REG - SpaceandPeople PLC - Interim results for six months ended 30 June 2023
25/09/2023 07:00
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RNS Number : 4329N SpaceandPeople PLC 25 September 2023
25 September 2023
SpaceandPeople plc
("SpaceandPeople" or the "Group")
Interim results for the six months ended 30 June 2023
SpaceandPeople (AIM:SAL), the retail, promotional and brand experience
specialist which facilitates and manages the sale of promotional and retail
merchandising space in shopping centres and other high footfall venues,
announces its interim results for the six months ended 30 June 2023.
Highlights
Financial
o Group revenue up 5% to £2,537k (H1 2022: £2,413k) due to German retail
revenue increasing by 38% to £801k (H1 2022: £582k), partially offset by a
decline in UK retail revenue of 23% to £468k (H1 2022: £609k).
o Operating loss increased by 11% to £355k (H1 2022: £320k) due to an
increase in administration expenses including professional fees and staff
costs.
o Loss after tax increased by 13% to £351k (H1 2022: £311k).
o Net cash outflow from operating activities of £1,058k (H1 2022: £470k)
primarily due to reduction in creditors with a significant creditor as at 31
December 2022 being paid during H1 2023.
o Facility headroom at 30 June 2023 of £1,306k (30 June 2022: £1,368k)
which has been increased post period end to £1,537k at 22 September 2023 (23
September 2022: £1,550k).
o Net bank debt as at 30 June 2023 has decreased by 25% to £763k (30 June
2022: £1,024k), with bank debt repayments of £323k since 30 June 2022.
Operational
o Transformation of UK retail division with the continued roll-out of Rock
Up and Pop Up concept.
o Growth in German retail division with average number of RMUs in operation
increasing to 95 during H1 2023 (H1 2022: 69).
o Further contract extension with Network Rail until September 2024.
o New trading relationship Multi Germany GmbH in Germany agreed during
September 2023.
Contact details:
SpaceandPeople Plc 0845 241 8215
Nancy Cullen, Gregor Dunlay
Zeus Capital Limited (Nominated Adviser and Broker) 0203 829 5000
David Foreman, Jamie Peel, Ed Beddows
Chief Executive's Interim Operating Statement
It is fantastic to be able to produce a report which is untainted by
extraneous factors, such as Covid-19, for the first time since 2019. This half
year has been encouraging for SpaceandPeople ("S&P"), with a drive to
invest further across the business both in the UK and in Germany in order to
develop products and services that are closely attuned to our customers
evolving needs. I am pleased, therefore, to report a 5% increase in revenues
from £2,413k in 2022 to £2,537k this period.
The growth in revenue in this first half year has been delivered mainly by
strong results in our German retail division and steady performance in our UK
promotions division, partially offset by a slight reduction in UK retail, as
this division transforms towards our innovative Rock Up and Pop Up ("RUPU")
concept of kiosk retailing.
This increase in revenue has driven an improvement in the gross profitability
of the business, enabling us to invest in both staff and IT systems that will
improve our customer experience and drive further revenue and profitability
growth in H2 2023 and beyond.
UK
Pop up food and drink kiosks remain very popular as venue activity,
particularly in the UK. However, it has been pleasing to see the growth of
other fashion items such as eyewear, home products and fragrance. Our latest
service, RUPU, is proving to be popular with both our venue clients and
nascent businesses. During the first six months of the year, we introduced ten
new retailers into our venues, including international, start-up and on-line
only retailers. None of these retailers were in a position to launch their
businesses in physical retail without the support that RUPU offered them. This
product, given its ability to provide vibrant new names into our venues, is
set to become an increasingly important aspect of the S&P service and we
look forward to introducing many more new businesses into a widening portfolio
of venues over the coming year.
S&P now has the operational capability and experience to take a business
on the whole journey from being a pure play on-line brand to supplying it with
a fully installed on-mall kiosk, designed to the brand's specification, with
merchandising, marketing and business planning support, access to agency staff
if required and all necessary equipment relating to the sale of its products.
This means that we can now support a whole new generation of retailers who
want to expand their businesses with a turnkey operation.
Our Brand Ex division had a very strong end of year in 2022, but the first
quarter of 2023 produced lower revenue and activity levels than we had
anticipated. I am therefore delighted to say that the second half of the year
is looking significantly better for this division and we are seeing a marked
resurgence in the scale of this activity across all venue types. Last year we
launched our on-line website www.experientialspace.co.uk
(http://www.experientialspace.co.uk) , which aims to provide brands and
agencies with comprehensive information about venues and their site details.
This website has been further developed this year with the addition of live
on-line availability calendars.
Additionally, the brand market continues to require more sophisticated data
regarding the sites they are purchasing and as a business, we have introduced
functionality to increase the data available to buyers to grow this market
further, along with working with technology partners to assess GDPR-compliant
behaviour tracking mechanisms, which support brands' analysis of post event
behaviour and campaign success.
Germany
In Germany we have had a strong start to 2023 with revenue up 38% to £801k
(H1 2022: £582k) across our shopping centre portfolio. This was as a result
of us having an average of 95 kiosks in operation compared with 69 in the
first six months of 2022. The principal area of growth has been increasing the
number of kiosks operating in additional venues that we have not previously
had an agreement to trade in, along with an increase in the occupancy rates in
our fixed rent portfolio.
Additionally, having launched two kiosks in Austria at the end of 2022, we
have continued to trade successfully on these kiosks and are looking to
develop further international opportunities.
Costs and Profitability
Our overall costs increased over the first six months by 5% to £3,004k (H1
2022: £2,865k) due to additional staff being employed both in London and
Glasgow to support the growth of the business. As with all businesses, we are
also not immune to inflationary pressures and therefore, costs have increased
across the Group over the last few months and we have had some significant
one-off costs related to professional and recruitment fees.
Other income of £112k is lower than in the same period of 2022, however, a
significant proportion of this income in 2022 was made up of government grant
support from Germany in relation to the Covid pandemic, which has not been
repeated in 2023.
The cash position of £556k is slightly lower than at the same point last year
(H1 2022: £618k) and headroom is correspondingly lower at £1,308k (2022:
£1,368k). However, net debt has fallen from to £763k (H1 2022: £1,024k) as
we have continued to repay our term loans. We have achieved this reduction in
net debt whilst also clearing a large balance outstanding to a major client in
this period.
Outlook
We are pleased, therefore, to report a solid first half of the year with
stable results and we are seeing the investment in staff across the business
delivering further growth. We are confident that plans are in place across
both the UK and Germany to support and drive the business forward and we are
very excited by the potential shown by new products such as RUPU.
We enter the second half of the year with confidence, as we have put in place
the venue infrastructure, the products and the personnel to ensure that we can
maximise the opportunities available to us during the busiest and most
profitable period of the year.
I am absolutely delighted that we have recently agreed an extension of our
relationship with Network Rail until September 2024. We look forward to
continuing to work closely with the Network Rail team to deliver even more
high quality brand events into their stations over the coming year.
We are also pleased to announce an agreement to supply new units into Centres
operated by Multi Corporation in Germany, thus helping us to expand our German
business beyond our core customer base.
Finally, I would like to take this opportunity to sincerely thank Steve
Curtis, who served as a non-executive director with S&P for 9 years and
who retired in June from his role. Steve provided invaluable support to the
business throughout his tenure and was a tremendous support to us, not least
during the lockdown/Covid affected period.
Nancy Cullen
22 September 2023
Independent Auditor's Review Report on Interim Financial Information
Conclusion
We have reviewed the accompanying balance sheet of Spaceandpeople plc as of
June 30, 2023 and the related statements of income, changes in equity and cash
flows for the six-month period then ended, and a summary of significant
accounting policies and other explanatory notes.
Based on our review, nothing has come to our attention that causes us to
believe that the accompanying interim financial information does not present
fairly, in all material respects the financial position of the entity as at
June 30, 2023, and of its financial performance and its cash flows for the
six-month period then ended in accordance with UK adopted International
Accounting Standard 34, "Interim Financial Reporting".
Basis for Conclusion
We conducted our review in accordance with International Standard on Review
Engagements 2410 (UK), "Review of Interim Financial Information Performed by
the Independent Auditor of the Entity". A review of interim financial
information consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing and consequently does not
enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express
an audit opinion.
As disclosed in note 2, the annual financial statements of the group are
prepared in accordance with United Kingdom adopted International Accounting
Standards. The condensed set of financial statements included in this half
yearly financial report has been prepared in accordance with United Kingdom
adopted international Accounting Standard 34, "Interim Financial Reporting".
Conclusions Relating to Going Concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis of Conclusion section of this report,
nothing has come to our attention to suggest that management have
inappropriately adopted the going concern basis of accounting or that
management have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
this ISRE, however future events or conditions may cause the entity to cease
to continue as a going concern.
Responsibilities of directors
Management is responsible for the preparation and fair presentation of this
interim financial information in accordance with UK adopted International
Accounting Standard 34, "Interim Financial Reporting".
In preparing the half-yearly financial report, the directors are responsible
for assessing the company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to
liquidate the company or to cease operations, or have no realistic alternative
but to do so.
Auditor's Responsibilities for the review of the financial information
In reviewing the half-yearly report, we are responsible for expressing to the
Company a conclusion on the condensed set of financial statement in the
half-yearly financial report. Our conclusion, including our Conclusions
Relating to Going Concern, are based on procedures that are less extensive
than audit procedures, as described in the Basis for Conclusion paragraph of
this report.
Use of our report
This report is made solely to the company in accordance with International
Standard on Review Engagements (UK) 2410 "Review of Interim Financial
Information Performed by the Independent Auditor of the Entity" issued by the
Financial Reporting Council. Our work has been undertaken so that we might
state to the company those matters we are required to state to it in an
independent review report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other
than the company, for our review work, for this report, or for the conclusions
we have formed.
Azets Audit Services
Chartered Accountants
Statutory Auditors
Titanium 1
King's Inch Place
Renfrew
PA4 8WF
22 September 2023
Consolidated Group Statement of Comprehensive Income
For the six months ended 30 June 2023
Notes 6 months to 30 June '23 6 months to 30 June '22 12 months to 31 December '22
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Revenue 4 2,537 2,413 5,529
Cost of sales (866) (869) (1,644)
Gross profit 1,671 1,544 3,885
Administration expenses (2,138) (1,996) (4,101)
Other operating income 112 132 207
Operating loss before non-recurring charges (355) (320) (9)
Non-recurring charges - - (1,500)
Operating loss (355) (320) (1,509)
Finance costs (69) (57) (116)
Loss before taxation 4 (424) (377) (1,625)
Taxation 73 66 (89)
Loss after taxation (351) (311) (1,714)
Other comprehensive income
Foreign exchange differences on translation of foreign operations (5) 11 (25)
Total comprehensive loss for the period (356) (300) (1,739)
Loss per share 10
Basic (18.4)p (16.0)p (88.4)p
Diluted (18.4)p (16.0)p (88.4)p
Consolidated Group Statement of Financial Position
As at 30 June 2023
Notes 30 June '23 30 June '22 31 December '22
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Assets
Non-current assets:
Goodwill 5 5,381 6,881 5,381
Property, plant & equipment 6 469 640 545
Deferred tax 281 364 208
6,131 7,885 6,134
Current assets:
Trade & other receivables 1,937 2,134 2,524
Cash & cash equivalents 7 556 618 1,885
2,493 2,752 4,409
Total assets 8,624 10,637 10,543
Liabilities
Current liabilities:
Trade & other payables 4,227 3,999 5,591
Lease liabilities 190 176 180
Borrowings repayable within one year 8 322 322 322
4,739 4,497 6,093
Non-current liabilities:
Lease liabilities 192 284 240
Borrowings repayable after one year 8 997 1,320 1,158
1,189 1,604 1,398
Total liabilities 5,928 6,101 7,491
Net assets 2,696 4,536 3,052
Equity
Share capital 9 195 195 195
Share premium 4,868 4,868 4,868
Special reserve 233 233 233
Own shares held (50) - (50)
Retained earnings (2,550) (760) (2,194)
Total equity 2,696 4,536 3,052
Consolidated Group Statement of Cash Flows
For the six months ended 30 June 2023
Notes 6 months to 30 June '23 6 months to 30 June '22 12 months to 31 December '22
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Cash flow from operating activities
Cash (outflow) / inflow from operations (989) (418) 1,216
Interest paid (69) (57) (116)
Taxation - 5 6
Net cash (outflow) / inflow from operating activities (1,058) (470) 1,106
Cash flows from investing activities
Purchase of property, plant & equipment 6 (28) (62) (87)
Disposal of property, plant & equipment 6 - 68 -
Purchase of own shares - - (50)
Net cash (outflow) / inflow from investing activities (28) 6 (137)
Cash flows from financing activities
Bank loans repaid 8 (161) (137) (298)
Payment of finance lease obligations (82) (161) (166)
Net cash outflow from financing activities (243) (298) (464)
(Decrease) / increase in cash and cash equivalents (1,329) (762) 505
Cash at beginning of period 1,885 1,380 1,380
Cash at end of period 7 556 618 1,885
Reconciliation of operating loss to net cash flow from operating activities
Operating loss (355) (320) (1,509)
Goodwill impairment - - 1,500
Loss on disposal - - (6)
Depreciation of property, plant & equipment 148 167 332
Effect of foreign exchange rate moves (5) 13 (25)
Decrease / (increase) in receivables 587 62 (328)
(Decrease) / increase in payables (1,364) (340) 1,252
Cash flow from operating activities (989) (418) 1,216
Consolidated Group Statement of Changes in Equity
For the six months ended 30 June 2023
Share capital Share premium Special reserve Own Shares Held Retained earnings Total equity
Six months to 30 June '23 £'000
£'000 £'000 £'000 £'000 £'000
At 1 January '23 195 4,868 233 (50) (2,194) 3,052
Foreign currency translation - - - - (5) (5)
Loss for the period - - - - (351) (351)
At 30 June '23 195 4,868 233 (50) (2,550) 2,696
Share capital Share premium Special reserve Own Shares Held Retained earnings Total equity
Six months to 30 June '22 £'000
£'000 £'000 £'000 £'000 £'000
At 1 January '22 195 4,868 233 - (460) 4,836
Foreign currency translation - - - - 11 11
Loss for the period - - - - (311) (311)
At 30 June '22 195 4,868 233 - (760) 4,536
Notes to the financial statements
For the six months ended 30 June 2023
1. General information
SpaceandPeople plc is a limited liability company incorporated and domiciled
in Scotland (registered number SC212277) which is quoted on AIM (ticker: SAL).
This condensed consolidated interim financial information has been reviewed,
but not audited, by the auditors, and their independent review is set out
earlier in this report. It does not constitute statutory accounts as defined
by Section 434 of the Companies Act 2006. The financial information for the 12
months to 31 December 2022 has been extracted from the statutory accounts for
that period. These published accounts were reported on by the auditors without
qualification or an emphasis of matter reference and did not include a
statement under section 498 of the Companies Act 2006 and have been delivered
to the Registrar of Companies.
This condensed consolidated interim financial information was approved by the
board on 22 September 2023.
2. Basis of preparation
This condensed consolidated interim financial information for the six months
ended 30 June 2023 has been prepared in accordance with IAS 34 'Interim
financial reporting'. The condensed consolidated interim financial information
should be read in conjunction with the financial statements of the Group for
the period ending 31 December 2022 which were prepared on a going concern
basis under the historical cost convention in accordance with International
Financial Reporting Standards (IFRS) as adopted by the UK, and those parts of
the Companies Act 2006 applicable to companies reporting under IFRS.
3. Accounting policies
The accounting policies adopted in the preparation of the condensed
consolidated interim financial information are consistent with those applied
in the financial statements of the Group for the year ended 31 December 2022.
Going Concern
The Directors are required to prepare the statutory financial statements on
the going concern basis unless it is inappropriate to presume that the Group
will continue in business. In satisfaction of this responsibility the
Directors have considered the Group's ability to meet its liabilities as they
fall due.
The Group meets its day-to-day cash requirements through working capital
management and the use of existing bank overdraft and loan. Management
information tools including budgets and cash flow forecasts are used to
monitor and manage current and future liquidity.
The current and future financial position of the Group, including its cash
flows and liquidity, continue to be reviewed by the Directors. They take a
prudent view on the continuing recovery in the Group's business post Covid and
in light of current inflationary and other macroeconomic factors impacting on
the business, its customers and suppliers. They have also considered the
Group's ability to withstand the loss of key contracts and any mitigating
actions that would be available to them.
The Group has term loans in place that mature in 2025 and 2027 along with
overdraft facilities available until 2024. Financial covenants are in place
that reflect the current and budgeted trading position and the Directors are
confident of renewing the overdraft facilities in the normal course of
business.
The Group continues to manage its cash flows prudently and the Directors are
confident that the current resources and available funding facilities will
provide sufficient headroom to meet the forecast cash requirements whilst
remaining within its financial covenants.
As such, the Directors consider that it is appropriate to prepare the
financial statements on the going concern basis.
4. Segmental reporting
The Group splits its business into two main areas, being promotions and
retail. The retail business is further sub-divided into both UK and German
territories. The Group maintains its head office in Glasgow and has a
subsidiary office in Hamburg, Germany. The Group has determined that these,
along with head office functions, are the principal operating segments as the
performance of these segments is monitored separately and reviewed by the
Board.
The following tables present revenues and loss/profitability regarding the
Group's two core business segments - Promotional Sales and Retail, split by
geographic area, after licence fees and management charges made between Group
companies.
Promotions Retail Retail Head Group
UK UK Germany Office
£'000 £'000 £'000 £'000 £'000
Six months to 30 June '23
Revenue 1,268 468 801 - 2,537
Segment (loss) / profit before tax 174 (52) (36) (510) (424)
Six months to 30 June '22
Revenue 1,222 609 582 - 2,413
Segment profit / (loss) before tax 244 16 (32) (605) (377)
12 months to 31 December '22
Revenue 3,011 1,236 1,282 - 5,529
Segment profit / (loss) before tax 944 (1,312) 31 (1,455) (1,625)
5. Goodwill
30 June '23 30 June '22 31 December '22
Net book value £'000 £'000 £'000
Opening and closing balance 5,381 6,881 5,381
6. Property, plant and equipment
30 June '23 30 June '22 31 December '22
Net book value £'000 £'000 £'000
Opening balance 545 690 690
IFRS16 Lease additions 44 123 168
Additions 28 62 87
Disposals - (68) (68)
Depreciation (148) (167) (332)
Closing balance 469 640 545
The right of use lease liabilities are secured against the right of use
assets.
7. Cash & cash equivalents
30 June '23 30 June '22 31 December '22
£'000 £'000 £'000
Cash at bank and on hand 556 618 1,885
8. Borrowings
At the reporting date the Group had the following borrowings:
30 June '23 30 June '22 31 December '22
£'000 £'000 £'000
Bank loans:
Less than one year 322 322 322
Greater than one year 997 1,320 1,158
1,319 1,642 1,480
As at 30 June 2023, SpaceandPeople plc had £1.32 million (2022: £1.64
million) of CBILS term loans, £0.44 million of which expire in April 2025 and
£0.88 million expire in January 2026. SpaceandPeople plc also had £0.75
million of overdraft facilities of which £nil was used as at 30 June 2023
(2022: £nil). The bank facilities are secured by floating charge over the
Group's assets and are subject to interest between 3.25% to 3.8% plus base.
9. Called up share capital
Allotted, issued and fully paid 30 June '23 30 June '22 31 December '22
Class Nominal value
Ordinary 10p £ 195,196 195,196 195,196
Number 1,951,957 1,951,957 1,951,957
10. Earnings per share
Earnings per share (EPS) has been calculated using the loss after taxation
attributable to owners of the company for the period and the weighted average
number of shares in issue.
30 June '23 30 June '22 31 December '22
£'000 £'000 £'000
Loss after tax for the period (351) (311) (1,714)
Non-recurring charges - - 1,500
Loss after tax for the period before non-recurring costs (351) (311) (214)
Weighted average number of shares in issue during the period
'000 '000 '000
- Number of shares in issue during the period 1,952 1,952 1,952
- Impact from purchase of own shares on (50) - (13)
28 September 2022
- Weighted average number of 10p ordinary shares 1,902 1,952 1,939
- Weighted average number of share options 182 110 137
- Weighted average number of diluted ordinary 10p shares 2,084 2,062 2,076
There are share options outstanding as at the end of each period which, if
exercised, would increase the number of shares in issue. However, in these
periods, there is an anti-dilutive effect and as such the effects of
anti-dilutive potential ordinary shares are ignored in calculating diluted
EPS.
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