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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Reach4entertainment Enterprises Plc | LSE:R4E | London | Ordinary Share | GB00B1HLCW86 | ORD 0.1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.225 | 0.20 | 0.25 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMR4E
RNS Number : 8031O
Reach4Entertainment Enterprises PLC
22 May 2018
Prior to publication, the information contained within this announcement was deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the publication of this announcement, this information is now considered to be in the public domain.
22 May 2018
reach4entertainment enterprises plc
("r4e", the "Company"' or the "Group")
Final results for the year ended 31 December 2017
r4e, the transatlantic media and entertainment company, today announces its results for the year ended 31 December 2017.
Highlights
-- Marketed over 100 events worldwide, including many of the best-known theatre shows including Kinky Boots, Lion King, Les Misérables, Book of Mormon and School of Rock
-- 2017 trading performance in line with management expectations reflecting weaker performance from the US division, SpotCo, and tougher trading conditions in the UK
-- Revenues of GBP80.2 million (2016: GBP96.6 million) -- Gross profit margin of 25.1% (2016: 23.6%) -- Adjusted EBITDA* of GBP1.0 million (2016: GBP1.9 million) -- GBP1.5 million (non-cash) impairment of carrying value of SpotCo's goodwill -- Adjusted profit after tax** of GBP0.6m (2016: GBP0.1m) -- Reported loss after tax of GBP1.9 million (2016: profit of GBP0.1 million) -- Loss per share of 0.30p (2016: earnings per share of 0.02p) -- Net cash of GBP4.3 million (2016: net debt of GBP2.9 million)
* Adjusted EBITDA is before exceptional items, and share based payment charges
** Adjusted profit after tax is before exceptional restructuring costs of GBP1.0 million and non-cash goodwill impairment charge of GBP1.5 million
New Management Team
-- New management team established under new CEO Marc Boyan in Q4 2017
-- Successfully raised GBP5.5 million from an equity placing in December 2017, to support new strategy focused on:
o expanding Group activities beyond theatrical production;
o growing the business both organically and via acquisition;
o entering new geographic markets; and
o cost saving initiatives.
2018 and Beyond
-- Strategic review of existing operations complete -- Investment in newly established entities:
o established Dewynters Amsterdam (in April 2018) following on from the successful launch of Dewynters Germany - r4e now has marketing teams in four major entertainment markets; and
o incubating a new company to focus on marketing-communications for emerging and challenger brands whilst drawing on capabilities of existing operations globally.
-- Re-organisation and restructuring of SpotCo resulting in:
o appointment of new Managing Directors Shelby Ladd and Stephen Santore to lead the division;
o centralisation of financial control function under Dewynters' Finance Director, Simon Shimell;
o new management team resetting expectations for 2018; and
o commencement of turnaround plan for SpotCo with a greater focus on data and analytics.
-- Implemented Group cost reduction programme that has achieved GBP2.0 million of gross annualised savings at the operational level, which has enabled the Group to invest in new operations and in strengthening the team
-- Senior level appointment of Mark Cox as Head of Corporate Development to spearhead M&A strategy for the Group
-- Appointment of Sir David Michels as Deputy Chairman, Non-Executive Director
-- Major new shows launched and won in 2018 include Chicago and Bat Out of Hell with the recent win of Warner Bros' Beetlejuice slated for 2019
Chairman of r4e Lord Michael Grade, said:
"The new team has made significant progress in the seven months it has been in place, raising GBP5.5 million, setting out a clear plan to build from r4e's traditional theatre strongholds in London and New York, achieving GBP2.0 million of gross annualised cost savings to date, and opening a new office in Amsterdam. It has also put in place new management to lead the turnaround of SpotCo having completed a strategic review.
"r4e represents a natural platform upon which to build an international live entertainment marketing business and we believe we have the necessary experience to make this happen. To that end, 2018 is likely to be a year of transition as we focus on bringing all parts of the business together to act as one team, providing our innovative, data led marketing services to events and theatre show where ever they are taking place. We look forward to finalising the restructuring of the business and pushing forward with expanding in the areas we have identified."
Enquiries:
reach4entertainment enterprises plc +44 (0) 20 7968 1655 Marc Boyan, Chief Executive Officer Allenby Capital (Nominated Adviser and Joint Broker) +44 (0) 20 3328 5656 Jeremy Porter/James Reeve Dowgate Capital (Joint Broker) James Serjeant +44 (0) 20 3903 7715 Novella Communications (Financial PR) +44 (0) 20 3151 7008 Tim Robertson/Toby Andrews
Chairman's Statement
Overview
This is my first statement as Chairman of r4e and I am pleased to be able to present these results for the 12 months ended 31 December 2017. It has been a year of significant change for the Company particularly through the appointment of a new management team in Q4 of 2017 under CEO Marc Boyan.
r4e has for a long time operated two independent divisions successfully in London and New York, primarily supporting theatre productions and major events under the Dewynters and SpotCo brands. In 2017, the Company collectively represented more than 100 shows and events including Kinky Boots, Lion King, Les Misérables, Book of Mormon and School of Rock, reflecting the established long-term relationships the Company has with the leading theatre and event production companies around the world.
The appointment of Marc Boyan in October 2017 marked an important change in the direction and ambition of the business and has led to the articulation of a new strategy to support the future growth of the business.
Financial Results
The Group generated revenue of GBP80.2 million (2016: GBP96.6 million) reflecting a stable performance in London, despite the terrorism incidents and a weaker trading outcome in New York against a strong prior year. This resulted in underlying Adjusted EBITDA of GBP1.0 million (2016: GBP1.9 million). The gross profit margin increased notably to 25.1% (2016: 23.6%). Loss per share from total operations for the year was 0.30p (2016: earnings per share 0.02p). The Board are not recommending a dividend for the year to 31 December 2017.
Strategy
Under Marc Boyan, the new management team have set out their strategy to build upon r4e's unique position within the live entertainment marketing sector for the future long-term growth of the business. As a result, the Company is now focused on growing through the expansion of its existing activities and beyond into non-theatre production clients, both organically and through strategic acquisitions, as well as focusing on opening up new geographic markets all serviced and supported by our strong capabilities in our existing operations.
To support the Company's strategic objectives, an equity placing was completed in December 2017, raising GBP5.5 million gross proceeds (GBP5.3 million net). Historically, the Company has been constrained by the costs associated with the high level of debt the Company had compared to its market capitalisation which has now been addressed with Group net cash of GBP4.3 million (2016: net debt of GBP2.9 million).
Alongside the reduction in borrowings, the restructuring actions taken to date have achieved annualised cost savings of GBP2.0 million, the majority of which have come from streamlining operations in SpotCo to create a more competency-based structure, which has enabled the Group to invest in new operations and in strengthening the team. On the back of a slowdown of activity in 2017, the new management team has taken the lead on the turnaround of this business and reset expectations for SpotCo's performance in 2018. A key focus going forward is to bring SpotCo closer together with the rest of the Group, allowing the business to offer clients a unified international service from its global talent pool, supporting events and shows wherever they are performed.
Since the year end, the Company established Dewynters Amsterdam (in April 2018) following on from the successful launch of Dewynters Germany. As a result, r4e now has marketing teams located in four key markets for theatre and events marketing.
Board Changes
The Board welcomed Marc Boyan as its CEO and Ralph Wilson as Interim CFO. Alongside the appointment of Marc, I moved from Non Executive Director to Non Executive Chairman, and Claire Hungate stepped down from the Board as a Non Executive Director to focus on a CEO role. Since the year end, r4e announced the appointment of Sir David Michels as Deputy Chairman, Non-Executive Director. Sir David was formerly CEO of Hilton Group and brings a wealth of public company experience to the Board.
On behalf of the Board I would like to thank David Stoller, former CEO of r4e, for his contribution to r4e.
Lord Michael Grade
Non-Executive Chairman
CEO Statement
Overview
I joined in October 2017 to help r4e expand within and develop outside its established market positions. Today, r4e employs over 200 marketing professionals across four countries and collectively this team has unparalleled experience of promoting and marketing shows and events. However, it has historically had a siloed-approach to operations with best practices in one market not necessarily shared across the business or beyond our core industry focus of theatrical production. r4e boasts a talented pool of operators within its ranks who understand how to drive consumers to ticketing and e-commerce environments. I believe this expertise can be successfully employed to service a broader set of customers beyond our existing base which if complemented by placing innovation and data driven decision making at the heart of all solutions, will represent a compelling offer for our clients.
Through my ownership of the Miroma group of companies, I am fortunate enough to be exposed to companies that have developed cutting edge marketing technology solutions that we are now able to employ for the benefit of r4e's current and prospective client base.
Supported by the GBP5.5 million of new capital raised from our shareholders, we have invested in attracting new people, opened up new operational subsidiaries and markets, re-organised parts of the business to achieve cost savings, created more efficient staffing structures to support greater collaboration and implemented centralised capabilities to service all current and prospective subsidiaries.
We have made excellent progress in the past seven months on these and other initiatives and while the restructuring programme is still ongoing, we expect the benefits of the actions taken so far to start to flow through in 2018.
I am pleased to be joined on the Board by Ralph Wilson as Interim CFO and Sir David Michels as Deputy Chairman. Sir David has served as Chairman of Miroma for the last four years and has overseen a period of rapid growth over that time. Furthermore, we have recently made a senior level hire for the group in Mark Cox who joins us as Head of Corporate Development to spearhead our M&A strategy. Mark has previously served as an Associate Director at WPP and a Director of a leading M&A advisory boutique focused on the media, marketing and technology sectors.
New York, London, Hamburg and Amsterdam
Alongside market-leading agencies in London and New York, r4e successfully launched a new agency in Hamburg in 2016. Consequently, the Company now has a strong presence in the three largest commercial theatre markets in the world. More recently, and subsequent to the year-end, the launch of the joint venture Dewynters Amsterdam in April 2018 stands as a blueprint for our desire to continue to expand operations organically. This, combined with the adoption of new data-driven marketing and analytics capabilities (which can and will be increasingly applied to the broader categories of live entertainment and e-commerce), and the highly collaborative approach taken by the new leadership teams, is expected to drive the Company's future growth.
In addition, in London the Group has commenced incubating a new company to focus on marketing-communications for emerging and challenger brands whilst drawing on capabilities of existing operations globally.
New York
2017 was a challenging market environment for SpotCo compared to the prior year resulting in revenue for this division reducing from GBP65.2 million to GBP48.5 million and operating profit moving from GBP1.0 million to a loss of GBP1.5 million, largely the result of a GBP1.5 million non-cash impairment of the carrying value of its goodwill.
The Board has taken a number of actions to restructure the division and has appointed a new leadership team under joint Managing Directors Shelby Ladd and Stephen Santore who had previously headed up SpotCo's Digital and Analytics respectively, supporting our belief that data informed decision making needs to be at the heart of marketing strategy. The new management team have been closely involved in defining a more achievable route to profitable growth. In addition, the Finance Director of Dewynters has taken over responsibility for financial control at SpotCo to improve processes and systems and bolster the resources of the business. As part of a turnaround plan, the focus will be to continue servicing our client base to the best of our ability, build on our recent successes for new business wins, maintain a greater discipline in relation to costs, and integrate with the management and skills base across the wider Group, all of which will contribute to returning this division to its previous position.
While the current year has begun well with the agency successfully securing several new Broadway musicals which will launch in the second half of 2018 and during 2019 and 2020, the impact of these new wins is not expected to support a return to growth until 2019.
London
Under divisional CEO James Charrington, Dewynters has been re-organised to deliver a more streamlined service and to cultivate a wider live entertainment client base, all underpinned by a commitment to utilise data and analytics technology to better identify target audiences, allocate marketing spend and track the impact of advertising against ticket sales.
As a result, 2017 has been a year of transition for Dewynters, reflected in the financial performance of the division with revenues broadly stable at GBP26.2 million (2016: GBP27.5 million). Adjusted EBITDA was GBP0.8 million (2016: GBP1.0 million) and operating profit was GBP0.4 million (2016: GBP0.7 million). Dewynters is well placed to improve on this performance in 2018.
Hamburg
Launched in September 2016, Dewynters Germany is still in its infancy but is already making significant strides under the leadership of Michael Hildebrandt, who has worked in Hamburg, the capital of the German entertainment market, for the past 18 years and is an established industry figure. Combined with the skills and capabilities that this division is able to draw upon from the wider Group, particularly from Dewynters in London, the agency has been able to grow from a zero base in 2016 to generating organic revenues of GBP1.4 million in 2017, and was breakeven at the operating profit level in 2017.
Newmans
Building on the back of a highly successful 2016, Newmans enjoyed further growth in 2017, with revenues up by 5% to GBP4.1 million (2016: GBP3.9 million), and generating EBITDA of GBP0.3 million (2016: GBP0.2 million). Previous investment in in-house printing and cutting machinery has continued to benefit the profitability of the division. Operating profit is also up on prior year, at GBP0.3 million (2016: GBP0.1 million). The division remains committed to growing into new customer markets and is well placed going into 2018.
Outlook
r4e is changing into a very different business, switching from operating leading brands in two separate markets, to being an international business located across a number of markets with a focus beyond the live entertainment market. We have made a good start to developing r4e - the business is now conservatively geared with headroom to invest in new opportunities. We have attracted senior personnel into the business and we have a clear plan to streamline the business further whilst targeting a larger share of our existing markets and opening up new opportunities.
2018 will be a period of transition as the changes we have made take effect. As a result, we reset expectations for the Group and we anticipate 2018 trading results will be in line with the prior year. However, looking further ahead we are establishing a more integrated, cost efficient, technology driven platform from which we expect to grow the business across all four markets in 2019 and beyond.
Marc Boyan
Chief Executive Officer
GROUP STRATEGIC REPORT EXTRACT
PRINCIPAL ACTIVITIES
The principal activities of the Group during the year were to provide creative, advertising, marketing and other services to the theatrical, film and live entertainment industries including media strategy and buying, marketing and sales promotions, signage and publishing.
REVIEW OF PERFORMANCE AND FUTURE DEVELOPMENTS
Year ended 31 December 2017
Hot Features
Premium
London Dewynters Head Group
Dewynters Newmans Jampot Total SpotCo GmbH Office Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 26,153 4,099 65 30,317 48,508 1,386 - 80,211
Adjusted EBITDA* 788 331 (107) 1,012 446 (52) (430) 976
Share based charges (80) (3) - (83) 40 (40) (151) (234)
---------- -------- -------- -------- -------- ---------- -------- --------
EBITDA pre-exceptional 708 328 (107) 929 486 (92) (581) 742
Exceptional items (157) - - (157) (78) - (727) (962)
Impairment of
Goodwill - - - - (1,533) - - (1,533)
Depreciation &
amortisation (189) (71) - (260) (373) (5) (3) (641)
---------- -------- -------- -------- -------- ---------- -------- --------
Operating profit/(loss) 362 257 (107) 512 (1,498) (97) (1,311) (2,394)
Year ended 31 December 2016
London Dewynters Head Group
Dewynters Newmans Jampot Total SpotCo GmbH Office Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 27,536 3,909 - 31,445 65,153 8 - 96,606
Adjusted EBITDA* 983 216 (45) 1,154 1,496 (124) (624) 1,902
Share based charges (107) - - (107) (124) - (119) (350)
---------- -------- -------- -------- -------- ------------ -------- --------
EBITDA pre-exceptional 876 216 (45) 1,047 1,372 (124) (743) 1,552
Exceptional items - - - - - - - -
Depreciation &
amortisation (182) (77) - (259) (379) - (60) (698)
---------- -------- -------- -------- -------- ------------ -------- --------
Operating profit/(loss) 694 139 (45) 788 993 (124) (803) 854
*Adjusted EBITDA is before exceptional items and share based payment charges. This is a measure used by r4e's provider of finance, PNC, to monitor covenant compliance, as well as by the Board as a proxy for cash profit.
Group
For the year ended 31 December 2017, the Group has seen a mixed trading performance, with reduced revenues, mitigated by improved gross profit margin and - as set out in note 4 to this final results announcement - by reduced overheads:
-- Revenue down by GBP16.4 million and 17% on prior year -- Gross profit down by GBP2.7 million and 12% on prior year -- Gross profit margin up by 1.5% on prior year (at 25.1%, versus 2016's 23.6%)
Operating (loss)/profit performance was also affected by:
-- Exceptional costs of GBP1.0 million relating primarily to Board and staff restructuring, which included the ceasing of David Stoller's roles of Executive Chairman and Chief Executive Officer;
-- Impairment of GBP1.5 million relating to the carrying value of SpotCo's goodwill and intangible assets;
-- Shared based payment charges associated with the Group's Long Term Incentive Plan ('LTIP'). A total of 228.0 million share options had been granted to employees by 31 December 2017, of which 19.4 million had been exercised, and 11.5 million had been forfeited in the year, leaving 197.1 million in place at the year-end. The options were valued and GBP0.2 million was charged to the income statement in the year (2016: GBP0.3 million). This is non-cash effecting, with the creation of a share option reserve, but the charge is recognised as personnel cost and thus reduces the Group's EBITDA.
Debt financing
The amount owing to debt provider PNC reduced significantly during the year, down to GBP2.5 million (2016: GBP5.0 million), which was a result of the accelerated repayment in July of the then-remaining term loan balance of GBP0.6 million, coupled with a reduced drawdown by year-end against the asset based lending facility.
As announced in October 2017, the Company breached its quarterly monitoring covenant in the third quarter of 2017. The breach was due to the covenant being determined on a 3-month rolling basis which is therefore sensitive to seasonality fluctuations in EBITDA. As announced in March 2018, the Company received formal agreement from PNC to waive its rights in connection with the breach of the covenant. As announced in February 2018, the Company stayed within its key overall full-year monitoring covenant for 2017.
The initial 3-year term of the facility runs to 3(rd) December 2018, and the facility automatically continues in place indefinitely thereafter unless either party gives at least six months' notice on or after 4(th) June 2018. The Group believes that the relationship with PNC is good, that they remain supportive of the Company, and that they appear likely to want to continue the arrangement after the end of the initial term.
Market
The Group's market is the provision of marketing and media services to ticketed live events. Historically, it has focused upon the entertainment sector, and specifically theatre. The Group's subsidiaries, Dewynters in London and SpotCo in New York, are market leaders in their respective theatrelands. As a result, the Group is diversifying into new territories, and beyond theatre.
London
The London segment comprises Dewynters, Newmans and - since October 2016 - Jampot. During the year the London operations generated EBITDA, before exceptional items, of GBP0.9 million compared to the year ended 31 December 2016 of GBP1.0 million. Operating profit of GBP0.5 million was down on the prior year (2016: GBP0.8 million). Jampot contributed a loss to this result, of GBP0.1 million (2016: a loss of GBP0.05 million), acting as a centre of expertise for data-driven marketing techniques.
Dewynters had a challenging year in 2017 to uphold margins in the face of a changing sales mix. Revenues were down on the prior year by 5%, caused partly by the impact of the London terrorist attacks. Being weighted more towards media, gross profit margin was down slightly at 26.9% (2016: 27.8%). In addition, the non-cash affecting LTIP employee share options resulted in a charge of GBP0.1 million to employee costs. EBITDA before exceptional items was down GBP0.2 million, at GBP0.7 million (2016: GBP0.9 million), or GBP0.8 million (2016: GBP1.0 million) when adding back the LTIP costs. Operating profit was down GBP0.3 million, at GBP0.4 million (2016: GBP0.7 million).
Newmans made a significant contribution to the London results in 2017 with an increase in revenue of GBP0.2 million (5%) to GBP4.1 million and a 50% increase in Adjusted EBITDA to GBP0.3 million, compared with 2016. The continued good performance is aided by the reduction in the level of outsourcing thanks to the investment in 2015 in in-house printing and cutting machinery. The result is particularly pleasing since it is despite the negative impact, earlier in the year, of the London terrorist attacks. Operating profit rose strongly against the prior year at GBP0.3 million (2016: GBP0.1 million) continuing the benefit of lower debt costs under the PNC facility arrangement.
Jampot had its first full year within the group, generating GBP0.1 million of revenue (2016: GBPnil) and an Adjusted EBITDA and operating loss of GBP0.1 million (2016: GBP0.05 million) as it focused mainly upon driving internal awareness, knowledge and skills.
New York
The New York segment now consists solely of SpotCo, after DAI was dissolved in December 2016 with only negligible closure costs that year.
After increasing by GBP10.5m in 2016, SpotCo's revenue contribution to the group decreased in 2017 by GBP16.6 million (26%) to GBP48.5 million (2016: GBP65.1 million). In US Dollars, SpotCo's 2017 revenue was $62.9 million, a $25.1 million (29%) decrease on 2016's $88.0 million. The weighted average exchange rate between the US Dollar and British Pound in 2017 for SpotCo's revenues was 1.30, compared with 2016's average of 1.35. The effective strengthening of the US Dollar helped mitigate the revenue reduction in British Pounds by GBP2.7 million. The disappointing level of trading was caused by challenging market conditions and intense competition: for example, two productions, Chicago and Waitress, switched agencies during the year. Jim Edwards, current chief executive of SpotCo, will be stepping down in June 2018, and Shelby Ladd and Stephen Santore have been appointed Managing Directors. In recent months, SpotCo has had encouraging and important wins for shows commencing in 2018, 2019, and provisionally even 2020, and the new management team are positive about long-term return to growth after what looks to be a challenging period of turnaround continuing into 2018.
Improved gross profit margin - primarily the result of a shift in favour of higher-margin non-media work - combined with actions leading to significant year-on-year savings in personnel costs and other administrative expenses, softened the impact of the revenue reduction upon Adjusted EBITDA which was GBP0.4 million (2016: GBP1.5 million). A GBP1.5 million impairment of SpotCo's goodwill was caused by inherent uncertainty during a period of continuing restructure, and led to a GBP1.5 million operating loss (2016: GBP1.0 million profit).
Other performance highlights
Long Term Incentive Plan (LTIP)
The Board recognises the importance of retaining and incentivising employees, and has continued to operate the r4e plc Long Term Incentive Plan, set up in 2016, which allows the Company to make grants of share options of up to 20 per cent of the issued share capital. Included within employee costs and therefore within EBITDA before exceptional items, in 2017, is GBP0.2 million of costs related to the valuation of the LTIP options granted to employees in the year (2016: GBP0.3 million). There is no cash effect of the valuation, with the costs being recognised within personnel costs in the Statement of Comprehensive Income and the creation of an option reserve on the Statement of Financial Position.
Finance Costs
Finance costs for the year amount to GBP0.3 million (2016: GBP0.4 million), and primarily comprise interest and fees on PNC debt of GBP0.3 million (2016: GBP0.3 million). The moderate reduction in the cost is attributable to lower levels of borrowings.
Tax
A tax credit of GBP0.8 million has been recognised in the year (2016: GBP0.4 million charge), arising GBP0.5 million due to a reduction in the deferred tax liability on intangibles and goodwill in SpotCo as a direct result of the US corporate tax rate being reduced from 35% to 21%, and a further GBP0.3 million reduction in that liability because of the impairment of goodwill. Deferred tax assets remain substantially unchanged. Group relief - mainly from r4e - has enabled the Group to extinguish any liability due from Dewynters and Newmans, whilst no tax is due in the USA on SpotCo profits (2016: GBP0.3 million).
Cash Flow
Cash inflow from operating activities in the year was GBP1.9 million (2016: GBP3.2 million inflow) as a result of positive trading (GBP0.01 million inflow) and working capital movements (GBP1.9 million inflow). As part of its investing activities, property plant and equipment expenditure was GBP0.1 million (2016: GBP0.3 million).
Financing activity cash flow has significant movements as a result of the PNC asset based lending facility. As cash was drawn down to fund working capital, proceeds from the facility totalled GBP83.7 million, and repayments to the lender through the facility totalled GBP84.4 million (2016: GBP108.7 million and GBP111.4 million respectively). Proceeds from the issues of share capital totalled GBP5.5 million - including GBP0.2 million arising upon the exercise of share options - after related expenses (2016: GBP1.9 million), to invest in the Group's new initiatives. Interest and fees paid out on debt totalled GBP0.29 million (2016: GBP0.34 million), reduced because of lower debt levels.
As explained in the prior year accounts, the cash position is not expected to increase over the short term as drawdowns from the PNC facility are charged a higher interest than unutilised borrowings. Therefore, cash for working capital purposes is only drawn down as required for payments rather than being retained on hand for any length of time.
POSITION AT 31 DECEMBER 2017
As at 31 December 2017, the Group balance sheet has strengthened by GBP3.8 million with a net asset position of GBP9.2 million (2016: GBP5.4 million), caused primarily by a successful equity placing in December 2017 raising funds of GBP5.3 million (net of GBP0.2 million of costs), offset by the GBP1.5 million impairment at SpotCo (2016: GBPnil).
Non-current assets are lower by GBP2.7 million at GBP11.1 million (2016: GBP13.8 million). GBP0.7 million of the decrease is the effect of foreign exchange rates on the value of intangibles (goodwill and brands) in SpotCo. GBP1.5 million is the impairment of goodwill at SpotCo. The remaining GBP0.5 million is depreciation of property, plant and equipment, with GBP0.1 million of additions offset by GBP0.1 million of foreign exchange impact.
Current assets have increased by GBP1.3 million, from GBP17.1 million at 31 December 2016 to GBP18.4 million. That is as a result of cash being higher by GBP4.7 million - resulting from the fund raise - offset by trade and other receivables being lower by GBP3.3 million (23%), primarily a reflection of the 17% decrease in revenues in the year, boosted by improved collections.
Trade and other payables have also reduced year-on-year, by 10%, or GBP1.8 million, at GBP15.8 million. This reflects reduced levels of work in 2017 but is proportionally less than the reduction in turnover because of an increase in trade payables creditor days at the respective year-ends. Current borrowings have come down from GBP4.5 million to GBP2.4 million, as the asset based lending liability has reduced, caused by lower maximum availability because of lower trading levels, coupled with lower utilisation. This can be due to timing as cash is drawn down and repaid on a constant rolling basis.
Net current assets/(liabilities) have improved by GBP5.2 million, from a liability position of GBP5.0 million to an asset position of GBP0.2 million, thanks primarily to the increase in cash.
Non-current liabilities have been reduced by GBP1.5 million, from GBP3.5 million to GBP2.0 million. Of this, GBP0.6 million was caused by impact of the reduction of the US corporate tax rate upon the deferred tax creditor arising on SpotCo's goodwill and intangible assets, and GBP0.3 million by a further reduction in that creditor because of the impairment of those assets. A further GBP0.4 million decrease is attributable to repayments against PNC's term loan.
The GBP5.1 million increase in equity was caused by new shares issues in the year totalling 386,086,744 shares. These are set out in note 10 to this final results announcement, and primarily relate to the equity placing in December 2017. A further GBP0.2 million was charged to the share option reserve in connection with the value of r4e plc LTIP options granted to employees. These were offset GBP0.7 million by the loss for the year. (Share options exercised during 2017 resulted in the release of GBP0.2 million from share option reserve to retained earnings.)
CONSOLIDATED INCOME STATEMENT
FOR THE YEARED 31 DECEMBER 2017
2017 2016
Note GBP'000 GBP'000
Continuing operations
Revenue 1 80,211 96,606
Cost of sales 4 (60,066) (73,779)
GROSS PROFIT 20,145 22,827
Administrative expenses 4 (22,539) (21,973)
Adjusted EBITDA* 976 1,902
Share based payment charges (234) (350)
-------------------- --------
EBITDA before exceptional items 742 1,552
Exceptional administrative expenses 2 (962) -
Impairment of goodwill 7 (1,533) (55)
Depreciation (452) (447)
Amortisation of intangible assets 7 (189) (196)
OPERATING (LOSS)/PROFIT (2,394) 854
Finance costs 3 (295) (355)
-------------------- --------
(LOSS)/PROFIT BEFORE TAXATION (2,689) 499
Taxation 5 824 (409)
(LOSS)/PROFIT FOR THE YEAR (1,865) 90
The profit is attributable to the equity
holders of the parent
Basic and diluted (loss)/earnings per
share (p)
Basic (loss)/earnings per share 6 (0.30) 0.02
Diluted (loss)/earnings per share 6 (0.30) 0.02
*Adjusted EBITDA is before exceptional items and share based payment charges.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 31 DECEMBER 2016
2017 2016
GBP'000 GBP'000
(LOSS)/PROFIT FOR THE YEAR (1,865) 90
--------- --------
Other comprehensive income:
Items that will not be reclassified to
profit and loss:
Currency translation differences (33) 89
Other comprehensive income for the year,
net of tax (33) 89
TOTAL COMPREHENSIVE (LOSS)/INCOME FOR THE
YEAR ATTRIBUTABLE TO THE EQUITY HOLDERS
OF THE PARENT (1,898) 179
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2017
2017 2016
Note GBP'000 GBP'000
NON-CURRENT ASSETS
Goodwill and intangible assets 7 8,635 10,946
Property, plant and equipment 2,230 2,720
Deferred tax asset 187 167
11,052 13,833
CURRENT ASSETS
Inventories 139 139
Trade and other receivables 10,981 14,263
Other current assets 549 601
Cash and cash equivalents 6,758 2,097
18,427 17,100
TOTAL ASSETS 29,479 30,933
======== ========
CURRENT LIABILITIES
Trade and other payables (15,773) (17,582)
Borrowings 8 (2,446) (4,489)
(18,219) (22,071)
NET CURRENT ASSETS/(LIABILITIES) 208 (4,971)
NON-CURRENT LIABILITIES
Deferred taxation (785) (1,733)
Other payables 9 (1,194) (1,241)
Borrowings 8 (56) (537)
(2,035) (3,511)
-------- --------
TOTAL LIABILITIES (20,254) (25,582)
NET ASSETS 9,225 5,351
======== ========
EQUITY
Called up share capital 10 5,005 3,074
Share premium 10 20,252 16,645
Deferred shares 1,498 1,498
Capital redemption reserve 15 15
Share option reserve 392 349
Warrant reserve 311 311
Retained earnings (18,154) (16,480)
Own shares held 10 (259) (259)
Foreign exchange reserve 165 198
TOTAL EQUITYATTRIBUTABLE TO EQUITY HOLDERS
OF THE PARENT 9,225 5,351
======== ========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEARED 31 DECEMBER 2017
Capital Share Own Foreign
Share Share Deferred Redemption option Warrant Retained Shares Exchange Total
capital premium shares reserve reserve reserve earnings held reserve Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
ATTRIBUTABLE
TO EQUITY
HOLDERS OF THE
PARENT
At 31 December
2015 2,374 15,329 1,498 15 - 311 (16,570) (259) 109 2,807
Profit for the
year - - - - - - 90 - - 90
Other
comprehensive
income, net of
tax:
Currency
translation
differences - - - - - - - - 89 89
Total
comprehensive
income for
the year - - - - - - 90 - 89 179
Transactions
with owners in
their capacity
as owners:
Shares issued 700 1,316 - - - - - - - 2,016
Share based
payment
charges - - - - 349 - - - 349
At 31 December
2016 3,074 16,645 1,498 15 349 311 (16,480) (259) 198 5,351
Loss for the
year - - - - - - (1,865) - - (1,865)
Other
comprehensive
income, net of
tax:
Currency
translation
differences - - - - - - - - (33) (33)
Total
comprehensive
income for
the year - - - - - - (1,865) - (33) (1,898)
Transactions
with owners in
their capacity
as owners:
Shares issued,
net of costs 1,931 3,607 - - - - - - - 5,538
Share based
payment
charges - - - - 234 - - - - 234
Share options
exercised - - - - (191) - 191 - - -
At 31 December
2017 5,005 20,252 1,498 15 392 311 (18,154) (259) 165 9,225
======== ======== ========= =========== ======== ======== ========= ======== ========= ========
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARED 31 DECEMBER 2017
2017 2016
Note GBP'000 GBP'000
Cash generated from operating activities 12 1,797 3,089
Income taxes paid (44) (436)
Net cash generated from operating
activities 1,753 2,653
Investing activities
Purchases of property, plant and equipment (115) (489)
Net cash used in investing activities (115) (489)
Financing activities
Net proceeds from the issue of share
capital 5,538 2,016
Proceeds from asset based lending 83,722 108,684
Repayment of asset based lending (85,114) (111,396)
Repayment of term loan (788) (287)
Repayments of obligations under finance
leases (65) (13)
Interest and fees paid on borrowings (295) (338)
Net cash generated from/(used in)
financing activities 2,998 (1,334)
Net increase in cash and cash equivalents 4,636 830
Cash and cash equivalents at the beginning
of the year 2,097 1,160
Effect of foreign exchange rate changes 25 107
Cash and cash equivalents at the end
of the year 6,758 2,097
Reconciliation of net debt
2016 Cash flows Non-cash 2017
GBP'000 GBP'000 GBP'000 GBP'000
Cash and cash equivalents 2,097 4,636 25 6,758
Borrowings (5,026) 2,245 279 (2,502)
--------- ----------- --------- ---------
Net (debt)/cash (2,929) 6,881 304 4,256
--------- ----------- --------- ---------
BASIS OF PRESENTATION
The financial information in this announcement does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. The figures for the year ended 31 December 2017 are an abridged version of the Company's accounts which have been reported on by the Company's auditor but have not been dispatched to the shareholders or filed with the Registrar of Companies. These accounts received an audit report which was unqualified and did not include a statement under section 498(2) or section 498(3) of the Companies Act 2006.
SIGNIFICANT ACCOUNTING POLICIES
Goodwill
Goodwill is reviewed for impairment at least annually and any impairment will be recognised in the income statement and is not subsequently reversed. As such it is stated at cost less provision for impairment in value. The indefinite-life nature of goodwill is considered appropriate given the longevity of agencies in the theatre world - for example Dewynters has been in existence for about a century now. On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.
Impairment of Assets (Intangible and Property, Plant and Equipment)
Goodwill is not subject to amortisation but is tested annually or whenever there is an indication that the asset may be impaired. For the purpose of impairment testing, assets are grouped at the lowest levels for which they have separately identifiable cash flows, known as cash generating units (CGUs). If the recoverable amount of the CGU is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. Impairment losses recognised for goodwill are not reversed in a subsequent period.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
At each balance sheet date, the Group reviews the carrying amounts of its property, plant and equipment and intangible assets with finite useful lives to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent, if any, of the impairment loss. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount. An impairment loss is recognised immediately in the income statement. Where an impairment loss subsequently reverses the carrying amount of the asset or cash-generating unit is increased to the revised estimate of its recoverable amount, not to exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognised immediately in the income statement.
Exceptional items
Exceptional items represent income or expenses, which based on their materiality, frequency or non-operating nature, have been separately disclosed to facilitate the assessment of the Group's underlying operating profitability.
Share based payments
The Group issues equity-settled share-based payments to certain employees. Equity-settled share-based payments are measured at fair value (excluding the effect of non-market based vesting conditions) at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group's estimate of the shares that will eventually vest and adjusted for the effect of non-market based vesting conditions.
Fair value is measured using a Black-Scholes valuation model for vanilla options and a binomial model for more complex options. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.
Capital Risk Management
The Group's objectives when managing capital - the combination of equity and debt funding - are to safeguard the Group's ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to adjust the capital structure, the Group may issue new shares or sell assets to reduce debt.
As part of the Capital Risk Management process the Group acknowledges the need to monitor, and meet in full, covenants held over the revolving asset based facility with PNC. More details on the bank debt are in the Strategic Report on page 10 of the Company's accounts, and in Borrowings note 8 to this final results announcement. Although breached in the third quarter of 2017, since then the covenants were met for the key full-year measure, and until the date of the release of those accounts.
Notes to the final results announcement
for the year ended 31 December 2017
Index of Notes
1. Business and Geographical Segments 2. Exceptional Administrative Items 3. Finance Costs 4. Expenses by Nature and Auditor's Remuneration 5. Taxation 6. Earnings Per Share 7. Goodwill and Intangible Assets 8. Borrowings 9. Other Non-Current Payables 10. Share Capital 11. Shared-Based Payments 12. Cash Generated from Operations 13. Related Party Disclosures 14. Transactions with Directors 15. Subsequent Events 1. BUSINESS AND GEOGRAPHICAL SEGMENTS
Business segments
For management purposes, the Group is currently organised into four operating segments - New York operations, London operations, German operations and Head Office. These divisions are the basis on which the Group reports its segment information to the chief operating decision maker.
Principal continuing activities are as follows:
New York (NY) - data-driven marketing, design, advertising, promotions, digital media services, and publishing.
London - data-driven marketing, design, advertising, promotions, digital media services, publishing, signage and fascia displays.
Germany - data-driven marketing strategy and planning, media planning, design, event production, PR, CRM and data consulting.
Head Office - corporate strategy, finance and administration services for the Group.
Segment information for continuing operations of the Group for the year ended 31 December 2017 is presented below:
NY London Hamburg
operations operations operations Head Office Group
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue
Provision of services 48,508 30,317 1,386 - 80,211
Revenue (all external
customers) 48,508 30,317 1,386 - 80,211
Adjusted EBITDA 446 1,012 (52) (430) 976
Share based payment
charges 40 (83) (40) (151) (234)
------------ ------------ ------------ ------------ ---------
EBITDA before exceptional
items 486 929 (92) (581) 742
Exceptional administrative (78) (157) - (727) (962)
Impairment of goodwill (1,533) - - - (1,533)
Depreciation (245) (199) (5) (3) (452)
Amortisation (128) (61) - - (189)
Operating profit/(loss) (1,498) 512 (97) (1,311) (2,394)
Finance costs (212) (42) (2) (39) (295)
(Loss)/profit before
tax (1,710) 470 (99) (1,350) (2,689)
Tax credit/(charge) 912 (31) - (57) 824
Profit/(loss) after
tax (798) 439 (99) (1,407) (1,865)
============ ============ ============ ============ =========
Management fees charged at an arm's-length basis between reportable segments are reflected in the figures above on the basis that this is a true reflection of the operating costs of each segment.
1. BUSINESS AND GEOGRAPHICAL SEGMENTS (continued)
NY London Hamburg Head
operations operations operations Office Group
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Capital additions:
Property, plant
and equipment - 90 25 - 115
============ ============ ============= ========= =========
Balance sheet:
Segment assets
Non-current assets 8,179 2,831 21 21 11,052
Current assets 5,106 7,028 649 5,644 18,427
------------ ------------ ------------- --------- ---------
Total segment assets 13,285 9,859 670 5,665 29,479
============ ============ ============= ========= =========
Liabilities:
Total segment liabilities (9,921) (7,822) (868) (1,643) (20,254)
Capital additions include no plant held under finance lease (2016: GBP0.19 million). GBP0.05 million had been paid against the finance lease additions of 2016 in the year ended 31 December 2017 (2016: GBP0.05 million).
1. BUSINESS AND GEOGRAPHICAL SEGMENTS (continued)
Segment information for continuing operations of the Group for the year ended 31 December 2016 is presented below.
NY London Hamburg
operations operations operations Head Office Group
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue
Sale of goods - 1,168 - - 1,168
Provision of services 65,153 30,277 8 - 95,438
Revenue (all external
customers) 65,153 31,445 8 - 96,606
Adjusted EBITDA 1,496 1,154 (124) (624) 1,902
Shared based payment
charges (124) (107) - (119) (350)
------------ ------------ ------------ ------------ ---------
EBITDA before exceptional
items 1,372 1,047 (124) (743) 1,552
Impairment of goodwill - - - (55) (55)
Depreciation (244) (198) - (5) (447)
Amortisation (135) (61) - - (196)
Operating profit/(loss) 993 788 (124) (803) 854
Finance costs (260) (95) - - (355)
Profit/(loss) before
tax 733 693 (124) (803) 499
Tax (charge)/credit (338) (971) - 900 (409)
Profit/(loss) after
tax 395 (278) (124) 97 90
============ ============ ============ ============ =========
Management fees charged at an arm's-length basis between reportable segments are reflected in the figures above on the basis that this is a true reflection of the operating costs of each segment.
1. BUSINESS AND GEOGRAPHICAL SEGMENTS (continued)
Head
NY London Hamburg Office
operations operations operations operations Group
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Capital additions:
Property, plant and equipment 42 502 1 - 545
============ ============ ============= ============ =========
Balance sheet:
Segment assets
Non-current assets 8,559 5,248 1 25 13,833
Current assets 9,831 6,268 127 874 17,100
------------ ------------ ------------- ------------ ---------
Total segment assets 18,390 11,516 128 899 30,933
============ ============ ============= ============ =========
Liabilities:
Total segment liabilities (16,806) (7,060) (42) (1,674) (25,582)
2. EXCEPTIONAL ADMINISTRATIVE ITEMS
2017 2016
GBP'000 GBP'000
Employee contract termination-related 814 -
costs
Costs relating to reorganisation 104 -
of the Board
Costs expensed to Income Statement 44 -
re share issues
Exceptional administrative expenses 962 -
Employee contract termination-related costs
The employee contract termination-related costs of GBP0.81m relate to employees of Dewynters, SpotCo, and Head Office, and are considered exceptional due to the level of redundancy, PILON, and compensation for loss of office required as a result of company performance.
Costs relating to reorganisation of Board
In order to ensure governance compliance when reorganising the Board, exceptional legal and other costs were incurred.
Costs expensed to Income Statement re share issues
Other costs of GBP0.15m directly associated with the equity placing of December 2017, raising GBP5.5 million (gross proceeds), were charged against the share premium account, making a total of GBP0.2m of costs re share issues.
3 FINANCE COSTS
2017 2016
GBP'000 GBP'000
Finance lease interest 20 13
Interest on PNC debt 170 200
Fees on PNC debt 108 137
Foreign exchange (gain)/loss on finance
items (3) 5
295 355
4 EXPENSES BY NATURE AND AUDITOR'S REMUNERATION
2017 2016
GBP'000 GBP'000
Media, marketing and promotional services 60,066 73,779
Staff costs 14,646 15,439
Share based payment costs (note 11) 234 350
Depreciation, amortisation and impairment 2,174 699
Exceptional administrative items (note 962 -
2)
General office expenses 1,596 1,817
Operating lease payments:
Land and buildings 1,460 1,339
Plant and machinery 62 160
Professional costs 636 1,373
Travelling 498 547
Other 271 249
Total cost of sales and administrative
expenses 82,605 95,752
During the year the Group obtained the following services from the Company's auditor and its associates:
2017 2016
GBP'000 GBP'000
Audit fees
* statutory audit of the parent and consolidated
accounts 45 40
Fees payable to the company's auditor
and its associates for other services:
* the audit of the company's subsidiaries, pursuant to
legislation 55 50
* audit related services 10 11
* tax compliance services - 21
* tax advisory services - 6
110 128
5 TAXATION
2017 2016
GBP'000 GBP'000
Current tax:
Current UK Corporation Tax - -
Overseas tax (credit)/charge on (losses)/profits
of the year (22) 338
Total current tax (credit)/charge (22) 332
-------- --------
Deferred tax:
Origination and reversal of timing differences (234) 69
Deferred tax rate change (568) 8
Total deferred tax (credit)/charge (802) 77
Tax (credit)/charge on (loss)/profit of
ordinary activities (824) 409
Factors affecting the tax charge for the year:
2017 2016
GBP'000 GBP'000
The tax assessed for the year differs
from the effective average rate of corporation
tax in the UK of 19.25% (2016: 20.00%).
The differences are explained below:
(Loss)/profit on ordinary activities
before tax (2,689) 499
(Loss)/profit on ordinary activities
multiplied by effective average rate
of corporation tax in the UK of 19.25%
(2016: 20.00%) (518) 100
Effects of:
Fixed asset differences 20 20
Expenses not deductible for tax purposes 393 -
Income not subject to tax - (439)
Other tax adjustments, reliefs and transfers (135) (30)
Temporary difference on overseas tax - (7)
Difference in tax rates on overseas earnings - 165
Timing differences not recognised in
the computation 128 132
Impact of changes in foreign tax rates
for deferred tax (568) 8
FX difference on opening gross timing 32 -
differences
Deferred tax not previously recognised (176) 460
Total tax (credit)/charge for the year (824) 409
========== ==========
5 TAXATION (continued)
A deferred tax asset of approximately GBP1.05 million (2016: GBP1.25 million) has not been recognised due to uncertainty over future profitability. At 31 December 2017, the Group had trade losses carried forward of GBP3.0 million (2016: GBP2.9 million), available for offset against future profits in the UK, as well as non-trade loan relationship deficit of GBP3.2 million (2016: GBP4.3 million) and capital losses of GBP4.7 million (2016: GBP4.7 million).
Taxation is calculated at the rates prevailing in the respective jurisdictions. The standard tax rates in each jurisdiction are 21% in the United States (2016: 35%) and 19% in the United Kingdom (2016: 20%).
6 EARNINGS PER SHARE
The calculations of earnings per share are based on the following profits and number of shares:
Profit attributable to equity holders of the company
2017 2016
GBP'000 GBP'000
For basic and diluted profit per share
(Loss)/profit for financial year (1,865) 90
Number Number
Number of shares
Weighted average number of ordinary
shares for the purposes of basic earnings
per share 627,060,836 500,208,593
Potentially dilutive effect of share
options 97,573,736 483,688
------------ ------------
Weighted average number of ordinary
shares for the purposes of diluted
earnings per share 724,634,572 500,692,281
(Loss)/earnings per share
pence pence
Basic (loss)/earnings per share (0.30) 0.02
Diluted (loss)/earnings per share (0.30) 0.02
The loss attributable to ordinary shareholders and weighted average number of ordinary shares for the purposes of calculating the diluted loss per share are the same as those used for basic loss per ordinary share. This is because the exercise of share options and other benefits would have the effect of reducing loss per share and is therefore not dilutive under the terms of IAS 33, Earnings Per Share.
7 GOODWILL AND INTANGIBLE ASSETS
Brands Customer relationships Purchased goodwill Total
GBP'000 GBP'000 GBP'000 GBP'000
Cost
1 January 2016 4,261 2,607 13,915 20,783
Additions - - 55 55
Foreign exchange differences 409 - 1,026 1,435
-------- ---------------------- ------------------ --------
31 December 2016 4,670 2,607 14,996 22,273
Additions
Foreign exchange differences (213) - (531) (744)
-------- ---------------------- ------------------ --------
31 December 2017 4,457 2,607 14,465 21,529
-------- ---------------------- ------------------ --------
Amortisation and impairment
1 January 2016 1,291 1,931 7,576 10,798
Charged in the year 135 61 - 196
Impairment charge - - 55 55
Foreign exchange differences 278 - - 278
31 December 2016 1,704 1,992 7,631 11,327
Charged in the year 128 61 - 189
Impairment charge - - 1,533 1,533
Foreign exchange differences (155) - - (155)
31 December 2017 1,677 2,053 9,164 12,894
Net book value
31 December 2017 2,780 554 5,301 8,635
31 December 2016 2,966 615 7,365 10,946
31 December 2015 2,970 676 6,339 9,985
Goodwill relates to the anticipated profitability and future operating synergies arising on the acquisition of subsidiaries.
Brands relate to the expected future benefit associated with the subsidiaries' well-known names in the market, as arising on acquisition.
Customer relationships represent the probable value over time of clients obtained by way of acquisition.
All amortisation and impairment charges have been recognised as administrative expenses in the income statement.
7 GOODWILL AND INTANGIBLE ASSETS (continued)
Impairment tests for goodwill
Goodwill is allocated to the Group's cash-generating units (CGUs) identified according to the operations as grouped upon acquisition. An operating level summary of the goodwill allocation is presented below:
2017 2016
GBP'000 GBP'000
-------------------------------------- ---------- ----------
Dewynters Group (Dewynters, Newmans) 1,351 1,351
SpotCo 3,950 6,014
Total goodwill 5,301 7,365
An impairment of GBP1.53 million in the year is related to the carrying value of SpotCo's goodwill (2016: GBP0.55 million related to Jampot Consulting Ltd - see note below). After a disappointing year in 2017 and with recovery looking like it may take longer than previously anticipated, management reviewed and cautiously revised the key assumptions for the value-in-use calculations of SpotCo, in particular pulling back from revenue growth rate for 2019 onwards from 1.5% to 1.0%, which - on the back of the softened outlook for 2018 - resulted in the impairment. Management will continue to monitor the trading outlook, and may revise the key revenue growth assumption upwards again, for future impairment review purposes, if and when they consider that to be an appropriate reflection of an improved forward view.
An impairment of GBP0.55 million in 2016 related to the purchase of Jampot Consulting Ltd. In 2016 the Company acquired Jampot for consideration totalling GBP55,000. Although Jampot's digital marketing IP was believed beneficial, since it related to the Group as a whole, and future revenues could not be specifically allocated to the acquired company, the goodwill in Jampot was written off in 2016. Subsequent to the write off, management decided to operate the Group's new data marketing analytics business through Jampot.
The recoverable amount of CGUs has been determined based on value-in-use calculations which cover a period of 5 years plus a terminal value. These calculations use pre-tax cash flow projections based on financial budgets for the year ended 31 December 2018 as approved by management and cash flows beyond the one-year period are extrapolated using straight line growth rates stated below. Prudent assumptions have been used in the value-in-use calculations in the tables detailed below and on the next page.
The table for Dewynters Group, below, also reflects the level of movements required in revenue or costs which could result in a potential impairment per the value in use calculation. A further percentage (fall)/increase, of the magnitude indicated in the table below, in any one of the key assumptions as set out, would result in a removal of the headroom in the value-in-use calculations in 2017.
The key assumptions used in 2017, for the value-in-use calculations and the change required to remove the headroom - along with whether the Board considers that to be a reasonable change - are as follows:
Dewynters Group Value-in-use Headroom Reasonable
assumption removal Change?
---------------------------------- ------------ -------- ----------
Revenue growth - year 1 4.6% (16.1%) No
Revenue growth per annum -
years 2-5 1.5% (4.4%) Yes
Gross profit margin- year 1 29.9% (83.4%) No
Gross profit margin - years
2-3 28.5% (51.7%) No
Gross profit margin - years
4-5 29.0% (18.2%) No
Employee costs (fall)/growth
- year 1 (4.3%) 20.3% No
Employee costs growth per annum
- years 2-3 1.5% 12.0% No
Employee costs growth per annum
- years 4-5 1.0% 16.2% No
Overhead costs growth - year
1 8.5% 52.5% No
Overhead costs growth - years
2-5 1.0% 15.5% No
Discount rate 15.5% 188.8% No
Capitalisation rate 15.5% (430.3%) No
EBITDA growth - year 1 81.1% (57.6%) Yes
7 GOODWILL AND INTANGIBLE ASSETS (continued)
Management have determined budgeted gross margin, revenue growth and costs based on past performance and expectations of the market development for each CGU. The discount rates are pre-tax and reflect management's assessment of the risks relating to each CGU. In line with the conservative approach adopted in valuing the CGUs, the discount rate applied in the value-in-use calculations has been adjusted to reflect long term rates.
Initial growth rates in year 1 are taken from the CGU's 2018 operational forecasts, and so in some cases
can show a difference to the straight-line growth rates applied to subsequent years. Growth after year 1 has been determined on the basis of a combination of general industry market growth - occasionally flexed if necessary for specific CGU circumstances - and so the rate generally remains consistent. The growth rates used are considered by management to be in line with general trends in which each CGU operates and deemed by management to be a reasonable expectation for the CGU.
As well and reflecting the key assumptions for the value-in-use calculations, the table for SpotCo, below, also shows the potential level of adverse change in revenue or costs that the Board considers to be possible in the future, along with the impairment that would arise were that change to occur:
SpotCo Value-in-use assumption Reasonable adverse Change Additional impairment would be -------------------------------- ----------------------- ------------------------- ------------------------------ Revenue (fall) - year 1 (5.8%) -5.0% GBP(2.87m) Revenue growth per annum - years 2-5 1.0% -2.0% GBP(3.14m) Gross profit margin - year 1 19.9% -5.0% GBP(0.38m) Gross profit margin - years 2-3 20.5% -3.0% GBP(0.32m) Gross profit margin - years 4-5 21.5% -2.0% GBP(0.74m) Employee costs growth - year 1 (18.0%) 1.0% GBP(0.40m) Employee costs growth per annum - years 2-3 1.0% 1.0% GBP(0.64m) Employee costs growth per annum - years 4-5 1.0% 1.0% GBP(0.47m) Overhead costs growth - year 1 (11.8%) 3.0% GBP(0.35m) Overhead costs growth - years 2-5 1.5% 2.0% GBP(0.66m) Discount rate 15.5% 25.0% GBP(0.30m) Capitalisation rate 15.5% 33.0% GBP(0.80m) EBITDA (fall) - year 1 -27.8% -75.0% GBP(0.85m)
Brands and customer relationships all arise on acquisition; there are not internally-generated intangible assets. The brand allocated to the Dewynters CGU totalling GBP2.3 million (2016: GBP2.3 million) is determined to have an indefinite life. It is subject to an annual impairment review using the same assumptions as for goodwill. The brand value allocated to SpotCo CGU totalling GBP0.5 million (2016: GBP0.7 million) is being amortised over 15 years and has 7 years remaining.
Intangible customer relationships are attributable to Dewynters only. The useful economic life for customer relationships within Dewynters is 20 years of which 10 are remaining as at 31 December 2017. It has a carrying value of GBP0.6 million (2016: GBP0.6 million) and GBP0.06 million was charged to amortisation in the year. Where there are any indications of impairment within these businesses the Group carries out impairment reviews on brands and customer relationships using the same assumptions as for goodwill.
8 BORROWINGS
2017 2016
GBP'000 GBP'000
Current:
Term debt - 378
Asset based lending facility 2,372 4,037
Finance leases 74 74
2,446 4,489
========= =========
Non-current:
Term debt - 410
Finance leases 56 127
--------- ---------
56 537
========= =========
Analysis of borrowings:
On demand or within one year
Term debt - 378
Asset based lending facility 2,372 4,037
Finance leases 74 74
2,446 4,489
In the second to fifth years inclusive
Term debt - 410
Finance leases 56 127
56 537
Amounts due for settlement 2,502 5,026
Less amounts due within one year (2,446) (4,489)
Amounts due for settlement after one year 56 537
========= =========
Analysis of borrowings by currency:
Sterling US Dollar Total
GBP'000 GBP'000 GBP'000
31 December 2017
Asset based lending facility 190 2,182 2,372
Finance leases 130 - 130
320 2,182 2,502
========= ========== =========
Sterling US Dollar Total
GBP'000 GBP'000 GBP'000
31 December 2016
Asset based lending facility 960 3,077 4,037
Term debt 240 548 788
Finance leases 201 - 201
1,401 3,625 5,026
========= ========== =========
Asset based lending facility - summary: 31 December 2017 31 December 2016
GBP'000 GBP'000
Drawn down 2,372 4,037
Available for drawdown but undrawn 1,264 1,982
Not available for draw down 4,864 2,481
8,500 8,500
================= =================
8 BORROWINGS (continued)
Term debt
The term debt with PNC had interest payable at 4% over Barclays Bank plc. base rate (Dewynters) and the rate published by the central bank or monetary authority of the relevant territory (SpotCo). Repayments were in equal monthly instalments and began in March 2016. The Group was able to pay off the remaining balance of GBP0.55 million in full in July 2017.
Asset based lending
SpotCo, Dewynters and Newmans all hold asset based lending facilities with PNC. Borrowing is determined by qualifying accounts receivable. The nature of the facility means that the balance will fluctuate from month to month and as the debt is paid down, new debt will arise to finance working capital, therefore the facility has been reflected as a current liability as it will be constantly revolving. Another effect of the facility is that cash balances across the group will be lower than they would otherwise be, since cash drawdown incurs a higher rate of interest and therefore cash will only be drawn down as required rather than being held on hand.
The facility with PNC has interest payable at 2.25% over Barclays Bank plc. base rate for amounts borrowed in Sterling, or for amounts in Euro or US Dollars 2.25% over the rate published by the central bank or relevant monetary authority. Borrowing facility amounts not utilised incur interest payable at a fixed 0.5%. On top of a fixed and floating charge over its assets, the Group has given PNC an unlimited guarantee in respect of these borrowings.
As announced in October 2017 the Company breached its quarterly monitoring covenant in the third quarter of 2017. The breach was due to the covenant being determined on a 3-month rolling basis which is therefore sensitive to seasonality fluctuations in EBITDA. As announced in March 2018, the Company received formal agreement from PNC to waive its rights in connection with the breach. As announced in February 2018, the Company stayed within its key overall full-year monitoring covenant for 2017.
The initial 3-year term of the facility runs to 3(rd) December 2018, and the facility automatically continues in place indefinitely thereafter unless either party gives at least six months' notice on or after 4(th) June 2018. We believe that the relationship with PNC is good, that they remain supportive of the Company, and that they appear likely to want to continue the arrangement after the end of the initial term. The Directors are confident the Group remains a going concern - see page 35 for further details.
9 OTHER NON-CURRENT PAYABLES
Landlord reimbursement accrual
Amounts in non-current other payables of GBP0.56 million (2016: GBP0.61 million) relate to the re-imbursement of leasehold improvement costs from SpotCo's landlord at the New York office. As with many US leases SpotCo, as tenant, had to undertake a programme of refurbishment of the property. Some of the expenses, related to the provision of basic utilities and services, were then refunded by the landlord. GBP0.84 million ($1.25 million) was received in cash from the Landlord in 2013. In line with SIC Interpretation 15 this reimbursement has been recognised as a liability and is being unwound to the income statement over the period of the lease, reducing rental costs. GBP0.06 million was unwound during the year (2016: GBP0.07 million). Amounts in current liabilities relating to the reimbursement total GBP0.06 million (2016: GBP0.07 million).
2017 2016
GBP'000 GBP'000
Within one year 60 74
--------- ---------
Between two and five years 296 296
More than five years 260 315
556 611
========= =========
Rent holiday accrual
Other amounts in non-current other payables of GBP0.46 million (31 December 2016: GBP0.63 million) relate to an accrual for rental payments built up during a period of 'rent holiday' as provided for in the new leases for Dewynters and SpotCo's Offices. In line with SIC Interpretation 15 the accrual will be released to the income statement over the term of the lease thus reducing rent costs.
2017 2016
GBP'000 GBP'000
Within one year 133 168
--------- ---------
Between two and five years 393 393
More than five years 69 237
--------- ---------
462 630
--------- ---------
Separation payments
Other amounts in non-current other payables of GBP0.18 million (31 December 2016: GBPNil) relate to remaining payments owed to David Stoller in relation to pay in lieu of notice and compensation for loss of office, and related payroll tax obligations.
2017 2016
GBP'000 GBP'000
Within one year 352 -
--------- ---------
Between two and five years 176 -
Summary
Total non-current payables 1,194 1,241
========= =========
10 SHARE CAPITAL
2017 2016
GBP'000 GBP'000
Authorised, allotted, issued and fully paid:
1,001,079,415 ordinary shares at 0.5 pence each
(2016: 614,992,671 ordinary shares of 0.5 pence each) 5,005 3,074
Authorised, allotted, issued and fully paid: Number of shares Nominal Value Share Premium
Date Detail No. GBP'000 GBP'000
01 Jan 2016 Balance brought forward 474,894,792 2,374 15,329
12 Feb 2016 Shares issued 1,000,000 5 5
29 Mar 2016 Shares issued 3,666,666 18 36
01 Nov 2016 Shares issued 133,333,334 667 1,243
21 Dec 2016 Shares issued 2,097,879 10 32
31 Dec 2016 Balance carried forward 614,992,671 3,074 16,645
07 Dec 2017 Options exercised 19,420,076 98 98
20 Dec 2017 Shares issued 366,666,668 1,833 3,509
31 Dec 2017 Balance carried forward 1,001,079,415 5,005 20,252
Employee benefit trust 2017 2017 2016 2016
Shares GBP'000 Shares GBP'000
Cost
At the beginning and end
of the year 259,000 259 259,000 259
======== ========= ======== =========
Date Event Shares Price Detail
In satisfaction of fees payable
12 Feb in connection with the placing
2016 Fees Payable 1,000,000 1.0p completed in December 2015
For the acquisition of Jampot
29 Mar Jampot on 29(th) March 2016 resulting
2016 Acquisition 3,666,666 1.5p in share premium of GBP0.04m
On fund raise resulting in
01 Nov share premium of GBP1.33m.
2016 Fund Raise 133,333,334 1.5p Costs of issue totalled GBP0.20m
To the CEO of Dewynters GmbH,
in accordance with the terms
of his service agreement,
21 Dec Dewynters as part of his remuneration
2016 GmbH CEO 2,097,879 2.0p package
Share
07 Dec Options Exercise of share options
2017 Exercise 19,420,076 1.0p (see note 11) by David Stoller
On fund raise resulting in
share premium of GBP3.67m.
Costs of issue totalled GBP0.20m,
20 Dec of which GBP0.04m was expensed
2017 Fund Raise 366,666,668 1.5p in the P&L
During 2007 and 2008 the company funded an employee benefit trust to purchase its own shares to meet the Group's expected obligations under an employee share scheme. As at 31 December 2017 the market value of own shares held in trust was GBP5,569 (2016: GBP4,727).
During the year the mid-price of the Company's shares traded between 1.12 pence and 2.25 pence (2016: 1.33 pence and 2.63 pence). At 31 December 2017 the share price was 2.15 pence (2016: 1.83 pence).
11 SHARE - BASED PAYMENTS
Equity-settled share option plan
Under the Group plan, share options are granted at the average price of the Company's shares at the grant date. The employee is entitled to the exercise the Options at 1.0p - 2.0p per share as to 50 per cent on the third anniversary of the date of grant and as to 50 per cent on the fourth anniversary of the date of grant.
In addition, Options held by David Stoller and certain other former or current senior employees and management may be exercised earlier if the Board determines that any exercise condition as set out below has been met:
Should the Company's mid-market closing share price meet or exceed the following targets for five trading days (which may be non-consecutive) within a period of 30 consecutive calendar days prior to the third anniversary of the date of grant, the Option shall be exercisable as follows:
(a) One third of the Option shall become exercisable on meeting a share price target of GBP0.035 per share;
(b) A further one third of the Option shall become exercisable on meeting a share price target of GBP0.045 per share; and
(c) The remaining one third of the Option shall become exercisable on meeting a share price target of GBP0.055 per share.
In addition, Options held by Marc Boyan may be exercised earlier if the Board determines that any exercise condition as set out below has been met:
Should the Company's mid-market closing share price meet or exceed the following targets for five trading days (which may be non-consecutive) within a period of 30 consecutive calendar days prior to the third anniversary of the date of grant, the Option shall be exercisable as follows:
(a) One third of the Option shall become exercisable on meeting i) a share price target of GBP0.025 per share and/or ii) an increase in Adjusted EBITDA of GBP1,000,000 over the Company's Adjusted EBITDA* for the 2017 financial year;
(b) A further one third of the Option shall become exercisable on meeting i) a share price target of GBP0.035 per share and/or ii) an increase in Adjusted EBITDA of GBP2,000,000 over the Company's Adjusted EBITDA* for the 2017 financial year; and
(c) The remaining one third of the Option shall become exercisable on meeting i) a share price target of GBP0.045 per share and/or ii) an increase in Adjusted EBITDA of GBP3,000,000 over the Company's Adjusted EBITDA* for the 2017 financial year.
*Adjusted EBITDA is before exceptional items and share based payment charges.
However, subject to the Board's discretion, the Option holders shall be required to retain the shares received on exercise of an Option on the Share Price Targets having been met until the earlier of:
i) Twelve months following the date the Option is exercised; or
ii) The third anniversary from the date of grant has passed.
If options remain unexercised after a period of 6 years from the date of grant, the options expire. Furthermore, options are forfeited if the employee leaves the Group as a "bad leaver" before they become entitled to exercise the share option.
11 SHARE-BASED PAYMENTS (continued)
The following options to subscribe for the Company's shares have been granted to directors and eligible employees ('Eligible Ees'), at - and had not lapsed or been exercised by - 31 December 2017:
Granted Date of Number of Exercise to Option Shares First exercisable* Expiry date Price David Stoller 04 Mar 2016 4,329,924 01 Oct 2017 04 Mar 2022 1.00 pence Linzi Allen 04 Mar 2016 4,750,000 01 Oct 2017 04 Mar 2022 1.00 pence Eligible 04 Mar 2016 20,267,637 04 Mar 2019 04 Mar 2022 1.00 pence Ees Eligible 21 Mar 2016 9,500,000 21 Mar 2019 21 Mar 2022 1.00 pence Ees Eligible 02 Jun 2016 10,800,000 02 Jun 2019 02 Jun 2022 1.00 pence Ees Eligible 27 Sep 2016 1,500,000 27 Sep 2019 27 Sep 2022 1.00 pence Ees Eligible 20 Dec 2016 9,500,000 20 Dec 2019 20 Dec 2022 2.00 pence Ees Eligible 01 Mar 2017 1,000,000 01 Mar 2020 01 Mar 2023 2.00 pence Ees Eligible 25 Apr 2017 1,000,000 25 Apr 2020 25 Jun 2023 1.50 pence Ees Eligible 13 Sep 2017 2,000,000 13 Sep 2020 13 Sep 2023 1.40 pence Ees Marc Boyan 20 Dec 2017 124,635,959 20 Dec 2020 20 Dec 2023 1.50 pence
*or on share price target where applicable
2017 2016
Movement in number of options in the year: No. Options No. Options
Outstanding brought forward at 1 January 93,100,000 -
Granted during the year 128,635,959 100,900,000
Exercised during the year (19,420,076) -
Forfeited during the year (17,782,363) (7,800,000)
------------- -------------
Outstanding carried forward at 31 December 184,533,520 93,100,000
------------- -------------
Options granted in 2017 were granted only on the dates, in the volumes, and at the exercise prices as shown in the above table. 8,147,561 options were exercisable at 31 December 2017 (2016: nil).
The share options outstanding as at 31 December 2017 had a weighted average remaining contractual life of 5.48 years (2016: 5.36 years). The weighted average share price of exercised options at the date of exercise was 1.80p (2016: not applicable).
The weighted average fair value of options granted during the period was 1.03p (2016: 1.19p).
The fair value of equity-settled share options granted is estimated as at the date of grant using a binomial model, taking account of the terms and conditions upon which the options were granted.
The key assumptions used to determine the fair value are as follows:
Exercise price 1.00-2.00 pence, as applicable Share price at valuation date 0.02150 pence Expected life 6 years Volatility 100% - 40% Risk free interest rate From 0.24% - 1.5% Exit rate of employees 5%
During the year the Group recognised total share-based payment expenses of GBP0.23 million (31 December 2016: GBP0.35 million).
12 CASH GENERATED FROM OPERATIONS
2017 2016
GBP'000 GBP'000
Reconciliation of net cash flows from
operating activities
(Loss)/profit before taxation (2,689) 499
Adjustments:
Finance costs 295 355
Depreciation 452 447
Amortisation of intangibles 189 196
Impairment of goodwill 1,533 55
Share based payment charges 234 349
Operating cash flows before movements
in working capital 14 1,901
Decrease in inventories - 13
Decrease/(increase) in trade and other
receivables 2,654 (1,357)
(Decrease)/increase in trade and other
payables (783) 2,532
Decrease in other non-current liabilities (88) -
Cash generated from operating activities 1,797 3,089
========= =========
Restatement of 2016 statement of cash flows
The comparative statement of cash flows and the related note have been restated to correct certain classification errors identified during the completion of the 2017 financial statements which has impacted the 2016 amounts as follows:
-- Increase in trade and other payables, Cash generated from operating activities, and Net cash generated from operating activities have reduced by GBP107,000;
-- Purchase of property, plant and equipment has increased by GBP133,000, and Purchase of finance lease equipment has reduced by this same amount;
-- Net proceeds from the issue of share capital has increased by GBP107,000 and Net cash used in financing activities has reduced by the same amount.
These changes had no impact on the profit for the year ended 31 December 2016 or on the cash and cash equivalents balance recognised in the consolidated statement of financial position at that date.
13 RELATED PARTY DISCLOSURES
During the year ended 31 December 2017, transactions with Key Management Personnel are in relation to Directors and other senior executive staff of the Group and are presented in the Directors Remuneration and other tables on page 20 of the Company's accounts and in note 5 to those accounts.
Lord Grade (non-executive Director of r4e) is currently a director of Gate Ventures plc, which was a substantial shareholder in r4e during the year. He is also a co-founder of The GradeLinnit Company Ltd ("GradeLinnit"). During 2017, Dewynters had an existing agreement in place with GL 42nd Street Limited, a subsidiary company of GradeLinnit, for the provision of marketing and media services for the West End production of 42nd Street, which launched at the Theatre Royal Drury Lane in the first half of 2017. The fees payable to Dewynters under the agreement were on the Company's normal commercial terms and amounted to GBP1,516,384 (2016: GBP264,788). The balance owed to Dewynters at 31 December 2017 was GBPNil (2016: GBP205,677).
14 TRANSACTIONS WITH DIRECTORS
At 31 December 2017, no directors owed the Group any amounts (2016: David Stoller owed the Group GBP268).
During the year ended December 2016, the Group procured consultancy services totalling GBP0.05 million from Glen House Capital Strategies Ltd., a company owned by Richard Ingham who was a non-executive director of the Board up until his resignation on 11 May 2016. No balance was outstanding at 31 December 2016.
During the year ended December 2017, the Group procured consultancy services totalling GBP0.03 million (2016: GBP0.03 million) from Springtime Consultants Ltd., a company owned by Marcus Yeoman, a non-executive director of the Board. No balance was outstanding at 31 December 2017 (2016: GBPNil).
15 SUBSEQUENT EVENTS
Miroma buying agreements
As announced by r4e on 12 February 2018, Dewynters and SpotCo have entered into media buying agreements with, respectively, Miroma International Limited and Miroma Outcomes LLC (collectively 'Miroma'). Those are companies owned by Miroma Holdings Limited, a company of which Marc Boyan, the CEO of r4e, is a director and the controlling shareholder. The Miroma group operates a successful media trading business which works with brands, media agencies and media owners to enable brand owners to extract additional value from their marketing budgets.
As part of an operational review of the business, the Board of r4e has been reviewing the Group's media suppliers and partners, and determined that it is in the best interests of the Group and its clients, for Dewynters and SpotCo to enter into agency referral and media trading services agreements with Miroma. The agreements are expected to result in efficiencies in media buying for Dewynters and SpotCo, through the expertise and purchasing power of Miroma, and were entered into on an arm's-length basis. They have an initial one-year term and will continue thereafter unless terminated by either party providing three months' notice.
PNC Waiver
As announced by r4e on 6 March 2018, PNC formally agreed to enter into an Amendment, Consent and Waiver agreement with the Group. The waiver covers the Group's breach of its rolling 3-months monitoring covenant in the third quarter of 2017. The Group stayed within its key overall full-year monitoring covenants for 2017.
Dewynters Amsterdam
As announced by r4e on 24 April 2018, the Group has launched a new agency and office in the Netherlands with the establishment of Dewynters Amsterdam B.V. It is a joint venture between r4e and Lisette Heemskerk, Ronald Luijendijk and Jacques Kuyf, all well-known leaders in the media and marketing sectors. Dewynters Amsterdam is 60% owned by r4e and 40% by the joint venture partners, and will focus on providing marketing, sales and communication services to the thriving theatrical and live entertainment markets in the Netherlands and the Dutch-speaking region of Belgium.
The Group will support the development of Dewynters Amsterdam, which has already secured, a multi-billion dollar European media and entertainment group as its first client, to provide commercial and business strategies, marketing plans and creative concepts. Under the joint venture agreement, r4e will invest towards establishing the business and make available the whole range of marketing skills used in supporting theatre shows and live entertainment events from across its employee base.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
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