REG - Live Company Group - Interim Results 2023
06/02/2024 07:00
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RNS Number : 0926C Live Company Group PLC 06 February 2024
6 February 2024
This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) No 596/2014. as it forms part
of UK Domestic Law by virtue of the European Union (Withdrawal) Act 2018
("UK MAR").
LIVE COMPANY GROUP PLC
("LVCG", the "Company" or the "Group")
INTERIM RESULTS
CHAIRMAN'S STATEMENT
The Group has made progress during the first six months of 2023, holding the
inaugural Cape Town e-prix taking place in February 2023 alongside and the
Cape Town stopover of the Global Ocean Race, however the residual effects of
COVID continue to have an impact on the company and there is a material
uncertainty as to going concern due to the continued trading performance of
the Group and the requirement for additional financing.
The Directors have taken steps, as detailed below to address these concerns
and to strengthen the management of the business.
1. Additional management meetings to review strategy and focus on the
revenue generating divisions.
2. Continued careful management of creditors and cash position, including
the payment of certain creditors in Ordinary Shares.
3. Cutting the fixed cost base by reducing staff and overhead.
4. De-risking the business model and reducing the funding requirement for
events which was proving a cash burden on the Company.
The Group continued to build on its strategy of reducing risk and maximising
asset and brand usage across divisions. This is clearly evident in the
BRICKLIVE division, with the sunshine strategy of maximum usage for the larger
tours in the USA, and in the new K-POP division where tickets went on sale for
the largest K-pop concert to take place on Spanish soil, KPOP LUX SBS Super
Concert Madrid. The concert took place in July 2023.
Unfortunately, two further concerts planned for 2023, Frankfurt KPOP.Flex and
the KPOP LUX Super Concert London, were postponed.
The StART division has spent the first 6 months of the year selling gallery
spaces for the annual fair in October 2023, which saw the 10(th) anniversary
edition of the StART Art Fair in London. StART will move to a new location
in 2024, The Town Hall, within the exciting Kings Cross regeneration zone.
It has been a busy half year for BrickLive with a growing emphasis on North
America. The two shows BrickLive Supersized and BrickLive Animal Paradise
premiered in Detroit Zoo to great acclaim. In October 2023 we saw BRICKLIVE
come to Toulouse at MEETT, Parc des Expositions, Convention and Congress
Centre where Brickosaurs models were on display and a fully interactive
children's play and model building area will be set up. Additionally, two
underperforming shows, Mythical Beasts and Outer Space were sold.
We remain committed to our strategy of year-round usage of our BRICKLIVE
assets, with continued grown and the expansion of further tours to the USA and
throughout Europe. We will also see the return of our KPOP concert to
Frankfurt in August 2024.
THE FUTURE
As a result of the financial pressures on the business, a strategic review was
undertaken which led to the removal of non-core and loss-making activities
which led to cost savings across the business. As well as short term measures
to improve working capital including the payment of some contractors in
shares, the Non-Executive Directors have announced their willingness to accept
their director fees in shares in 2023.
We continue to monitor our finances closely and we are committed to the
financial restructuring of the Group to reduce overheads and consolidate and
manage our COVID loans and creditors. As part of this, in the last quartile
of 2023, the Group undertook a cost reduction and cash preservation exercise
with staff numbers cut and salaries reduced where appropriate.
In late 2023, in light of the disappointing trading performance of StART.Art,
the Independent Non-Executive Directors agreed in principle (subject inter
allia to shareholder approval to cancel the acquisition of the 80.06% of Start
Art announced on 8 July 2022 in return for the cancellation of all outstanding
amounts owing to myself and Ranjit Murugason being up to an aggregate of
£500,000 in cash and £519,800 in Ordinary Shares, with the Company retaining
a 19.94% interest. The StART.Art disposal is classified as a Related Party
transaction under AIM Rules for Companies (the 'AIM Rules') as I am a Director
of the Company and a substantial shareholder, interested in 20.92% of the
Company's issued share capital. Ranjit Murugason is also a Director of the
Company. The Company intends to seek approval from shareholders at a General
Meeting during the first quarter of 2024, details of which will be provided in
due course. The General Meeting circular will provide all information with
regards to the Related Parties and the opinion of the independent director
after consultation with the Company's Nominated Adviser, Beaumont Cornish
Limited
I support and agree with the detailed going concern statement and confirm my
support for any interim cash flow shortfalls under the terms of my guarantee.
As part of this commitment, I have agreed to provide a £1,200,000 two-year
convertible loan note to the Company, of which £570,000 has already been
advanced in order to meet certain liabilities as they fall due. The
convertible loan note is classified as a Related Party transaction under AIM
Rules for Companies (the 'AIM Rules'). The terms of the convertible loan
note have been agreed by the independent directors and announced separately
today. In addition, I have also provided a letter of support of £1,000,000
to support the cash flow of the business from 12 months of date of signing
these financial statements.
A placing for a £500,000 equity placement has been agreed with the Company's
broker, CMC Markets, details of which have been announced today,
The Company has also been in advanced negotiations with a cornerstone investor
who has indicated interest in investing in LVCG in a two-stage process. The
first being a £1.5m loan and the second being a potential equity investment
in the Company. Negotiations are ongoing and there can be no guarantee that
these will conclude.
In addition to the above, LVCG has begun a comprehensive strategy of settling
several creditor payments via shares in LVCG.
The Directors are focused on a path to profitability, based on de-risking the
business model and reducing the funding requirements which were proving a
burden on the Company.
I would like to thank the team for all their efforts and for their ongoing
support and energy and hard work in continuing to develop and diversify the
Live Company Group brand. I would also like to thank all our stakeholders for
their continued belief and support of the Group.
David Ciclitira Chairman
2 February 2024
FORWARD BUSINESS MODEL
Having established a presence in Europe, Asia, South and North America, the
Group plans to continue investment in the BRICKLIVE, KPOP LUX and LCSE
divisions with the intention of increasing recurring revenue via key
partnerships, multi-year licence fee agreements for specific brands, as well
as the introduction of new concepts.
· Securing key long-term global partnerships with licensed partners, as
well as sports and entertainment event owners, enabling popular sports,
entertainment (with a key focus on KPOP) and edutainment events to be
replicated in multiple territories;
· Increasing our assets, introducing new divisions and ensuring our
content and our events are current and fresh, giving audiences what they want
to see and capitalising on global trends;
· Generating sustainable recurring revenue by developing a loyal and
repeat customer base through the expansion of existing brands;
· Enhancing our global presence by expanding the number of territories
in which KPOP LUX, BRICKLIVE and LCSE events are held; and
· De-risking our revenue streams with multi-year licence fee
arrangements rather than taking ticketing and event organisation risk.
FINANCIAL REVIEW
REVENUE AND OPERATIONS
The six months to 30 June 2023 saw the first Cape Town e-Prix and also advance
ticket sales and licencing revenues associated with K-Pop, this led to a
significant increase in revenue for the period, which, at £5,317k, were up
104% on the same period in 2021. This revenue increase can be considered as
exceptional and may not necessary be replicated in future periods. A
detailed analysis by operating unit is set out in Note 2 below.
Formula E will be taking a break from Cape Town in 2024 and currently there is
no equivalent licencing agreement in place for 2024.
K.FLEX / KPOP LUX
KPOP LUX was the brand behind our first successful Madrid concert which took
place in July 2023 at Civitas Metropolitano Stadium with artists including
ENHYPHEN, ATEEV, IVE, SHINee, STAYC and CAVITY. Close to 40,000 fans attended
the show which provided a chance for European fans to see several phenomenal
K-pop acts on one stage.
Two further concerts planned for 2023, Frankfurt KPOP.Flex and the KPOP LUX
Super Concert London, were postponed. The contracts are multi-year and the
concert in Frankfurt has been rescheduled for August 2024.
BRICKLIVE
Aside from the Bricklive Supersized and Bricklive Animal Paradise which were
both in place in North America, the BRICKLIVE tours below appeared in various
cities across Europe:
2023
· Safari at Schenefeld, Germany
· Ocean at Aquazoo. Belgium
· Safari at Zooparc, Belgium
· Animal Paradise Mini at Northampton BID, UK
· Supersized & Animal Paradise at Detroit Zoo, USA
· Brickosaurs Mini at St Davids Shopping Centre, Cardiff, UK
· Brickosaurs Mini at Severn Valley Railway, Kidderminster, UK
· Safari at Planckadael Zoo, Belgium
· Big Cats at Planckadael Zoo, Belgium
· Ocean at Blue Planet Aquarium, Cheshire, UK
· Kingdom at Bradford BID, UK
· Brickosaurs Mini at Reading BID, UK
· Animal Paradise Mini at Sewerby Hall, Bridlington, UK
· Evolution in Toulouse, France
· Santa and March of the Penguins in Rugby, UK
2024 (signed to date)
· Brickosaurs at Louritzen Gardens, Omaha, USA
· Brickosaurs and Animal Paradise at Severn Valley Railway, UK
· Animal Wonders at ICC Wales, UK
· Brickosaurs at ICC Wales, UK
· Ocean at Stirling BID, UK
· Brickosaurs Mini at Southport BID, UK
· Brickosaurs Mini at Amelia Scott Museum, Kent, UK
· Fantasy Kingdom at Reading BID, UK
· Animal Paradise at St David's Shopping Centre, Cardiff, UK
· Animal Wonders and Safari at Zooparc, Netherlands
· Animal Jungle at Festival Place Shopping Centre, Basingstoke, UK
Furthermore, following our strategy to optimise the BRICKLIVE assets, in 2023
LVCG sold two of its underperforming tours - Mythical Beasts and Outer Space -
for £350,000 in staged payments during 2023. Whilst the Company has had
success with these tours, they have not been as popular in recent times and
hence a buyer for the assets was sourced.
LCSE
February 2023 saw two major events happen for LCSE. The first was the
inaugural Cape Town e-prix which took place on 25 February 2023. Over 20,000
tickets were sold, with all 3,400 hospitality seats sold out prior to the week
of the event. The live broadcast drew 9.3 million viewers globally while
there were more than 42 million social media impressions. The fastest speed
on a Formula E track was recorded and the event was later awarded fan
favourite for the season.
LVCG has shares in the local company (E Movement PTY Limited) that owns the
hosting rights to the Cape Town e-prix and also received a management fee
(LCSE) for staging the event.
February was also the month of The Ocean Race's iconic stopover in Cape Town,
for the 11th time since the race began. It was a haul out stage that saw the
IMOCA class boats undergo cleaning and repairs before their departure on 26
February 2023. LCSE hosted the various activities around the event over the
three weeks the race village was live. LCSE received a management fee for
hosting the event and a percentage of local sales.
LCSE provided hospitality services and brand activation for the Cape Town
Cycle Tour event and its sponsors Pick and Pay. The race took place on 12
March 2023 with over 28,000 riders taking to the streets for the 109km race
and the first ever short route of 42km.
Across the division, revenue for the six months to 30 June 2023 was £1,966k,
240% up on the six months ended 30 June 2022.
In October 2023 LCSE organised the hospitality village, as well as other side
events, for the World Rallycross event in Cape Town. Throughout the year,
LCSE also organised several Pick n Pay Wine Festivals
E-MOVEMENT
LVCG was proud to bring the E-prix to Cape Town in February 2023 for the
sold-out inaugural event. While revenue was generated principally from a
staging fee of £200,000 as there was no title sponsor in this inaugural
year. Discussions are ongoing for the race to return to Cape Town in 2025.
StART
We ran a series of StART+ events in Seoul and Busan, South Korea, as well as a
show which coincided with the Formula E race in Mexico City in January 2023.
The team explored various venue options for a 2024 StART Art Fair in
London and various planned StART+ exhibitions around Europe. StART Art Fair in
London and planned StART+ exhibitions around Europe. A joint venture
agreement, on a non-rental basis, was signed in December that sees StART
London move to the Town Hall, King's Cross.
In late 2023, the Independent Non-Executive Directors agreed to cancel the
acquisition of the 80.06% of StART.Art announced on 8 July 2022. The
StART.Art disposal is classified as a Related Party transaction under AIM
Rules for Companies (the 'AIM Rules'). The Company intends to seek approval
from shareholders at a General Meeting by no later than 28 March 2024, details
of which will be provided in due course. The General Meeting circular will
provide all information with regards to the Related Parties and the opinion of
the independent director following consultation with the Company's Nominated
Adviser, Beaumont Cornish Limited.
PXEBITDA
The Group uses PXEBITDA (Pre-Exceptional Item EBITDA) to allow the users of
the consolidated financial statements to gain a clearer understanding of the
underlying performance of the business without the impact of one off
non-recurring costs of an exceptional nature.
Consolidated Results for the first six months of year
Six months to 30 June 2023 Six months to 30 June 2022
£'000 £'000
Revenue 5,317 2,606
Pre-Exceptional items EBITDA 828 (597)
Share option and warrant charge (18) (88)
Other exceptional costs (10) (14)
Total Exceptional Items (28) (102)
Depreciation and amortisation expense (594) (600)
Finance costs (68) (88)
Taxation 20 -
Profit / (Loss) after tax 158 (1,387)
POST BALANCE SHEET EVENTS
On the 22 July 2023 KPOP LUX SBS Super Concert took place in Madrid at the
Civitas Metropolitana. It was attended by just under 40,000 people and was
perceived locally and internationally to be a success. The event was live
streamed globally (excluding Korea) and appeared in Japan in October. In
financial terms, being the first event in Madrid, it did not yield a net
profit, but the Group had positive cash inflows from marketing fees, streaming
rights and producers' fees. There will also be delayed income due from
government rebates using Economic Interest Groups, which will come in 2024.
Following the event in Madrid the company announced in August it had raised a
loan facility of £1,250,000 from a funding partner to help fund KPOP LUX SBS
Super Concert in London. Ticket sales for the three-day event were launched
on the 11th of August 2023. To ensure that the event was of the highest
possible quality, it was shortened to a two-day concert. Unfortunately, with
another event occurring during the same weekend in Europe, the cost of living
crisis ongoing and KPOP LUX SBS Super Concert at the O2 being between two
other KPOP events, ticket sales were not sufficient to allow the event to go
ahead and it was therefore postponed. As a result of the postponement, only
£600,000 of the loan facility was provided to the Company. The first
repayment has been made utilising the £1,200,000 loan facility advanced by
David Ciclitira, with the remainder to be repaid shortly also from the loan
facility.
Subsequent to the postponement of London, KPOP LUX has commenced planning
discussions for the Frankfurt show in August 2024. We continue to look at a
strategy based on licenced fees and profit share without any pre-payment risk
for organizing concerts.
In September 2023 Maria Serena Papi resigned as a director of Live Company
Group plc.
During the last quartile of 2023, the Company undertook a cost reduction and
cash preservation exercise with staff numbers cut and salaries reduced where
appropriate.
David Ciclitira has agreed to provide a £1,200,000 two-year convertible loan
note to the Company, of which £570,000 has already been advanced to settle
certain liabilities as they fall due. The convertible loan note is
classified as a Related Party transaction under AIM Rules for Companies (the
'AIM Rules'). The terms of the convertible loan note have been agreed by the
independent Non-Executive Directors and announced separately in due course.
I have also confirmed a guarantee of £1,000,000 to support the cash flow of
the business from 12 months of date of signing these financial statements.
The Non-Executive Directors, including Maria Serena Papi, have agreed to
convert their outstanding director fees totalling £221,193 into new ordinary
shares at £0.03. In addition, other creditors totalling £382,920 have
agreed to convert into new ordinary shares at £0.03. Further discussions
with creditors to convert their outstanding balances into new ordinary shares
at £0.03 are on-going.
The Company has agreed with David Ciclitira and Ranjit Murugason, as original
owners of Start Art Global Limited ("StartArt"), to cancel the acquisition of
the 80.06% of Start Art as announced on 8 July 2022 in return for the
cancellation of all amounts owing to the being up to an aggregate of £500,000
in cash and £519,800 in Ordinary Shares, with the Company retaining a 19.94%
interest. The StART.Art disposal is classified as a Related Party
transaction under AIM Rules for Companies (the 'AIM Rules'). The Company
intends to seek approval from shareholders at a General Meeting during the
first quarter of 2024, details of which will be provided in due course. The
General Meeting circular will provide all information with regards to the
Related Parties and the opinion of the independent director further to
consultation with the Company's Nominated Adviser, Beaumont Cornish Limited.
Any changes in the goodwill will be reflected in the Annual Report and
Accounts for the Company ending 31 December 2023.
A placing for a £500,000 equity placement has been agreed with the Company's
broker, CMC Markets. Final details will be communicated to shareholders on
conclusion of this placing.
The Company has also been in negotiations with a cornerstone investor who has
indicated an interest in investing in LVCG in a two-stage process. The first
being a £1.5m loan and the second being a potential equity investment in the
Company. Negotiations are ongoing and there can be no guarantee that these
will conclude.
UNAUDITED CONDENSED CONSOLIDATED INCOME STATEMENT
Notes Six months to Six months to
30 June
30 June
2023
2022
£'000 £'000
Revenue 2 5,317 2,606
Cost of sales (3,566) (2,148)
Gross /profit 1,751 458
Administrative expenses (including exceptional costs of £28k; 2022: £102k) 3 (1,544) (1,757)
Operating profit / (loss) 207 (1,299)
Finance costs (69) (88)
Profit / (Loss) for the period before tax 138 (1,387)
Taxation 20 -
Profit / (Loss) for the period 158 (1,387)
Other comprehensive income
Items that may be reclassified in future periods
Translation of foreign operation - -
Total other comprehensive loss - -
Total comprehensive profit / (loss) for the year 158 (1,387)
Profit/(Loss) attributable to:
Owners of the parent 157 (1,470)
Non-controlling interest 1 83
158 (1,387)
Total comprehensive loss attributable to:
Owners of the parent 157 (1,470)
Non-controlling interest 1 83
158 (1,387)
Profit/(Loss) per share - Basic and Diluted 4 0.1p (0.9p)
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Note 30 June 31 December 2022
2023
£'000 £'000
Non-current assets
Property, plant, and equipment 6 1,971 2,387
Intangible assets 7 910 1,057
Right of use assets 77 108
Investments 5 83 83
Goodwill 738 738
Total non-current assets 3,779 4,373
Current assets
Inventories 2,613 2,836
Trade and other receivables 1,923 860
Cash and cash equivalents 144 291
Total current assets 4,680 3,987
Total assets 8,459 8,360
Current liabilities
Borrowings 9 539 511
Trade and other payables 4,382 5,389
Lease liabilities 76 72
Accruals and deferred income 1,953 1,236
Total current liabilities 6,690 7,208
Net current liabilities (2,380) (3,221)
Non-current liabilities
Deferred tax - -
Borrowings 662 819
Lease liabilities 11 50
Total non-current liabilities 673 869
Net (liabilities) /assets 826 285
Equity
Share capital 10 6,683 6,509
Share premium 28,977 28,844
Other reserves (10,463) (10,419)
Capital redemption reserve 5,034 5,034
Share option and warrant reserve 433 311
Accumulated losses (29,848) (30,005)
Equity attributable to equity holders of the parent 816 274
Non-controlling interest 10 9
Total Equity 826 285
UNAUDITED CONDENSED MONTH STATEMENT OF CASH FLOWS
Six months to Six months to
30 June
30 June
2023
2022
£'000 £'000
Cash flows from operating activities
Operating gain / (loss) 207 (1299)
Depreciation 419 426
Amortisation of intangible assets 144 144
Depreciation of right of use assets 31 30
Non exceptional option and warrants charge 104 52
Cash flow from exceptional items 18 88
Decrease in inventories 224 229
Increase in receivables (992) (473)
Decrease) / increase in payables (257) 336
Cash used in operations (100) (467)
Cash flow from investing activities
Acquisition of intangible fixed assets - (24)
Acquisition of investments - -
Acquisition of property, plant and equipment - (206)
Net cash used in investing activities - (230)
Cash flow from financing activities
Issue of equity 256 896
Repayment of lease liabilities (35) (32)
Proceeds from borrowings 200 50
Repayment of loans (400) (281)
Interest paid (68) (88)
Share issue costs (41)
Net cash generated from financing activities (47) 504
Net cash outflow (147) (193)
Cash and cash equivalents at beginning of the period 232 211
Net decrease in cash and cash equivalents (147) (193)
Cash and cash equivalents at end of the period 85 18
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
£'000 Ordinary share capital Share premium Reverse acquisition reserve Forex reserve Own shares reserve Merger reserve Capital redemption reserve Share option reserve Non-controlling interest Retained earnings Total
As at 1 January 2022 5,682 27,024 (24,268) 570 (2,111) 14,472 5,034 515 - (21,496) 5,422
Loss for the period - - - - - - - - 83 (1,470) (1,387)
Shares issued for cash 179 717 - - - - - - - - 896
Debt to share conversion 62 156 - - - - - - - - 218
Forex differences arising - - - 4 - - - - - - 4
Own share reserves - - - - (18) - - - - - (18)
Gain on sale of own shares - - - - - - - - - 19 19
Warrant charge - - - - - - - 17 - - 17
Options charge - - - - - - - 53 - - 53
Lapsed and expired options and warrants - - - - - - - - - 71 71
Share issue costs - (42) - - - - - - - - (42)
As at 30 June 2022 5,923 27,855 (24,268) 574 (2,129) 14,472 5,034 585 83 (22,876) 5,253
As at 1 January 2023 6,509 28,844 (24,268) 568 (2,105) 15,386 5,034 311 9 (30,005) 285
Loss for the period - - - - - - - - 1 157 158
Shares issued for cash 156 100 - - - - - - - - 256
Debt to share conversion 18 33 - - - - - - - - 51
Forex differences arising - - - (44) - - - - - - (44)
Warrant charge - - - - - - - 18 - - 18
Options charge - - - - - - - 104 - - 104
As at 30 June 2023 6,683 28,977 (24,268) 524 (2,105) 15,386 5,034 433 10 (29,848) 826
NOTES TO THE FINANCIAL INFORMATION
1. Basis of preparation
The condensed consolidated interim financial report for the half-year
reporting period ended 30 June 2023 are unaudited and have been prepared in
accordance with Accounting Standard IAS 34 Interim Financial Reporting and the
same accounting policies and methods of computation are followed in the
interim financial report as compared with the most recent annual financial
statements. They do not constitute statutory accounts as defined in section
434 of the Companies Act 2006. The financial statements for the year ended 31
December 2022 were prepared in accordance with UK adopted International
Accounting Standards (IFRS), and with those parts of the Companies Act 2006
applicable to companies reporting under IFRS as at 31 December 2022.
The report of the auditor on those financial statements was qualified, on the
basis of three matters:
Matter 1: Inventories
The report of the auditor identified uncertainty as to the carrying value of
inventories of loose plastic bricks held for use in the Groups events and for
construction of models used for tour and trails recognised in the Consolidated
Statement of Financial Position at £2,480,000 (31 December 2022:
£2,480,000), in the carrying value of LEGO sets held for resale recognised in
the Consolidated Statement of Financial Position at £63,000 (31 December:
2022 £63,000) and other merchandise held for resale recognised in the
Consolidated Statement of Financial Position at £70,000 (31 December: 2022
£70,000).
Matter 2: Goodwill and accounting for business acquisition
The report of the auditor identified uncertainty as to the carrying value of
the assets and liabilities of Start Art Global Ltd and the Group's calculation
of goodwill amounting to £3,924,000 relating to the acquisition and its
subsequent impairment. Goodwill is recognised in the Consolidated Statement of
Financial Position at £738,000 (31 December: 2022 £738,000).
Matter 3: Carrying value of investments - Brick Live Group
The report of the auditor identified uncertainty in the carrying value of the
Company's investment in Brick Live Group held in the Company balance sheet as
an investment in subsidiary at £8,841,000 (31 December 2022: £8,841,000) due
to the uncertainty over future projections and the sensitivity of the
discounted cashflow projections to the choice of discount rate adopted by the
Company.
In addition the audit report drew attention to a material uncertainty that may
cast significant doubt on the group's ability to continue as a going concern,
it concluded that the Directors' use of the going concern basis of accounting
in the preparation of the financial statements was appropriate.
The interim report does not include all the notes of the type normally
included in an annual financial report. Accordingly, this report is to be read
in conjunction with the annual report for the year ended 31 December 2022 and
any public announcements made by the Live Company Group Plc during the interim
reporting period.
1.1 Going Concern
After careful assessment, the Directors have adopted the going concern basis
in preparing these financial statements.
For the purposes of the going concern assessment, the Directors have prepared
monthly cash flow projections for the period to 31 January 2025 (the
assessment period). The Directors consider this to be a reasonable period for
the going concern assessment as it enables us to consider the potential impact
of macroeconomic and geopolitical factors over an extended period. The cash
flow projections show that the Group requires additional external support in
the form of an underwritten financial guarantee from the majority shareholder
and a binding conversion of a loan to equity swap. This will enable the
business to meet its financial obligations and comply with all covenants in
our banking facilities.
The Group has also performed stress tests against the base monthly cash flow
projections referred to above in order to determine the performance level that
would result in reduction in headroom against its cash facilities to nil. As a
further stress test, the Group considered the impact of event cancellations
due to market uncertainty. Each of the stress tests would require a further
guarantee or refinancing of the business.
In addition, mitigating actions available to the Group, should they be
required, include reductions in discretionary expenditure and ceasing dividend
payments.
After considering the monthly cash flow projections, and the facilities
available to the Group and Company outlined within the directors report, the
Directors have a reasonable expectation that the Group and Company will secure
the additional £1.5m loan facility and £500k placing agreement, described in
the Chairman's statement on page 8, enabling them to meet their existing
obligations with the added support of the guarantee from the majority
shareholder to 31 January 2025. Accordingly, and having reassessed the
principal risks and uncertainties, the Directors considered it appropriate to
adopt the going concern basis in preparing the Group and Company financial
statements. However there remains a material uncertainty related to events or
conditions, that may cast significant doubt on the Group's and Company's
ability to continue as a going concern. This is due to the Group's current and
recent trading performance and the remaining uncertainty relating to the
proposed loan of £1,500,000 from the new cornerstone investor and £500,000
placing agreement.
2. Segment Information
The Group has four operating segments: BRICKLIVE Tours and Trails, BRICKLIVE
Models and Sets, Sports and Entertainment division (LCSE), KPOP and StART.Art.
The Group uses PXEBITDA as a measure to assess the performance of the
segments. This excludes discontinued operations and the effects of exceptional
items of expenditure which may have an impact on the quality of earnings such
as restructuring costs, fundraising costs, legal expenses and impairments when
the impairment is the result of an isolated, non-recurring event.
Content depreciation is included with amortisation and depreciation in this
note but in cost of sales in the Consolidated Statement of Comprehensive
Income. Administrative expenses are apportioned to each trading segment in
proportion to the revenue earned. Interest expenditure is not allocated to
segments as this type of activity is driven by the central treasury function
which manages the cash position of the Group.
Six months to 30 June 2022 Models and Sets Tours and Trails LCSE K FLEX StART Art Unallocated Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Revenue 171 835 573 977 - 50 2,606
Cost of Sales (111) (542) (418) (649) - (28) (1,748)
Administrative expenses (143) (698) (157) (162) - (294) (1,454)
Amortisation and depreciation (25) (523) (52) - - - (600)
Finance costs - - - - - (88) (88)
Exceptional items - - - - - (102) (102)
Taxation - - - - - - -
Non-controlling interest - - - (83) - - (83)
-
Segment profit/(loss) for period (108) (928) (54) 83 - (462) (1,469)
PXEBITDA (83) (404) (2) 166 - (273) (596)
Six months to 30 June 2023 Models and Sets Tours and Trails LCSE K FLEX StART Art Unallocated Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Revenue 67 579 1,966 2,705 - - 5,317
Cost of Sales (33) (287) (1,629) (1,193) (7) - (3,149)
Administrative expenses (16) (137) (131) (757) (41) (257) (1,339)
Amortisation and depreciation (6) (470) (117) (1) - (594)
Finance costs - - - - (68) (68)
Exceptional items - - - - (28) (28)
Taxation - - - - 20 20
Non-controlling interest - - - (1) - (1)
Segment profit/(loss) for period 12 (315) 89 752 (49) (333) 157
PXEBITDA 18 155 206 754 (49) (257) 828
3. Exceptional Items
Share option and warrant charge
Six months to 30 June 2023 Six months to 30 June 2022
£'000 £'000
Share options and warrant charge 18 88
Transaction costs 10 14
28 102
The Group uses the Black-Scholes model to value its share options and
warrants. Certain judgement is required in determining the assumptions such as
the risk-free interest rate and standard deviation rate used. The charge for
the six months to 30 June 2023 is £18,000 (six months to 30 June 2022:
£88,000).
During the six months to 30 June 2023 no options and no warrants lapsed (six
months to June 2022: 1,744,457 options and 8,028,840 warrants lapsed resulting
in a transfer of £71,000 from share option reserve to retained earnings).
Transactional costs
The group incurred £10k due diligence and legal fees in connection with a
loan from Riverfort during the period.
During the six months to 30 June 2022 transactional costs relate to the
acquisition of the remaining share capital of Start Art Global Ltd. not
already owned, the acquisition was completed in July 2022.
4. Earnings per share
The basic loss per share is calculated by dividing the loss attributable to
equity shareholders by the weighted average number of shares in issue during
the period. In calculating the diluted loss per share, any outstanding share
options and warrants are considered where the impact of these is dilutive.
Six months to 30 June 2023 Six months to 30 June 2022
Profit(loss) for the period after tax (£'000) 157 (1,470)
Weighted average number of shares in issue 253,589,706 172,677,557
Basic and diluted profit/ (loss) per share (p) 0.1p (0.9p)
Diluted profit or loss per share in both 2022 and 2021 are the same as basic
profit or loss per share, as the options in issue had no dilutive effect on
continuing operations.
5. Dividends
No dividend was recommended or paid for the period under review.
6. Property, plant, and equipment
Content Fixtures, fittings, and office equipment Total
30 June 2023 31 Dec 2022 30 June 2023 31 Dec 2022 30 June 2023 31 Dec 2022
£'000 £'000 £'000 £'000 £'000 £'000
Cost
Cost at start of period 5,663 6,142 182 178 5,845 6,320
Additions - 205 - 4 - 209
Disposals - (686) - - - (686)
At end of the period 5,663 5,661 182 182 5,845 5,843
Depreciation
At start of period 3,282 2,241 174 147 3,456 2,388
Charge for the period 416 824 2 27 418 851
Impairment charge - 628 - - - 628
Disposals - (411) - - - (411)
At end of the period 3,698 3,282 176 174 3,874 3,456
Net book value at end of period 1,965 2,379 6 8 1,971 2,387
Net book value at start of period 2,381 3,901 8 31 2,387 3,932
7. Intangible assets
Group Trademarks Novated Contracts Software Platform Total
30 June 2023 31 Dec 2022 30 June 2023 31 Dec 2022 30 June 2023 31 Dec 2022 30 June 2023 31 Dec 2022
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Cost
Cost at start of period - 90 1,450 1,450 83 - 1,659 1,540
Additions for period - 36 - - - 83 - 119
Cost at end of period - 126 1,450 1,450 83 83 1,659 1,659
Amortisation
At start of period 40 32 557 277 5 - 602 309
Charge for period 7 8 139 280 1 5 147 293
At end of period 47 40 696 557 6 5 749 602
Net book value at end of period (47) 86 754 893 77 78 910 1,057
Net book value at start of period 86 58 893 1,173 78 - 1,057 1,231
Trademarks
Trademarks are obtained or each show in each jurisdiction around the world.
Trademarks are amortised over their estimated useful lives, which is on
average 10 years. The carrying value of trademarks at 30 June 2023 is £82k
(31 December 2022: £86k).
LCSE novated contracts
In December 2020 the Company formed a new Sports and Entertainment division
('LCSE') through the acquisition of the entire issued share capital of Live
Company Sports and Entertainment Limited together with its wholly owned
subsidiary Live Company Sports and Entertainment (Pty) Limited and 50%
interest in K-Pop Europa Limited for £650,000. Prior to the acquisition Live
Company Sports and Entertainment Limited was 100% owned by David Ciclitira.
The Company also purchased certain contracts from World Sport South Africa
(Pty) Limited for £500,000 and acquired the entire issued share capital of E
Movement Holdings Ltd for £300,000. Prior to the acquisition E Movement
Holdings Ltd was 33.34% owned by David Ciclitira.
The substance of these transactions being the acquisition of a series of
contracts rather than a business combination as defined in IFRS 3 'Business
Combinations'. The acquired contracts are amortised over the period of the
rights acquired, where contracts are renewable and are likely to be renewed
for a further period such further period, but no subsequent periods, is
considered to be part of the period of the rights acquired. The carrying value
of these contracts at 30 June 2023 is £753,000 (31 December 2022: £893,000)
StART.Art
In July 2022 the Company acquired the remaining 80.6% of StART.Art not already
owned by the Group from David Ciclitira and Ranjit Murugason. Prior to July
2022 the Company did not exercise significant influence over StART.Art and the
Company's interest was included in investments in Other Financial Assets in
the Consolidated Statement of Financial Position as 31 December 2021.
On acquisition StART.Art included intangible assets, comprising the
capitalised costs of developing the online StART.Art software platform, the
carrying value of these assets at 30 June 2023 is £78,000 (31 December 2023:
£78,000).
The directors have reviewed the value of the online software platform included
in Intangible Assets and determined that there is no impairment of its value.
This conclusion is based on a detailed assessment of various factors,
including market conditions, technological advancements, and the platform's
ongoing performance and strategic importance.
The Company has agreed with David Ciclitira and Ranjit Murugason, as original
owners of Start Art Global Limited ("StartArt"), to cancel the acquisition of
the 80.06% of Start Art as announced on 8 July 2022 in return for the
cancellation of all amounts owing to the being up to an aggregate of £500,000
in cash and £519,800 in Ordinary Shares, with the Company retaining a 19.94%
interest. The StART.Art disposal is classified as a Related Party
transaction under AIM Rules for Companies (the 'AIM Rules'). The Company
intends to seek approval from shareholders at a General Meeting by no later
than 28 March 2024, details of which will be provided in due course. The
General Meeting circular will provide all information with regards to the
Related Parties and the opinion of the independent director and the Company's
Nominated Adviser, Beaumont Cornish Limited. Any changes in the goodwill
will be reflected in the Annual Report and Accounts for the Company ending 31
December 2023.
8. Investments
Six months to 30 June 2023 Six months to 30 June 2022
£'000 £'000
Cost
Cost at start of the period 113 1,113
Additions for the period - -
Disposals for the period - (1,000)
Cost at end of period 113 113
Impairment
At start of period 30 -
Impairment in the period - 30
at end of period 30 30
Net book value at end of period 83 83
Net book value at start of period 83 1,113
The Directors considered the carrying value at 30 June 2023 for each
investment identified below, and it was determined that no further impairment
was required.
Six months to 30 June 2023 At start of period Additions/ (Impairment) At end of period
(Disposals
/reversal of impairment
£'000 £'000 £'000 £'000
Start Art Global Ltd - - - -
E-Movement (PTY) Ltd 83 - - 83
83 - - 83
Year to 31 December 2022 At start of period Additions/ (Impairment) At end of period
(Disposals
/reversal of impairment
£'000 £'000 £'000 £'000
Start Art Global Ltd 1,000 (1,000) - -
E-Movement (PTY) Ltd 113 - (30) 83
1,113 (1,000) (30) 83
Prior to July 2022, and the acquisition of the remaining 80.06% of StART.Art,
the Company did not exercise significant influence over StART.Art and the
Company's interest was included in Investments in Other Financial Assets in
the Consolidated Statement of Financial Position at 31 December 2021. From
July 2022 the results of StART.Art have been consolidated and the investment
previously included in Investments in Other Financial Assets treated as a
disposal.
In November 2021 the Company purchased 271 ordinary shares, representing 20%
of the total issued share capital, in E-Movement (PTY) Limited ('EMPL') from
David Ciclitira for a total consideration of £113,460. These shares were
originally purchased by David Ciclitira (acting in his personal capacity) for
the same amount in anticipation of them being transferred to the Company. EMPL
is the South African based promoter of the Cape Town E Prix which has been
confirmed for Series 9 of the ABB FIA Formula E World Championship which took
place in February 2023. Following the issue of further shares in EMPL in
October 2022 the Group's interest in the company was reduced to 14.8%.
9. Borrowings
30 June 2023 31 December 2022
£'000 £'000
Loan due within one year 539 511
Loan due after one year 662 819
1,201 1,330
In April 2020 the Group entered into a £500,000 loan agreement with David
Ciclitira, in March 2022 the outstanding balance was repaid in full.
In April 2020 the Company entered into a £250,000 CBILS loan agreement with
NatWest Bank plc of which £157,400 remained outstanding at the balance sheet
date. The loan is unsecured, for a term of six years with an effective
interest rate of 4.08%.
In August 2020 the Group entered into an agreement with Close Leasing Limited
whereby stock totalling £1,500,000 included under Inventories in the
Statement of Financial Position in these condensed consolidated financial
statements was sold to Close Leasing Limited and purchased back under the
terms of a £1,500,000 Hire Purchase Facility (HP Agreement) provided in
conjunction with the CBILS, of which £911,500 remained outstanding at the
balance sheet date. The HP Agreement was for a term of five years at an
effective interest rate of 5.14% secured against the £1,500,000 of stock
subject to the agreement and a fixed and floating charge over the Groups other
assets.
In August 2020 Start Art (2013) Ltd entered into a £50,000 bounce back loan
agreement with Coutts of which £29,800 remained outstanding at the balance
sheet date. The loan is unsecured, for a term of six years with an effective
interest rate of 2.52%.
In February 2023, LVCG entered into a short-term prepayment facility with
Riverfort Global Opportunities PCC Ltd. Under this agreement, LVCG
immediately drew down £217,000 (£200,000 net) repayable within 6 months at a
fixed coupon of 10%. To repay this loan, LVCG subsequently raised
£200,000 in cash by way of a new equity subscription by a number of long-term
existing shareholders. The balance due as at 30th June 2023 was £45,000.
David Ciclitira has agreed to provide a £1,200,000 two-year convertible loan
note to the Company, of which £570,000 has already been advanced. The
convertible loan note is classified as a Related Party transaction under AIM
Rules for Companies (the 'AIM Rules'). The terms of the convertible loan
note have been agreed by the independent directors and announced separately
today. I have also confirmed a guarantee of £1,000,000 to support the cash
flow of the business from 12 months of date of signing these financial
statements.
10. Share capital
Shares issued Avg. price per share Value Nominal price per share Nominal Premium per share Premium
No. £ £'000 £ £'000 £ £'000
January 2023 1,700,000 0.03 51 0.01 17 0.02 34
February 2023 5,654,316 0.01 57 0.01 57 - -
April 2023 9,975,000 0.02 200 0.01 100 0.01 100
17,329,316 0.02 307 0.01 173 0.01 134
During the six months to June 2023, 1,700,000 Ordinary 1p shares were issued
in satisfaction of £51,000 of fees due to contractors, 5,654,316 Ordinary 1p
share were issued for £56,543.16 in part settlement of future equity placings
associated with a short-term facility from Riverfort Global Opportunities PCC
Ltd ('Riverfort') and 9,975,000 Ordinary 1p shares were issued to existing
shareholders who participated in direct subscriptions to repay the £200,000
short term prepayment facility from Riverfort.
During the six months to 30 June 2022 6,223,859 Ordinary 1p shares were issued
in satisfaction of £218,000 of salary and fees due to employees, Directors
and suppliers,16,500,000 new Ordinary 1p shares were issued for £825,000 and
1,428,571 new Ordinary 1p shares were issued on the exercise of 1,428,571
warrants at 5p.
The Deferred shares do not entitle their holders to receive dividend or other
distribution, nor do they entitle their holders to receive notice, attend
speak or vote at any General Meeting of the Group.
The rights of Deferred shareholders are set out in full in the financial
statements for the year ended 31 December 2022.
Issued share capital as at 30 June 2023 is comprised as follows:
No. of shares £'000
Issued and fully paid
Ordinary shares of 1p 2,598,989,120 2,598
Deferred shares of 51.8p 2,047,523 1,061
Deferred Ordinary shares of 0.5p 199,831,545 999
Deferred B shares of £19.60 103,260 2,024
Total 6,682
11. Related Parties
The following amounts were owed to/(due from) Directors of the Group :
Unpaid balances 30 June 2023 31 December 2022
£'000 £'000
David Ciclitira 578 559
Serenella Ciclitira 58 48
Ranjit Murugason 200 200
Bryan Lawrie 49 35
Stephen Birrell 8 14
893 856
Directors Remuneration Six months to 30 June 2023 Six months to 30 June 2022
£'000 £'000
David Ciclitira 137 137
Bryan Lawrie 10 13
Ranjit Murugason 0 50
Maria Serena Papi 15 16
Stephen Birrell 15 17
177 233
David Ciclitira
David Ciclitira injected funds during the period as set out below:
Six months to 30 June 2023 Six months to 30 June 2022
£'000 £'000
Current account advances 54 -
Total funds injected 54 0
David Ciclitira received payments during the period as set out below:
Six months to 30 June 2023 Six months to 30 June 2022
£'000 £'000
Business expenses and healthcare costs. 93 8
Repayment of advance 20 0
Fees and interest to provide loan facility 0 12
Repayment of loan 0 90
113 111
12. Other
Copies of the unaudited half-yearly results have not been sent to
shareholders; however, copies are available at www.livecompanygroup.com or on
request from the Company's Registered Office.
13. Approval of Half-Yearly Financial Statements
The half-yearly financial statements were approved by the Board on 2 February
2024.
Enquiries:
Live Company Group Plc Tel: 020 7225 2000
David Ciclitira, Executive Chairman
Sarah Dees, Chief Operating Officer
Beaumont Cornish Limited (Nominated Adviser) Tel: 020 7628 3396
Roland Cornish/Rosalind Hill Abrahams
CMC Markets (Broker) Tel: 020 7392 1436
Thomas Smith
About Live Company Group
Live Company Group Plc ("LVCG", the "Company" or the "Group") is a live
events, entertainment and sports events Company, that has been trading on AIM
since 2017.
The Group is divided into four divisions:
· BRICKLIVE - consisting of a network of partner-driven fan-based and
touring shows using BRICKLIVE created content worldwide. The Company owns the
rights to BRICKLIVE - an interactive experience built around the creative
ethos of the world's most popular construction toy bricks. The Group is an
independent producer of BRICKLIVE and is not associated with the LEGO Group.
· LVCG owns the brand KPOP Lux and is the Executive Producer of KPOP
Lux.
· StART Art Global (SAG) - SAG owns StART Art Fair in London which has
been staged over the last 10 years at the Saatchi Gallery. SAG has licensed
the rights to the StART brand in Korea. The licence includes the right to
create and run StART Art Fair Seoul and various StART+ exhibitions.
· Live Company Sports and Entertainment (LCSE) - LCSE owns LCSE Pty in
South Africa.
LVCG is a founder shareholder in E-Movement - the promoter of the Formula E
Race in Cape Town. As part of this relationship E-Movement has retained LCSE
(through E-Movement holdings) as its implementation partner. E-Movement
Holdings a 100% subsidiary of Live Company Group has the right to sell
sponsorship for the Formula E race in Cape Town.
IMPORTANT NOTICES
Neither this Announcement, nor any copy of it, may be taken or transmitted,
published or distributed, directly or indirectly, in or into the United
States, Australia, Canada, Japan, New Zealand, the Republic of Ireland or the
Republic of South Africa or to any persons in any of those jurisdictions or
any other jurisdiction where to do so would constitute a violation of the
relevant securities laws of such jurisdiction. This Announcement is for
information purposes only and does not constitute an offer to sell or issue,
or the solicitation of an offer to buy, acquire or subscribe for any shares in
the capital of the Company in the United States, Australia, Canada, Japan, New
Zealand, the Republic of Ireland or the Republic of South Africa or any other
state or jurisdiction in which such offer or solicitation is not authorised or
to any person to whom it is unlawful to make such offer or solicitation. Any
failure to comply with these restrictions may constitute a violation of
securities laws of such jurisdictions. The securities referred to in this
Announcement have not been, and will not be, registered under the US
Securities Act of 1933, as amended (the "US Securities Act"), or with any
securities regulatory authority of any state or jurisdiction of the United
States, or under any securities laws of any state or other jurisdiction of the
United States and may not be offered, sold, resold, pledged, transferred or
delivered, directly or indirectly, in or into the United States except
pursuant to an applicable exemption from, or in a transaction not subject to,
the registration requirements of the US Securities Act and, in each case, in
compliance with the securities laws of any state or other jurisdiction of the
United States.
Beaumont Cornish Limited ("Beaumont Cornish") is the Company's Nominated
Adviser and is authorised and regulated by the FCA. Beaumont Cornish's
responsibilities as the Company's Nominated Adviser, including a
responsibility to advise and guide the Company on its responsibilities under
the AIM Rules for Companies and AIM Rules for Nominated Advisers, are owed
solely to the London Stock Exchange. Beaumont Cornish is not acting for and
will not be responsible to any other persons for providing protections
afforded to customers of Beaumont Cornish nor for advising them in relation to
the proposed arrangements described in this announcement or any matter
referred to in it.
Cautionary statements
This Announcement may contain and the Company may make verbal statements
containing "forward-looking statements" with respect to certain of the
Company's plans and its current goals and expectations relating to its future
financial condition, performance, strategic initiatives, objectives and
results. Forward-looking statements sometimes use words such as "aim",
"anticipate", "target", "expect", "estimate", "intend", "plan", "goal",
"believe", "seek", "may", "could", "outlook" or other words of similar
meaning. By their nature, all forward-looking statements involve risk and
uncertainty because they relate to future events and circumstances which are
beyond the control of the Company. As a result, the actual future financial
condition, performance and results of the Company may differ materially from
the plans, goals and expectations set forth in any forward-looking statements.
Any forward-looking statements made in this Announcement by or on behalf of
the Company speak only as of the date they are made. The information contained
in this Announcement is subject to change without notice and except as
required by applicable law or regulation (including to meet the requirements
of the AIM Rules, MAR, the Prospectus Regulation Rules and/or FSMA), the
Company expressly disclaims any obligation or undertaking to publish any
updates or revisions to any forward-looking statements contained in this
Announcement to reflect any changes in the Company's expectations with regard
thereto or any changes in events, conditions or circumstances on which any
such statements are based. Statements contained in this Announcement regarding
past trends or activities should not be taken as representation that such
trends or activities will continue in the future. You should not place undue
reliance on forward-looking statements, which speak only as of the date of
this Announcement.
No statement in this Announcement is intended to be a profit forecast and no
statement in this Announcement should be interpreted to mean that earnings per
share of the Company for the current or future years would necessarily match
or exceed the historical published earnings per share of the Company. Any
indication in this Announcement of the price at which ordinary shares have
been bought or sold in the past cannot be relied upon as a guide to future
performance.
This Announcement does not identify or suggest, or purport to identify or
suggest, the risks (direct or indirect) that may be associated with an
investment in the Placing Shares. Any investment decisions to buy Placing
Shares in the Placing must be made solely on the basis of publicly available
information, which has not been independently verified by the Sole Bookrunner.
The Offer Shares to be issued pursuant to the Capital Raise will not be
admitted to trading on any stock exchange other than AIM.
Neither the content of the Company's website (or any other website) nor the
content of any website accessible from hyperlinks on the Company's website (or
any other website) is incorporated into or forms part of this Announcement.
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