Spaceandpeople Share Discussion Threads

[cockerhoop] 01/7/2016 12:12

I seem to remember in the Paul Scott interview at the end of March the CEO constantly likening the business to 'snakes & ladders' Maybe this was one of the snakes he was referring to........and possibly already aware of?

[topvest] 01/7/2016 08:58

Yes, very disappointing. I've now assumed only a 1p dividend this year but recognise that could be cut fully. Suspect they are holding fire on the dividend to see how H2 goes as they should be profitable excluding all these one-off's. Very disappointing in the short term though.

[cerrito] 27/5/2016 12:49

I find this weak share price rather puzzling..perhaps people concerned about a perceived BREXIT vulnerability. There have been no discernible changes in the volume traded.

[jaykaytee] 26/5/2016 11:54

Just took a nibble here yesterday, seeing as it has come down a few pence recently.

[cerrito] 21/4/2016 23:35

Just listened to the interview and for me Matthew Bending came across very well and liked the way he focused on the snakes as much as the ladders.

[naeclue] 05/4/2016 08:55

Any link to Paul's interview with Matthew Bending?

[housemartin2] 03/4/2016 12:08

The results webinar was very useful. Clearly their PR had told them that on no account were they to smile ! Look forward to PS interview tomorrow

[maddox] 01/4/2016 11:44

Thanks Hannah,

The webinar was great - and very encouraging. SAL now have two excellent contracts to execute and another very exciting prospect with Immochan. Clearly there is execution risk and time to scale-up but the management's understated confidence came through far more in the webinar than in the RNS.

Couple of areas that I hope Paul will follow up on Monday:

a) The threat that shopping centre owners in-house the service;

b) SAL's innovative Mobile Promotional Kiosks seem to be a very attractive proposition:

So I've submitted a couple of questions.

Gotta say how fantastic the investor communications are now - this has improved hugely on just a few years ago. Credit to all concerned in driving this transformation including the company directors that have decided to engage with us.

Regards, Maddox

[hannahh] 01/4/2016 09:20

A recording of the recent results webinar presented by Matthew Bending, CEO, and Gregor Dunlay, CFO, is now available to view at:

Kind regards,
The Equity Development team

[paulypilot] 31/3/2016 13:31

I'm interviewing Matthew Bending, CEO of Spaceandpeople (SAL) on Monday morning (4 Apr 2016).

So if you wish to submit a question for me to ask him, then the usual form is here:

It's an independent interview (I'm NOT charging a fee), although I do hold shares in SAL myself.

I will publish the interview on the afternoon of the same day. I hope you find it interesting, and do please feel welcome to submit questions, otherwise I'll have nothing to ask him!

Regards, Paul.

[topvest] 29/3/2016 20:13

I'm holding as well. Results were in-line. Outlook was a tad more cautious than I would have liked. Overall, that's already priced in, so will hold for the recovery. Hopefully, it won't be long before they gain some further contracts.

[masurenguy] 29/3/2016 14:03

Cheers Professor X - here it is.

"Revenue fell from £15.4m in 2014, to £13.8m in 2015 - mainly due to a large one-off (but low margin) contract in one division during 2014. Doesn't really matter - as an investor, I'm interested in profits, not revenues.

Operating profit (before non-recurring costs) fell a little from £1,135k to £1,089k, but it's in the same ballpark, and in line with expectations, so that's fine. Note that there were no non-recurring costs this year, which is pleasing. So after non-recurring costs, operating profit actually rose from £744k to £1,089k.

EPS - initially I couldn't understand why basic EPS (before non-recurring costs) had risen from 3.91p in 2014, to 4.26p in 2015, when operating profit had fallen slightly. The penny has just dropped - it's due to minority interests being much smaller in 2015 than in 2014 - so the profit in 2015 was mainly earned in subsidiaries which are 100% owned by SAL. This is positive for SAL shareholders, so don't worry too much about understanding this point if you're a non-accountant! Valuation - at 60p share price, and EPS of 4.26p, the PER is 14.1 - expensive? Not really, as PER is a blunt instrument at small caps where profits move about a lot. For various reasons, there should be good upside on earnings over the coming 2 years, so the market price is factoring in expectations of earnings rising from the low point of the last 2 years, after numerous problems hit the company in 2014. It is gradually recovering from those issues.

Cashflow - this was poor in 2015, with the culprit being a large reduction in creditors, from £5.8m to £4.5m. I queried this point with the FD this morning, who indicated that it was just timing differences - creditors had been stretched in 2014, but have returned to normal in 2015. This is the big problem with balance sheets (and hence cashflow) - it's a snapshot on a particular day, so timing differences can greatly skew the year end figures. This is fine for one year, but I'll be looking closely to make sure that operating cashflow returns to normal in 2016. Note that capex has increased to £690k, financed by an increase in bank loans of £500k. This is mainly for the expansion of the successful new MPKs (mobile promotional kiosks), of which there are now 56 operating. These are high margin additional sales, so it's good that growth is being achieved here.

Dividends - this company likes paying divis, and it's important to note that throughout a difficult patch in the last 2 years, the company continued to pay (reduced) divis. I like that. There is no interim divi, just a final divi each year, because the bulk of profits come from Xmas trade. The divi has been raised from 2p to 2.2p. The trajectory of divis should continue to be upwards. Note that the divi peaked at 4.1p in 2013.

Admin costs - the company has demonstrated over the last 2 years that it can & does reduce costs if trading becomes difficult. This is important, as a variable cost base means that profit can be protected, or at least re-built after a time lag, if trade deteriorates.

Outlook - the company is making cautiously optimistic noises about 2016. Remember that management got badly burned by putting out overly-optimistic guidance in 2014, when a lot of things unexpectedly went wrong. So they're now much more cautious with outlook. Forecasts should therefore be exceeded in future, or met even if things go wrong. The development of the MPK programme and the focus on product solutions as opposed to service solutions to UK and French venues in particular will be the key driver in 2016. The venues teams in Germany, UK and France have specific targets for rolling out MPKs and pop up retail solutions this year and this should make up the loss of the Whiterose Shopping Centre RMU contract. Although 2016 will see modest growth in profitability, the behind the scenes transformations the group is making will reposition and strengthen our offer which we believe will result in a more sustainable and growing business.

There are 4 key drivers of future growth, namely;
Network Rail contract - which has started well, but should kick in meaningfully from mid-2016 onwards.
Mobile Promotional Kiosk continued roll-out of this new, successful, and high margin kiosk design.
French pilot operations - currently this is loss-making, but not huge numbers (c.£100k p.a.), but should generate profits from 2017 onwards.
British Land contract win - takes time to get up & running, so again is expected to be a profit driver more in 2017 than 2016.
Brokers are forecasting an increase in profit from £1.0m to £1.3m for 2016, but the idea is that the bar is set low, so that hopefully the company can exceed this.

My opinion - I'm happy to hold for another year. The company is recovering well from numerous problems in 2014. Indeed, the UK business is actually doing really well - if you look at note 4 of today's account for the divisional split, Germany's profits have collapsed from £586k in 2014, to just £99k in 2015. Yet that shortfall has been almost entirely recouped by a much stronger performance from its UK operations. It's an interesting niche business, has a good track record on dividend payments, and there are 4 clear growth drivers as noted above. Therefore my feeling is that we could be looking at a significantly more profitable group in say 2 years' time.

It takes time for the market to forgive and forget profit warnings, but at some point I think the market will focus more on the growth potential coming through, and possibly re-rate the shares back up to nearer 100p, than the current level of 60p. That's not going to happen overnight obviously (unless someone bids for it, which is very unlikely), but it's good potential upside, providing nothing major goes wrong in the meantime.

[professor x] 29/3/2016 13:28

It's up on his site already Mas.

[masurenguy] 29/3/2016 13:02

Hmmm....a one line first time post, containing no insight whatsoever, hardly provides any credibility !

Sales were only down 10% largely because last years revenues were boosted by a significant one-off contract. This will be boosted this year by the Network Rail and British Land deals. More importantly eps was up 9% and the dividend was increased by 10%2.20p (FY14: 2.00p). The forward PER is just over 11 and drops to less than 10 on the predicted earnings forecast.

Paul Scott is an investor here so it will also be interesting to read his view in due course.

[carcosa] 29/3/2016 08:19

Revenue miss. EPS miss. Outlook for future profits flat...

[masurenguy] 29/3/2016 08:16

Sales down 10%, profit flat, eps up by 84%, dividend up by 10% and forward prospects looking good !

RNS Number : 2642T
SpaceandPeople PLC
29 March 2016

Preliminary Results and Proposed Final Dividend

SpaceandPeople, the retail, promotional and brand experience specialist, is pleased to announce its preliminary results for the 12 months ended 31 December 2015.

Financial Highlights
-- Gross revenue of £26.5 million
-- Net revenue of £13.8 million
-- Profit before tax attributable to shareholders of £1.0 million
-- Basic Earnings per share of 4.26p
-- Proposed final dividend of 2.2p
-- Net cash at year end of £0.7 million

Operational Highlights
-- 56 Mobile Promotion Kiosks in operation by the year end
-- 5 year Network Rail contract won
-- British Land contract won in early 2016
-- Immochan pilot MPK contract agreed in France starting in 2016

There were a number of areas where the business and product offering have been significantly changed for the future which we are confident will be of longer term benefit for the Group:

-- Commercially, the winning of the Network Rail contract will allow the Group to expand its range of venues and provides the security of a long term contract;

-- The Mobile Promotional Kiosk product was launched in 2014 and was expanded successfully in the course of the last year with 56 units currently operational and a target of expanding this to at least 80 to 90 units by the end of 2016; and

-- We commenced a promising pilot project with Immochan in France, a geographic expansion with significant potential. We see the start-up costs on this as a fruitful investment.

As these new initiatives roll out and deliver growth, there will continue to be existing venues which will opt to create commercialisation revenues in-house rather than use the services of SpaceandPeople, but the pipeline of new opportunities, venue development and geographic expansion continues to outweigh business reversals. It was also encouraging to see the cost base of the business lowered and underlying margins increasing in the course of the year.

With an expanded range of venues, new products available, the Management Team are focussed on ensuring that the sales effort is stepped up to meet the potential of these opportunities. We believe that SpaceandPeople is creating a solid platform for growth and a sustainable future. The Board has decided to recommend a full dividend of 2.20p per share, a 10% increase on last year's dividend, payable on 29 April 2016 to all shareholders on the register on 15 April 2016.

[topvest] 05/2/2016 20:14

Yes, some more good news. Only one centre, but still good.

[25october1969] 05/2/2016 17:59

From SAL on Twitter 40 mins ago

We are pleased to announce that we have secured an exclusive agreement to manage promotional space in Ealing Broadway Shopping Centre

Maybe not significant, as not clear if all or just a proportion of space, but they all count

[masurenguy] 01/2/2016 15:39

Some interesting comments from Paul Scott on todays trading update.

"Good growth is coming from the new Mobile Promotional Kiosks (MPKs), which are promotional kiosks which can be managed remotely, and are let for very short (one week) stints to various operators (e.g. charities, utility companies, and anyone who wants to promote a product or service face-to-face within a shopping centre). The branding is downloaded onto flat screens on the kiosks remotely, so they are set up with the correct branding for each client each week. These units have been well-received, and are generating much stronger margins than conventional units. Another growth activity is the Network Rail contract. Another decent contract win is announced today, with British Land, that should be extended to 40 sites in due course. Plus there is a pilot scheme in France starting.

Management have learned from their mistakes, and are now guiding expectations fairly modestly, so that unexpected costs or setbacks can be absorbed within market forecasts. That should mean the likelihood of another profit warning is quite low now. I'm not concerned by a bit of revenue being deferred from 2015 into 2016, as the valuation is very modest now. So hopefully there should be scope for the 2016 figures to improve on 2015, with several growth catalysts underway. My feeling remains that SAL is on the mend nicely now, pays good divis, and therefore I'm happy to hold for another year - it's one of my long-term things, where I ride out any bumps in the road. My feeling remains that SAL is on the mend nicely now, pays good divis, and therefore I'm happy to hold for another year - it's one of my long-term things, where I ride out any bumps in the road."

You can checkout his views on daily company trading updates at Stockopedia:

[masurenguy] 01/2/2016 14:04

Latest Equity Development analyst note on SAL.

[housemartin2] 01/2/2016 11:39

Agree Mas. No way this contained a profit warning in any sense of the word. Forecast EPS with lower top line is better profitability. Being interesting to see where that comes from in Finals. Hopefully most at GM would be nice - the MPK's ?? (we are expecting lower overheads as a result of management actions anyway) Yes they need to watch the cash - they were to loose £1m of their facility in December but may have replaced that - but its a pretty cash generative business. All round, a tick so far.