Final Results
04/05/2023 07:00
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RNS Number : 3500Y Let's Explore Group PLC 04 May 2023
4(th) May 2023
Let's Explore Group PLC
(the "Company" or the "Group")
2022 full year results
Let's Explore Group PLC is pleased to announce its audited results for the
year ended 31 December 2022. Following the year end, the Group's largest
business, Location Based Entertainment (LBE) was sold for approximately
$25m. Furthermore, a smaller subsidiary, Uvisan was also sold following the
year end. Accordingly, these results represent the performance of the Group
for the full year ended 31 December 2022 prior to these disposals.
Highlights
· Revenue from total operations up 23% to £11.6m (2021: £9.4m)
· Adjusted EBTIDA from total operations up 51% to £1.4m (2021:
£0.9m)
· Loss after tax from total operations reduced to £0.7m (2021:
£2.0m)
· Disposal of the Location based entertainment based completed
on 1 March 2023
· Cash on hand circa £19m
· Capital reduction confirmed by court on 25 April 2023, expected
to become effective 5 May 2023
· Company expects to return approximately £12.5m to shareholders
by way of a tender offer
Chairman's Statement
At the time of my last annual report, we had decided to focus on our LBE
business. Normal trading conditions returned through 2022 and good progress
was made with further expansion of the LBE estate and improved overall
like-for-like trading. Accordingly, LBE revenue increased by 62% to £10.2m
(2021: £6.4m) 1 (#_ftn1) .
The continued growth of the LBE business clearly caught the eye of a potential
acquirer and, following some detailed conversations, we received a serious
approach for our LBE business in late 2022. After much debate, we decided
certainty, in what was quickly becoming a very uncertain world, was the right
decision for our shareholders, and as a result we took the decision to sell
the LBE business to LBE BidCo, Inc. for approximately $25m in cash. This
transaction was concluded on 28 February 2023.
We remain committed to returning circa £12.5m of the net cash from the sale
to our shareholders via a tender offer which is expected to complete in early
June 2023. On 25 April 2023, the court confirmed the capital reduction which
it is anticipated will become effective on or around 5 May 2023 when it is
processed by Companies House. The terms of the tender offer will be subject to
final shareholder approval, details of which will be announced imminently.
Despite the fact all of our resources had been allocated to the LBE business,
we did see some encouraging progress from our Home Based Entertainment (HBE)
business, both in terms of online sales and sales via the QVC TV channel
(though there were some challenges with returns of opened products). Given the
level of demand seen, we have therefore taken the decision in the meantime to
retain this business unit as, given the knowledge we now have in online
retailing, our new B2B relationships and the capacity to purchase more stock,
the potential of this business can be explored further.
Going forward, with an existing AIM listing, supportive shareholders, an
experienced board and cash on hand, we expect, in the coming months, to be
able to secure an attractive opportunity on favourable terms, particularly
against the current challenging stock market backdrop. Our focus is on
acquiring ownership or control of a growing business that needs development
capital to take it to the next stage of its development.
While the formalities of returning cash are complex, we feel that the upcoming
tender offer and the potential to pursue further interesting transactions
provides a balanced approach to risk.
In the meantime, we wish our former colleagues in the LBE business and the new
owners good fortune and look forward to seeing the business grow for the
benefit of the team and the new owners.
I look forward to reporting further progress of our new initiatives in the
coming months.
Chief Executive's Review
The overall outcome for the year met our expectations, with Group revenue from
total operations increasing by 23% per cent to £11.6m (2021: £9.4m).
Adjusted EBITDA from total operations (before central costs) increased by 51%
to £1.4m (2021: £0.9m).
LBE
This time last year, we took the decision to focus the Group's resources on
the LBE business and were pleased to see it grow significantly in the year
with revenue increasing 60% to £10.2m (2021: £6.4m) 2 (#_ftn2) and segment
adjusted EBITDA before central costs increased from £2.3m to £2.9m.
The LBE business enjoyed its first full year of post-COVID trading conditions
in 2022, and whilst this was by no means a certainty as the year started we
decided to take a cautious approach to growth. That said, we still opened a
further 11 new sites (122 seats) and increased capacity at a number of sites
where demand was very strong at peak times (adding a further 49 seats across 9
sites).
We developed new content, most notably "Gorilla Trek" which we were delighted
to see win a prestigious Lumiere award in the 'Best Use of VR' category at a
ceremony in Los Angeles in February 2023. The launch of Gorilla Trek, along
with the containerised solution we developed for outdoor spaces, opened up new
opportunities for roll-out into the zoo market.
We were also pleased, following period-end, to agree a new 3-year framework
agreement with Merlin (running through to January 2026) covering 26 sites.
At 31 December 2022, the LBE estate had 491 headsets in operation (439 partner
and 53 ImmotionVR) across 53 sites as shown in the table below:
USA UK ROW Total
At 1 January 2022
Headsets 204 105 55 364
Sites 26 13 9 48
Additions
Headsets 132 31 8 171
Sites 8 3 - 11
Removals
Headsets (22) (22) - (44)
Sites (3) (3) - (6)
At 31 December 2022
Headsets 314 114 63 491
Sites 31 13 9 53
HBE
HBE revenue reduced to £0.8m (2021: £2.5m) as a far more cautious approach
was taken to stock investment following the decision during the early part of
the year to prioritise the LBE business. The division made a gross loss of
£69k (2021: gross profit £99k). Divisional adjusted EBITDA, before central
costs, resulted in an increased loss of £212k (2021: £110k loss).
The only stock investment in the year was 30,000 Vodiac units for sale
primarily through the QVC TV channel. The sale of the Vodiac units resulted
in a modest contribution, though this was offset by a loss on the sale of
Let's Explore Oceans packs held in stock. The Let's Explore Oceans stock was
fully paid for in 2021 and, as stated at the time, was subjected to
extraordinary freight costs, pushing up the cost per unit. Despite the book
losses, the sale of the units benefitted cash flow as the stock was sold.
Stock of HBE products was low coming into 2023 and, given the majority of the
division's trade takes place in late Q3 and Q4, trading so far in 2023 has
been at a much reduced level.
Uvisan
Uvisan made satisfactory progress but it was apparent that further investment
would need to be made into stock given long lead times from China. In
addition, the business remained very small in terms of potential profit
contribution to the Group.
Accordingly, the board had decided to exit the business and the business was
sold to management for cash consideration of £100k post period end
(completing on 1 February 2023). The Group retains an option to acquire 15%
of the equity in specific circumstances.
Uvisan's revenue increased modestly to £540k (2021: £477k) and profit before
tax was £73k before central costs and impairment of the disposal group (2021:
£67k). This was mainly driven by the increasing orders from the distributor
and reseller networks which the business established over the last 24 months,
including one large order from a new US distributor.
Financial review
The table below shows the results of the various business units in the year.
LBE and Uvisan are included within discontinued operations as the directors
assessed that it was highly probable at the year-end that the transactions
would complete.
Continuing Discontinued
Operations Operations
HBE Head Office LBE Uvisan Total Total
2022 2022 2022 2022 2022 2021
£'000 £'000 £'000 £'000 £'000 £'000
Revenue 796 - 10,241 540 11,577 9,391
Adjusted EBITDA (212) (1,370) 2,851 106 1,375 908
Profit/(loss) after tax (370) (1,558) 1,295 (28) (661) (1,999)
Revenue from total operations for the year increased 23% to £11,577k (2021:
£9,391k).
The Group made gross profit from total operations in the period of £5,016k
(2021: £3,196k), a gross profit margin of 43% (2021: 34%).
The Group achieved a second full year positive adjusted EBITDA(( 3 (#_ftn3)
)) from total operations of £1,375k and (2021: £908k).
The Group's total loss after tax reduced to £661k (2021: £1,999k). The
total adjusted loss(( 4 (#_ftn4) )) per share was 0.07p (2021: 0.28p).
The overall cash outflow in the period was £770k (2021: outflow of £565k) as
illustrated in the table below:
2022 2021
£'000 £'000
Opening cash 1,099 1,664
Operating activities 1,604 263
Investing activities (2,283) (788)
Financing activities (91) (40)
Closing cash 329 1,099
The Group's improved total operating cash inflow of £1,604k (2021: £263k
inflow) was comprised of a £1,383k inflow from operations before working
capital movements (2021: £988k inflow) and a £221k inflow from working
capital movements (2021: £725k outflow). This was driven predominantly by the
improvement in LBE trading.
Total investing cash outflows increased to £2,283k (2021: £788k outflow) as
a result of additional capital expenditure incurred (primarily in the LBE
business) compared with the COVID-impacted prior period.
The Group had a net financing cash outflow of £91k (2020: £40k outflow).
During the year, the Group took out a new loan of £100k and entered into a
new lease valued at £228k in accordance with IFRS 16. IFRS 16 lease
repayments amounted to £218k and loan repayments amounted to £204k.
Net assets at the balance sheet date were £5,391k (2021: £5,720k).
Outlook
Following the sale of the LBE business, we now have a strong balance sheet
with circa £19m of cash on hand and a further $1.25m plus interest due to be
received from the buyer of the LBE business in February 2024.
We have announced the intent to return circa £12.5m to our shareholders and
we believe that following completion of this exercise we will be well placed
to pursue new opportunities.
We have retained the HBE division, encompassing both the Let's Explore and
Vodiac products, and we will seek to take advantage of the strong seasonal
periods whilst not over-committing Group cash resources into stock buying.
That said, the main focus over the coming months with the tender offer
completed, will be to find a suitable opportunity for the Group, which we
would expect to become the Group's principal activity. We feel that our AIM
listing, experienced management team and cash resources on hand could be
attractive to a growing business in need of development capital, especially
whilst the equity markets remain challenging.
This announcement contains certain inside information for the purposes of
Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK
domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"),
and is disclosed in accordance with the Company's obligations under Article 17
of MAR.
Enquiries:
For further information please visit www.letsexploregroup.com/
(http://www.letsexploregroup.com/) , or contact:
Let's Explore Group plc Martin Higginson investors@letsexploregroup.com (mailto:investors@letsexploregroup.com)
David Marks
Cenkos Securities plc Adrian Hadden Tel + 44 (0) 207 7397 8900
(Nomad and Sole Broker) Camilla Hume
Charlie Combe
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
Restated
Year Ended Year Ended
31 December 31 December
2022 2021
£'000 £'000
Continuing operations Note
Revenue 796 2,526
Cost of sales (865) (2,427)
--------------- ---------------
Gross profit (69) 99
Administrative expenses (1,848) (1,871)
Other operating income - 8
--------------- ---------------
Loss from operations (1,917) (1,764)
Memorandum:
Adjusted EBITDA (1,582) (1,084)
Depreciation (1) -
Amortisation (168) (4)
Share based payments (133) (676)
One-off costs (33) -
______
Loss from operations (1,917) (1,764)
Finance costs (11) (3)
_______ _______
Loss before taxation and attributable to equity (1,928) (1,767)
Taxation - -
_______ _______
Loss after taxation from continuing operations (1,928) (1,767)
Profit after tax from discontinued operations 5 1,267 (232)
______ ______
Loss after taxation from all operations (661) (1,999)
Other comprehensive expense
Profit/(loss) on translation of subsidiary 129 44
Loss after taxation and attributable to equity ______ ______
holders of the parent and total comprehensive (532) (1,955)
income for the period ======== ========
Year ended Year ended
31 December 2022 31 December
2021
£0.01 £0.01
Earnings/(loss) per share
Continuing operations
Basic 6 (0.46) (0.43)
Diluted 6 (0.46) (0.43)
------------ ------------
Discontinued operations
Basic 6 0.30 (0.05)
Diluted 6 0.30 (0.05)
------------ ------------
Continuing and discontinued operations
Basic 6 (0.16) (0.48)
Diluted 6 (0.16) (0.48)
------------ ------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
Share capital Share premium Foreign exchange reserve Retained deficit Total equity
£'000 £'000 £'000 £'000 £'000
Balance at 1 January 2021 164 20,273 (80) (13,643) 6,714
Issue of shares 2 298 - - 300
Issue costs deducted from equity - (15) - - (15)
Loss after tax - - - (1,999) (1,999)
Equity settled share-based payments - - - 676 676
Currency translation of overseas subsidiary - - 44 - 44
------------ -------------- ------------ ---------------- ------------
Balance at 31 December 2021 166 20,556 (36) (14,966) 5,720
------------ -------------- ------------ ---------------- ------------
Loss after tax - - - (661) (661)
Equity settled share-based payments - - - 133 133
Currency translation of overseas subsidiary - - 129 - 129
------------ -------------- ------------ ---------------- ------------
Balance at 31 December 2022 166 20,556 93 (15,494) 5,321
------------ -------------- ------------ ---------------- ------------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022
31 December 2022 31 December 2021
ASSETS Note £'000 £'000
Non-current assets
Property, plant and equipment 7 3 1,188
Intangible fixed assets 8 214 3,305
------------ ------------
Total non-current assets 217 4,493
Current assets
Inventories 67 103
Trade and other receivables 786 1,783
Contract assets 2 83
Cash and cash equivalents 51 1,099
------------ ------------
Total current assets 906 3,068
------------ ------------
Assets held for sale 5 6,362 -
------------ ------------
Total assets 7,485 7,561
====== =======
LIABILITIES
Current liabilities
Trade and other payables (786) (1,103)
Loans and borrowings (45) (130)
Lease liabilities - (171)
Contract liabilities (7) (278)
------------ --------------
Total current liabilities (838) (1,682)
------------ --------------
Non-current liabilities
Loans (28) (155)
Lease liabilities - (4)
------------ ------------
Total non-current liabilities (28) (159)
------------ ------------
(1,298) -
Liabilities associated with assets held for sale 5
------------ ------------
Total liabilities (2,164) (1,841)
------------ ------------
Total net assets 5,321 5,720
====== ======
Capital and reserves attributable to owners
of the parent
Share capital 9 166 166
Share premium 20,556 20,556
Foreign exchange reserve 93 (36)
Retained deficit (15,494) (14,966)
______ ______
Total equity 5,321 5,720
======== ========
The financial statements were approved by the Board and authorised for issue
on 3 May 2023
Martin
Higginson
Daniel Wortley
Chief Executive Officer
Finance Director
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2022
Restated
Year ended Year ended
31 December 2022 31 December
2021
£'000 £'000
Cash flows from operating activities
Loss before tax from continuing operations (1,928) (1,767)
Loss before tax from discontinued operations 1,297 (270)
Adjustments for:
Share based payments 133 676
Depreciation on property plant and equipment 1,036 1,470
Profit on disposal of fixed assets (19) (18)
Amortisation of intangible assets 601 641
Impairment of tangible and intangible assets 176 82
Finance costs 37 44
Finance income (1) (1)
Foreign exchange profit/(loss) 37 50
Foreign corporate tax payment (4) (3)
Corporation tax repayment received 18 84
_____ _____
Cash inflows/(outflows) from operating activities before changes in working 1,383 988
capital
Decrease/(increase) in inventories (11) 49
Increase in trade and other receivables (46) (989)
Increase in trade & other payables and contract liabilities 278 215
_____ _____
Cash generated/(used) in operations 1,604 263
Investing activities
Purchase of intangible assets (510) (404)
Purchase of property, plant and equipment (1,797) (425)
Proceeds from disposals of property, plant and equipment 24 41
_____ _____
Net cash used in investing activities (2,283) (788)
Financing activities
Finance costs (37) (44)
Finance income 1 1
New loans and finance leases 328 119
Loan and finance lease repayments (422) (405)
Foreign exchange on retranslation of financing 39 4
Issue of new share capital - 300
Costs on issue of shares - (15)
_____ _____
Net cash from financing activities (91) (40)
Net (decrease)/increase in cash and cash equivalents (770) (565)
Cash and cash equivalents at beginning of the period 1,099 1,664
_____ _____
Cash and cash equivalents at end of the period 329 1,099
====== ======
Year ended Year ended
31 December 2022 31 December 2021
£'000 £'000
Reconciliation of net cashflow to movement in net debt
Net (decrease)/increase in cash and cash equivalents (770) (565)
New loans and finance leases (328) (119)
Repayment of loans and finance leases 422 405
Foreign exchange on retranslation of financing (39) (4)
_____ _____
Movement in net funds in the year (715) (283)
Net funds/(debt) at beginning of year 639 922
_____ _____
Net funds at end of year (76) 639
====== ======
Breakdown of net funds/(debts)
Cash and cash equivalents 51 1,099
Cash and cash equivalents attributable to disposal groups 278 -
_____ _____
329 1,099
Loans and borrowings (73) (285)
Loans and borrowings attributable to disposal groups (136) -
Lease liabilities - (175)
Lease liabilities attributable to disposal groups (196) -
_____ _____
Net funds at end of year (76) 639
====== ======
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
1 GENERAL INFORMATION
Let's Explore Group plc is a public limited company incorporated and domiciled
in the United Kingdom. The address of the registered office is Cumberland
Court, 80 Mount Street, Nottingham, England, NG1 6HH. The Group is listed on
AIM.
The principal activities of the Group during the year were: (i) the provision
of virtual reality (VR) experiences to partner sites and via its own
ImmotionVR sites; (ii) the sale of the Let's Explore virtual and augmented
reality consumer product; and (iii) the sale of UV sanitisation equipment.
Activities (i) and (iii) are treated as discontinued operations in these
financial statements.
These financial statements are presented in pounds sterling because that is
the currency of the primary economic environment in which the Group operates.
Foreign operations are included in accordance with the policies set out in
note 2.
2 ACCOUNTING POLICIES
Principal accounting policies
The Company is a public company incorporated and domiciled in the United
Kingdom. The principal accounting policies applied in the preparation of these
consolidated financial statements are set out below. These policies have been
consistently applied to all the periods presented, unless otherwise stated.
Basis of preparation
The financial statements have been prepared in accordance with International
Financial Reporting Standards, International Accounting Standards and
Interpretations (collectively IFRS) issued by the International Accounting
Standards Board (IASB) as adopted by the United Kingdom ("adopted IFRSs") and
those parts of the Companies Act 2006 which apply to companies preparing their
financial statements under IFRSs. The financial statements are presented to
the nearest round thousand (£'000) except when otherwise indicated.
Basis of Consolidation
The Group comprises a holding company and a number of subsidiaries and all of
these have been included in the consolidated financial statements in
accordance with the principles of acquisition accounting as laid out by IFRS 3
Business Combinations.
Going concern
At the time of approving the financial statements, the Directors have a
reasonable expectation that the Company and the Group have adequate resources
to continue in operational existence for the foreseeable future. The going
concern basis of accounting has therefore been adopted in preparing the
financial statements.
In reaching this conclusion, the Directors have considered the financial
position of the Group following receipt of the sale proceeds from the LBE
business, together with its forecasts and projections for the next 12 months,
taking into account reasonably possible changes in trading performance and
capital expenditure requirements.
The financial statements do not include any adjustments that would result from
the going concern basis of preparation being inappropriate.
Business combinations and goodwill
Acquisitions of subsidiaries and business are accounted for using the
acquisition method. The assets and liabilities and contingent liabilities of
the subsidiaries are measured at their fair value at the date of acquisition.
Any excess of acquisition over fair values of the identifiable net assets
acquired is recognised as goodwill. Goodwill arising on consolidation is
recognised as an asset and reviewed for impairment twice annually. Any
impairment is recognised immediately in profit or loss accounts and is not
subsequently reversed. Acquisition related costs are recognised in the income
statement as incurred.
Revenue recognition
Revenue is recognised to the extent that it is probable that the economic
benefits will flow to the Group and the revenue can be reliably measured.
Revenue is measured as the fair value of the consideration received or
receivable, excluding discounts, rebates, value added tax and other sales
taxes. The following criteria must also be met before revenue is recognised:
Location Based Entertainment
Partner revenue is recognised on the date which the sale to the customer takes
place. The Group acts as the principal in the transaction and therefore
recognises the revenue charged to the end user in full with the concession
partners' shares deducted as a cost of sale.
Home Based Entertainment
For sales to consumers, revenue is recognised on sales of the Let's Explore
and Vodiac products in the period in which the corresponding order is placed
and paid for. For sales to resellers, revenue is recognised in the period in
which delivery to the reseller takes place.
Uvisan and other hardware sales
Revenue from the sale of goods is recognised when all of the following
conditions are satisfied:
· the Group has transferred the significant risks and rewards of
ownership to the buyer;
· the Group retains neither continuing managerial involvement to the
degree usually associated with ownership nor effective control over
the goods sold;
· the amount of revenue can be reliably measured;
· it is probable that the Group will receive the consideration due
under the transaction; and
· the costs incurred or to be incurred in respect of the transaction
can be reliably measured.
Content
Content licensing revenue is recognised on the date on which the related sale
of that content by the licensee takes place where agreements do not provide
for new or updated content to be supplied. Where the Group is committed
under licensing agreements to producing new content, or material updates,
revenue is recognised over the period of the agreement. No element of
financing is deemed present as the sales are made with standard credit terms
of 30 days which is consistent with market practice. The Group does not expect
to have any contracts where the period between the transfer of the promised
services or goods to the customer and payment by the customer exceeds one
year. As a consequence, the Group does not adjust any of the transaction
prices for the time value of money.
Leases
The Group assesses whether a contract is or contains a lease, at inception of
a contract. The Group recognises a right-of-use asset and a corresponding
lease liability with respect to all lease agreements in which it is the
lessee, except for short-term leases (defined as leases with a lease term of
12 months or less) and leases of low value assets. In the latter cases, the
Group recognises the lease payments as an operating expense on a straight-line
basis over the term of the lease unless another systematic basis is more
representative of the time pattern in which economic benefits from the leased
asset are consumed.
The lease liability is initially measured at the present value of the lease
payments that are not paid at the commencement date, discounted by using the
rate implicit in the lease. If this rate cannot be readily determined, the
Group uses its incremental borrowing rate.
Lease payments included in the measurement of the lease liability comprise
fixed lease payments (including in-substance fixed payments), less any lease
incentives.
The lease liability is included in liabilities in the Statement of Financial
Position.
The lease liability is subsequently measured by increasing the carrying amount
to reflect interest on the lease liability (using the effective interest
method) and by reducing the carrying amount to reflect the payments made.
The right-of-use assets comprise the initial measurement of the corresponding
lease liability, lease payments made at or before the commencement day and any
initial direct costs. They are subsequently measured at cost less accumulated
depreciation and impairment losses.
Right-of-use assets are depreciated over the shorter period of lease term and
useful life of the underlying asset. If a lease transfers ownership of the
underlying asset or the cost of the right-of-use asset reflects that the Group
expects to exercise a purchase option, the related right-of-use asset is
depreciated over the useful life of the underlying asset. The depreciation
starts at the commencement date of the lease.
The right-of-use assets are included in the property, plant and equipment in
the Statement of Financial Position.
The Group applies IAS 36 to determine whether a right-of-use asset is impaired
and accounts for any identified impairment losses where applicable.
Foreign currency
The individual financial statements of each group company are presented in the
currency of the primary economic environment in which it operates (its
functional currency). For the purpose of the consolidated financial
statements, the results and financial position of each group company are
expressed in pound sterling, which is the functional currency of the Group,
and the presentational currency for the consolidated financial statements.
In preparing the financial statements of the individual companies,
transactions in currencies other than the Group company's functional currency
(foreign currencies) are recorded at rates of exchange prevailing on the dates
of the transactions. At the reporting date, monetary assets and liabilities
that are denominated in foreign currencies are retranslated at the rates
prevailing on the reporting date. Non-monetary items carried at fair value
that are denominated in foreign currencies are translated at the rates
prevailing at the date when the fair value was determined. Non-monetary items
that are measured in terms of historical cost in foreign currency are not
retranslated. Exchange differences arising on the settlement of monetary
items, and on the retranslation of monetary items, are included in profit or
loss for the period. Exchange differences arising on the retranslation of
non-monetary items carried at fair value are included in profit or loss for
the period except for differences arising on the retranslation of non-monetary
items in respect of which gains and losses are recognised directly in equity.
For such non-monetary items, any exchange component of the gain or loss is
also recognised directly in equity.
For the purpose of presenting consolidated financial statements, the assets
and liabilities of the Group's foreign operations are translated at exchange
rates prevailing on the reporting date. Income and expense items are
translated at the average exchange rates for the period, unless exchange rates
fluctuate significantly during the period, in which case the exchange rates at
the date of transactions are used. Exchange differences arising, if any, are
classified as equity and transferred to the Group's translation reserve. Such
translation differences are recognised as income and expense in the period of
the disposal of the operation. Goodwill and fair value adjustments arising on
the acquisition of a foreign entity are treated as assets and liabilities of
the foreign entity and translated at the closing rates.
Property, plant and equipment
Property, plant and equipment are stated at cost net of accumulated
depreciation and provision for impairment. Depreciation is provided on all
property plant and equipment, at rates calculated to write off the cost less
estimated residual value, of each asset on a straight-line basis over its
expected useful life.
The residual value is the estimated amount that would currently be obtained
from disposal of the asset if the asset were already of the age and in the
condition expected at the end of its useful economic life.
The method of depreciation for each class of depreciable asset is:
Leasehold
property
- Over term of lease
Fixtures, fittings and equipment - Between
3 and 7 years on a straight-line basis
IFRS 16 right of use assets
- Over term of lease
Intangible assets
Intangible assets include goodwill arising on the acquisition of subsidiaries
and represents the difference between the fair value of the consideration
payable and the fair value of the net assets that have been acquired. The
residual element of goodwill is not being amortised but is subject to
twice-annual impairment review.
Internally-generated intangible assets
An internally-generated intangible asset arising from the Group's development
activities is capitalised and held as an intangible asset in the statement of
financial position when the costs relate to a clearly defined project; the
costs are separately identifiable; the outcome of such a project has been
assessed with reasonable certainty as to its technical feasibility and its
ultimate commercial viability; the aggregate of the defined costs plus all
future expected costs in bringing the product to market is exceeded by the
future expected sales revenue; and adequate resources are expected to exist to
enable the project to be completed. Internally generated intangible assets are
amortised over their estimated useful lives, being between 3 and 7 years from
completion of development. Other development expenditure is recognised as an
expense in the income statement in the period in which it is incurred.
Impairment of assets
Impairment tests on goodwill are undertaken twice-annually. The recoverable
value of goodwill is estimated on the basis of value in use, defined as the
present value of the cash generating units with which the goodwill is
associated. When value in use is less than the book value, an impairment is
recorded and is irreversible.
Other non-financial assets are subject to impairment tests whenever
circumstances indicate that their carrying amount may not be recoverable.
Where the carrying value of an asset exceeds its estimated recoverable value
(i.e. the higher of value in use and fair value less costs to sell), the asset
is written down accordingly. Where it is not possible to estimate the
recoverable value of an individual asset, the impairment test is carried out
on the asset's cash-generating unit. The carrying value of property, plant and
equipment is assessed in order to determine if there is an indication of
impairment. Any impairment is charged to the statement of comprehensive
income. Impairment charges are included under administrative expenses within
the consolidated statement of comprehensive income.
Inventories
Inventories are stated at the lower of cost and net realisable value. Costs
comprise direct materials and, where applicable, direct labour costs and
overheads that have been incurred in bringing the inventories to their present
location and condition. Net realisable value represents the estimated selling
price less all estimated costs of completion and costs to be incurred in
marketing, selling and distribution.
Financial instruments
The Group classifies financial instruments, or their component parts, on
initial recognition as a financial asset, a financial liability or an equity
instrument.
The Group recognises lifetime expected credit losses for trade receivables and
amounts due on contracts with customers when appropriate. The expected credit
losses on these financial assets are estimated based on the Group's historical
credit loss experience, adjusted for facts that are specific to the debtors,
general economic conditions and an assessment of both the current as well as
the forecasted conditions at the reporting date, including time value of money
where appropriate. Lifetime expected credit losses are losses which will
result from all possible default events over the expected life of a financial
instrument.
Contract assets
Contract assets are recognised when the Group has satisfied a performance
obligation but cannot recognise a receivable until other obligations are
satisfied. Contract assets represent a right to payment that is conditional on
further performance while receivables represent an unconditional right to
payment.
Contract liabilities
Contract liabilities comprise payments in advance of revenue recognition and
revenue deferred due to contract performance obligations not being completed.
They are classified as current liabilities if the contract performance
obligations are due to be completed within one year or less (or in the normal
operating cycle of the business if longer). If not, they are presented as
non-current liabilities. Contract liabilities are recognised initially at fair
value and subsequently at amortised cost.
Trade and other receivables
Trade and other receivables are measured at initial recognition at fair value,
and subsequently measured at amortised cost using the effective interest
method. A provision is established when there is objective evidence that the
Group will not be able to collect all amounts due. The amount of any provision
is recognised in profit or loss.
Cash and cash equivalents
Cash and cash equivalents are recognised as financial assets. They comprise
cash held by the Group and short-term bank deposits with an original maturity
date of three months or less.
Trade payables
Trade payables are initially recognised as financial liabilities measured at
fair value, and subsequent to initial recognition are
measured at amortised cost.
Bank borrowings
Interest bearing bank loans, overdrafts and other loans are recognised as
financial liabilities and recorded at fair value, net of direct issue costs.
Finance costs are accounted for on an amortised cost basis in the income
statement using the effective interest rate.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the
assets of an entity after deduction of all its liabilities. Equity instruments
issued by the Company are recorded at the proceeds received net of direct
issue costs.
Share based payments
Where share options are awarded to employees, the fair value of the options at
the date of grant is charged to the statement of comprehensive income on a
straight-line basis over the vesting period. Non-market vesting conditions are
taken into account by adjusting the number of options expected to vest at each
statement of financial position date so that, ultimately, the cumulative
amount recognised over the vesting period is based on the number of options
that eventually vest. Market vesting conditions are factored into the fair
value of the options granted. The cumulative expense is not adjusted for
failure to achieve a market vesting condition.
Where share options are cancelled due to employees leaving the Group's
employment before they have vested, cumulative share based payment expenses
recognised in respect of those employees are reversed through the statement of
comprehensive income.
Where share options are replaced the fair value of the replaced options at the
date of grant continues to be recognised through the statement of
comprehensive income in addition to a charge equating to the incremental value
of the new options granted.
Fair value is calculated either using the Monte-Carlo model or Black-Scholes
model.
Pensions
The pension schemes operated by the Group are defined contribution schemes.
The pension cost charge represents the contributions payable by the Group.
Taxation and deferred taxation
Corporation tax payable is provided on taxable profits at prevailing rates.
Deferred tax assets and liabilities are recognised where the carrying amount
of an asset or liability in the balance sheet differs from its tax base,
except for differences arising on:
· the initial recognition of goodwill; and
· the initial recognition of an asset or liability in a transaction
which is not a business combination and at the time of the transaction affects
neither accounting nor taxable profit.
Recognition of deferred tax assets is restricted to those instances where it
is probable that future taxable profit will be available against which the
asset can be utilised. The amount of the asset or liability is determined
using tax rates that have been enacted or substantively enacted by the balance
sheet date and are expected to apply when the deferred tax
liabilities/(assets) are settled/(recovered).
Deferred tax assets and liabilities are offset when the Group has a legally
enforceable right to offset current tax assets and liabilities and the
deferred tax assets and liabilities relate to taxes levied by the same tax
authority on either:
· the same taxable Group company; or
· different Group entities which intend either to settle current
tax assets and liabilities on a net basis, or to realise the assets and settle
the liabilities simultaneously, in each future period in which significant
amounts of deferred tax assets or liabilities are expected to be settled or
recovered.
Government grants
The Group recognises government grants when it has reasonable assurance that
it will comply with the relevant conditions and the grant will be received.
Grants related to income are recognised in the profit and loss account in line
with the recognition of the expenses that the grants are intended to
compensate. Such grants are presented as income and are not deducted from the
related expenditure.
Segmental reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the Executive Directors, who are responsible for
allocating resources and assessing performance of the operating segments.
A business segment is a group of assets and operations, engaged in providing
products or services that are subject to risks and returns that are different
from those of other operating segments.
A geographical segment is engaged in providing products or services within a
particular economic environment that are subject to risks and returns that are
different from those of segments operating in other economic environments. The
Executive Directors assess the performance of the operating segments based on
the measures of revenue, adjusted EBITDA, profit before taxation and profit
after taxation. Central overheads are not allocated to business segments.
Non-current assets held for sale and discontinued operations
The Group classifies non-current assets and disposal groups as held for sale
if their carrying amounts will be recovered principally through a sale
transaction rather than through continuing use. Non-current assets and
disposal groups classified as held for sale are measured at the lower of their
carrying amount and fair value less costs to sell. Costs to sell are the
incremental costs directly attributable to the disposal of an asset (disposal
group), excluding finance costs and income tax expense.
The criteria for held for sale classification is regarded as met only when the
sale is highly probable, the asset or disposal group is available for
immediate sale in its present condition and the sale is expected to complete
within one year from the date of the classification.
Assets and liabilities classified as held for sale are presented separately as
current items in the statement of financial position.
The Location Based Entertainment (LBE) and Uvisan divisions have been
classified as discontinued operations in the consolidated statement of
comprehensive income and the prior period comparatives have been restated for
consistency.
Administrative expenses which the Group will continue to incur following the
sale of the disposal groups are included within continuing operations and
costs which will cease on disposal are included in discontinued operations.
Discontinued operations are excluded from the results of continuing operations
and are presented as a single amount as profit or loss after tax from
discontinued operations in the statement of profit or loss.
Details of discontinued operations are shown in note 5. All other notes to
the financial statements include amounts for continuing operations only,
unless otherwise stated.
3 CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
In the application of the Group's accounting policies, which are described in
note 2, the Directors are required to make judgments, estimates and
assumptions about the carrying amounts of assets and liabilities that are not
readily apparent from other sources. The estimates and associated assumptions
are based on experience and other factors considered to be relevant. Actual
results may differ from these estimates. The estimates and underlying
assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the
revision affects only that period, or in the period of the revision and future
periods if the revision affects both current and future periods.
The following are the critical judgments and estimations that the Directors
have made in the process of applying the Group's accounting policies and that
have the most significant effect on the amounts recognised in the financial
statements.
Critical accounting judgments
Discontinued operations
The Directors assessed and concluded that the sale of the Location Based
Entertainment (LBE) and Uvisan businesses were highly probable to take place
within 12 months of the reporting date. Therefore, the results of both
divisions have been included within discontinued operations in accordance with
IFRS 5.
Revenue recognition
Location Based Entertainment revenue is accounted for on the basis that the
Group acts as the principal in the transactions between partners and
customers. Gross sales of services by partners to end customers are reported
to the Group regularly and are included within the Group's turnover without
any deductions.
For sales to consumers, revenue from the sale of Let's Explore and Vodiac
products is recognised on receipt of payment, which is a condition for an
order to be accepted. The price paid by the consumer excluding sales taxes is
recognised as revenue. At each accounting date provision is made for refunds
to be made for orders received and paid for, prior to the accounting date.
This provision is based on past experience of the level of refund applications
received.
For sales to resellers, revenue from the sale of Let's Explore and Vodiac
products is recognised in the period in which delivery to the reseller takes
place. The price paid by the reseller is recognised as revenue.
The revenue for the sale of Uvisan products and other hardware is recognised
once the benefits and control of these items are no longer with the Group and
are instead with the customer. Management exercise judgment to consider when
the risks have been transferred to the customer. For both sales direct to
customers and via resellers, the income received by the Group is recognised as
revenue.
Recoverability criteria for capitalisation of development expenditure
The Group recognises costs incurred on development projects as an intangible
asset which satisfies the requirements of IAS 38. The calculation of the costs
incurred includes the percentage of time spent by certain employees on the
development project. The decision whether to capitalise and how to determine
the period of economic benefit of a development project requires an assessment
of the commercial viability of the project and the prospect of selling the
project to new or existing customers. An assessment is made as to the future
economic benefits of the project and whether an impairment is needed.
Impairment of goodwill
Impairment of the valuation of the goodwill relating to the acquisition of
subsidiaries is considered twice annually for indicators of impairment to
ensure that the asset is not overstated within the financial statements. The
twice annual impairment assessment in respect of goodwill requires estimates
of the value in use (or fair value less costs to sell) of subsidiaries to
which goodwill has been allocated. As a result, estimates of future cash flows
are required, together with an appropriate discount factor for the purpose of
determining the present value of those cash flows.
Critical accounting estimates
Amortisation of intangible assets
The periods of amortisation adopted to write down capitalised intangible
assets and capitalised staff costs requires judgments to be made in respect of
estimating the useful lives of the intangible assets to determine an
appropriate amortisation rate. Capitalised development costs are being
amortised on a straight-line basis over the period when economic benefits are
expected to be received, which has been estimated at 3 years.
Depreciation
The useful economic lives of tangible fixed assets are based on management's
judgment and experience. When management identifies that actual useful
economic lives differ materially from the estimates used to calculate
deprecation, that charge is added retrospectively. Due to the significance of
tangible fixed assets to the Group, variances between actual and estimated
useful economic lives could impact on the operating results both positively
and negatively.
Share based payments expense
Non-market performance and service conditions are included in the assumptions
about the number of options that are expected to vest. At the end of each
reporting period the Group revises its estimates of the number of options that
are expected to vest based on the non-market vesting conditions. It recognises
the impact of the revision to the original estimates, if any, in the
consolidated statement of comprehensive income, with a corresponding
adjustment to equity. This requires a judgment as to how many options will
meet the future vesting criteria as well as the judgments required in
estimating the fair value of the options. Where options are cancelled,
followed by the grant of new options at or close to the time of the
cancellations, a key judgment, based on the reasons for the cancellations and
the new issues, is made as to the extent to which the new options granted are
modifications of, or replacements for, the cancelled options, or new options.
IFRS 16 discount rates
The Group estimates an appropriate discount rate based on an incremental rate
of borrowing for the calculation of the IFRS 16 right-of-use assets. This
requires judgment as to an appropriate discount rate.
4 SEGMENTAL INFORMATION
A segmental analysis of revenue and expenditure for the year ended 31 December
2022 is below.
HBE HO Total Continuing Operations Discontinued Operations Total
£'000 £'000 £'000 £'000 £'000
Revenue 796 - 796 10,781 11,577
Cost of sales (865) - (865) (5,696) (6,561)
Administrative expenses* (143) (1,370) (1,513) (2,167) (3,680)
Other operating income - - - 39 39
Adjusted EBITDA**
(212) (1,370) (1,582) 2,957 1,375
Depreciation - (1) (1) (1,035) (1,036)
Amortisation (158) (10) (168) (433) (601)
Impairment: intangible assets - - - (78) (78)
Impairment: assets held for sale - - - (97) (97)
Profit on disposal - - - 19 19
One-off costs - (33) (33) (12) (45)
Share based payments - (133) (133) - (133)
Finance costs - (11) (11) (25) (36)
Finance income - - - 1 1
Taxation - - - (30) (30)
----------- ------------- ---------- ------------ ------------
(Loss) / profit for the year (370) (1,558) (1,928) 1,267 (661)
====== ====== ====== ====== ======
HBE = Home Based Entertainment
HO = Head Office
*Administrative expenses exclude depreciation, amortisation, impairment,
profit on disposal, one-off costs and income and share based payments.
**Adjusted EBITDA is a non-GAAP metric.
A segmental analysis of revenue and expenditure for the year ended 31 December
2021 is below:
HBE HO Total Continuing Operations Discontinued Operations Total
£'000 £'000 £'000 £'000 £'000
Revenue 2,526 - 2,526 6,865 9,391
Cost of sales (2,427) - (2,427) (3,768) (6,195)
Administrative expenses* (212) (979) (1,191) (1,629) (2,820)
Other operating income 3 5 8 524 532
Adjusted EBITDA**
(110) (974) (1,084) 1,992 908
Depreciation - - - (1,470) (1,470)
Amortisation - (4) (4) (637) (641)
Impairment - - - (82) (82)
Profit on disposal - - - 18 18
One-off costs - - - (51) (51)
Share based payments - (676) (676) - (676)
Finance costs - (3) (3) (41) (44)
Finance income - - - 1 1
Taxation - - - 38 38
---------- ------------ -------------- --------------- ----------
Loss for the year (110) (1,657) (1,767) (232) (1,999)
======= ======= ======= ======= =======
HBE = Home Based Entertainment
HO = Head Office
*Administrative expenses exclude depreciation, amortisation, impairment, loss
on disposal, restructuring costs and share based payments
**Adjusted EBITDA is a non-GAAP metric.
The table below splits revenue, assets and capital expenditure by location:
External revenue by location of customer
2021
2022 £'000
£'000
Continuing operations
USA & Canada 400 1,645
United Kingdom 396 387
Australia - 443
Other - 51
---------- ------------
796 2,526
===== ======
Total assets by location Net tangible capital expenditure by location
2022 2021 2022 2021
£'000 £'000 £'000 £'000
United Kingdom 1,062 5,542 3 75
USA & Canada 61 1,969 - 340
Middle East - 27 - -
Rest of Europe - 10 - 7
Australia - 10 - 3
China - 3 - -
Assets held for sale 6,433 - 1,794 -
------------ ------------ ------------- ------------
7,556 7,561 1,797 425
====== ====== ====== ======
5 DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE
The Location Based Entertainment (LBE) and Uvisan businesses and net assets
were in the process of being sold as at 31 December 2022. Both sales were
subsequently completed after the reporting date. Both divisions are deemed
to be discontinued operations as they represent separate major lines of
business. The results for these businesses have been excluded from the
continuing results of the Group for the period ended 31 December 2022. The
results for the period ended 31 December 2021 have been restated to exclude
the results of these businesses from the continuing operations of the Group in
those periods.
Summary income statement
The results for LBE and Uvisan included in the income statement as
discontinued operations are as follows:
Restated
Total Total
LBE Uvisan 2022 2021
Discontinued operations £'000 £'000 £'000 £'000
Revenue 10,241 540 10,781 6,865
Cost of sales (5,453) (244) (5,697) (3,768)
Other operating income 39 - 39 524
Administrative expenses (3,482) (320) (3,802) (3,851)
---------------- ---------------- --------------- ---------------
Operating profit/(loss) 1,345 (24) 1,321 (230)
Finance costs (25) - (25) (41)
Finance income 1 - 1 1
---------------- ---------------- ------------- ----------------
Profit/(loss) before taxation 1,321 (24) 1,297 (270)
Taxation (26) (4) (30) 38
---------------- ---------------- ------------- ----------------
Profit/(loss) from discontinued operations 1,295 (28) 1,267 (232)
---------------- ---------------- ------------- ----------------
Adjusted EBITDA 2,851 106 2,957 1,990
Depreciation (1,028) (7) (1,035) (1,469)
Amortisation (407) (26) (433) (637)
Impairment of intangible assets (78) - (78) (83)
Impairment of assets held for sale - (97) (97) -
Profit on disposal of fixed assets 19 - 19 18
One-off costs (12) - (12) (51)
---------------- ---------------- ------------- ----------------
Operating profit/(loss) 1,345 (24) 1,321 (232)
---------------- ---------------- ------------- ----------------
LBE - Location Based Entertainment
Uvisan - Sale of UV-C disinfection cabinets
The figures included in discontinued operations do not include any allocation
of head office costs, details of which can be found in note 4.
Summary cash flow statement
The net cash flows for LBE and Uvisan included in the cash flow statement are
as follows:
Restated
Total Total
LBE Uvisan 2022 2021
Discontinued operations £'000 £'000 £'000 £'000
Net cash generated from operating activities 3,155 61 3,216 1,008
Net cash used in investing activities (2,003) (67) (2,070) (805)
Net cash used in financing activities (105) - (105) (319)
---------------- ---------------- ------------- ----------------
Net cash flows generated/(used in) discontinued operations 1,047 (6) 1,041 (116)
---------------- ---------------- ------------- ----------------
Net assets held for sale
The major classes of assets and liabilities classified as held for sale as at
31 December 2022 were as follows:
LBE Uvisan Total
Discontinued operations £'000 £'000 £'000
Assets
Property, plant and equipment 1,996 23 2,019
Goodwill on consolidation 2,438 - 2,438
Other intangible assets 466 32 498
Cash and cash equivalents 187 91 278
Other assets 1,013 213 1,226
Impairment of assets held for sale - (97) (97)
------------ ------------ ------------
Assets held for sale 6,100 262 6,362
------------ ------------ ------------
Liabilities
Liabilities directly associated with assets held for sale (1,136) (162) (1,298)
------------ ------------ -----------
Net assets held for sale 4,964 100 5,064
------------ ------------ -----------
Other assets comprise inventories, receivables, prepayments and accrued
income. Liabilities comprise payables, accruals, deferred income and tax
liabilities.
6 EARNINGS PER SHARE
2022 2021
£'000 £'000
Profit/(loss) after taxation
Continuing operations (1,928) (1,767)
Discontinued operations 1,267 (232)
-------------- -------------
Loss after taxation from all operations (661) (1,999)
Basic weighted average number of shares 415,538,083 414,140,823
Diluted weighted average number of shares 473,775,097 472,053,826
============ ============
Continuing and discontinued operations £0.01 £0.01
Basic loss per share (0.16) (0.48)
Diluted loss per share (0.16) (0.48)
======= ========
Continuing operations £0.01 £0.01
Basic loss per share (0.46) (0.43)
Diluted loss per share (0.46) (0.43)
======== ========
Discontinued operations £0.01 £0.01
Basic earnings/(loss) per share 0.30 (0.05)
Diluted earnings/(loss) per share 0.30 (0.05)
======== ========
Earnings/(loss) per ordinary share has been calculated using the weighted
average number of shares in issue during the relevant financial periods. IAS
33 requires presentation of diluted EPS when a company could be called upon to
issue shares that would decrease earnings per share or increase the loss per
share. Per IAS 33 the diluted EPS cannot show an improvement on the basic EPS.
As that would be the result in this case the potential ordinary shares have
been disregarded in the calculation of diluted EPS
7 PROPERTY, PLANT AND EQUIPMENT
Fixtures, Fittings & Equipment
Leasehold Property Right-of-Use
Asset Total
Cost £'000 £'000 £'000 £'000
At 1 January 2021 380 4,092 806 5,278
Additions 3 422 - 425
Disposals (4) (1,836) (169) (2,009)
Foreign exchange - 21 5 26
----------- ------------ -------------- ------------
At 31 December 2021 379 2,699 642 3,720
----------- ------------ -------------- ------------
At 1 January 2022 379 2,699 642 3,720
Additions 71 1,498 228 1,797
Disposals (154) (86) (659) (899)
Foreign exchange - 230 42 272
Redesignated as held for sale (296) (4,338) (253) (4,887)
----------- -------------- ------------- ------------
At 31 December 2022 - 3 - 3
------------ --------------- ------------- ------------
Accumulated depreciation
At 1 January 2021 226 2,292 500 3,018
Depreciation on owned assets 92 1,202 - 1,294
Depreciation on financed assets - - 176 176
Disposals (3) (1,817) (166) (1,986)
Foreign exchange - 24 6 30
----------- --------------- -------------- ------------
At 31 December 2021 315 1,701 516 2,532
----------- --------------- --------------- ------------
At 1 January 2022 315 1,701 516 2,532
Depreciation on owned assets 64 816 - 880
Depreciation on financed assets - - 156 156
Disposals (153) (84) (659) (896)
Foreign exchange - 149 47 196
Redesignated as held for sale (226) (2,582) (60) (2,868)
------------- -------------- -------------- ------------
At 31 December 2022 - - - -
------------- -------------- -------------- ------------
Net Book Value
At 31 December 2022 - 3 - 3
======= ======= ======= ======
At 31 December 2021 64 998 126 1,188
======= ====-== ======= ======
At 31 December 2020 154 1,800 306 2,260
======= ======= ======= ======
8 INTANGIBLE ASSETS
Goodwill Other
Development Arising on Intangible
Costs Consolidation Assets Total
£'000 £'000 £'000 £'000
Cost
At 1 January 2021 2,171 2,438 545 5,154
Transfers (4) - 6 2
Additions 384 - 20 404
Disposals (6) - (2) (8)
Impairment (81) - (1) (82)
Foreign exchange 3 - - 3
------------- ------------- ------------ ---------------
At 31 December 2021 2,467 2,438 568 5,473
------------- ------------ ------------ ---------------
At 1 January 2022 2,467 2,438 568 5,473
Additions 493 - 17 510
Disposals - - (66) (66)
Foreign exchange 57 - - 57
Redesignated as held for resale (2,563) (2,438) (490) (5,491)
------------- ------------- ------------- ---------------
At 31 December 2022 454 - 29 483
------------- ------------- ------------- ---------------
Accumulated amortisation
At 1 January 2021 1,002 - 527 1,529
Amortisation 624 - 17 641
Transfers (2) - 3 1
Disposals (6) - (1) (7)
Impairment - - (1) (1)
Foreign exchange 5 - - 5
------------ ------------- ------------ --------------
At 31 December 2021 1,623 - 545 2,168
------------ -------------- ------------- ---------------
At 1 January 2022 1,623 - 545 2,168
Amortisation 582 - 19 601
Disposals - - (66) (66)
Impairment 78 - - 78
Foreign exchange 42 - - 42
Redesignated as held for resale (2,070) - (484) (2,554)
------------ ------------- ------------ ---------------
At 31 December 2022 255 - 14 269
------------ -------------- -------------- ---------------
Net Book Value
At 31 December 2022 199 - 15 214
====== ======= ====== =======
At 31 December 2021 844 2,438 23 3,305
====== ======= ====== =======
At 31 December 2020 1,169 2,438 18 3,625
====== ======== ====== =======
Other intangible assets comprise website development and trademark costs.
Amortisation is charged on development costs and other intangible assets over
periods ranging between 3 and 7 years. Development costs have between two
and three years' remaining average useful lives.
Goodwill and impairment
The Group is obliged to test goodwill annually for impairment, or more
frequently if there are indications that goodwill and indefinite life
intangibles might be impaired, due to the goodwill deemed to have an
indefinite useful life. In order to perform this test, management is required
to compare the carrying value of the relevant cash generating unit ("CGU")
including the goodwill with its recoverable amount. The recoverable amount of
the CGU is determined from a value in use calculation. It is considered that
any reasonably possible changes in the key assumptions would not result in an
impairment of the present carrying value of the goodwill.
Immotion Studios Limited, C.2K Entertainment Inc. and Immotion Limited were
acquired and continue to operate in relation to the Location Based
Entertainment segment. The Location Based Entertainment segment has been
assessed as a single CGU when conducting impairment reviews.
Location Based Entertainment
The recoverable amount of the Location Based Entertainment segment has been
assessed in light of the sale of the division in February 2023. The sale
proceeds received by the Company were substantially greater than the value of
the businesses assets and goodwill and as a result no impairment charge has
been recognised. Further details on the sale of the Location Based
Entertainment business are included in note 10.
9 SHARE CAPITAL 2022 2021
£'000 £'000
Called up share capital
Allotted, called up and fully paid
415,538,083 Ordinary shares of 0.040108663 pence each 166 166
(2021: 415,538,083 ordinary shares)
====== ======
No shares were issued in
the year ended 31 December 2022.
10 POST BALANCE SHEET EVENTS
On 2 February 2023, the Company announced that it has completed the sale of
Uvisan Limited for cash consideration of £100,000.
On 8 February 2023, the Company announced that it had issued 632,563 new
ordinary shares pursuant to the exercise of share options under the Company's
share option scheme.
On 1 March 2023, the Company announced the completion of the sale of the
Location Based Entertainment (LBE) virtual reality division, comprising
Immotion Studios Limited, Immotion VR Limited and C.2K Entertainment Inc., to
LBE BidCo, Inc. for $25,119,739. The sale proceeds were comprised of cash
paid at completion of $23,869,739 and a loan note of $1,250,000 repayable 12
months following completion, subject to any price adjustments under the terms
of the sale and purchase agreement.
On 1 March 2023, the Company also announced its intention to return circa
£12.5m of the LBE sale proceeds to shareholders via a tender offer. The
tender offer has required shareholder and Court approvals and is expected to
be completed in June 2023.
On 1 March 2023, the Company also announced that Rodney Findley had resigned
as a director of the Company and that Daniel Wortley was appointed as a
director of the Company.
On 2 March 2023, the Company announced that it had changed its name to Let's
Explore Group PLC from its previous name of Immotion Group PLC.
1 (#_ftnref1) Includes content licensing income.
2 (#_ftnref2) Includes content licensing income.
3 (#_ftnref3) Adjusted EBITDA stated before depreciation, amortisation,
impairment, share based payments, profit on asset disposals and other one-off
costs.
4 (#_ftnref4) Adjusted loss is the loss after taxation, adjusted for share
based payments, impairment charges and one-off costs.
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