REG - Live Company Group - Operational Update, Issue of Equity and TVR

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05/01/2023 07:00

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RNS Number : 7323L  Live Company Group PLC  05 January 2023

05 January 2023

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")

 

OPERATIONAL UPDATE

 

ISSUE OF EQUITY

TOTAL VOTING RIGHTS

 

LVCG announces an operational update on its four business Divisions as well as
a general corporate update.

 

This serves as a return to the Group's quarterly updates and going forward,
every quarter, we will provide an operational update broken down into the
various Divisions.

 

The 4 Divisions being; BRICKLIVE, StART Art, LCSE (Sports & Entertainment
division) and a K-POP division trading under a number of brands.

 

 

Highlights:

 

-      A  Korean Division of Live Company was set up to focus on K-POP
and StART

-      Divisional Update on:

-      BRICKLIVE - Strategy for growth in 2023

-      K-POP Division - Minimum 3 events in advanced stages of
negotiations for 2023, and discussions in place to add further events

-      StART Art Division - 10(th) year edition of StART London, second
year of StART in Korean, several StART+ shows planned for 2023 including
Thailand and Singapore

-      LCSE - Upcoming E-prix and Ocean Race and the 45th edition of the
Cape Town Cycle Tour

-      General Corporate update and cost savings: Cost savings to be
delivered from restructuring and debt restructure

-      Issue of Equity to certain contractors

-      Analyst Update planned in the early part of Q1 2023

 

Korean Division of Live Company Group

A division of Live Company was set up in Seoul with Jason Lee at the helm.
The primary purpose of LVCG Korea is to provide Korean based support, intel
and execution of contracts, for the K-POP division.  The secondary purpose is
to expand the physical StART presence in Korea and across the rest of Asia
whilst moving the digital StART platform to the next level.

 

Divisional Updates

BRICKLIVE

 

During 2022, 31 Tours, 3 live shows and two other activities (2021: 42 tours)
were sold for client events in the UK, Europe, Asia and the US, creating
amazing experiences for their customers. August saw the first BRICKLIVE event
since the pandemic.  It took place in London over five days and was extremely
popular.

 

Despite the reduction in tours compared to last year, revenue is expected to
be in line with the prior year due to focus on higher value tours and longer
rental duration.

 

Pre-pandemic BRICKLIVE sold 71 Tours and the Group's strategy is to return
BRICKLIVE to this delivery level. To achieve this BRICKLIVE will look at new
markets in the Middle East, not currently covered with our existing partners,
as well as a renewed focus on tour utilisation with a streamlined team.

 

In 2019 and previously, BRICKLIVE had numerous licence fees, which we are
looking to recapture in 2023 and beyond.

 

 

K-POP Division (operating under several brand names)

 

In 2022 we saw the launch of the K-POP Division of the Group, KPOP.FLEX /
K.Flex, with the first European festival launched in May 2022 in Frankfurt,
Germany, and subsequent announcement of the O2 show in London in the second
half of 2022, and a further Frankfurt show in the summer of  2023. Due to
force majeure circumstances the O2 concert was cancelled. The event that took
place on 14 and 15 May 2022 to great acclaim in Frankfurt, Germany reported a
profit of £80,000 to LVCG, in addition to the profit share, LVCG was also
able to recover £137,000 of staff costs.

 

Since the disappointment of the cancellation of the London event and learnings
from Frankfurt, the Group set up a division in Korea that employs a team with
expertise and relationships in the K-POP world.  As a result, investment was
generated, and further relationships built with broadcasters, promoters, and
management companies in the K-POP industry.  This has enabled us to reach the
final stages of negotiations for events in 2023. The aim in 2023 is to offer 3
events in major European cities ranging from 1-day concerts to 2-day
festivals. The contracts for 2023 are multi-year and identified further
options in Japan and Europe embedding our strategy of being a primary player
in bringing KPOP to audiences globally using a low-risk licencing business
model.

 

In due course the Group will be announcing the European dates and locations,
in addition to the line-ups for Frankfurt and London. The Group will be the
Executive Producer at the new European events, supported by broadcasters,
promoters, arena providers, thus reducing working capital requirements.
Negotiations are also in progress to roll out the K-POP offering to Japan and
any developments will be announced in due course.

 

In 2023 these European events, in total, are expected to generate revenues of
more than £1m to this division. The corresponding contracts are multiyear and
one day shows have the option to extend to multi-day festivals. As a result,
revenues and profits should increase. Negotiations to extend our concert
offerings further afield are in advanced stages and announcements will be made
in due course.

 

StART Art Division

 

In 2022 the Group acquired the remaining shares in StART Art Global, an online
and physical art business. The Division hosted the 9(th) instalment of the
London show at the Saatchi Gallery and is expected to report a profit for this
event and its licence fee income from the licensee StART.Art Korea. In
conjunction with StART Korea, the strategy for 2023 is a renewed focus on
marketing, sponsorships, and licence fees are implemented for 2023 which will
be the 10(th) Edition of StART London.

 

The licensee, StART.Art Korea, exhibited the inaugural StART Art Fair Seoul at
Galleria Forêt, which is in the affluent and fashionable Sung Dong Gu
district of Seoul.  Jason Lee of StART Korea, a division of Live Company
Korea will bring his expertise to operate the StART Art digital platform to
maximise returns for the Group. The strategy for StART.Art Korea in 2023 is to
operate a minimum of 3 revenue generating shows in Korea, Thailand and
Singapore.

 

Revenue from on-line art linked merchandised and online art sales has been
minimal thus far and testing on issuing of NFTs is ongoing. However, the
physical art events have continued to grow.

 

LCSE

 

In March 2022 the Group's Live Sports and Entertainment ('LCSE') Division
hosted the annual mass participation Cape Town Cycle Tour - after it returned
to its usual March slot post Covid. Throughout the year the Division also
participated in producing several Pick 'n' Pay Wine Festivals in South Africa.
However, the bulk of the Division's work has been around the preparation for
the 2023 Cape Town Formula E race which was

finally confirmed by the FIA in October and the Cape Town stopover of the
Global Ocean Race. Both events take place in the first quarter of 2023.

 

During 2022, LCSE has performed in line with expectations regarding the
operational delivery and we look forward to a successful Formula E event in
February 2023 with revenue derived from management fees but unfortunately
sponsorship for 2022 was not obtained. As already communicated to shareholders
LCSE will received a percentage of all sponsorship fees delivered. The
Strategy for 2023 is to source significant title sponsorships for all managed
events.

 

General Corporate update and cost savings

 

During 2022 the Group continued to focus on increasing and improving its
offerings.  The K-POP division added a new event, the StART division added
several new events in new territories including Korea and South Africa, LCSE
confirmed the FE race and BRICKLIVE added shows in new locations and hosted
its first event since 2019.

 

Whilst the foundation for successful revenue generation from the groups
diverse Divisional offering, as disclosed in the Group's 2022 Interim
Financial Statements, 2022 continued to be challenging as the negative impact
on live events from Covid were still being felt, despite the attempts to
diversify and the acquisition of the remaining share capital of StART and the
commitment of investment from the Republic of Korea, the Group will deliver a
loss during 2022

 

 

Revenue, Cost Saving

 

The Group believes in the multi-Divisional strategy, but revenues will take
some time to develop as each division moves towards achieving their full
potential. As a result, a number of significant cost saving initiatives have
been activated. These include several redundancies after a review of all
revenue streams and the removal of none-core and loss-making activities; as
well as short term measures to improve working capital including the payment
of some contractors in shares, and the non- executive Directors have announced
their willingness to accept their director fees in shares further
announcements will be made in due course.

 

The Group, with its new CFO John Miller, is as is standard in operational
businesses, in the process of reviewing its existing debt structures with the
view of renegotiating repayment schedules to align with cash flows.  Further
short-term liquidity facilities to assist with legacy debt repayments and
operational working capital requirements are being explored.

 

The strength of the Group's brand and the relationships nurtured with
licensees resulted in one of the Group's licensee's, Jason Lee, equity
investing in the Group during the second half of 2022. Further tranches
(subject to shareholder approval at the Group's General Meeting which is due
to take place on 9 January 2023) are due in Q1 of 2023 and will total
£750,000 as announced on an RNS update on 18 November 2022.

 

To support this RNS update, an Analyst Update will be provided in the early
part of first quarter of 2023.

 

 

 

Contractor Shares

 

As detailed earlier the Group has elected to pay certain contractors,
including PDMRs Sarah Ullman the Group's COO and John Miller the Group CFO, in
shares ('Contractor Shares') for December. A total of 1,700,000 contractor
shares will be issued at 3p and application will be made for the Contractor
Shares, which rank pari passu, with existing ordinary shares, to be admitted
to trading on AIM ("Admission").  Admission is expected on or around 11
January 2023. Post issuance Sarah Ullman will own 829,486 ordinary shares in
the Group, and CFO John Miller will own 376,846.

 

Total Voting Rights

Following Admission, the enlarged issued share capital of the Group will
comprise 244,269,604 ordinary shares of 1p each ("Ordinary Shares").  Each
Ordinary Share has one voting right.  No Ordinary Shares are held in
treasury.  The above figure may be used by LVCG shareholders as the
denominator for the calculation by which they will determine if they are
required to notify their interest in, or a change to their interest in, the
Group under the FCA's Disclosure Guidance and Transparency Rules.

 

 

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

 Oval(X) (Broker)                              Tel: 020 7392 1436

 Thomas Smith

 

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.  The second is KPOP which owns the
K.Flex brand. K.Flex is Europe's first ever Mega KPOP music festival.  The
third is Live Company Sports and Entertainment, which manages several global
sports, entertainment, and lifestyle events.  The fourth Division is StART
Art Global. StART Art Global is a combination of both physical art shows and a
digital art platform.

 

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