TIDMSAL
RNS Number : 7530K
SpaceandPeople PLC
26 September 2016
SpaceandPeople plc
("SpaceandPeople" or the "Group")
Interim Results for the 6 months to 30 June 2016
SpaceandPeople (AIM:SAL), the retail, promotional and brand
experience specialist which facilitates and manages the sale of
promotional and retail merchandising space in shopping centres and
other high footfall venues, announces interim results for the six
months ended 30 June 2016.
Highlights
* Consolidated gross revenue GBP11.1m (2015: GBP11.3m)
- 1.8% down
* Consolidated net revenue GBP4.65m (2015: GBP4.77m) -
2.5% down
o UK promotional net revenue GBP1.50m (2015:
GBP1.43m) - 5.4% up
o UK retail and MPK net revenue GBP1.46m (2015:
GBP1.42m) - 3.2% up
o German promotional net revenue GBP544k (2015:
GBP612k) - 11.1% down
o German retail net revenue GBP1.07m (2015:
GBP1.24m) - 13.7% down
* Loss before taxation from continuing operations
GBP174k (2015: profit GBP62k) - GBP236k down
* Basic earnings per share negative 2.96p (2015:
positive 0.06p)
* Successful start to Network Rail contract won in 2015
* 75 Mobile Promotions Kiosks ("MPKs") in operation in
the UK
* Commencement of kiosk pilot in France in January 2016
* Closure of S&P+ due to insufficient prospects leading
to a one off charge of GBP552k in the period
------------------------------------------------------------------
Contact details:
SpaceandPeople Plc 0845 241 8215
Matthew Bending, Gregor Dunlay
Cantor Fitzgerald Europe 020 7894 7000
David Foreman, Will Goode (Corporate Finance)
David Banks, Richard Sloss (Sales)
Chief Executive's Interim Operating Statement
Overview
2015 was a year of transition for SpaceandPeople with a focus on
gaining new clients and delivering higher value services. The first
half of 2016 has been a continuation of this process with the
successful expansion of our MPK programme and "Pop Up kiosks"
offsetting the termination of some other traditional RMU contracts
that were known to be occurring. We have also continued to explore
opportunities for geographic expansion of our offer by commencing a
pilot project with Immochan in France.
Taking our key divisions in turn:
UK Divisions
MPKs
The expansion of our innovative MPK programme has continued
during the first half of 2016 and by the half year end we had 75
kiosks installed in 56 venues throughout the UK including 9 Network
Rail stations (2015: 37 kiosks). This area of the business will
continue to grow and we anticipate having 80 kiosks in operation by
the end of the year. MPK revenue in the first half was GBP661k
compared with GBP260k in the same period in 2015. This was as a
result of both an increase in the number of kiosks in operation as
well as the improved sales performance of each kiosk.
RMUs
Revenue generated by the RMUs decreased in the first half of
2016 compared with the previous period as some contracts came to an
end during 2015 and some other clients removed RMUs from their
malls. The average number of RMUs trading in the first half year of
2016 was 123 compared with 128 in 2015. The movement away from the
long term minimum guarantee business model by some clients has been
as a result of them wanting more dynamism on their malls and
retailers wanting more flexibility in duration and location for
their operations. Our innovative Pop Up kiosk programme, where
units can be deployed for shorter periods of time and at short
notice, has been refined and should better satisfy the requirements
of both venues and operators going forward. This Pop Up kiosk
programme, combined with the well-received rebrand of "Retail
Profile" as "POP Retail" demonstrates that temporary retailing in
malls is vibrant and in demand.
The Pop Up kiosks allow short term trading, particularly at the
Christmas period, which allows existing operators to up-sell into
more units in different locations as well as removing barriers of
entry into the venues for new retailers. In 2015 we deployed around
30 Pop Up kiosks and we aim to double that number this year.
Promotions
The core UK promotions division has performed well during the
period with revenue increasing by 5% to GBP1.50 million. Within
this division there has been a development of large scale Brand
Experience campaigns into Network Rail stations, with high profile
campaigns including the launch of the new Ghostbusters movie, the
Renault Clio 25(th) Anniversary promotion and a campaign by Dubai
Tourism.
German Divisions
Retail
Our retail business in Germany transacts almost exclusively with
ECE's portfolio of managed shopping centres. When this contract was
renewed at the start of 2016 there was an agreed reduction in the
number of kiosks deployed as centres that had proven to be
difficult to trade in were removed from the contract. As a result,
the average number of kiosks in operation in the first half of this
year was 112, down from 136 in the previous year. It had been
expected that the reduction in the number of kiosks and their
concentration in the more desirable centres from our perspective
would lead to higher average prices and higher levels of occupancy.
Unfortunately, poor weather during the Spring and an unseasonably
hot Summer have not helped retailer demand overall. However, the
team are currently building the Christmas pipeline which is the
crucial trading period for the division.
Promotions
The German promotions business saw a fall away of long term
promotions. These are long term promotions booked over three years
and are now coming to an end as we exited from the ECE long term
agreement hence the overall reduction of revenue, down 11%.
Stripping this revenue out showed the underlying performance of
short term promotions growing by 14% which is an excellent
performance.
SpaceandPeople Ventures
This is the grouping of our overseas companies and also new
businesses that we are developing.
SpaceandPeople India, which is 60% owned by the Company, saw
trading in line with expectations despite the effects of a heavier
monsoon period than usual which has impacted on some retailers. The
overall contribution of this business to the profitability of the
group is not significant.
The first half of 2016 saw the commencement of the pilot MPK
programme with Immochan in France. This pilot is enabling us to
learn a great deal about operating in the French market and the
client is very happy with the product and the way it has improved
the presentation of promotions within their malls. The costs of
running the pilot are not inconsiderable with GBP94k being spent in
the first six months of the year which has been fully recognised in
these results. The pilot will conclude at the end of this year and
a decision will be made in early 2017 on whether or not to continue
and expand the roll-out.
In June this year the decision was taken to close S&P+, our
London based Above-the-Line ("ATL") advertising support business.
Although well received by our clients and despite a promising start
in 2013, the company did not develop sales to a level that would
enable it to be self-sustaining. In late June a number of contracts
they had been working on were either cancelled or postponed. This
meant that they required additional funding to be able to continue
to trade and with their pipeline of business for the remainder of
the year not being as strong as we would have hoped, the Board
decided that the business did not have a viable future and that
committing further cash was not in the best interests of the Group.
The closure of this business caused a release of the
non-controlling interest resulting in a GBP252k one-off charge to
the Group in the first half of 2016.
Outlook
As we entered 2016 we were aware that a number of significant
revenue streams that we had benefitted from in the past had either
ended or were going to end during 2016. The development of the Pop
Up kiosk concept along with the continued roll-out of MPKs and the
new contracts with Network Rail and British Land means that our
business has replaced the old revenue streams with new products
that are attractive to both existing and new venues and customers
alike.
The results for the first half year are in line with the results
of the previous year excluding the costs associated with the
closure of S&P+ and the running of the MPK pilot programme in
France.
The continuing development of the MPK and Pop Up kiosk
programmes in the UK as well as continuing to source and develop
new products that are attractive to our clients is key to the
growth in the second half of 2016.
The UK promotions division has a strong pipeline of business for
the second half of this year. We have put new sales management in
place and combined with a focused programme of staff incentives
this should help this business develop further.
The Pop Up kiosk offer could see between 60 and 80 units trading
this Christmas. This division's results are crucial to our
achieving forecasts. There is a strong pipeline of business, but
again transactions in October are historically when this business
is done.
The German promotions division is currently negotiating a
contract extension beyond 2016 with its key client. While this
negotiation has been going on we have encountered a block on long
term promotions being accepted. Hopefully once the contract is
agreed we will be able to transact this business which is important
to our second half year income.
In common with many retail related businesses, trading across
the Group in the period since the half year end has been more
subdued than we had anticipated. We will need to perform strongly
over the remainder of the year in order to meet our expectations.
We have a good team led by experienced managers who are all focused
on delivering our objectives.
As a result of the one off costs of closing S&P+ and the
need to invest further in the growth of the MPK programme next
year, for the first time since being admitted to AIM in 2005, we do
not intend to propose a dividend during the 2016 financial period.
This is intended to be a one year pause with dividends recommencing
during the 2017 financial period.
Matthew Bending
23 September 2016
Independent Review Report to SpaceandPeople plc
Introduction
We have been engaged by the company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 June 2016 which comprises, the consolidated
statement of comprehensive income, the consolidated statement of
financial position, the consolidated statement of cash flows, the
consolidated statement of changes in equity and the related
explanatory notes. We have read the other information contained in
the half-yearly financial report and considered whether it contains
any apparent misstatements or material inconsistencies with the
information in the condensed set of financial statements.
This report is made solely to the company in accordance with the
terms of our engagement. Our review has been undertaken so that we
might state to the company those matters we are required to state
to it in this report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the company for our review work, for this
report, or for the conclusions we have reached.
Directors' Responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the AIM Rules for Companies.
As disclosed in note 2, the annual financial statements of the
group are prepared in accordance with IFRSs as adopted by the
European Union. The condensed set of financial statements included
in this half-yearly financial report has been prepared in
accordance with International Accounting Standard 34, Interim
Financial Reporting, as adopted by the European Union.
Our Responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity, issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
June 2016 is not prepared, in all material respects, in accordance
with International Accounting Standard 34 as adopted by the
European Union and the AIM Rules for Companies.
Campbell Dallas LLP
Chartered Accountants
Statutory Auditors
Titanium 1
King's Inch Place
Renfrew
PA4 8WF
Date: 23 September 2016
Consolidated Group Statement of Comprehensive Income
For the 6 months ended 30 June 2016
Notes 6 months Restated Restated
to 30 - -
June
'16
(Unaudited) 6 months 12 months
to 30 to 31
June December
'15 '15
GBP'000 (Unaudited) (Audited)
GBP'000 GBP'000
Revenue 5 4,646 4,766 11,433
Cost of Sales (1,725) (1,637) (3,947)
------------- ------------- -----------
Gross Profit
2,921 3,129 7,486
Administration
expenses (3,220) (3,198) (6,713)
Other operating
income 114 131 295
Operating (loss)
/ profit (185) 62 1,068
------------- ------------- -----------
Finance income 31 14 -
Finance costs (20) (14) (28)
(Loss) / Profit
before taxation (174) 62 1,040
------------- ------------- -----------
Taxation - - (197)
(Loss) / Profit
after taxation
from continuing
operations (174) 62 843
------------- ------------- -----------
Discontinued Operations 6 (552) (85) 21
(Loss) / Profit
after taxation
Other comprehensive
income (726) (23) 864
Foreign exchange
differences on
translation of
foreign operations 143 (10) (39)
------------- ------------- -----------
Total comprehensive
income for the
period (583) (33) 825
(Loss) / Profit
attributable to:
Owners of the Company (578) 12 831
Non-controlling
interests (148) (35) 33
------- ------ ----
(726) (23) 864
------- ------ ----
Total comprehensive
income for the
period attributable
to:
Owners of the Company (435) 2 792
Non-controlling
interests (148) (35) 33
------- ------ ----
(583) (33) 825
------- ------ ----
Earnings per share 14
Basic (2.96p) 0.06p 4.26p
Diluted (2.74p) 0.06p 3.89p
Consolidated Group Statement of Financial Position
At 30 June 2016
Notes 30 June 30 June 31 December
'16 '15 '15
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Assets
Non-current assets:
Goodwill 7 8,225 8,225 8,225
Other intangible
assets 8 32 28 17
Property, plant
& equipment 9 1,702 1,701 1,625
------------- ------------- ------------
9,959 9,954 9,867
Current assets:
Trade & other receivables 3,685 3,648 4,205
Cash & cash equivalents 10 778 1,028 1,723
------------- ------------- ------------
4,463 4,676 5,928
Total assets 14,422 14,630 15,795
------------- ------------- ------------
Liabilities
Current liabilities:
Trade & other payables 3,807 4,657 4,506
Current tax payable (96) (142) 18
Other borrowings 11 - 250 250
------------- ------------- ------------
3,711 4,765 4,774
Non-current liabilities:
Deferred tax liabilities 58 10 58
Long term loan 11 1,200 500 750
------------- ------------- ------------
1,258 510 808
Total liabilities 4,969 5,275 5,582
------------- ------------- ------------
Net assets 9,453 9,355 10,213
------------- ------------- ------------
Equity
Share capital 13 195 195 195
Share premium 4,868 4,868 4,868
Special reserve 233 233 233
Retained earnings 3,883 3,957 4,747
Equity attributable
to owners of the
Company 9,179 9,253 10,043
------------- ------------- ------------
Non-controlling
Interest 274 102 170
------------- ------------- ------------
Total equity 9,453 9,355 10,213
------------- ------------- ------------
Consolidated Group Statement of Cash Flows
For the 6 months ended 30 June 2016
Notes 6 months Restated Restated
to 30 - -
June '16
(Unaudited) 6 months 12 months
to 30 to 31
June '15 December
'15
GBP'000 (Unaudited) (Audited)
GBP'000 GBP'000
Cash flows from
operating activities
Cash (outflow) /
inflow from operations (290) (448) 192
Interest paid (20) (14) (28)
Taxation (114) 28 39
------------- ------------- -----------
Net cash (outflow)
/ inflow from operating
activities (424) (434) 203
------------- ------------- -----------
Cash flows from
investing activities
Interest received 31 14 -
Purchase of intangible
assets (23) (15) (15)
Purchase of property,
plant & equipment 9 (300) (512) (690)
Net cash outflow
from investing activities (292) (513) (705)
------------- ------------- -----------
Cash flows from
financing activities
Bank facility received 11 200 250 500
Dividends paid 12 (429) (390) (390)
------------- ------------- -----------
Net cash outflow
from financing activities (229) (140) 110
------------- ------------- -----------
(Decrease) in cash
and cash equivalents (945) (1,087) (392)
Cash at beginning
of period 1,723 2,115 2,115
------------- ------------- -----------
Cash at end of period 10 778 1,028 1,723
------------- ------------- -----------
Reconciliation of
operating profit
to net cash flow
from operating activities
------ -------- --------
Operating (loss)
/ profit (185) 62 1,068
------ -------- --------
Operating (loss)
/ profit from discontinued 6 (300) (85) 21
Amortisation of
intangible assets 8 5 16
Depreciation of
property, plant
& equipment 223 185 439
Effect of foreign
exchange rate moves 143 (10) (39)
Decrease in receivables 520 573 16
(Decrease) in payables (699) (1,178) (1,329)
------ -------- --------
Cash flow from operating
activities (290) (448) 192
------ -------- --------
Consolidated Group Statement of Changes in Equity
For the 6 months ended 30 June 2016
Share Share Special Retained Non-controlling Total
6 months to capital premium reserve earnings Interest equity
30 June '16 GBP'000
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January
'16 195 4,868 233 4,747 170 10,213
Foreign currency
translation - - - 143 - 143
Loss for the
period - - - (578) (148) (726)
Elimination
of non-controlling
interest in
S&P+ - - - - 252 252
Dividends
paid - - - (429) - (429)
At 30 June
'16 195 4,868 233 3,883 274 9,453
--------- --------- --------- ---------- ---------------- ---------
Share Share Special Retained Non-controlling Total
6 months to capital premium reserve earnings Interest equity
30 June '15 GBP'000
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January
'15 195 4,868 233 4,345 137 9,778
Foreign currency
translation - - - (10) - (10)
Profit / (Loss)
for the period - - - 12 (35) (23)
Dividends
paid - - - (390) - (390)
At 30 June
'15 195 4,868 233 3,957 102 9,355
--------- --------- --------- ---------- ---------------- ---------
Share Share Special Retained Non-controlling Total
12 months capital premium reserve earnings Interest equity
to 31 December GBP'000
'15 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January
'15 195 4,868 233 4,345 137 9,778
Foreign currency
translation - - - (39) - (39)
Profit for
the period - - - 831 33 864
Dividends
paid - - - (390) - (390)
At 31 December
'15 195 4,868 233 4,747 170 10,213
--------- --------- --------- ---------- ---------------- ---------
Notes to the financial statements
For the 6 months ended 30 June 2016
1. General information
SpaceandPeople plc is a limited liability company incorporated
and domiciled in Scotland (registered number SC212277) which is
listed on AIM (ticker: SAL).
This condensed consolidated interim financial information has
been reviewed, but not audited, by the auditors, and their
independent review is set out in this announcement. It does not
constitute statutory accounts as defined by Section 434 of the
Companies Act 2006. The financial information for the 12 months to
31 December 2015 has been extracted from the statutory accounts for
that period. These published accounts were reported on by the
auditors without qualification or an emphasis of matter reference,
and did not include a statement under section 498 of the Companies
Act 2006, and have been delivered to the Registrar of
Companies.
This condensed consolidated interim financial information was
approved by the board on 23 September 2016.
2. Basis of preparation
This condensed consolidated interim financial information for
the 6 months ended 30 June 2016 has been prepared in accordance
with IAS 34 'Interim financial reporting'. The condensed
consolidated interim financial information should be read in
conjunction with the financial statements of the Group for the
period ending 31 December 2015 which were prepared on a going
concern basis under the historical cost convention in accordance
with International Financial Reporting Standards (IFRS) as adopted
by the European Union, and those parts of the Companies Act 2006
applicable to companies reporting under IFRS.
3. Accounting policies
The accounting policies adopted in the preparation of the
condensed consolidated interim financial information are consistent
with those applied in the financial statements of the Group for the
year ended 31 December 2015.
4. Seasonality of operations
Due to the seasonal nature of the retail business, higher
revenues and operating profits are usually expected in the second
half of the year than in the first six months, particularly for
subsidiary companies POP Retail Limited and Retail Profile Europe
GmbH.
5. Segmental reporting
The Group maintains its head office in Glasgow and an office in
Hamburg, Germany. These are reported separately. The Group operates
both Promotional Sales and Retail businesses in both the UK and
Germany. The Group has determined that these are the principal
operating segments as the performance of these segments is
monitored separately and reviewed by the board.
The following table presents revenue and profit and loss
information regarding the Group's two business segments -
Promotional Sales and Retail, split by geographic area. Other
segment represents the Groups investments in SpaceandPeople India
and Retail Profile France.
Promotions Promotions Retail Retail Head Other Group
UK Germany UK Germany Office
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
6 months
to
30 June
'16
Revenue 1,502 544 1,462 1,068 - 70 4,646
----------- ----------- --------- --------- --------- --------- ---------
Segment
operating
profit/(loss) 385 145 (169) 1 (456) (80) (174)
----------- ----------- --------- --------- --------- --------- ---------
6 months
to
30 June
'15
Revenue 1,425 612 1,417 1,237 - 75 4,766
----------- ----------- --------- --------- --------- --------- ---------
Segment
operating
profit/(loss) 328 279 27 60 (649) (107) (62)
----------- ----------- --------- --------- --------- --------- ---------
12 months
to 31 December
'15
Revenue 3,063 2,438 3,151 2,632 - 149 11,433
----------- ----------- --------- --------- --------- --------- ---------
Segment
operating
profit/(loss) 1,684 53 206 46 (1,039) 90 1,040
----------- ----------- --------- --------- --------- --------- ---------
6. Discontinued operations
During the period, the Group took decision to close its S&P+
business, which operated in a niche sector distinct from
SpaceandPeople's core business. SpaceandPeople owned 51% of
S&P+ and didn't consider it prudent to continue funding the
venture beyond what had already been provided. The combined results
of the discontinued operations included in the loss for the year
are set out below. The comparative loss / profit from discontinued
operations have been represented to include those operations
classified as discontinued in the current year.
6 months 6 months 12 months
Profit / (Loss) to to to
for the year from 30 June 30 June 31 December
discontinued operations '16 '15 '15
GBP'000 GBP'000 GBP'000
Revenue 487 997 2,381
Cost of Sales (343) (744) (1,738)
Gross Profit 144 253 643
Administration expenses (444) (338) (622)
Results from operating
activities (net
of tax) to date
of disposal
Non-controlling
interest eliminated (300) (85) 21
(Loss) / profit (252) - -
for period from
discontinued operations (552) (85) 21
7. Goodwill
6 months 6 months 12 months
Net book value to to to
30 June 30 June 31 December
'16 '15 '15
GBP'000 GBP'000 GBP'000
Opening Balance 8,225 8,225 8,225
Closing Balance 8,225 8,225 8,225
--------- --------- -------------
8. Other intangible assets
6 months 6 months 12 months
Net book value to to to
30 June 30 June 31 December
'16 '15 '15
GBP'000 GBP'000 GBP'000
Opening Balance 17 18 18
Additions 23 15 15
Amortisation (8) (5) (16)
--------- --------- -------------
Closing Balance 32 28 17
--------- --------- -------------
9. Property, plant and equipment
6 months 6 months 12 months
Net book value to to to
30 June 30 June 31 December
'16 '15 '15
GBP'000 GBP'000 GBP'000
Opening Balance 1,625 1,374 1,374
Additions 300 512 690
Depreciation (223) (185) (439)
--------- --------- -------------
Closing Balance 1,702 1,701 1,625
--------- --------- -------------
10. Cash & cash equivalents
30 June 30 June 31 December
'16 '15 '15
GBP'000 GBP'000 GBP'000
Cash at Bank and
on hand 778 1,028 1,723
778 1,028 1,723
--------- --------- ------------
11. Non-current liabilities
As at 30 June 2016, SpaceandPeople had drawn down GBP1.2 million
(June 2015: GBP750k) of its agreed bank facility of GBP2 million.
The amount drawn is part of a revolving credit facility of which
GBP1 million is repayable by 31 Jul 2017 and GBP1 million is
repayable by 31 July 2019.
12. Dividends
30 June 30 June 31 December
'16 '15 '15
GBP'000 GBP'000 GBP'000
Paid during the
period 429 390 390
13. Called up share capital
Allotted, issued 30 June 30 June 31 December
and fully paid '16 '15 '15
Class Nominal
value
Ordinary 1p GBP 195,196 195,196 195,196
Number 19,519,563 19,519,563 19,519,563
14. Earnings per share
Earnings per share has been calculated using the (loss) / profit
after taxation for the period and the weighted average number of
shares in issue.
30 June 30 June 31 December
'16 '15 '15
GBP'000 GBP'000 GBP'000
(Loss) / profit
after taxation (578) 12 831
Weighted average
number of shares '000 '000 '000
in issue during
the period
* 1p ordinary shares 19,520 19,520 19,520
* Share options 1,562 1,883 1,866
* Diluted ordinary shares 21,082 21,403 21,386
SpaceandPeople plc
2(nd) Floor
100 West Regent Street
Glasgow
G2 2QD
Telephone: 0845 2418215
Email: help@spaceandpeople.com
www.spaceandpeople.com
This information is provided by RNS
The company news service from the London Stock Exchange
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