REG - Everyman Media Grp - Interim Results
Everyman Media Group PLC
("Everyman" or the "Group")
Interim results (unaudited) for six-month period ended 5 July 2018
Highlights:
· Revenue for the period up 32% to £24.9m (H1 2017: £18.8m)
· Adjusted EBITDA up 35% to £4.1m (H1 2016: £3.0m)
· One new venue added in the period, expanding the current estate to 22 venues operating 69 screens
· Committed to a further 15 new venues, with the Group exchanging contracts on a further 3 sites at Crystal Palace, Cardiff and London Broadgate since the beginning of 2018
· Trading since the period end has continued in line with the Board's expectations
For further information, please contact:
Everyman Media Group plc
Crispin Lilly
Tel: 020 3145 0500
Canaccord Genuity Limited (NOMAD and Broker)
Antony Isaacs
Henry Fitzgerald-O'Connor
Richard Andrews
Tel: 020 7523 8000
The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.
Chairman's Statement:
I am pleased to report on the Group's results for the 27 weeks ended 5 July 2018.
2018 has continued the significant growth in the business seen in 2016 and 2017. This expansion, along with underlying revenue growth and improved efficiencies, delivered an overall performance in line with the Board's expectations for the period.
The Group now operates 22 venues. A four-screen venue opened in York at the beginning of the period as well as a minor refurbishment of our Maida Vale site.
Review of the business
For the 27 weeks ended 5 July 2018, the Group's box office revenue was up 29.7% on the previous period, reflecting favourably compared to a market movement of 4.5% for the same comparative period. This resulted in the Group's market share increasing to 2.45% for the period (29 June 2017: 1.98%, 28 December 2017: 2.11%) (Source: Comscore).
The 22 venues and 69 screens that now successfully operate across an increasingly regional range of towns and cities prove the breadth of appetite for the Everyman experience and continue to build on our reputation as a trusted and highly regarded brand in the cinema and leisure industry.
Everyman differentiates by focusing on delivering a high-quality offer through its venues, content, staff and F&B. The Board's long held belief in this model as being the bedrock for significant growth within the UK has been further strengthened in the last six months and our ambitions continue to grow.
A further 15 committed venues, and a continually evolving pipeline beyond, is substantially increasing our footprint across the UK.
Results
Revenue for the period was up 32.3% on last year to £24,916,000 (29 June 2017: £18,830,000, full year to 28 December 2017: £40,620,000).
The Group's adjusted operating profit before depreciation, amortisation, pre-opening expenses, exceptional items and share-based payments was £4,067,000 (29 June 2017: £3,010,000, full year to 28 December 2017: £6,615,000). The Group generated a profit for the period of £768,000 (29 June 2017: £438,000, full year to 28 December 2017: £1,268,000).
The effective tax rate is higher than the standard rate of corporation tax for the six-month period ended 5 July 2018 due to the effect of significant continuing capital expenditure incurred by the Group.
The share-based payment expense for the period was £221,000 (29 June 2017: £144,000, full year to 28 December 2017: £301,000) reflecting share option incentives provided to the Group's senior management and employees.
The Board does not recommend the payment of a dividend at this stage of the Group's development.
Key performance indicators
The growth in revenue in the current period reflects the effect of an increase in the number of sites and admissions, an increase in box office pricing and an improved spend per head on food and beverages.
The Group uses the following key performance indicators, in addition to total revenues, to monitor the progress of the Group's activities:
Six-month ended
5 July 2018
Six-month ended
29 June 2017
Year ended
28 December 2017
Admissions
+29.3%
1,348,097
1,042,853
2,227,885
Box office average ticket
+0.4%
£11.28
£11.24
£11.28
Food and beverage spend per head
+5.3%
£6.14
£5.83
£5.97
The underlying performance of the business continues to be as expected, with a small increase in box office average ticket price of 0.4% (diluted, as expected, by the disproportionate increase in business outside of London) and continued healthy growth in food and beverage spend per head of 5.3% (with menu development and improved operational delivery adding to inflationary increases in pricing).
Openings and capital expenditure
During the period, the Group opened a new four-screen venue in York at the end of December 2017.
During the period the Group completed on the purchase of the freehold of a site in Crystal Palace for £3,225,000 and exchanged contracts on 2 further sites at Cardiff and London Broadgate. These are in addition to the pre-existing contracts for Newcastle, Liverpool, Glasgow, Altrincham, Lincoln, Cirencester, London's Borough Market, Tunbridge Wells, Horsham, Durham, Wokingham and Edinburgh.
The Group continues to invest in its infrastructure and head office to support the growth of new venues, further details of which are set out in note 7 to the financial statements.
Cash flows
Net cash used in operating activities was £2,304,000 (29 June 2017: £3,759,000 generated from operating activities, full year to 28 December 2017: £13,825,000 generated from operating activities). Net cash outflows for the year, before financing, were £9,257,000 (29 June 2017: £2,180,000, full year to 28 December 2017: £3,538,000). This is largely represented by capital expenditure on the expansion of the business through build costs and refurbishment of sites.
The movement in trade and other payables in the period is largely due to the cash settlement of new venue capital expenditure which was accrued at the year end.
Cash held at the end of the period was £3,145,000 (29 June 2017: £1,221,000, 28 December 2017: £18,366,000). The cash held will be invested in the continuing development and expansion of the Group's business.
Current trading
Trading since the period end has been in line with expectations, reflecting a solid summer in the cinema market.
Paul Wise
Chairman
4 September 2018
Consolidated statement of profit and loss and other comprehensive income for the period ended 5 July 2018 (unaudited)
Six-month period
Six-month period
Year ended
ended 5 July
ended 29 June
28 December
2018
2017
2017
Note
£000
£000
£000
Revenue
3
24,916
18,830
40,620
Cost of Sales
(9,602)
(7,268)
(15,937)
Gross profit
15,314
11,562
24,683
Other operating income
-
45
48
Administrative expenses
(13,950)
(10,828)
(23,107)
Operating profit
1,364
779
1,624
Financial income
-
4
4
Profit before taxation
1,364
783
1,628
Tax charge on profit for the period
4
(596)
(345)
(360)
Profit for the period
768
438
1,268
Other comprehensive income for the period
16
-
851
Total comprehensive income for the period
784
438
2,119
Total comprehensive income attributable to equity holders of the Company
784
438
2,119
Basic earnings per share (pence)
5
1.08
0.73
2.04
Diluted earnings per share (pence)
5
1.03
0.71
1.97
All amounts relate to continuing activities.
Non-GAAP measure: adjusted profit from operations
Adjusted profit from operations
4,067
3,010
6,615
Before:
Depreciation and amortisation
(2,246)
(1,750)
(3,688)
Acquisition expenses
6
(4)
-
(86)
Pre-opening expenses
(232)
(337)
(916)
Share-based payment expense
(221)
(144)
(301)
Operating profit
1,364
779
1,624
Consolidated balance sheet at 5 July 2018 (unaudited)
5 July
29 June
28 December
2018
2017
2017
£000
£000
£000
Assets
Non-current assets
Property, plant and equipment
52,910
39,864
48,239
Intangible assets
10,191
8,398
10,066
Trade and other receivables
173
199
173
63,274
48,461
58,478
Current assets
Inventories
315
242
308
Trade and other receivables
3,060
2,274
1,044
Cash and cash equivalents
3,145
1,221
18,366
6,520
3,737
19,718
Total assets
69,794
52,198
78,196
Liabilities
Current liabilities
Other interest-bearing loans and borrowings
15
9
43
Trade and other payables
8,356
6,422
12,479
8,371
6,431
12,522
Non-current liabilities
Other interest-bearing loans and borrowings
1,000
5,000
7,000
Other payables
5,221
5,343
5,168
Provisions
1,838
1,395
1,883
Deferred tax liabilities
863
607
284
8,922
12,345
14,335
Total liabilities
17,293
18,776
26,857
Net assets
52,501
33,422
51,339
Equity attributable to owners of the Company
Share capital
7,021
5,989
7,003
Share premium
38,493
22,773
38,354
Merger reserve
11,152
11,152
11,152
Retained earnings
(4,165)
(6,492)
(5,170)
Total equity
52,501
33,422
51,339
These financial statements were approved by the Board of Directors on 4 September 2018 and signed on its behalf by:
C Lilly
CEO
Consolidated statement of changes in equity for the period ended 5 July 2018
Share
Share
Capital
Retained
Total
capital
premium
reserve
earnings
equity
£000
£000
£000
£000
£000
Balance at 30 December 2016
5,982
22,720
11,152
(7,590)
32,264
Profit for the period
-
-
-
438
438
Other comprehensive income
-
-
-
516
516
Total comprehensive income for the period
-
-
-
954
954
Shares issued in the period
7
52
-
-
59
Share-based payments
-
-
-
144
144
Total transactions with owners of the parent
7
52
-
144
203
Balance at 29 June 2017
5,989
22,772
11,152
(6,492)
33,421
Balance at 30 June 2017
5,989
22,772
11,152
(6,492)
33,421
Profit for the period
-
-
-
830
830
Other comprehensive income
-
-
-
335
335
Total comprehensive income for the period
-
-
-
1,165
1,165
Shares issued in the period
1,014
16,103
-
-
17,117
Share issue expenses
-
(521)
-
-
(521)
Share-based payments
-
-
-
157
157
Total transactions with owners of the parent
1,014
15,582
-
157
16,753
Balance at 28 December 2017
7,003
38,354
11,152
(5,170)
51,339
Balance at 29 December 2017
7,003
38,354
11,152
(5,170)
51,339
Profit for the period
-
-
-
768
768
Other comprehensive income
-
-
-
16
16
Total comprehensive income for the period
-
-
-
784
784
Shares issued in the period
18
137
-
-
155
Share-based payments
-
-
-
221
221
Total transactions with owners of the parent
18
137
-
221
376
Balance at 5 July 2018
7,021
38,491
11,152
(4,165)
52,499
Consolidated cash flow statement for the period ended 5 July 2018 (unaudited)
5 July
29 June
28 December
2018
2017
2017
Note
£000
£000
£000
Cash flows from operating activities
Profit for the period
768
438
1,268
Adjustments for:
Financial income
-
(4)
(4)
Income tax expense
4
596
345
360
Operating profit
1,364
779
1,624
Depreciation and amortisation
2,246
1,750
3,688
Loss on disposal of property, plant and equipment
-
-
13
Bad debts
(2)
-
(91)
Lease incentives
(13)
86
135
Market rent provisions
(45)
(35)
(76)
Acquisition expenses
4
-
86
Equity-settled share-based payment expenses
221
144
301
3,775
2,724
5,680
Changes in working capital
(Increase)/decrease in inventories
(7)
3
(63)
(Increase)/decrease in trade and other receivables
(2,014)
(678)
669
(Decrease)/increase in trade and other payables
(4,058)
1,710
7,539
Cash (used in)/generated from operating activities
(2,304)
3,759
13,825
Cash flows from investing activities
Acquisition as business combination
6
(4)
-
(1,388)
Acquisition of property, plant and equipment
(6,687)
(5,757)
(15,588)
Acquisition of intangibles
(262)
(186)
(391)
Interest received
-
4
4
Net cash used in investing activities
(6,953)
(5,939)
(17,363)
Cash flows from financing activities
Proceeds from the issuance of ordinary shares
157
60
17,176
Share issue expenses
-
-
(521)
(Repayment of)/proceeds from bank borrowings
(6,000)
2,000
4,000
Interest paid
(121)
(225)
(317)
Net cash (used in)/generated from financing activities
(5,964)
1,835
20,338
Net (decrease)/increase in cash and cash equivalents
(15,221)
(345)
16,800
Cash and cash equivalents at the beginning of the period
18,366
1,566
1,566
Cash and cash equivalents at the end of the period
3,145
1,221
18,366
Notes to the financial statements
1. General information
Everyman Media Group PLC and its subsidiaries (together, 'the Group') are engaged in the ownership and management of cinemas in the United Kingdom. Everyman Media Group PLC (the Company) is a public company limited by shares domiciled and incorporated in England and Wales (registered number 08684079). The address of its registered office is Studio 4, 2 Downshire Hill, London NW3 1NR.
2. Basis of preparation and accounting policies
These condensed interim financial statements of the Group for the period ended 5 July 2018 have been prepared using accounting policies consistent with International Financial Reporting Standards (IFRSs) as adopted by the European Union. The same accounting policies, presentation and methods of computation are followed in the condensed set of financial statements as applied in the Group's latest audited financial statements for the year ended 28 December 2017. Amendments made to IFRSs specifically IFRS9 and IFRS15 since 28 December 2017 have not had a material effect on the Group's results or financial position for the period.
The financial statements presented in this report have been prepared in accordance with IFRSs applicable to interim periods. However, as permitted, this interim report has been prepared in accordance with the AIM Rules for Companies and does not seek to comply with IAS34 "Interim Financial Reporting".
These condensed interim financial statements have not been audited, do not include all of the information required for full annual financial statements and should be read in conjunction with the Group's statutory consolidated annual financial statements for the year ended 28 December 2017. The auditor's opinion on these financial statements was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under s498(2) or s498(3) of the Companies Act 2006.
3. Revenue
Six-month period
Six-month period
Year ended
ended 5 July
ended 29 June
28 December
2018
2017
2017
£000
£000
£000
Film and entertainment
15,201
11,718
25,124
Food and beverages
8,277
6,078
13,306
Other income
1,438
1,034
2,190
24,916
18,830
40,620
4. Taxation
Six-month period
Six-month period
Year ended
ended 5 July
ended 29 June
28 December
2018
2017
2017
£000
£000
£000
Current tax
-
-
-
-
-
-
Deferred tax expense
Origination and reversal of temporary differences
201
169
259
Adjustments in respect of prior years
395
176
101
Total tax charge
596
345
360
The reasons for the difference between the actual tax charge for the period and the standard rate of corporation tax in the United Kingdom applied to the profit for the period are as follows:
Reconciliation of effective tax rate
Six-month period
Six-month period
Year ended
ended 5 July
ended 29 June
28 December
2018
2017
2017
£000
£000
£000
Profit before taxation
1,364
783
1,628
Tax at the UK corporation tax rate of 19.00%/19.25%
259
151
313
Permanent differences ((allowable deductions)/expenses not deductible for tax purposes)
(11)
51
13
Adjustments in respect of prior years
395
176
101
Other short term timing differences
(47)
(20)
(40)
Effect of change in expected future statutory rates on deferred tax
-
(13)
(27)
Total tax expense
596
345
360
Reductions in the UK corporation tax rate from 20% to 19% (effective from 1 April 2017) and to 18% (effective 1 April 2020) were substantively enacted on 26 October 2015. Accordingly, the Group's profits for this accounting period are subject to tax at a blended rate of 19% (2017: 19%). An additional reduction to 17% was substantively enacted on 6 October 2016. Deferred tax has been calculated based on these rates.
5. Earnings per share
Six-month period
Six-month period
Year ended
ended 5 July
ended 29 June
28 December
2018
2017
2017
£000
£000
£000
Profit used in calculating basic and diluted earnings per share
768
438
1,268
Number of shares (000's)
Weighted average number of shares for the purpose of basic earnings per share
71,413
59,843
62,099
Number of shares (000's)
Weighted average number of shares for the purpose of diluted earnings per share
74,598
61,421
64,528
Basic earnings per share (pence)
1.08
0.73
2.04
Diluted earnings per share (pence)
1.03
0.71
1.97
Basic earnings per share amounts are calculated by dividing net profit/(loss) for the period attributable to Ordinary equity holders of the parent by the weighted average number of Ordinary shares outstanding during the year.
The Company has 5,496,000 potentially issuable shares (2017: 5,818,000) all of which relate to the potential dilution from both the Group's 'A' shares and share options issued to the Directors and certain employees and contractors, under the Group's incentive arrangements.
6. Acquisition of Group companies
Acquisitions in the period
During the period the Group acquired 100 Ordinary shares in ECPee Ltd for £1 plus professional costs.
7. Related party transactions
The Group intends to enter into a new lease on its head office, where it has been based since June 2012. Full details of the original head office lease are contained within the admission document of the Company, published on 30 October 2013, and available on the Company's website.
Under the terms of the new lease the Group will enter into a 10 year lease with Proper Proper T Ltd, a company 50% controlled by Adam Kaye, who is also one of its directors. The annual rent will be £100,000. As Adam Kaye is a Director of the Company, the new lease is considered a related party transaction under the AIM rules. The Directors of the Company consider the terms of the lease to be on commercial terms and have taken professional advice which supports this view. Furthermore, the Directors of the Company, other than Adam Kaye, having consulted the Company's nominated advisor Canaccord Genuity, consider the terms of the lease to be fair and reasonable insofar as the Company's shareholders are concerned.
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.ENDIR SSAFALFASEDU
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