% of issued share capital in Start Art Global Limited ('StART.Art'). StART.Art is building an online sales platform (with several potential revenue streams including potential for non-fungible tokens ('NFT's).
The StART.Art platform was soft launched on 22 June 2021 and went live in October 2021. In November StART.Art acquired Start 2013 Limited, the promoter of the physical Start Art Fairs. In May 2022 StART.Art launched StART Art Fair Seoul which is due to take place in September 2022.
At the end of 2021 the LVCG shareholding in StART.Art increased to 19.9% following a reorganisation of the capital structure of StART.Art.
Corporate
In May 2021 and December 2021, we raised a total of GBP1.9m via two separate placings to facilitate the investment into StART.Art and to fund the initial capital requirements for the launch of KPOP.Flex (prior to ticket revenue being generated) and to provide working capital for the Group. Post balance sheet in March 2022 we raised GBP0.8 million (gross) via a placing - introducing a new institutional client into the share register.
Following the resignation of three Directors in February 2021 and as referred to in the announcement on 4 May 2021 the Company appointed a new independent Non-Executive Director Stephen Birrell. The Company still intends to conduct a full board review with the intention of making further changes during the latter half of 2022.
Financial Review
The Group continued to makes use of the Coronavirus Job Retention Scheme receiving a total of GBP185,000 (2020: GBP425,000) during the year.
Hot Features
Premium
2021 2020
GBP'000 GBP'000
------------------------------------------- -------- --------
Revenue 2,674 1,857
Gross profit/(loss) 36 (699)
Gross profit/(loss) % 1% (38%)
Administrative expenses (2,880) (3,213)
Share of results of associate - -
Operating loss before exceptional items (2,844) (3,912)
Addback: Depreciation and amortisation 1,149 824
-------- --------
Pre-exceptional items EBITDA (1,695) (3,088)
Exceptional items:
Share option and warrant charge (285) (278)
Other exceptional costs (79) (4,077)
Total exceptional costs (364) (4,355)
Depreciation and amortisation (1,149) (824)
Finance costs (108) (110)
Taxation (61) 144
-------- --------
Loss after tax (3,377) (8,233)
------------------------------------------- -------- --------
Pre-exceptional items EBITDA (PXEBITDA)
The Group uses the alternative performance measures PXEBITDA to allow the users of the consolidated financial statements to gain a clearer understanding of the underlying performance of the business without the impact of one off non-recurring costs of an exceptional nature.
Revenue
Revenues from operations increased 44% from GBP1,857,000 in 2020 to GBP2,674,000 in 2021; with the new LCSE division contributing GBP849,000 (2020: GBPnil) and BRICKLIVE contributing GBP1,825,000 (2020: GBP1,857,000) a fall of 3% resulting from a fall in fees paid by international licence partners due to the ongoing effects of COVID-19.
Regional analysis
The impact of COVID-19 continued to be felt in all markets and sectors in which the Group operates however it was felt most acutely in Asia where revenues fell 66%, from a very low base in 2020 Europe has increased 555% and the launch of LCSE has significantly increased revenues from the Middle East and Africa region.
2021 2020
GBP'000 GBP'000 % change
---------------------- -------- -------- ---------
United Kingdom 999 1,013 (1%)
Europe 321 49 555%
USA 314 265 18%
Asia 147 434 (66%)
Middle East & Africa 893 96 830%
-------- -------- ---------
2,674 1,857 44%
---------------------- -------- -------- ---------
Gross profit
Due to the higher operating costs of remaining COVID-19 compliant and reduced revenues associated with lower visitor numbers and restricted opening during the pandemic gross profit per event was significantly reduced, additionally a material component of cost of sales comprises depreciation on content assets which are not dependent on the number of events or revenue. Thus Gross profit for the year was GBP36,000 (2020: gross loss GBP699,000).
Exceptional items
Exceptional items as detailed in Note 6 to the consolidated financial statements totalled GBP364,000 (2020: GBP4,355,000), These relate to IFRS 2 share option and warrant charges and transactional and reorganisational costs, and the impairment of associate and intangible assets.
Finance costs
Finance costs comprise loan interest charges, interest on lease liabilities in accordance with IFRS 16, and other interest charges.
Tax
The tax charge relates to deferred tax arising on timing differences and an adjustment to the prior year relating to Research and Development Tax Credits.
Loss per share
The loss per share decreased to 2.6p (2020: loss 9.8p) as set out in Note 12 to the consolidated financial statements.
Cash flows
The Consolidated Statement of Cash Flows is set out below.
Statement of Financial Position
The Consolidated Statement of Financial Position as at 31 December 2021 shows the Group's total net assets having decreased to GBP5,422,000 (2020: GBP5,769,000).
Capital expenditure
The Group maintained a reduced build programme throughout the year, completing three new tours Animal Wonders, Caledonia and a second Paw Patrol set as well as augmenting the existing Christmas , this equated to content additions during the year of GBP586,000 (2020: GBP921,000).
Investments and impairment
In May 2021 the Company subscribed to 389 ordinary shares in Start Art Global Limited. ('StART.Art'), representing a non-controlling stake of 18.6% of the total issued share capital of the company, for a total consideration of GBP1,000,000. Prior to the transaction StART.Art was 100% owned by David Ciclitira and Ranjit Murugason as detailed in Note 32.
In November 2021 StART.Art acquired the entire issued share capital of Start (2013) Limited, the promoter of the StART Art Fair, in an all share transaction, resulting in a decrease in the Company's interest in the enlarged group from 18.6% to 14.4% with no diminution of value. Prior to the acquisition Start (2013) Limited was 100% owned by David Ciclitira and Ranjit Murugason.
In December 2021, following a reorganisation of the capital structure of StART.Art, StART.Art issued a further 180 ordinary shares to LVCG for nominal consideration increasing LVCG's holding to 19.9%.
In November 2021 the Company purchased 271 ordinary shares, representing 20% of the total issued share capital, in E Movement (PTY) Limited ('EMPL') from David Ciclitira for a total consideration of GBP113,460. These shares were originally purchased by David Ciclitira (acting in his personal capacity) for the same amount in anticipation of them being transferred to the Company. EMPL is the South African based promoter of the Cape Town E Prix which has been confirmed for Series 9 of the ABB FIA Formula E World Championship and due to take place in February 2023.
As detailed in Notes 15, 16, 17 and 18 to the consolidated financial statements the Directors considered the carrying value of investments, goodwill and intangible assets including in the in light of the continued impact of COVID-19, together with the effects of the measures taken to contain it, in the markets in which the Group operates and have determined the changes, as described in the following table, were required at 31 December 2021.
Change in carrying value Group Company
GBP'000 GBP'000
----------------------------------------- -------- --------
Brick Live Far East Limited - -
Brick Live Group (incorporating Bright
Bricks Limited) - 3,816
Parallel Live Group (12) (116)
Total (decrease)/increase (12) 3,699
Net goodwill/investments 1 January 2021 896 6,025
Additions - 1,113
Net goodwill/investments 31 December
2021 884 10,838
----------------------------------------- -------- --------
This partially reverses the 2020 impairment in the carrying value of the Company's investment in Brick Live Group.
Cash and debt position
At the year end, the Group had total cash balances of GBP211,000 (2020: GBP168,000) and total borrowings of GBP1,678,000 (2020: GBP2,045,000) giving a net debt figure of GBP1,467,000 (2020: GBP1,877,000). During the year, the Group raised new equity in May 2021 and December 2021 as detailed in Note 27.
As at 31 May 2022 the Group had total cash balances of GBP114,000 and total borrowings of GBP1,434,000.
Share options and warrants
During the year 1,500,000 (2020: 75,000) warrants were issued to investors and service providers resulting in an exceptional charge as detailed in Notes 6 and 30 to the consolidated financial statements.
In addition 11,428,572 (2020: 16,810,000) warrants were issued to investors as part of an equity raise and are therefore outside the scope of IFRS 2 and consequently there is no share-based payment charge in respect of these warrants.
Going concern
Based on the Group's balance sheet and a review of its forecast future operating budgets and forecasts, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for at least twelve months from the date of signing of these consolidated financial statements. This review of future operating budgets and forecasts included certain reasonable downside scenarios and confirmed that even in the case of such downside scenarios the Group could continue to operate and comply with all covenants in our banking facilities. Accordingly, the Directors have adopted the going concern basis in preparing the Annual Report and consolidated financial statements.
The Directors have assessed the viability of the Group over a five-year period, taking account of the Group's current position and prospects, its strategic plan and the principal risks and how these are managed. Based on this assessment, the Directors have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over this period.
In making this assessment, the Directors have considered the resilience of the Group in severe but plausible scenarios, taking into account the principal risks and uncertainties facing the Group and the effectiveness of any mitigating actions. The Directors' assessment considered the potential impacts of these scenarios, both individually and in combination, on the Group's business model, future performance, solvency and liquidity over the period. Sensitivity analysis was also used to stress test the Group's strategic plan and to confirm that sufficient headroom would remain available under the Group's credit facilities. The Directors consider that under each of these scenarios, the mitigating actions would be effective and sufficient to ensure the continued viability of the Group. The Directors believe that five years is an appropriate period for this assessment, reflecting the average length of the Group's contract base; key markets; and the nature of its businesses and products.
Enquiries:
Live Company Group Plc Tel: 020 7225 2000
David Ciclitira, Executive Chairman
Sarah Dees, Chief Operating Officer
Beaumont Cornish Limited (Nominated Adviser) Tel: 020 7628 3396
Roland Cornish/Rosalind Hill Abrahams
===================
Monecor (London) Limited (Broker) Tel: 020 7392 1436
Thomas Smith
===================
LIVE COMPANY GROUP
Live Company Group Plc ("LVCG", the "Company" or the "Group") is a live events, entertainment and sports events company, that has been trading on AIM since 2017.
The Group is divided into four divisions; BRICKLIVE, consisting of a network of partner-driven fan-based and touring shows using BRICKLIVE created content worldwide. The Company owns the rights to BRICKLIVE - an interactive experience built around the creative ethos of the world's most popular construction toy bricks. The Group is an independent producer of BRICKLIVE and is not associated with the LEGO Group. The second is Kpop Europa (KPE), which owns the kpop.flex brand. KPE is a joint venture between LVCG and the Explorado Group. Kpop.flex is Europe's first ever Mega KPOP music festival. The third is Live Company Sports and Entertainment, which manages a number of global sports, entertainment and lifestyle events. LCSEs main focus for 2022 will be Cape Town Cycle Tour and the successful one year out launch of the Formula E Cape Town race for series 9 in 2023. The fourth division is StART Art Global, in which LVCG holds a minority stake. StART Art Global is a combination of both physical art shows and a digital art platform.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME for the year ended 31 December 2021
Year to 31 December
2021 2020
Note GBP'000 GBP'000
Continuing operations
Revenue 4 2,674 1,857
Cost of sales (2,638) (2,556)
---------- ----------
Gross profit/(loss) 36 (699)
Administrative expenses
Foreign exchange - (17)
Depreciation and amortisation of non-financial
assets (393) (119)
Other administrative expenses (2,487) (3,077)
---------- ----------
Total administrative expenses (2,880) (3,213)
Share of result of associate 18 - -
---------- ----------
Operating loss before exceptional items 5 (2,844) (3,912)
Exceptional items 6 (364) (4,355)
---------- ----------
Operating loss after exceptional items (3,208) (8,267)
Finance costs 10 (108) (110)
---------- ----------
Loss for the year before tax (3,316) (8,377)
Taxation 11 (61) 144
Loss for the year (3,377) (8,233)
Other comprehensive income - -
Total comprehensive income for the year attributable
to the equity holders of the parent Company (3,377) (8,233)
========== ==========
Loss per share - continuing and total operations
-basic and diluted 12 (2.6p) (9.8p)
CONSOLIDATED AND COMPANY STATEMENTS OF FINANCIAL POSITION as at 31 December 2021
Note Consolidated Company
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
Non-current assets
Property, plant and equipment 13 3,932 4,144 - -
Intangible assets 15 1,231 1,516 1,173 1,450
Right of use assets 14 169 231 - -
Investments 16 1,113 - 10,838 6,025
Goodwill 17 884 896 - -
Investments in associates - - - -
and joint ventures 18
Total non-current assets 7,329 6,787 12,011 7,475
--------- --------- ----------- ---------
Current assets
Inventories 19 3,805 4,831 - -
Trade and other receivables 20 512 404 1,330 1,460
Cash and cash equivalents 21 211 168 - 191
Total current assets 4,528 5,403 1,330 1,651
--------- --------- ----------- ---------
Total assets 11,857 12,190 13,341 9,126
--------- --------- ----------- ---------
Current liabilities
Borrowings 22 477 615 56 167
Trade and other payables 23 2,636 2,364 970 1,037
Lease liabilities 25 66 60 - -
Accruals and deferred income 23 1,172 1,120 336 343
Total current liabilities 4,351 4,159 1,362 1,547
--------- --------- ----------- ---------
Net current assets 177 1,244 (32) 104
Non-current liabilities
Deferred tax 26 761 644 359 288
Borrowings 22 1,201 1,430 185 83
Lease liabilities 25 122 188 - -
--------- --------- ----------- ---------
Total non-current liabilities 2,084 2,262 544 371
--------- --------- ----------- ---------
Net assets 5,422 5,769 11,435 7,208
========= ========= =========== =========
Equity
Share capital 27 5,682 5,165 5,682 5,165
Share premium 28 27,024 25,004 27,024 25,004
Other reserves (23,698) (23,697) 557 557
Own shares reserve (2,111) (2,151) - -
Merger reserve 14,472 14,472 14,472 14,472
Capital redemption reserve 5,034 5,034 5,034 5,034
Share option reserve 30 515 496 515 496
Retained earnings (21,496) (18,554) (41,849) (43,520)
Equity attributable to equity
holders of the parent 5,422 5,769 11,435 7,208
========= ========= =========== =========
CONSOLIDATED AND COMPANY STATEMENTS OF CHANGES IN EQUITY for the year ended 31 December 2021
Ordinary Share Reverse Forex Own Merger Capital Share Retained Total
Share Premium acquisition reserve shares reserve Redemption option Earnings
Capital reserve reserve reserve reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Consolidated
As at 31
December
2020 5,165 25,004 (24,268) 571 (2,151) 14,472 5,034 496 (18,554) 5,769
Loss for the
period - - - - - - - - (3,377) (3,377)
Shares issued
for cash 414 1,486 - - - - - - - 1,900
Debt to share
conversion 103 644 - - - - - - - 747
Forex
differences
arising on
conversion - - - (1) - - - - - (1)
Own share
reserves - - - - 40 - - - - 40
Gain on sale
of own
shares - - - - - - - - 168 168
Warrant
charge - - - - - - - 63 - 63
Options
charge - - - - - - - 223 - 223
Options
charge
transfer - - - - - - - (267) 267 -
Share issue
costs - (110) - - - - - - - (110)
-------------- --------- -------- ------------ -------- -------- -------- ----------- -------- --------- --------
At 31
December
2021 5,682 27,024 (24,268) 570 (2,111) 14,472 5,034 515 (21,496) 5,422
-------------- --------- -------- ------------ -------- -------- -------- ----------- -------- --------- --------
Company
As at 31
December
2020 5,165 25,004 - 557 - 14,472 5,034 496 (43,520) 7,208
Profit for
the period - - - - - - - - 1,404 1,404
Shares issued
for cash 414 1,486 - - - - - - - 1,900
Debt to share
conversion 103 644 - - - - - - - 747
Warrant
charge - - - - - - - 63 - 63
Options
charge - - - - - - - 223 - 223
Options
charge
transfer - - - - - - - (267) 267 -
Share issue
costs - (110) - - - - - - - (110)
At 31
December
2021 5,682 27,024 - 557 - 14,472 5,034 515 (41,849) 11,435
-------------- --------- -------- ------------ -------- -------- -------- ----------- -------- --------- --------
CONSOLIDATED AND COMPANY STATEMENTS OF CASHFLOW for the year ended 31 December 2021
Consolidated Company
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Operating loss (2,844) (3,912) (1,504) (1,122)
Share of result of associate - - - -
Depreciation 801 751 - -
Amortisation of intangible assets 286 11 277 -
Depreciation of right of use
assets 62 61 - -
Loss on disposal of property, - 192 - -
plant and equipment
Corporation tax refund 55 209 - -
Net cash flow from exceptional
items (66) (819) (66) (626)
Decrease in inventories 1,026 1,421 - -
(Increase)/decrease in receivables (108) 404 (231) 1,061
Increase in payables 1,070 732 673 631
Cash used in operations 282 (950) (856) (56)
-------- -------- -------- --------
Cash flow from investing activities
Acquisition of intangible fixed
assets (1) (51) - (50)
Acquisition of investments (1,113) - (1,113) -
Acquisition of property, plant
and equipment (589) (935) - -
Disposal of property, plant and - - - -
equipment
Net cash used in investing activities (1,703) (986) (1,113) (50)
-------- -------- -------- --------
Cash flow from financing activities
Issue of equity 1,900 1,000 1,900 1,000
Repayment of lease liabilities (60) (55) - -
Gain on sale of own shares 209 - - -
Proceeds from borrowings - 2,250 - 250
Loans repaid (367) (995) (9) (995)
Interest paid (108) (110) (3) 7
Share issue costs (110) (84) (110) (84)
Net cash generated from financing
activities 1,464 2,006 1,778 178
-------- -------- -------- --------
Net cash inflow/(outflow) 43 70 (191) 72
-------- -------- -------- --------
Cash and cash equivalents at
beginning of the year 168 98 191 119
Net increase/(decrease) in cash
and cash equivalents 43 70 (191) 72
Cash and cash equivalents at
end of the year 211 168 - 191
-------- -------- -------- --------
The impairment of GBP116,000 and reversal of impairment of GBP3,816,000 in the company is a non-cash transaction. The settlement of deferred consideration of GBP747,000 by the issue of equity is also a non-cash transaction.
1. NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 31 December 2021 Basis of preparation
These financial statements have been prepared on the historical cost basis as modified by use of the fair-value basis where required and in accordance with UK adopted International Accounting Standards (IFRS), and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS as at 31 December 2021.
The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts in the financial statements which are disclosed in Note 3 to these consolidated financial statements.
The consolidated financial statements of the Group are presented in UK Pounds Sterling ("GBP"), rounded to the nearest thousand.
1.1 Going concern
These financial statements have been prepared on a going concern basis. The Consolidated Statement of Comprehensive Income shows a loss of GBP3,377,000 for the year ended 31 December 2021 (2020: GBP8,233,000 loss). The Consolidated Statement of Financial Position shows net current assets of GBP177,000 (2020: GBP1,244,000 net current assets). In assessing going concern the Directors have considered the Group's cash flows, solvency and liquidity positions.
Based on the Group's balance sheet and a review of its forecast future operating budgets and forecasts, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for at least twelve months from the date of signing of these consolidated financial statements. This review of future operating budgets and forecasts included certain reasonable downside scenarios and confirmed that even in the case of such downside scenarios the Group could continue to operate and comply with all covenants in our banking facilities. Accordingly, the Directors have adopted the going concern basis in preparing the Annual Report and consolidated financial statements.
The Directors have assessed the viability of the Group over a five-year period, taking account of the Group's current position and prospects, its strategic plan and the principal risks and how these are managed. Based on this assessment, the Directors have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over this period.
In making this assessment, the Directors have considered the resilience of the Group in severe but plausible scenarios, taking into account the principal risks and uncertainties facing the Group and the effectiveness of any mitigating actions. The Directors' assessment considered the potential impacts of these scenarios, both individually and in combination, on the Group's business model, future performance, solvency and liquidity over the period. Sensitivity analysis was also used to stress test the Group's strategic plan and to confirm that sufficient headroom would remain available under the Group's credit facilities. The Directors consider that under each of these scenarios, the mitigating actions would be effective and sufficient to ensure the continued viability of the Group. The Directors believe that five years is an appropriate period for this assessment, reflecting the average length of the Group's contract base; key markets; and the nature of its businesses and products.
Consequently, the Directors have prepared these consolidated financial statements on the going concern basis, which assumes that the Group will continue in operational existence for the foreseeable future.
1.2 Adoption of standards effective in 2021
The following new and revised Standards and Interpretations have been issued and are effective for the current financial period of the Company:
-- Interest Rate Benchmark Reform Phase 2 - amendments to I FRS 9, IAS 39, IFRS 7,
IFRS 4 and IFRS 16; and
-- COVID-19 Related Rent Concessions (Amendment to IFRS 16). 1.3 IFRS in issue but not applied in the current financial statements
The following IFRS and IFRIC Interpretations have been issued but have not been applied by the Company in preparing these financial statements as they are not as yet effective. The Company intends to adopt these Standards and Interpretations when they become effective, rather than adopt them early:
-- Amendments to IAS 1 - Classification of Liabilities as Current or Non-current; -- Amendments to IAS 16 - Property, Plant and Equipment: Proceeds before intended use; -- Amendments to IFRS 3 - Reference to the Conceptual Framework; -- Amendments to IAS 37 - Onerous Contracts - Cost of Fulfilling a Contract; and -- Annual Improvements to IFRS Standards 2018-2020.
The directors do not expect that the adoption the Standards listed above will have a material impact on the Company in future periods.
A number of IFRS and IFRIC Interpretations are also currently in issue which are not relevant for the Company's activities and which have not therefore been adopted in preparing these financial statements.
Other new and amended Standards and Interpretations issued by the IASB that will apply for the first time in the next annual financial statements are not expected to impact the Company as they are either not relevant to the Company's activities or require accounting which is consistent with the Company's current accounting policies.
2. Accounting policies 2.1. Basis of consolidation
The consolidated financial statements incorporate:
-- the results of LVCG, Brick Live Group Limited ('Brick Live Group'), Parallel Live Group Limited ('Parallel Live Group'), Bright Bricks Limited ('Bright Bricks Group'), Live Company Sports and Entertainment Limited ('LCSE'), E Movement Holdings Ltd ('EMHL'), Live Company Group EBT Limited ('EBT') and their subsidiary companies for the year ended 31 December 2021.
-- the assets and liabilities of LVCG, Brick Live Group, Parallel Live Group, Bright Bricks Group, LCSE, EMHL, EBT and their subsidiary companies at 31 December 2021.
Business combinations
The information contained in this note sets out how the Group typically accounts for Business Combinations, which is effectively using the purchase method explained in IFRS 3, 'Business Combinations'.
Subsidiary undertakings are all entities over which the Group has the power to govern the financial and operating policies of the subsidiary and therefore exercises control. The existence and effect of both current voting rights and potential voting rights that are currently exercisable or convertible are considered when assessing whether control of an entity is exercised. Subsidiaries are consolidated from the date at which the Group obtains the relevant level of control and are de-consolidated from the date at which control ceases.
Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.
The amendments to IFRS 3, 'Business Combinations' have clarified the definition of a business and have permitted a simplified assessment of whether an acquired set of activities and assets is a group of assets rather than a business. The Group has assessed it's acquisitions on the basis of this amendment.
The cost of an acquisition is measured as an aggregate of the consideration transferred, measured at the acquisition date fair-value and the amount of any non-controlling interest in the acquiree. For each business combination, the Group measures the non-controlling interest in the acquiree at the proportionate share of the acquiree's identifiable net assets. Subsequent changes in the proportion of the non-controlling interests, which do not result in de-recognition of the subsidiary, are accounted for in equity. Costs incurred in connection with acquisitions are recognised as exceptional costs in the income statement, as incurred.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions at the acquisition date.
If the business combination is achieved in stages, the acquisition date fair-value of the Group's previously held equity interest in the acquiree is re-measured to fair-value at the acquisition date through profit or loss. Goodwill is initially measured at cost being the excess of the consideration transferred over the Group's share of net identifiable assets acquired and liabilities assumed.
If this consideration is lower than the fair-value of net assets of the subsidiary acquired, the difference is recognised in profit or loss.
After initial recognition, goodwill is measured at cost less any recognised impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to either the acquired business or to each of the Group's cash generating units that are expected to benefit from the combination irrespective of whether other assets or liabilities of the acquiree are assigned to those units.
Where goodwill forms a part of a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in these circumstances is measured based on the relative values of the operation disposed of and the portion of the cash-generating unit until retained.
Formal impairment reviews were completed at 30 June 2021 and 31 December 2021 given the indicators of impairment existing at both dates.
Brick Live Group
In 2017 the reverse acquisition of LVCG by the Brick Live Group resulted in goodwill arising of GBP4,581,000. This goodwill was fully impaired in the year ended 31 December 2017.
Bright Bricks Group
In October 2018, the Group acquired Bright Bricks Group, resulting in goodwill arising of GBP86,000. This goodwill was fully impaired in the year ended 31 December 2020.
Parallel Live Group
In December 2017, the Group acquired Parallel Live Group, resulting in goodwill arising of GBP1,271,000. The carrying value of the goodwill was reduced from GBP896,000 to GBP884,000 in the year ended 31 December 2021.
Brick Live Far East Limited ('BLFE')
In December 2017, the Company became the 100% owner of BLFE. Goodwill of GBP2,950,000 arose on the acquisition. BLFE is a company registered in Hong Kong which owns a 49% stake in the Brick Live Group's China associate company, Brick Live Centre Education Development (Beijing) Company Limited. This goodwill was fully impaired in the year ended 31 December 2020.
Live Company Sports and Entertainment ('LCSE')
In December 2020 the Group established its new LCSE division, through an all share acquisition of Live Company Sports and Entertainment Limited, including its 50% interest in K-Pop Europa Limited; the novation of a number of contracts from World Sport South Africa (Pty) Limited and the acquisition of the entire issued capital of E Movement Holdings Ltd.
The substance of these transactions was the acquisition of a series of contracts rather than a business combination as defined in IFRS 3, 'Business Combinations'. The transactions were therefore accounted for as additions to intangible fixed assets of GBP1,450,000 with no goodwill arising.
Intercompany balances
All intercompany balances are eliminated on consolidation.
Subsidiary companies audit exemption
The company's active subsidiaries Bright Bricks Limited, Brick Live Group Limited, Brick Live International Limited, Live Company Group EBT Limited, and Parallel Live Group Limited are exempt from the requirements of the Companies Act 2006 relating to the audit of their individual accounts by virtue of section 479A of the Companies Act 2006.
2.2. Intangible fixed assets
Trademarks are registered in each of the geographical territories for the BRICKLIVE brand. Trademarks are amortised on a straight line basis over their estimated useful lives, which is on average 10 years.
Acquired contracts are amortised over the period of the rights acquired, where contracts are renewable and are likely to be renewed for a further period such further period, but no subsequent periods, is considered to be part of the period of the rights acquired.
2.3. Investment in associates and joint ventures
An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but does not have control or joint control over those policies. The Group uses the equity method of accounting for its associate.
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control. The Group uses the equity method of accounting for its joint ventures.
Start Art Global Ltd. ('StART.ART')
In May 2021 the Company subscribed to 389 ordinary shares in Start Art Global Limited. ('StART.Art'), representing a non-controlling stake of 18.6% of the total issued share capital of the company, for a total cash consideration of GBP1,000,000. Prior to the transaction StART.Art was 100% owned by David Ciclitira and Ranjit Murugason as detailed in Note 32.
In November 2021 StART.Art acquired the entire issued share capital of Start (2013) Limited, the promoter of the StART Art Fair, in an all share transaction, resulting in a decrease in the Company's interest in the enlarged group from 18.6% to 14.6% with no diminution of value. Prior to the acquisition Start (2013) Limited was 100% owned by David Ciclitira and Ranjit Murugason as detailed in Note 32.
In December 2021 StART.Art issued a further 180 ordinary shares to LVCG for nominal consideration increasing LVCG's holding to 19.9%.
The Directors reviewed the investment and concluded LVCG did not exercise significant influence over StART.Art due to its holding being less than the 20% threshold at which significant influence is presumed to exist and there being no contrary indicators of significant influence:
-- Although David Ciclitira and Ranjit Murugason are Directors of both LVCG and StART.Art, LVCG does not have the power to appoint or remove directors of StART.Art;
-- LVCG is not a party to the StART.Art shareholder agreement and has no reserved powers; and -- LVCG does not participate in the key strategic and operational decisions of StART.Art.
E-Movement (PTY) Limited. ('EMPL')
In November 2021 the Company purchased 271 ordinary shares, representing 20% of the total issued share capital, in E Movement (PTY) Limited ('EMPL') from David Ciclitira for a total consideration of GBP113,460. These shares were originally purchased by David Ciclitira (acting in his personal capacity) for the same amount in anticipation of them being transferred to the Company. EMPL is the South African based promoter of the Cape Town E Prix which has been confirmed for Series 9 of the ABB FIA Formula E World Championship and due to take place in February 2023.
The Directors reviewed the investment and concluded LVCG did not exercise significant influence over EMPL despite a shareholding of 20%, being the threshold at which significant influence is presumed to exist. The presumption was rebutted on the basis that EMPL was actively seeking an additional investor which would reduce LVCG's holding below the threshold and that other indicators of significant influence were not met as follows:
-- Although David Ciclitira is a Director of both LVCG and EMPL the board of directors is controlled by EMPL's largest shareholder which is an unrelated third party;
-- LVCG has no reserved powers in the Shareholder Agreement and such powers that are exercisable are exercised jointly with the other shareholders; and
-- LVCG does not participate in the key strategic and operational decisions of EMPL. 2.4. Property, plant and equipment
All property, plant and equipment assets are stated at cost less accumulated depreciation. Content is capitalised in the periods in which they are purchased or completed and valued at the lower of cost and net realisable value.
Depreciation is provided on content assets over eight years on a straight-line basis to reflect their useful life. Residual values, remaining useful lives and depreciation methods are reviewed annually and adjusted if appropriate.
Depreciation is provided on other fixtures, fittings and office equipment over five years on a straight-line basis. Residual values, remaining useful lives and depreciation methods are reviewed annually and adjusted if appropriate.
2.5. Leases
In accordance with IFRS 16, 'Leases' a right of use asset, being the present value of the operating lease payments over the remaining life of the lease, has been recognised within non-current assets. The right to use assets and corresponding lease liability were calculated using a discount rate of 9% which the Directors consider to be appropriate, based on the Group's current borrowing structure. The depreciation of the assets and interest charge are recognised in the Statement of Comprehensive Income in the year and the buildings maturity analysis of lease liabilities at 31 December 2021 is detailed in Note 25 .
2.6. Impairment of assets
The carrying amounts of the Group's assets, other than inventories, are reviewed at each reporting date to determine whether there is any indication of impairment. An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in the Statement of Comprehensive Income.
Where there is an indication that previously recognised impairment losses may no longer exist or may have decreased the previously recognised impairment loss is reversed. The reversal is limited so that the carrying value of the asset or its cash-generating unit does not exceed either its recoverable amount, or the carrying amount that would have been determined, net of depreciation/amortisation, had no impairment loss been recognised in prior years. Such a reversal is recognised in the Statement of Comprehensive Income.
2.7. Inventories
Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and, where applicable, direct labour costs that have been incurred in bringing the inventories to their present location and condition. Cost is calculated using a weighted average cost method. Net realisable value represents the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution. The majority of inventories are measured at fair value following the acquisition of the Bright Bricks Group in October 2018 as detailed in Note 19 .
2.8. Financial instruments
Financial assets and financial liabilities are recognised in the Group's statement of financial position when the Group becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.
Financial assets
The Group classifies its financial assets as either financial assets measured at amortised cost, fair value through profit and loss or fair value through Other Comprehensive Income (OCI).
Financial assets at fair value through OCI consist of equity investments in other companies or limited partnerships where the Group does not exercise either control or significant influence.
Financial assets at fair value through OCI are shown at fair value at each reporting date with changes in fair value being shown in OCI. In cases where the Group can reliably estimate fair value, fair value will be determined in reference to practical completion of each development project.
All assets for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
-- Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities;
-- Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable; and
-- Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
Financial instruments are derecognised on the trade date when the Group is no longer a party to the contractual provisions of the instrument.
2.9. Share based payments
The Company issues equity settled share-based payment transactions to certain employees and service providers. Equity settled share-based payment transactions with employees are measured at the fair value at the date of grant. The calculation of fair value at the date of grant requires the use of management's best estimate of volatility, risk free rate and expected time to exercise the options.
Equity settled share based payment transactions with service providers are measured at the fair value of the goods or services received, except where the fair value cannot be reliably estimated, in which case they are measured at the fair value of the equity instrument granted, measured at the date the entity obtains the goods or the counterparty renders the service.
2.10. Trade and other receivables
Trade and other receivables are stated at their amortised cost. Trade receivables are reduced by appropriate allowances for estimated irrecoverable amounts.
A loss allowance is recognised on initial recognition of financial assets held at amortised cost, based on expected credit losses, and is re-measured annually with changes appearing in profit or loss. Where there has been a significant increase in credit risk of the financial instrument since initial recognition, the loss allowance is measured based on lifetime expected losses. In all other cases, the loss allowance is measured based on 12-month expected losses. For assets with a maturity of 12 months or less, including trade receivables, the 12-month expected loss allowance is equal to the lifetime expected loss allowance.
2.11. Cash and cash equivalents
Cash equivalents comprise short-term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.
2.12. Trade and other payables
Trade and other payables are stated at their amortised cost.
2.13. Interest-bearing borrowings (other than compound financial instruments)
Interest-bearing borrowings are stated at amortised cost using the effective interest method. The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability.
2.14. Revenue recognition
Revenue is the value of goods and services provided by the Group to customers, net of VAT and discounts. Revenue includes licence fees, revenue from the sale of products, rental fees, sale of content (brick-based statues), brick lease fees and ticket sales from self-promoted events.
Revenue from contracts is recognised in accordance with IFRS 15 as follows:
i. Identify the contract with the customer; ii. Identify separate performance obligations in the contract; iii. Determine the transaction price;
iv. Allocate the transaction price to separate performance obligations; and
v. Recognise revenue when the entity satisfies a performance obligation.
Revenue recognised as above is measured on the following basis:
i. Annual licence fees - on a straight-line basis in accordance with the terms of the agreement, unless it is non-refundable in which case fees are recognised on the contractual invoice date;
ii. Event licence fees and revenue shares - in accordance with the terms of the agreement;
iii. Content fees - on delivery of the specific content to the client in accordance with the terms of the agreement;
iv. Tour and show rental fees - in accordance with the terms of the agreement;
v. Brick lease fees - on a straight-line basis in accordance with the terms of the agreement;
vi. Ticket sales from self-promoted events - on the date of the event; and
vii. Sales of products - in accordance with contract.
2.15. Deferred taxation
Deferred tax is provided in full using the balance sheet liability method. Deferred tax is the future tax consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities shown on the Statement of Financial Position.
The amount of deferred tax provided is based on the expected manner of recovery or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the reporting date.
The Group does not recognise deferred tax liabilities, or deferred tax assets, on temporary differences associated with investments in subsidiaries, as it is not considered probable that the temporary differences will reverse in the foreseeable future.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. The carrying amounts of the deferred tax assets are reviewed at each statement of financial position date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the assets to be recovered.
2.16. Segmental reporting
The Group has three operating segments, namely: Models and Sets, Tours and Trails and Sports and Entertainment. In identifying these operating segments, management generally follows the Group's service lines representing its main products and services (see Note 4).
For management purposes, the Group uses the same measurement policies as those used in its consolidated financial statements, except for certain items not included in determining the operating profit of the operating segments, such as exceptional costs.
In addition, corporate assets and expenses which are not directly attributable to the business activities of any operating segment are not allocated to a segment. This primarily applies to the Group's headquarters.
2.17. Foreign currencies
Monetary assets and liabilities expressed in foreign currencies are translated at the rates of exchange ruling at the reporting date. Transactions in foreign currencies are translated at the rate ruling at the date of the transaction. Differences on exchange arising on translation of subsidiaries are charged directly to other comprehensive income. All other exchange differences have been charged to the profit or loss in the period under review.
2.18. Exceptional items
Exceptional items are those costs incurred by the Group which are considered by the Directors to be material in size and are unusual and infrequent in occurrence which require separate disclosure within the financial statements. See Note 6 for details of exceptional items in the year.
2.19. Government grants and assistance
Government grants and assistance are recognised in the related expense line in the consolidated statement of comprehensive income on a systematic basis over the period in which the entity recognises the expense, for which the grant is intended to compensate.
Therefore, grants in recognition of specific expenses are recognised in the related expense line in the same period.
The Group continued to makes use of the Coronavirus Job Retention Scheme receiving a total of GBP185,000 (2020: GBP425,000) during the year.
2.20. Reserves
Reverse acquisition reserve
The reverse acquisition reserve of (GBP24,268,000) arose in December 2017 with the acquisition of 100% of the issued share capital of Brick Live Group, 100% of the issued share capital of Parallel Live Group and the remaining 61.1% of Brick Live Far East Limited not already owned indirectly by the Group via Brick Live International Limited, The transaction was treated as a reverse acquisition on a consolidated bases with Brick Live Group Limited considered to be the acquirer for the purposes of the consolidated financial statements with the cumulative acquisition adjustment to adjust comparatives to a consistent basis in the consolidated financial statements treated as a reverse acquisition reserve.
Forex reserve
The forex reserve of GBP570,000 comprises all foreign currency differences arising from translation of the financial position and performance of certain subsidiaries, which have a functional currency different to the Group's presentation currency of GBP.
Own shares reserve
The own share reserve of (GBP2,111,000) arose in August 2020 on the creation of the Employee Benefit Trust ('EBT'), following the termination of the ESA described in Note 33, and the EBT's acquisition into trust of 5,726,480 ordinary shares in the Company previously held by YA II and RiverFort (representing 6.51%. of the Company's issued share capital at the time). Movement on the reserve reflects changes in the number of shares held by the EBT during the year.
Merger reserve
The merger reserve of GBP14,472,000 comprises:
-- GBP4,833,333, being the premium recognised on the issue of 16,666,666 new ordinary shares with a nominal value of 1p and a price of 30p in consideration for the entire issued share capital of Brick Live Group Limited in December 2017;
-- GBP966,666, being the premium recognised on the issue of 3,333,3334 new ordinary shares with a nominal value of 1p and a price of 30p in consideration for the entire issued share capital of Parallel Live Group Limited in December 2017;
-- GBP2,851,297, being the premium recognised on the issue of 9,832,060 new ordinary shares with a nominal value of 1p and a price of 30p in consideration for the remaining 61.1% of the issued share capital of Brick Live Far East Limited not already owned indirectly by the Company through Brick Live International Limited in December 2017;
-- GBP5,415,385, being the premium recognised on the issue of 8,461,536 new ordinary shares with a nominal value of 1p and a price of 65p in partial consideration for the entire issued share capital of Bright Bricks Holdings Limited in October 2018; and
-- GBP405,000, being the premium recognised on the issue of 941.860 new ordinary shares with a nominal value of 1p and a price of 44p in partial consideration for the entire issued share capital of Bright Bricks Holdings Limited in November 2019.
Capital Redemption Reserve
The capital redemption reserve of GBP5,034,000 comprises the cumulative effect of previous reorganisations in the capital of the Company and represents the value of shares redeemed from retained earnings.
Share option reserve
The share option and warrant reserve of GBP515,000 is attributable to the accumulated charge relating to share options and warrants issued by the Company which is recognised over the vesting period of the share option or warrant. This is partially offset by the accumulated charge relating to lapsed share options and warrants, which is transferred to retained earnings.
3. Accounting estimates and judgements
The preparation of these consolidated financial statements in accordance with generally accepted accounting practice, being UK adopted International Accounting Standards, requires the Directors to make estimates and judgements that affect the reported amount of assets, liabilities, income and expenditure and the disclosures made in these consolidated financial statements. Such estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events.
The significant judgements made by management in applying the Group's accounting policies as set out above, and the key sources of estimation which management consider may have a significant risk of causing a material adjustment to the reported amounts in the year, were:
Impairment of investments and goodwill
The Directors have carried out impairment reviews of the Group's intangible assets, goodwill, investments and the share of net assets of associates as detailed in Notes 15, 16, 17 and 18.
Depreciation and amortisation
Depreciation rates have been set to accurately reflect the reduction in value of property, plant and equipment assets over their economic life, less their expected residual value. This requires judgement by the Directors, who have set the depreciation rates as detailed in Note 2.4 to these consolidated financial statements based on their knowledge of the industry and typically how long each asset type retains its value.
Amortisation rates have been set to reflect the reduction in value of intangible assets over their economic life, less their expected residual value. This requires judgement by the Directors, who have set the amortisation rates as detailed in Note 2.2 to these consolidated financial statements based on their knowledge of the industry and typically how long each asset type retains its value.
Revenue recognition with customers
Revenue from contracts with customers is recognised in accordance with IFRS 15. This requires judgement as revenue transactions are subject to a variety of contract terms, albeit under the general guidelines of the accounting policies for revenue recognition as explained in Note 2.14 to these consolidated financial statements.
Share option and warrants
The Black-Scholes model is used to calculate the appropriate charge of the share options and warrants. The use of this model to calculate the charge involves a number of estimates and judgements to establish the appropriate inputs to be entered into the model, covering areas such as the use of an appropriate interest rate and dividend rate, exercise restrictions and behavioural considerations. A significant element of judgement is therefore involved in the calculation of the charge.
Carrying value of inventory
The Directors have carried out impairment reviews of the Group's inventory as detailed in Note 19 . Inventory is not readily replaceable and has a long economic life, a significant element of judgement is therefore involved in assessing it for impairment.
Carrying value of content assets
The Directors have carried out impairment reviews of the Group's content assets as detailed in Note 13 . Content assets are unique and have a long economic life, a significant element of judgement is therefore involved in assessing them for impairment.
Accounting treatment of investments, and acquisition
The Company has an interest, both directly and indirectly, in a number of entities over which it exerts a varying degree of control or influence. The accounting treatment of business combinations in accordance with IFRS 3, and also consolidation of subsidiaries under IFRS 10 and treatment of associates under IAS 28 requires a significant element of judgement in assessing the extent to which the acquired entity represents a business combination or acquisition of assets and the extent to which it is controlled or influenced by the Group.
4. Segment reporting
The Directors have identified the Group's business segments by reference to the principal product and service lines offered and geographical organisation of the business as reported to the Executive Chairman, identified by the Directors as the chief operating decision-maker (CODM).
Reportable segments
The reportable segment results for the year ended 31 December 2021 are as follows:
BRICKLIVE Sports Unallocated Total
and Entertainment
Models Tours
and Sets and Trails
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 578 1,247 849 - 2,674
---------- ------------ ------------------- ------------ --------
Cost of sales* 437 941 506 - 1,884
Administrative
expenses 291 629 309 1,256 2,485
Amortisation
and depreciation 53 867 1 228 1,149
Finance costs - - - 108 108
Exceptional
items - - - 364 364
Taxation - - - 61 61
Segment (loss)/profit
for the year (203) (1,190) 33 (2,017) (3,377)
---------- ------------ ------------------- ------------ --------
The reportable segment results for the year ended 31 December 2020 were as follows:
BRICKLIVE Sports Unallocated Total
and Entertainment
Models Tours
and Sets and Trails
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 497 1,360 - - 1,857
---------- ------------ ------------------- ------------ --------
Cost of sales* 684 1,166 - - 1,850
Administrative
expenses 540 1,479 - 1,075 3,094
Amortisation
and depreciation 21 762 - 42 825
Finance costs - - - 110 110
Exceptional
items - - - 4,355 4,355
Taxation - - - (144) (144)
Segment (loss)/profit
for the year (748) (2,047) - (5,438) (8,233)
---------- ------------ ------------------- ------------ --------
Content depreciation is included with amortisation and depreciation in this note 4 but in cost of sales in the Consolidated Statement of Comprehensive Income on page 38.
Administrative expenses are apportioned to each trading segment in proportion to the revenue earned.
Segment assets consist primarily of property, plant and equipment, intangible assets, investments, goodwill, trade and other receivables and cash and cash equivalents.
Unallocated assets comprise deferred taxation and financial assets held at fair value through profit or loss. Segment liabilities comprise operating liabilities; liabilities such as deferred taxation are not allocated to individual business segments.
Segment assets and liabilities as at 31 December 2021 are as follows:
BRICKLIVE Sports Unallocated Total
and Entertainment
Models Tours
and Sets and Trails
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Assets - 10,399 343 1,115 11,857
----------- ------------ ------------------- ------------ --------
Labilities - 5,828 - 607 6,435
----------- ------------ ------------------- ------------ --------
Segment assets and liabilities as at 31 December 2020 were as follows:
BRICKLIVE Sports Unallocated Total
and Entertainment
Models Tours
and Sets and Trails
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Assets - 10,868 - 1,322 12,190
----------- ------------ ------------------- ------------ --------
Labilities - 5,776 - 645 6,421
----------- ------------ ------------------- ------------ --------
Geographical information
The Group's business segments operated in five principal geographical areas in the year, although they are managed on a worldwide basis from the Group's head office in the United Kingdom.
A geographical analysis of the Group's continuing revenue and non-current assets is given below. Revenue is allocated based on the location of the customer; non-current assets are allocated based on the physical location of the asset.
2021 2020
GBP'000 GBP'000
Revenue
United Kingdom 999 1,013
Europe 321 49
USA 314 265
Asia 147 434
Middle East and Africa 893 96
-------- --------
2,674 1,857
======== ========
2021 2020
GBP'000 GBP'000
Non-current assets
United Kingdom 4,721 4,445
Europe 270 -
USA 668 394
South America - 31
Asia 786 711
Middle East and Africa - 310
Unallocated 884 896
-------- --------
7,329 6,787
======== ========
Major customers
Included within BRICKLIVE Tours and Trails are revenues of GBP128,000 (2020: GBP225,000) which arose from sales to the Groups largest customer.
5. Operating loss before exceptional items
2021 2020
GBP'000 GBP'000
This is stated after charging:
Content depreciation (included within
cost of sales) 754 705
Loss on disposal of content assets (included
within cost of sales) - 192
Other depreciation and amortisation (included
within administrative expenses) 333 57
Inventories recognised as an expense 637 1,036
Depreciation on right of use assets 62 61
Net foreign exchange losses - 17
======== ========
6. Exceptional items
The exceptional items consist of the following:
2021 2020
GBP'000 GBP'000
Share options and warrants charge 286 278
Transactional and reorganisational costs 66 2,676
Impairment of associate and intangible
assets 12 1,401
364 4,355
-------- --------
2021 Exceptional items
Share option and warrant charge
Ongoing charges related to options and warrants issued in connection to previous transactional and reorganisational events, the costs of which were treated as exceptional items at the time, continue to be classified as exceptional items in the year they are recognised.
The Group uses the Black-Scholes model to value its share option and warrants. Certain judgement is required in terms of selecting the risk-free interest rate and standard deviation rate used. The charge for the current year is GBP286,000 which may increase or decrease with changes to these rates.
Transactional and reorganisational costs
Transactional costs relate to equity raises completed during the year as detailed in Note 27 and the ongoing guarantee fees relating to the HP Agreement entered into with Close Leasing Ltd. in August 2020 as detailed in Note 22.
Impairment of associate and intangible assets
The Directors considered the carrying value of goodwill as at 31 December 2021 and determined the impairment, as detailed in Note 17 was required.
2020 Exceptional items
Share option and warrant charge
Ongoing charges related to options and warrants issued in connection to previous transactional and reorganisational events, the costs of which were treated as exceptional items at the time, continue to be classified as exceptional items in the year they are recognised. The Group uses the Black-Scholes model to value its share option and warrants, the charge for 2020 was GBP278,000.
Transactional and reorganisational costs
Transactional costs relate to various debt and equity raises completed during 2020 as well as costs associated with terminating the ESA as detailed in note 33.
Impairment of associate and intangible assets
The Directors considered the carrying value of goodwill, investments and the share of net assets of associates as at 31 December 2020 and determined the impairment, as detailed in Notes 16, 17 and 18 were required.
7. Auditor's remuneration
2021 2020
GBP'000 GBP'000
Fees payable to the auditor, Moore Kingston
Smith LLP, for the audit of the annual
accounts of the Group and the Company 81 76
Taxation compliance 8 8
89 84
-------- --------
8. Employees
The average number of employees (including Directors not under employment contracts) during the year was:
2021 2020
No. No.
Administration 5 5
Production 28 44
Sales 2 3
----- -----
35 52
===== =====
The aggregate payroll costs (including Directors not under employment contracts) were:
2021 2020
GBP'000 GBP'000
Wages, salaries and fees 1,448 2,250
Social security costs 77 133
Pension costs 13 22
-------- --------
1,538 2,405
-------- --------
Wages, salaries and fees are stated in this note 8 gross of GBP185,000 (2020: GBP425,000) received in accordance with the Coronavirus Job Retention Scheme which is netted off in the Consolidated Statement of Comprehensive Income on page 40.
9. Remuneration of Directors and key management personnel
In the opinion of the Board, only the Directors of the Company and the other members of the Executive Team, as detailed in the Corporate Governance Report, are regarded as key management personnel. The remuneration of key management personnel during 2021 was, in aggregate, GBP451,000 (2020: GBP508,000).
Directors' remuneration and fees, including Non-Executive Directors, during the year were as follows, (no pension contributions were made in either 2021 or 2020):
2021 2020
GBP'000 GBP'000
David Ciclitira 261 330
Bryan Lawrie 17 76
Serenella Ciclitira* 20 10
Ranjit Murugason* 107 20
Trudy Norris-Grey (resigned 14 February
2021) 15 52
Simon Horgan (resigned 17 February 2021)* 2 10
Mark Freebairn (resigned 14 February 2021)* 2 10
Stephan Birrell (appointed 27 July 2021) 27 -
451 508
-------- --------
*In 2020 the Non-Executive Directors waived their fees for Q2 and Q3.
David Ciclitira 2021 2020
GBP'000 GBP'000
UK Chairman's fees* - 25
International consultancy fees 250 250
Additional contracted work during the year 11 55
-------- --------
261 330
-------- --------
*In 2021 David Ciclitira voluntarily waived his Chairman's fees.
In the prior year David Ciclitira invoiced a further GBP178,000 for further additional contracted work which was subsequently paid but then waived by credit note. The balance is included in unpaid balances due to related parties at 31 December 2020. This was subsequently offset against the outstanding loan balance due to David Ciclitira in the current year.
Bryan Lawrie
2021 2020
GBP'000 GBP'000
Fees as Chief Financial Officer - 71
Non-Executive fees 17 5
17 76
-------- --------
Fees for the services of Bryan Lawrie as Chief Financial Officer were paid to CFO Partners Limited.
Ranjit Murugason
2021 2020
GBP'000 GBP'000
Temporary increase agreed in February 2021 67 -
Non-Executive fees 40 20
107 20
-------- --------
Stephen Birrell
2021 2020
GBP'000 GBP'000
Consultancy fees 15 -
Non-Executive fees 12 -
27 -
-------- --------
Fees for consultancy services provided by Stephen Birrell were paid to Ossian Energy Limited.
In April 2019 the Group adopted a share option scheme on 2 April 2019 for certain Directors and senior management. Options are generally exercisable at a price equal to the market price of the Plc shares on the day immediately prior to the date of the grant. Options are forfeited if the employee leaves the Group before the options vest.
As at 31 December 2021 the following outstanding share options were held by Directors and key management personnel. No options were issued to directors in 2020 or 2021.
2021 2020
David Ciclitira 1,341,891 1,341,891
Bryan Lawrie 335,472 335,472
Serenella Ciclitira - -
Ranjit Murugason - -
Stephan Birrell (appointed 27 July 2021) - -
1,677,363 1,677,363
---------- ----------
Further information on share options are set out in Note 30.
Further information on related party transactions are set out in Note 32.
10. Finance costs
2021 2020
GBP'000 GBP'000
Loan interest 65 59
Interest expense on lease liabilities 19 24
Other interest 24 27
-------- --------
108 110
-------- --------
Included in loan interest is GBP22,000 (2020: GBP51,000) paid to David Ciclitira in accordance with the loan facility described in Note 22, see also Note 32.
11. Taxation
2021 2020
Current tax GBP'000 GBP'000
UK Corporation tax in respect of current
year:
Current taxation - -
Adjustments in respect of prior years (56) (238)
-------- --------
Total tax (credit) charge for the year (56) (238)
-------- --------
Deferred taxation
Original and reversal of timing differences (87) 28
Effect of change in tax rates 204 66
Total deferred taxation charge 117 94
-------- --------
Tax charge on loss on ordinary activities 61 (144)
-------- --------
2021 2020
GBP'000 GBP'000
Loss on ordinary activities before tax (3,316) (8,377)
Loss on ordinary activities at the standard
rate of corporation tax of 19% (2020: 19%) (630) (1,592)
Effect of disallowable expenditure 234 960
Tax losses (utilised)/carried forward 299 660
Effect of change in tax rates 204 66
Adjustment in respect of prior years (56) (238)
Effect of different tax rates applied in 10 -
overseas jurisdictions
-------- --------
Total tax charge/(credit) for the year 61 (144)
-------- --------
12. Earnings per share
The basic earnings per share is calculated by dividing the (loss)/profit attributable to equity shareholders by the weighted average number of shares in issue during the year. In calculating the diluted earnings per share, any outstanding share options, warrants and convertible loans are taken into account where the impact of these is dilutive.
2021 2020
Loss for the year after tax (GBP'000) (3,377) (8,233)
Weighted average number of shares in issue 131,155,672 83,678,936
Basic and diluted earnings per share (2.6p) (9.8p)
------------ -----------
Diluted earnings per share in both 2021 and 2020 are the same as basic earnings per share, as there are no dilutive options or warrants in issue during these years, the number of outstanding share options and warrants are detailed in Note 30.
13. Property, plant and equipment
Group Content Other Total
2021 2020 2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
Cost at start of year 5,556 5,015 175 176 5,731 5,191
Additions for year 586 921 3 14 589 935
Disposals - (380) - (15) - (395)
-------- -------- -------- -------- -------- --------
Cost at end of year 6,142 5,556 178 175 6,320 5,731
-------- -------- -------- -------- -------- --------
Depreciation
Cumulative depreciation
at start of year 1,487 970 100 69 1,587 1,039
Charge for year 754 705 47 46 801 751
Eliminated on disposal - (188) - (15) - (203)
-------- -------- -------- -------- -------- --------
Cumulative depreciation
at end of year 2,241 1,487 147 100 2,388 1,587
-------- -------- -------- -------- -------- --------
Net book value at
end of year 3,901 4,069 31 75 3,932 4,144
-------- -------- -------- -------- -------- --------
Net book value at
start of year 4,069 4,045 75 107 4,144 4,152
-------- -------- -------- -------- -------- --------
The Company had no property, plant and equipment assets in either 2021 or 2020.
The Directors considered the carrying value at 31 December 2021 for each asset and it was determined that no impairment was required.
14. Right of use Assets
Buildings Group
2021 2020
GBP'000 GBP'000
-------- --------
Cost
Cost at start of year 308 308
Additions for year - -
Cost at end of year 308 308
-------- --------
Depreciation
Cumulative depreciation at start of year 77 16
Charge for year 62 61
Cumulative depreciation at end of year 139 77
-------- --------
Net book value at end of year 169 231
-------- --------
Net book value at start of year 231 292
-------- --------
The Company had no right of use assets in either 2021 or 2020.
15. Intangible assets
Group Company
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
-------- -------- -------- --------
Cost
Cost at start of year 1,539 88 1,450 -
Additions for year 1 1,451 - 1,450
Cost at end of year 1,540 1,539 1,450 1,450
-------- -------- -------- --------
Amortisation
Cumulative amortisation at start of year 23 12 - -
Charge for year 286 11 277 -
Cumulative amortisation at end of year 309 23 277 -
-------- -------- -------- --------
Net book value at end of year 1,231 1,516 1,173 1,450
-------- -------- -------- --------
Net book value at start of year 1,516 76 1,450 -
-------- -------- -------- --------
Trademarks
Trademarks are obtained for each show in each jurisdiction around the world. Trademarks are amortised over their estimated useful lives, which is on average 10 years. The carrying value of trademarks at 31 December 2021 is GBP59,000 (2020; GBP66,000).
LCSE
In December 2020 the Company formed a new Sports and Entertainment division ('LCSE') through the acquisition of the entire issued share capital of Live Company Sports and Entertainment Limited together with its wholly owned subsidiary Live Company Sports and Entertainment (Pty) Limited and 50% interest in K-Pop Europa Limited for GBP650,000. Prior to the acquisition Live Company Sports and Entertainment Limited was 100% owned by David Ciclitira.
The Company also purchased certain contracts from World Sport South Africa (Pty) Limited for GBP500,000 and acquired the entire issued share capital of E Movement Holdings Ltd for GBP300,000. Prior to the acquisition E Movement Holdings Ltd was 33.34% owned by David Ciclitira.
The substance of these transactions being the acquisition of a series of contracts rather than a business combination as defined in IFRS 3 'Business Combinations'. The acquired contracts are amortised over the period of the rights acquired, where contracts are renewable and are likely to be renewed for a further period such further period, but no subsequent periods, is considered to be part of the period of the rights acquired. The carrying value of these contracts at 31 December 2021 is GBP1,172,000 (2020; GBP1,450,000).
2020 Acquisitions Purchase
price
GBP'000
Live Company Sports and Entertainment
Limited 650
Live Company Sports and Entertainment Pty -
Limited
K-Pop Europa Limited (50%) -
Novation of contracts 500
E Movement Holdings Ltd 300
----------
1,450
----------
Satisfied by:
Cash 50
Deferred consideration 800
Equity instruments (6,000,000 Ordinary shares
of parent Company) 600
----------
1,450
----------
As detailed in Note 27 5,500,000 Ordinary shares of the Company representing GBP550,000 of the deferred consideration were issued in May 2021; a further 1,142,858 Ordinary shares of the Company representing a further GBP40,000 of the deferred consideration were issued in December 2021, which together with cash payments of GBP25,000 in March 2021 and GBP25,000 in April 2021 left GBP160,000 of deferred consideration outstanding at 31 December 2021.
In March 2022 GBP45,000 of the outstanding deferred consideration due to David Ciclitira was settled in cash, leaving GBP105,000 of deferred consideration outstanding of which GBP55,000 is due to David Ciclitira.
The Directors considered the carrying value at 31 December 2021 for each intangible asset and it was determined that no impairment was required.
16. Investments
Group Company
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
Cost
Cost at start of the year - - 17,450 17,450
Additions for the year 1,113 - 1,113 -
--------- --------- --------- ---------
Cost at end of year 1,113 - 18,563 17,450
--------- --------- --------- ---------
Impairment
At start of the year - - 11,425 -
Impairment in the year - - 116 11,425
Reversal of prior year impairment - - (3,816) -
--------- --------- --------- ---------
Cumulative impairment at
end of year - - 7,725 11,425
Net book value at end of
the year 1,113 - 10,838 6,025
--------- --------- --------- ---------
Net book value at start
of year - - 7,725 17,450
--------- --------- --------- ---------
Cash generating units
The Directors considered the carrying value at 31 December 2021 for each cash generating unit, identified below, based on a detailed budget and forecast, discounted over five years at the Groups current cost of capital, considered by the Directors to be 9%, and it was determined the impairment, and reversal of prior impairment, as described in the table below, was required.
At start Additions (Impairment) At end
of year /reversal of year
of
GBP'000 GBP'000 GBP'000 GBP'000
Brick Live Far East Limited - - - -
Brick Live Group (incorporating
Bright Bricks Limited) 5,025 - 3,816 8,841
Parallel Live Group 1,000 - (116) 884
---------- ----------- -------------- ----------
6,025 - 3,700 9,725
---------- ----------- -------------- ----------
Financial assets
The Directors considered the carrying value at 31 December 2021 for each investment, identified below, and it was determined that no further impairment was required.
At start Additions Impairment At end
of year of year
GBP'000 GBP'000 GBP'000 GBP'000
Start Art Global Ltd - 1,000 - 1,000
E-Movement (PTY) Ltd - 113 - 113
----------- ----------- ------------ ----------
- 1,113 - 1,113
----------------------------------- ----------- ------------ ----------
In May 2021 the Company subscribed to 389 ordinary shares in Start Art Global Limited. ('StART.Art'), representing a non-controlling stake of 18.6% of the total issued share capital of the company, for a total consideration of GBP1,000,000. Prior to the transaction StART.Art was 100% owned by David Ciclitira and Ranjit Murugason as detailed in Note 32.
In November 2021 StART.Art acquired the entire issued share capital of Start (2013) Limited, the promoter of the StART Art Fair, in an all share transaction, resulting in a decrease in the Company's interest in the enlarged group from 18.6% to 14.6% with no diminution of value. Prior to the acquisition Start (2013) Limited was 100% owned by David Ciclitira and Ranjit Murugason as detailed in Note 32. In December 2021 StART.Art issued a further 180 ordinary shares to LVCG for nominal consideration increasing LVCG's holding to 19.9%.
There being no active market for shares in StART.Art the carrying value has been assessed with reference to a DCF model prepared by the management of StART.Art and reviewed by the directors of LVCG. The valuation has also been reviewed by a third party independent valuer.
In November 2021 the Company purchased 271 ordinary shares, representing 20% of the total issued share capital, in E-Movement (PTY) Limited ('EMPL') from David Ciclitira for a total consideration of GBP113,460. These shares were originally purchased by David Ciclitira (acting in his personal capacity) for the same amount in anticipation of them being transferred to the Company. EMPL is the South African based promoter of the Cape Town E Prix which has been confirmed for Series 9 of the ABB FIA Formula E World Championship and due to take place in February 2023.
These transactions have been treated as the acquisition of investments as detailed in Note 2.8 .
Purchase
price
GBP'000
Start Art Global Limited 1,000
E-Movement (PTY) Limited 113
---------
1,113
---------
Satisfied by:
Cash 1,113
1,113
---------
17. Goodwill
Group Company
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
Cost at start and end of
year 8,888 8,888 - -
--------- --------- --------- ---------
Impairment
At start of the year 7,992 4,581 - -
Impairment in the year 12 3,411 - -
--------- --------- --------- ---------
Cumulative impairment at
end of year 8,004 7,992 - -
--------- --------- --------- ---------
Net book value at end of
year 884 896 - -
--------- --------- --------- ---------
Net book value at start
of year 896 4,307 - -
--------- --------- --------- ---------
Cash generating units
The Directors considered the carrying value at 31 December 2021 for each cash generating unit, identified below, based on a detailed budget and forecast, discounted over five years at the Groups current cost of capital, considered by the Directors to be 9%, and it was determined the impairment, as described in the table below, was required.
At start Additions (Impairment) At end
of year of year
GBP'000 GBP'000 GBP'000 GBP'000
Brick Live Far East Limited - - - -
Brick Live Group (incorporating - - - -
Bright Bricks Limited)
Parallel Live Group 896 - (12) 884
896 - (12) 884
---------- ----------- -------------- ----------
18. Investments in Associates and Joint Ventures
Group Company
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
Cost
Cost at start of year 197 197 - -
Additions in the year - - - -
--------- --------- ----------- ---------
Cost at end of year 197 197 - -
--------- --------- ----------- ---------
Impairment
At start of year 197 111 - -
Impairment in the year - 86 - -
--------- --------- ----------- ---------
At end of year 197 197 - -
--------- --------- ----------- ---------
Net book value at end of - -
year - -
--------- --------- ----------- ---------
Net book value at start - -
of year - 86
--------- --------- ----------- ---------
Brick Live Centre Education Development (Beijing) Company Ltd ('BLCED')
In July 2017, BLFE entered into a long-term agreement with Fortune Access, to create a limited liability foreign enterprise company in China called Brick Live Centre Education Development (Beijing) Company Limited. BLFE agreed to invest 980,000 RMB (approximately GBP111,000) for a 49% shareholding. Based on the performance in the year ended 31 December 2020 the investment in the associate was impaired to GBPnil.
The Group accounts for the associate under the equity method of accounting.
The results of BLCED in the year are: 2021 2020
GBP'000 GBP'000
-------- --------
Revenue 473 128
-------- --------
Loss before tax (468) (500)
Taxation - -
-------- --------
Loss after tax (468) (500)
Current assets 380 287
Non-current assets 490 693
Current liabilities (1,205) (912)
Non-current liabilities (64) -
(400) 68
-------- --------
In August 2021 Fortune Access injected a further 516,000 RMB (approximately GBP65,000).
BLCED losses have been recognised through the Consolidated Statement of Comprehensive Income to the extent that they do not exceed the Group's initial investment in BLCED together with the Group's share of its accumulated profits. The Group's unrecognised share of BLCED's loss for the year to 31 December 2021 is GBP168,000. The Groups unrecognised share of BLCED's cumulative loss is GBP118,000.
Parallel Three Six Zero Inc ('PTSZ')
In September 2018, Parallel Live Group signed a joint venture agreement with US-based company Three Six Zero, forming the new company Parallel Three Six Zero Inc. It has been granted exclusive rights by Parallel Live Group to promote BRICKLIVE events in North America and Canada with Brick Live International Limited as its content provider.
There were no BRICKLIVE events in North America operated by PTSZ in 2021 or 2020.
The Group accounts for the joint venture under the equity method of accounting.
The results of the PTSZ in the year are:
2021 2020
GBP'000 GBP'000
-------- --------
Revenue - -
-------- --------
Loss before tax - (1)
Taxation - -
-------- --------
Loss after tax - (1)
Current assets - -
Non-current assets - -
Current liabilities (27) (27)
Non-current liabilities - -
(27) (27)
-------- --------
19. Inventories
Group Company
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
Inventories of bricks 3,742 4,633 - -
Work in progress 63 198 - -
-------- -------- -------- --------
3,805 4,831 - -
-------- -------- -------- --------
Included in inventories is GBP3,097,000 (2020: GBP3,983,000) of stock acquired on acquisition of Bright Bricks Group and included at fair value at that date.
Included in inventories is GBP1,500,000 (2020: GBP1,500,000) subject to a sale and HP Agreement entered into with Close Leasing Limited, (see Note 22 ).
The Directors considered the carrying value at 31 December 2021 for inventories and it was determined that no impairment was required.
20. Trade and other receivables
Group Company
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
Trade receivables 231 123 2 -
Amounts owed by subsidiaries (note 34) 41 - 1,155 1,226
Other receivables 57 64 50 78
Prepayments and accrued income 183 217 123 156
-------- -------- -------- --------
512 404 1,330 1,460
-------- -------- -------- --------
Amounts owed by subsidiaries are unsecured, interest free and repayable on demand.
21. Cash and cash equivalents
Group Company
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
Cash at bank 211 168 - 191
-------- -------- -------- --------
22. Borrowings
Group Company
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
Loan due within one year 477 615 56 167
Loan due after one year 1,201 1,430 185 83
1,678 2,045 241 250
-------- -------- -------- --------
In April 2020 the Company entered into a GBP250,000 CBILS loan agreement with NatWest Bank Plc of which GBP240,740 remained outstanding at the balance sheet date. The loan is unsecured, for a term of six years with an effective interest rate of 4.08%.
In April 2020 the Group entered into a GBP500,000 loan agreement with David Ciclitira of which GBP90,823 remained outstanding at the balance sheet date. The loan from David Ciclitira bears interest at 16.2% and is secured by a second fixed and floating charge over the Groups assets with priority given to the security held by Close Leasing Limited as detailed below. In March 2022 the outstanding balance was repaid in full.
In August 2020 the Group entered into an agreement with Close Leasing Limited whereby stock totalling GBP1,500,000 included under Inventories in the Statement of Financial Position in these condensed consolidated financial statements was sold to Close Leasing Limited and purchased back under the terms of a GBP1,500,000 Hire Purchase Facility (HP Agreement) provided in conjunction with the CBILS, of which GBP1,346,504 remained outstanding at the balance sheet date. The HP Agreement was for a term of five years at an effective interest rate of 5.14% secured against the GBP1,500,000 of stock subject to the agreement and a fixed and floating charge over the Groups other assets.
23. Trade and other payables
Group Company
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
Trade payables 1,098 574 533 112
Amounts owed to subsidiaries - - 217 66
Other payables 275 866 188 835
Other taxation and social
security 1,265 924 32 24
Accruals and deferred income 1,170 1,120 336 343
-------- -------- -------- --------
3,808 3,484 1,306 1,380
-------- -------- -------- --------
Amounts owed to subsidiaries are unsecured, interest free and repayable on demand.
Other payables include GBP160,000 (2020: GBP800,000) of deferred consideration as detailed in Note 15 .
24. Financial risks
The Group and Company operations expose them to a number of financial risks. The Directors aim to protect the Group and Company against the potential adverse effects of these financial risks.
Financial assets
Financial assets include cash and trade and other receivables, excluding prepayments.
These amounts, where appropriate, have been shown separately on the face of the Statement of Financial Position. Funds not immediately required for the Group and Company's operations are invested in bank deposits. It is the Directors' opinion that the carrying values of cash, trade receivables and investments approximate to their fair values.
Financial liabilities
Financial liabilities include current and non-current borrowings and trade and other payables (excluding taxation and social security and deferred income).
All amounts are carried at amortised cost. These amounts have been disclosed in the notes to the financial statements. It is the Directors' opinion that the carrying values of financial liabilities approximate to their fair-value.
Liquidity risk
The Group and Company's surplus liquid resources are maintained on short-term interest-bearing deposits. The Group and Company plans to continue to meet operating and other loan commitments as they fall due. Liquidity risk is managed through cash flow forecasts and regular planning.
Set out below are liquidity risk comparative tables as at 31 December 2021 and 31 December 2020.
Remaining contractual maturities year ended 31 December 2021
Group Within > 3 months > one Total
3 months < 1 year year carrying
< 5 years amount
GBP'000 GBP'000 GBP'000 GBP'000
Bank loans and borrowings 185 292 1,201 1,678
Trade and other payables 1,373 - - 1,373
Lease liabilities 16 50 122 188
----------- ----------- ----------- ----------
1,574 342 1,323 3,239
----------- ----------- ----------- ----------
Company Within > 3 months > one Total
3 months < 1 year year carrying
< 5 years amount
GBP'000 GBP'000 GBP'000 GBP'000
Bank loans and borrowings 14 42 185 241
Trade and other payables 938 - - 938
----------- ----------- ----------- --------------
952 42 185 1,179
----------- ----------- ----------- --------------
Remaining contractual maturities year ended 31 December 2020
Group Within > 3 months > one Total
3 months < 1 year year carrying
< 5 years amount
GBP'000 GBP'000 GBP'000 GBP'000
Bank loans and borrowings 8 607 1,430 2,045
Trade and other payables 1,440 - - 1,440
Lease liabilities 15 45 188 248
----------- ----------- ----------- ----------
1,463 652 1,618 3,733
----------- ----------- ----------- ----------
Company Within > 3 months > one Total
3 months < 1 year year carrying
< 5 years amount
GBP'000 GBP'000 GBP'000 GBP'000
Bank loans and borrowings - 167 83 250
Trade and other payables 1,013 - - 1,013
----------- ----------- ----------- --------------
1,013 167 83 1,263
----------- ----------- ----------- --------------
Trade and other payables above exclude taxation and accruals and deferred income.
Credit risk
Financial assets past due but not impaired as at 31 December 2021:
Not impaired Not impaired but past due
and not by the following amounts
past due
>30 days >60 days >90 days >120 days
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Group: Trade and
other receivables 269 14 8 16 22
Company: Trade and
other receivables 1,207 - - - -
Financial assets past due but not impaired as at 31 December 2020:
Not impaired Not impaired but past due
and not by the following amounts
past due
>30 days >60 days >90 days >120 days
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Group: Trade and
other receivables 113 25 - - 49
Company: Trade and
other receivables 1,304 - - - -
Trade and other receivables above exclude prepayments and accrued income.
The Group is exposed to credit risk on its cash and cash equivalents, trade and other receivables. The maximum exposure to credit risk is represented by the carrying value of each financial asset.
Credit risk with respect to cash is reduced through maintaining banking relationships with established financial intermediaries with acceptable credit ratings. Bank deposits as at 31 December 2021 were GBP211,000 (2020: GBP168,000), all of which are considered of low credit risk.
Credit risk with respect trade and other receivables Is reduced through assessing all material new clients for credit risk prior to entering into a contractual relationship. All trade and other receivables are assessed regularly for credit risk and those which are past due by 90 days or more and where there has been a breakdown of communication with the client such that there is no longer confidence that the sum will be collectable are impaired to the extend they are no longer expected to be colectable.
Group trade and other receivables excluding prepayments and accrued income as at 31 December 2021 were GBP287,000 (2020: GBP187,000), all of which are collected and/or collectable and are considered of low credit risk.
Market risk
a. Interest rate risk
The Group had two outstanding interest bearing loans (one with NatWest Bank PLC and one with David Ciclitira) and the HP Agreement with Close Leasing Limited at the year end.The interest rates in respect of the HP Agreement and loan from David Ciclitira are fixed and in respect of the loan from NatWest Bank PLC is calculated in relation to bank Base Rate, there are no early redemption penalties associated with the NatWest Bank PLC loan and the risk is therefore considered to be insignificant.
b. Foreign currency risk
Although the Company is based in the United Kingdom, a significant part of the Group's and Company's operations are overseas, and the operating or functional currency of a large part of the global business is in US Dollars, Euros and South African Rand. As a result, the Group's sterling accounts can be affected by movements in the US Dollar/Sterling, the Euro/Sterling and the South African Rand/Sterling exchange rates.
The foreign assets and liabilities of the Group and Company are closely matched as at 31 December 2021. The table below sets out the carrying amounts of assets and liabilities for the Group in their presentational currency (i.e. Sterling) and a total impact for each 10% fluctuation in exchange rates. Based on the carrying amounts of foreign assets and liabilities as at 31 December 2021, for each 10% fluctuation in exchange rates, net assets are expected to be impacted by GBP11,000 (2020: GBP16,000).
Year ended 31 December 2021
Carrying amount (sterling equivalent) Forex Risk
GBP $ EUR R Total (-10%) 10%
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Financial assets
Cash (36) 1 - 246 211 25 (25)
Trade and other
receivables 390 14 12 96 512 12 (12)
------- ------- ------- ------- ------- ------- -------
354 15 12 342 723 37 (37)
------- ------- ------- ------- ------- ------- -------
Financial liabilities
Borrowings 1,678 - - - 1,678 - -
Trade payables 836 88 101 73 1,098 26 (26)
Other payables 275 - - - 275 - -
Lease liabilities 188 - - - 188 - -
Other taxation
and social security 1,265 - - - 1,265 - -
Accruals and
deferred income 1,170 - - - 1,170 - -
5,412 88 101 73 5,674 26 (26)
Net Impact (11) 11
------- -------
Year ended 31 December 2020
Carrying amount (sterling equivalent) Forex Risk
GBP $ EUR R Total (-10%) 10%
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Financial assets
Cash 164 3 1 - 168 - -
Trade and other
receivables 331 27 46 - 404 7 (7)
------- ------- ------- ------- ------- ------- -------
495 30 47 - 572 7 (7)
------- ------- ------- ------- ------- ------- -------
Financial liabilities
Borrowings 2,045 - - - 2,045 - -
Trade payables 349 67 158 - 574 23 (23)
Other payables 866 - - - 866 - -
Lease liabilities 248 - - - 248 - -
Other taxation
and social security 924 - - - 924 - -
Accruals and
deferred income 1,120 - - - 1,120 - -
5,552 67 158 - 5,777 23 (23)
Net Impact 16 (16)
------- -------
25. Lease liabilities
Group Company
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
Current 66 60 - -
Non-current 122 188 - -
188 248 - -
-------- -------- -------- --------
In 2019, a right of use asset, being the present value of the operating lease payments over the remaining life of the lease, was recognised. The right of use assets and corresponding lease liability have been calculated using a discount rate of 9%. The depreciation of the assets and interest charge are recognised in the Statement of Comprehensive Income in the year and the buildings maturity analysis of lease commitments at 31 December 2021 is detailed below.
Lease payments relate to leases of property. The Group does not have an option to purchase the leased property at the expiry of the lease period.
Payments recognised as an expense 2021 2020
GBP'000 GBP'000
Minimum lease payments - -
Lease depreciation 62 61
Interest 19 24
-------- --------
Non-cancellable lease commitments 2021 2020
GBP'000 GBP'000
Not later than 1 year 66 79
Later than 1 year and not later than 5 years 122 219
Later than 5 years - -
-------- --------
188 298
-------- --------
26. Deferred tax
2021 2020
GBP'000 GBP'000
At start of year 644 550
Charged to profit or loss 117 94
At end of year 761 644
-------- --------
Due to the availability of UK tax losses, subject to agreement with the HMRC, there is an estimated deferred tax asset of GBP2,944,000 (2020: GBP2,648,000). This is not recognised due to the uncertainty of the timing of future taxable profits against which these losses could be utilised.
27. Share capital
The issued share capital is set out in the table below:
2021 2020
No. of GBP'000 No. of GBP'000
shares shares
Issued and fully paid
Ordinary shares of 1p 159,802,147 1,598 108,138,544 1,081
Deferred shares of 51.8p 2,047,523 1,061 2,047,523 1,061
Deferred Ordinary shares
of 0.5p 199,831,545 999 199,831,545 999
Deferred B shares of GBP19.60 103,260 2,024 103,260 2,024
-------- --------
Total 5,682 5,165
-------- --------
The changes in the year to 1p Ordinary shares, relating to the various capital transactions during the year were as follows:
2021
Ordinary shares of 1p No. of GBP'000
shares
At start of year 108,138,544 1,081
Settlement of supplier and contractor fees
(RNS Number : 4882P 17 February 2021) 1,863,219 19
Share placing, settlement of deferred consideration
and contractor fees (RNS Number : 3348X 04
May 2021) 36,000,000 360
Loan conversion and settlement of contractor
fees (RNS Number : 1210F 14 July 2021) 1,114,668 11
Share placing, settlement of deferred consideration
and contractor fees (RNS Number : 9667V 17
December 2021) 12,685,716 127
At end of year 159,802,147 1,598
------------ ----------
2020
Ordinary shares of 1p No. of GBP'000
shares
At start of year 79,500,419 794
Settlement of director fees (RNS Number :
1029A 17 January 2020) 116,667 1
Settlement of advisor fees (RNS Number : 6990J
15 April 2020) 233,333 2
Settlement of salary and contractor fees (RNS
Number : 9396L 05 May 2020) 1,196,866 12
Share Placing (RNS Number : 1520R 26 June
2020) 4,000,000 40
Loan conversion (RNS Number : 1520R 26 June
2020) 2,050,000 21
Settlement of salary and contractor fees (RNS
Number : 5485T 21 July 2020) 835,182 8
Settlement of salary and contractor fees (RNS
Number : 9339Z 24 September 2020) 1,396,077 14
Share placing and subscription (RNS Number
: 3562H 03 December 2020) 18,810,000 189
At end of year 108,138,544 1,081
------------ ----------
The number of additional shares authorised for issue is 60,314,284 (2020: 30,104,523).
Deferred shares
The Company has 2,047,523 Deferred shares of 51.8p each and 199,831,545 Deferred Ordinary shares of 0.5p each (together the 'Deferred shares') in issue. The Company also has 103,260 Deferred B shares in issue.
The Deferred shares have the following rights and restrictions. They shall:
a. Not entitle their holders to receive any dividend or other distribution;
b. Not entitle their holders to receive notice of or to attend, speak or vote at any General Meeting of the Company by virtue of or in respect of their holding of such Deferred shares; and
c. Entitle their holders on a return of assets on a winding-up of the Company or otherwise only to the repayment of the capital paid up on such Deferred shares and only after repayment of the capital paid up on each Ordinary share in the capital of the Company and the payment of a further GBP100,000 on each such Ordinary share.
The holders of the Deferred shares shall not be entitled to any further participation in the assets or profits of the Company. Notwithstanding any other provision of these Articles and unless specifically required by the provisions of the Act, the Company shall not be required to issue any certificates in respect of the Deferred shares. The Company shall have irrevocable authority at any time:
a. to appoint a person on behalf of any holder of Deferred shares to enter into an agreement to transfer, and to execute a transfer of, the Deferred shares, for no consideration, to such person (whether or not an officer of the Company) as the Directors may determine as the custodian thereof;
b. to purchase all the Deferred shares then in issue in consideration of an aggregate payment of one penny for all of such shares then redeemed and upon giving 28 days' prior notice to the holders of Deferred shares as to be redeemed fixing a time and place for redemption; and
c. in the event of any transfer, purchase or redemption to retain any share certificate relating to such shares. If any Deferred shares are purchased or redeemed as aforesaid, the relevant amount of authorised but unissued share capital arising may be redesignated by the Directors as Ordinary share capital.
Neither the passing by the Company of any special resolution for the cancellation of the Deferred shares for no consideration by means of a reduction of capital requiring the confirmation of the Court nor the obtaining by the Company nor the making by the Court of any Order confirming any such 103 reduction of capital nor the becoming effective of any such Order shall constitute a variation, modification or abrogation of the rights attaching to the Deferred shares and accordingly the Deferred shares may at any time be cancelled for no consideration by means of a reduction of capital effected in accordance with the Act without sanction or consent on the part of the holders of the Deferred shares.
28. Share premium
2021 2020
GBP'000 GBP'000
At start of year 25,004 23,480
Premium arising on issue of equity shares 1,486 840
Shares issued on acquisition of subsidiary and novation of contracts - 135
Debt to share conversion 644 634
Share issue costs (110) (85)
-------- --------
At end of year 27,024 25,004
-------- --------
29. Acquisitions
There were no acquisitions in 2021.
30. Share options and warrants
Share option reserve
2021 2020
GBP'000 GBP'000
At start of year 496 218
Share option charge 223 222
Share options forfeited (267) -
Warrant charge 63 56
At end of year 515 496
-------- --------
Share options
The Group adopted a share option scheme on 2 April 2019 for certain directors and senior management. Options are generally exercisable at a price equal to the market price of the Plc shares on the day immediately prior to the date of the grant. Options are forfeited if the employee leaves the Group before the options vest.
The Share Option Plan provides for the grant of both tax-approved Enterprise Management Incentives (EMI) Options and unapproved options.
No options were issued in 2020 or 2021.
The charge for the year ended 31 December 2021 for the options issued in April 2019 totals GBP223,000 (2020: GBP222,000).
Details of the share options outstanding during the year are as follows.
2021 2020
Weighted Weighted
average average
exercise exercise
Number price (p) Number price (p)
Outstanding at the beginning
of the year 3,086,346 65 3,086,346 65
Granted during the year - - - -
Forfeited during the year (1,341,889) 65 - -
Exercised during the year - - - -
Outstanding at the end of
the year 1,744,457 65 3,086,346 65
Options become exercisable on the third anniversary of the grant date and lapse on the tenth anniversary of the grant date. All options currently outstanding were granted on 2 April 2019.
Advisor and creditor warrants
1,500,000 (2020: 75,000) advisor warrants were issued during the year at a weighted average exercise price of 5p (2020: 15p).
The inputs into the warrant pricing model for the warrants issued in the year are:
Weighted average exercise price 5p Expected volatility 77% Expected life 2 years Risk free interest rate 1.1% Expected dividends 0.00
The charge for the year ended 31 December 2021 for the advisor and creditor warrants in issue totals GBP63,000 (2020: GBP56,000).
A total of 2,213,941 advisor and creditor warrants were outstanding at 31 December 2021 (2020: 713,941).
Investor warrants
11,428,572 (2020: 16,810,000) investor warrants were issued to investors as part of an equity raise and are therefore outside the scope of IFRS 2 'Share-based payment' and consequently there is no share-based payment charge in respect of these warrants.
During the year 3,903,840 (2020: nil) investor warrants expired leaving a total of 28,238,572 investor warrants outstanding at 31 December 2021 (2020: 20,713,840).
Details of all warrants outstanding during the year are as follows.
31 December 31 December
2021 2020
Number Price Number Price
(p) (p)
Investor (exercisable up to 25
February 2021) - - 3,903,840 80.00
Adviser (exercisable up to 25
February 2022)* 50,000 15.00 50,000 80.00
Investor (exercisable up to 25
June 2022)** 4,000,000 10.00 4,000,000 15.00
Adviser (exercisable up to 25
June 2022)** 75,000 10.00 75,000 15.00
Creditor (exercisable up to 17
October 2022) 356,923 38.79 356,923 38.79
Investor (exercisable up to 3
December 2022) 12,810,000 10.00 12,810,000 10.00
Creditor (exercisable up to 16
December 2022) 232,018 38.79 232,018 38.79
Adviser (exercisable up to 24
May 2023) 1,500,000 5.00 - -
Investor (exercisable up to 23
December 2023) 11,428,572 5.00 - -
30,452,513 8.44 21,427,781 24.66
* repriced from 80p to 15p in May 2021.
** repriced from 15p to 10p in May 2021.
2021 2020
Warrants Weighted Weighted
average average
exercise exercise
Number price (p) Number price (p)
Outstanding at the beginning
of the year 21,427,781 24.66 4,542,781 74.66
Issued during the year 12,928,572 5.00 16,885,000 11.21
Expired during the year (3,903,840) 15.00 - -
Exercised during the year - - - -
Outstanding at the end of
the year 30,452,513 8.44 21,427,781 24.66
31. Capital management
The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern, so that it can continue to provide returns to shareholders and benefits for other stakeholders. The Group had net assets of GBP5.4m at 31 December 2021 (2020: GBP5.8m). The Group's capital management strategy is to retain sufficient working capital for day to day operating requirements and to ensure sufficient funding is available to meet commitments as they fall due and to support growth. There are no externally imposed capital requirements.
2021 2020
GBP'000 GBP'000
Loan facility (1,678) (2,045)
-------- --------
Total debt (1,678) (2,045)
-------- --------
Cash 211 168
-------- --------
Net debt (1,467) (1,877)
-------- --------
In order to maintain or adjust the capital structure the Group may issue new shares or sell assets to reduce debt.
32. Related party transactions
Details of the Directors' remuneration and consultancy fees are disclosed in Note 9.
David Ciclitira
David Ciclitira injected funds into the Company 2021 2020
during the year as follows:
GBP'000 GBP'000
Fees settled in shares - 28
Loan converted to equity 30 205
Acquisition of LCSE settled in shares 200 450
230 683
-------- --------
Loan advanced
Loan facility - 500
Total funds injected 230 1,183
-------- --------
David Ciclitira received payments during the 2021 2020
year as set out below:
GBP'000 GBP'000
Business expenses and healthcare costs. 14 13
Rental arrangements for use of Venturi Formula
E Car as described in Note 33 to the annual
report for the year ended 31 December 2019 - 17
Fees and interest at 16.2% in relation to
the provision of loan facility detailed in
Note 22. 22 101
Fees in relation to HP Agreement guarantee 21 28
Consideration for the purchase of share in 113 -
EMPL
Consideration for the purchase of LCSE, settled
in shares 200 450
Fee in relation to the assumption of historic
liabilities - 29
-------- --------
370 638
-------- --------
Loan repaid
Loan converted to equity 30 205
Loan repaid 174 -
-------- --------
204 205
-------- --------
Total payments received 574 843
-------- --------
Unpaid balances due to related parties at 2021 2020
31 December
GBP'000 GBP'000
David Ciclitira* 205 318
Serenella Ciclitira 28 8
Ranjit Murugason** 127 20
Bryan Lawrie** 24 11
Trudy Norris-Grey - (15)
Mark Freebairn - 10
Simon Horgan - 10
Stephen Birrell** 16 -
400 362
-------- --------
*Includes total deferred consideration of GBP100,000 (2020: GBP300,000) in relation to the acquisition of David Ciclitira's interest in EMHL, and the outstanding loan balance of GBP90,823 (2020: GBP295,000) as detailed in Note 22 . In March 2022 the outstanding loan balance was repaid in full together with GBP45,000 of the outstanding deferred consideration relating to the acquisition of EMHL leaving GBP55,000 outstanding.
**In February 2022 6,223,859 new Ordinary shares in the Company were issued in settlement of outstanding Director's fees. Senior Director Ranjit Murugason received 5,047,620 Ordinary shares at 3.5p, Bryan Lawrie received 747,667 Ordinary shares at 3.5p and Stephen Birrell received 428,572 shares at 3.5p price.
Subsidiary undertakings and associates
During the year the Company provided and received services to other Group companies totalling:
Services provided by the Company to: 2021 2020
GBP'000 GBP'000
Brick Live International Limited 90 -
-------- --------
90 -
-------- --------
Services received by the Company from:
Brick Live International Limited 102 -
-------- --------
102 -
-------- --------
Unpaid balances due to subsidiary undertakings
and associates 2021 2020
GBP'000 GBP'000
Brick Live Group Limited 65 66
Bright Bricks Limited (521) (943)
Brick Live International Limited (593) (283)
K-Pop Europa Limited (41) -
Live Company Group EBT Limited 152 -
(938) (1,160)
-------- --------
Investments
In May 2021 the Company subscribed to 389 ordinary shares in Start Art Global Limited. ('StART.Art'), representing a non-controlling stake of 18.6% of the total issued share capital of the company, for a total consideration of GBP1,000,000. Prior to the transaction StART.Art was 100% owned by David Ciclitira and Ranjit Murugason who are both directors of the Company.
In November 2021 StART.Art acquired the entire issued share capital of Start (2013) Limited, the promoter of the StART Art Fair, in an all share transaction, resulting in a decrease in the Company's interest in the enlarged group from 18.6% to 14.6% with no diminution of value. Prior to the acquisition Start (2013) Limited was 100% owned by David Ciclitira and Ranjit Murugason who are both directors of the Company.
In December 2021, following a reorganisation of the capital structure of StART.Art, StART.Art issued a further 180 ordinary shares to LVCG for nominal consideration increasing LVCG's holding to 19.9%.
In November 2021 the Company purchased 271 ordinary shares, representing 20% of the total issued share capital, in E-Movement (PTY) Limited ('EMPL') from David Ciclitira for a total consideration of GBP113,460. These shares were originally purchased by David Ciclitira (acting in his personal capacity) for the same amount in anticipation of them being transferred to the Company.
33. Equity Share Arrangement
In December 2019, the Company entered into a subscription agreement with YA II PN, Limited. ('YA II') and RiverFort Global Opportunities PCC Limited ('RiverFort') together the 'Investors' whereby the Investors agreed to make an equity investment of GBP2m, before expenses ,through the subscription for, and issue of 6,666,667 new Ordinary shares of 1 pence each in the capital of the Company at a price of 30p per share. Under an equity sharing agreement also entered into by the Company with the Investors (the 'ESA'), an amount equal to the gross proceeds of the Subscription following its completion, will then be returned by the Company to the Investors (the 'ESA Payment'), with the Company to receive back the ESA Payment, subject to certain pricing adjustments on a pro rata monthly basis.
In August 2020 the Group entered into a GBP1,500,000 CBILS borrowing agreement with Close Leasing Limited, the proceeds from the facility were used to repay the outstanding YA II and RiverFort borrowing and to terminate the ESA agreement.
In addition to an early termination fee of GBP143,000 payable by the Group, Live Company Group EBT Limited purchased 5,726,480 shares previously held by YA II and RiverFort (representing 6.51%. of the Company's issued share capital at the time) into trust, at a cost of GBP57,000.
These payments together with the Group's expected share of the ESA Payment (GBP2,000,000 at the time of the agreement and included in non-current receivables in the Groups consolidated statement of financial position at 31 December 2019) which following the termination will no longer be receivable will be considered part of the consideration for the share purchase at a group level and is included in the Group retained earnings in the Consolidated Statement of Financial Position.
34. Subsidiaries
At 31 December 2021, the Company had the following (direct and indirect) subsidiaries:
Held directly Company number Place of % owned Principal activities
incorporation
Brick Live Group
Limited 10151705 UK 100% Holding Company
Specialist production
Bright Bricks Limited 07227540 UK 100% company
Bright Bricks 2020
Limited 12333294 UK 100% Dormant
Live Company Group Employee Benefit
EBT Limited 12792192 UK 100% Trust Company
Parallel Live Group
Limited 09932658 UK 100% Holding Company
Live Company Sports
and Entertainment
Limited 12328268 UK 100% Holding Company
E Movement Holdings
Limited 12502990 UK 100% Holding Company
Championship (Singapore) 201427355K Singapore 95% Dormant
Pte Limited
Held indirectly
Brick Live International
Limited 10257756 UK 100% BRICKLIVE events
Brick Live Far East
Limited 10308158 UK 100% Dormant
Owner of Associate
Brick Live Far East investment in
Limited 2460460 Hong Kong 100% China
Parallel Live (NY)
LLC 6339763 USA 100% Dormant
Live Company Sports 2020/765082/07 South Africa 100% Sports and entertainment
and Entertainment events
(Pty) Limited
K-Pop Europa Limited 12924203 UK 50% KPOP events
E Movement Holdings 2021/354354/07 South Africa 100% Formula E events
(Pty) Limited
In December 2020, the Company acquired the entire issued share capital of Live Company Sports and Entertainment Limited including its 50% interest in K-Pop Europa Limited (KPE).
At the time of acquisition the Directors concluded, by virtue of David Ciclitira being the sole director of KPE and was thus able to direct its activities, that KPE should be consolidated as a subsidiary in accordance with IFRS 10. The directors continued to assess signifiers of control during the year ended 31 December 2021 and concluded that the criteria for consolidation continued throughout the year.
During the year KPE made a pre tax loss of GBP8,000; and at 31 December KPE had net liabilities of GBP8,000. The results of KPE have not been consolidated in these financial statements on the basis of immateriality.
The following subsidiaries were dissolved in the year:
Held directly Company number Place of % owned Principal activities
incorporation
Brick Live Touring
Limited 11253539 UK 100% Dissolved
Held indirectly
Bright Bricks Consumer
Limited 10653625 UK 100% Dissolved
Brick Live Far East Limited is in the process of being dissolved.
The registered office of the subsidiaries incorporated is England and Wales is 3 Park Court Pyrford Road, West Byfleet, Surrey, KT14 6SD.
The registered office of the overseas subsidiaries are as follows:-
Championship (Singapore) Pte Limited, 62 Neil Road, Singapore (088833).
Brick Live Far East Limited, RM 1307A 13/F, Two Harbourfront, 22 Tak Fung Street, Hughom, Hong Kong.
Parallel Live ((NY) LLC, 800 N King St, Suite 303, Wilmington, DE 19801, USA
E Movement Holdings (Pty) Limited, 9 Viscount Crescent, Baronetcy Estate, Plattekloof, Western Cape, 7500, South Africa.
Live Company Sports and Entertainment (Pty) Limited, Noland House, River Park, Mowbray, Western Cape, South Africa.
The company's subsidiaries Brick Live Group Limited, Parallel Live Group Limited, Brick Live International Limited, and Live Company Group EBT Limited are exempt from the requirements of the Companies Act 2006 relating to the audit of their individual accounts by virtue of section 479A of the Companies Act 2006.
35. Post balance sheet events
In February 2022 6,223,859 new Ordinary shares in the Company were issued in settlement of outstanding Director's fees. Senior Director Ranjit Murugason received 5,047,620 Ordinary shares at 3.5p, Bryan Lawrie received 747,667 Ordinary shares at 3.5p and Stephen Birrell received 428,572 shares at 3.5p price.
In March 2022 the outstanding balance of GBP90,823 due under the loan arrangement with David Ciclitira as detailed in Note 22 was repaid in full. Also in March 2022 GBP45,000 of the outstanding deferred consideration due to David Ciclitira in relation to the acquisition of EMHL as detailed in Note 29 was settled in cash.
In March 2022 16,500,000 new Ordinary shares of 1 pence each in the capital of the Company were issued at a price of 5p, raising GBP784,000 net of fundraising costs.
In April 2022 1,428,571 Investor warrants were exercised at a price of 5p raising GBP57,000.
Note to the announcement
The financial information set out above does not constitute the Company's statutory accounts for the year ended 31 December 2021 or year ended 31 December 2020, but is derived from those accounts. Statutory accounts for 2020 have been delivered to the Registrar of Companies and those for 2021 on which the auditors have provided an unqualified report will be delivered following the AGM.
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.
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