Paragon Entertainment Limited Trading Update (7220V)

TIDMPEL

RNS Number : 7220V

Paragon Entertainment Limited

07 November 2017

 
Date:      7 November 2017 
On behalf  Paragon Entertainment Limited ("Paragon", 
 of:        the "Company" or the "Group") 
 

Paragon Entertainment Limited

Trading Update

Paragon Entertainment Limited (AIM: PEL), the attractions design, production and fit-out business, wishes to announce that it expects to complete the 2017 financial year with sales broadly in line with the Board's expectations at GBP15.0m.

At the EBITDA level however, second half performance has been notably impacted with the result that EBITDA for the full year to 31 December 2017 will be significantly lower than previous expectations at approximately GBP0.7m. The primary reasons for the change in expectations are as follows:

-- Notwithstanding solid growth in our Product business, two major projects with high margins which were forecast for 2017 have been deferred to 2018;

-- Delays and cost overruns on certain projects resulted in less gross margin than was previously expected;

-- Group overheads had been increased in expectation of improved revenue growth in H2 (and into 2018); in the absence of this growth and incremental margin the Board is now taking steps to rationalise costs, manage spare capacity while ensuring that the Group is adequately resourced for the future.

We continue to work hard to improve operational delivery at Paragon; both our contracting and finance teams are now under new leadership and have improved processes to tighten our contract discipline. However there has been management distraction, in terms of prolonged contract discussions and staffing issues during the second half which has certainly diverted attention away from several key projects which we had intended to execute on this year. These projects are intended to streamline and improve further our design methodology, procurement operations and management reporting, as well as improve operational flexibility and ultimately margins. The impact of these programmes will now likely only become apparent in 2018.

The day to day operation of our finance function is now under the control of an experienced full time interim group head of finance, David McCabe. The Board intends to make a full time appointment of a Group CFO and a suitable candidate is being actively sought.

We continue to pursue the re-location of Paragon to a single site so as to improve efficiencies and reduce property costs and we are making sound progress in this regard.

Mark Taylor, Chairman, said:

"Our enormous growth in recent years necessitates that we take a breath and consolidate. While we are disappointed with the way 2017 has unfolded we remain satisfied that the longer term plan for Paragon is sound and our aspirational objective of achieving revenues of GBP20 million in 2020 remains an appropriate medium term goal for the business with a focus on high quality earnings rather than growth for growth's sake."

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 ("MAR").

 
 For further information: 
 
  Paragon Entertainment Limited 
  John Dobson (Chief Executive) 
  Mark Taylor (Non-Executive 
  Chairman) 
                                      01904 608020 
  finnCap Ltd 
  Julian Blunt / Simon Hicks 
  (corporate finance) 
  Alice Lane (corporate broking)      020 7220 0500 
 

About Paragon

Paragon Entertainment Limited (AIM:PEL) is an award winning provider of attraction services from initial design production and consulting through to the fit out and installation of themed attractions, heritage exhibits, museums, aquariums and water parks, inter alia. Paragon Entertainment is the holding company for Paragon Creative Limited.

The Group's projects have included:

   --     The build of Rolling Stones Exhibitionism at the Saatchi Gallery, London; 
   --     The design and build of Kidzania, London; 

-- The design and build of galleries at the Olympic Museum for the IOC in Lausanne, Switzerland;

   --     The design and build of the galleries at The National Museum of Kazakhstan; 
   --     The design and build of Titanic Belfast; and 
   --     The thematic build of the Wallace and Gromit ride at Blackpool Pleasure Beach. 

The Group listed on AIM in 2011. Further information can be found at http://www.paragonent.com.

This information is provided by RNS

The company news service from the London Stock Exchange

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November 07, 2017 02:00 ET (07:00 GMT)