REG - Ten Lifestyle Group - Interim results for the 6 months ended 28 Feb 2023
03/05/2023 07:00
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RNS Number : 1913Y Ten Lifestyle Group PLC 03 May 2023
3 May 2023
Ten Lifestyle Group plc
("Ten", the "Company" or the "Group")
Interim results for the six months ended 28 February 2023
Ten Lifestyle Group plc (AIM: TENG), the platform driving customer loyalty for
global financial institutions and other premium brands, is pleased to announce
its unaudited Interim Results for the six months ended 28 February 2023
("H1").
Financial
· Net Revenue(1) at £30.9m, an increase of 49%, compared to the first
half of the prior year (H1 2022: £20.8m); 18% higher than the second half of
the prior year (H2 2022: £26.1m)
o supplier revenue(2) increased 42% to £3.4m (H1 2022: £2.4m)
o corporate revenue(3) increased 49% to £27.5m (H1 2022: £18.4m)
o Net Corporate Revenue Retention Rate(4) of 144% (H1 2022: 105%)
· Adjusted EBITDA(5) of £5.0m, an increase of £4.1m compared to first
half of the prior year (H1 2022: £0.9m) and above the second half of the
prior year (H2 2022: £4.0m)
· Profit before tax of £0.4m, a £3.2m increase compared to the first
half of the prior year (H1 2022: £(2.8)m)
· Cash and cash equivalents of £7.2m (FY 2022: £6.6m) and net cash
of £0.5m (FY 2022: £3.2m)
Operational
· Record number of Active Members(6), up 43% compared to the first half
of the prior year to 316k (H1 2022: 221k, H2 2022: 275k)
· New mandate won in the Americas and 100% of Material Contracts
retained, a number of key contract renewals and contract extensions signed
Maintained investment in proprietary digital platforms,
communications, and technologies to improve service quality and efficiency,
£7.1m (H1 2022: £6.5m)
· Member satisfaction levels(7) have improved during the period, a key
indicator of repeat use and value to our corporate clients
CURRENT TRADING AND OUTLOOK
Since the end of the first half of the financial year, member activity remains
robust in all regions. Ten continues to develop its proposition and
technology, having retained all Material Contracts during the period and
developed a healthy pipeline of future potential launches.
The Board's expectations for the full financial year are unchanged.
Alex Cheatle, CEO of Ten Lifestyle Group, said;
"We are pleased to report our first profit before tax since our IPO in 2017,
which provided capital to invest primarily in new geographical markets and
technology. Our digital platform is now rolled out in over 40 countries. We
reported an impressive 49% Net Revenue growth year-on-year, meaning Ten is
well positioned to continue to drive our growth engine, even as we target
sustained cash generation."
Analyst Presentation
An online analyst presentation will be held by video link today at 9:00am.
The Group will also be presenting an Investor Webinar for current and
prospective investors tomorrow, Thursday 4 May 2023 at 5:30pm BST.
To attend either the Analyst Presentation or the Investor Webinar, please
email investorrelations@tengroup.com (mailto:investorrelations@tengroup.com)
.
For further information please visit www.tenlifestylegroup.com
(http://www.tenlifestylegroup.com) or call:
Ten Lifestyle Group plc +44 (0)20 7850 2796
Alex Cheatle, Chief Executive Officer
Alan Donald, Chief Financial Officer
Peel Hunt LLP, Nominated Advisor and Broker +44 (0) 20 7418 8900
Paul Gillam
James Smith
( )
(1) Net Revenue excludes the direct cost of sales relating to certain member
transactions managed by the Group.
(2) Supplier revenue is Net Revenue from Ten's supplier base, such as hotels,
airlines and event promoters which sometimes pay commission to Ten.
(3) Corporate revenue is Net Revenue from Ten's corporate clients, including
service fees, implementation fees and fees for the customisation of the Ten
Digital Platform.
(4) Net Corporate Revenue Retention Rate is the annual percentage change in
corporate revenue, less non-recurring revenue (i.e., non-recurring service
fees, implementation fees and fees for the customisation of the Ten Digital
Platform), from corporate client programmes operating in the previous year.
(5) Adjusted EBITDA is operating profit/(loss) before interest, taxation,
amortisation, depreciation, share-based payment expense and exceptional items.
(6) Individuals holding an eligible product, employment, account or card with
one of Ten's corporate clients are "Eligible Members", with access to Ten's
platform, configured under the relevant corporate client's programme, with
Eligible Members who have used the platform in the past twelve months becoming
"Active Members".
(7) Ten categorises its corporate client contracts based on the annualised
value paid, or expected to be paid, by the corporate client for the provision
of concierge and related services by Ten as: Small contracts (below £0.25m);
Medium contracts (between £0.25m and £2m); Large contracts (between £2m and
£5m); and Extra Large contracts (over £5m). This does not include the
revenue generated from suppliers through the provision of concierge services.
Medium, Large and Extra Large contracts are collectively Ten's "Material
Contracts".
(8) Ten measures member satisfaction using the Net Promoter Score management
tool, which gauges the loyalty of a firm's customer relationships
(https://en.wikipedia.org/wiki/Net_Promoter
(https://en.wikipedia.org/wiki/Net_Promoter) ).
OPERATING AND FINANCIAL REVIEW
CHIEF EXECUTIVE'S STATEMENT
The positive momentum seen in the business during 2022 has continued, with Ten
seeing increased Net Revenue and Active Members for the fourth consecutive
half-year period. Alongside this record Net Revenue, Ten generated its first
half year profit before tax since its IPO in 2017, even whilst continuing to
invest in its proprietary technology and other innovations.
Net Revenue increased 49% to £30.9m (H1 2022: £20.8m), 39% at constant
currency, and Adjusted EBITDA increased £4.1m to £5.0m (H1 2022: £0.9m),
£3.9m at constant currency. Growth has been achieved in all regions, with
broad success in developing existing contracts and winning new mandates with
existing and new corporate clients. This success has resulted in a 49%
increase in corporate revenue (H1: £27.5m; H1 2022: £18.4m).
Growth was especially high in the Americas following new programme launches
and good continued recovery in member activity. Growth was slowest in APAC,
where travel is still restricted in some areas.
Throughout the period, we have focused on improving Ten's proprietary
technology, content, and service quality, further improving our member
proposition, which continued to boost the number of Active Members.
FY 2019 FY 2020 FY 2021 H1 2022 FY 2022 H1 2023
Total Active Members ('000) 192 226 203* 221 275 316
*Impacted by COVID-19.
Member satisfaction, as measured by Net Promoter Score (NPS), has also
improved during the period. Our member engagement and satisfaction metrics
continue to be instrumental in demonstrating a positive return on corporate
client investment in the service. This has helped us retain 100% of our
Material Contracts.
We have maintained investment in technology, communications, and content, with
£7.1m invested in the period (H1 2022: £6.5m). This includes development of
the digital experience, personalisation, automation and AI technology that
drives member engagement as well as greater efficiencies and scale. We believe
that our market-leading digital capability continues to clearly differentiate
us from our competition and that our strong client retention and contract
tender successes validate our strategy.
In addition to new contract wins and development of existing contracts, such
as the expansion of Large contracts in each of Latin America and EMEA, we have
continued to grow the penetration of our service amongst Eligible Members,
resulting in an increase in the number of Active Members. This is enabled
through a stronger proposition, communicated even more effectively due to
improved automation and personalisation.
Our corporate clients often measure the usage of our platform as a key metric
to evaluate the Return on Investment from our service. As we continue to
expand our digital service, this will, in turn help to reduce the cost "per
interaction" to the Corporate Client and further demonstrate the
cost-effectiveness of our service.
Our proposition improvements are focused in our four service pillars - dining,
travel, live entertainment and retail - and include improved access, better
pricing (typically not available to the public), value-add benefits and
insightful editorial content. Ten's high-quality concierge, content and
support services are delivered to our members and corporate clients from
committed experts in over 20 offices globally, led by an outstanding
management team.
We believe these results further strengthen Ten's position as the platform
driving customer loyalty for global financial institutions and other premium
brands, through service delivery, technology integration, personalisation and
unique content projects that enhance member experience and improve customer
loyalty metrics for our corporate clients.
We remain committed to building a sustainable business and are more aware than
ever of the impact our business and members have on the world around us.
That's why we continue to expand our range of ESG partners and services across
travel, dining, retail and entertainment to deliver increased member choice.
Enhancing the visibility of these options across all channels, including our
inspirational content, and digital platform will drive sustainable decisions
amongst our members.
FINANCIAL REVIEW
Results
H1 2023 H1 2022 change
£m £m £m
Revenue 32.4 21.3 11.1
Net Revenue 30.9 20.8 10.1
Operating expenses and Other income (25.9) (19.9) (6.0)
Adjusted EBITDA 5.0 0.9 4.1
Adjusted EBITDA % 16.1% 4.3%
Depreciation (1.5) (1.3) (0.2)
Amortisation (2.5) (2.2) (0.4)
Share-based payments (0.4) (0.3) (0.1)
Operating Profit/(Loss) before interest and tax 0.6 (2.9) (0.1)
Net finance (expense)/income (0.1) 0.1 (0.2)
Profit/(Loss) before taxation 0.4 (2.8) 3.2
Taxation expense (0.6) (0.4) (0.3)
Loss for the period (0.2) (3.2) 3.0
Revenue
Revenue for the current period has increased significantly to £32.4m, a 52%
increase compared to the first half of the prior year (H1 2022: £21.3m). Net
Revenue has increased to £30.9m, a 49% increase compared to the first half of
the prior year (H1 2022: £20.8m), 39% at constant currency. This increase in
Net Revenue was driven by an increase in activity across the existing business
as well as new mandates won and launched. Revenue for the period is now higher
than pre-pandemic levels, with a 27% increase compared to H1 2020 (£25.6m),
the last undisturbed period prior to the pandemic.
Corporate revenue for H1 2023 was £27.5m, a 49% increase compared to the
first half of the prior year (H1 2022: £18.4m) (38% at constant currency) and
now 29% above pre-COVID levels (H1 2020: £21.3m), with a Net Corporate
Revenue Retention Rate of 144% (H1 2022: 105%), as core recurring revenue
increased from £16.9m to £24.3m. Supplier revenue (predominantly travel
related) was £3.4m, a 42% increase compared to the first half of the prior
year (H1 2022: £2.4m) and 36% higher than pre-COVID levels (H1 2020: £2.5m).
Operating expenses & other income excluding depreciation, amortisation,
share-based payments and exceptional items
Operating expenses and other income for the period was £25.9m, an increase of
£6.0m (30%), compared to the first half of the prior year (H1 2022: £19.9m),
mainly due to an increase in employee costs, reflecting higher headcount to
support growth as activity increased.
Adjusted EBITDA
Adjusted EBITDA, as reported, takes into account all Group operating costs,
other than the depreciation of £1.5m (H1 2022: £1.3m), amortisation
of £2.5m (H1 2022: £2.2m), and share-based payment expenses
of £0.4m (H1 2022: £0.4m). On this basis, Adjusted EBITDA was a profit
of £5.0m (H1 2022: £0.9m), £3.9m at constant currency rates.
Depreciation has increased by £0.2m and amortisation increased by £0.3m,
reflecting our continued technology investment. Share-based payment expenses
increased by £0.1m as the number of options granted in the period was higher
than in the prior year.
Profit before tax
Profit before tax was £0.4m, a £3.2m improvement compared to the first half
of the prior year (H1 2022: £(2.8)m), and our first reported half year profit
before tax since IPO in November 2017.
Regional performance
Segmental Net Revenue reporting reflects our servicing location rather than
the location of our corporate clients. This allows us to understand and track
the efficiency and profitability of our operations around the world.
£m H1 2023 H1 2022 % change
EMEA 13.3 10.0 +33%
Americas 13.1 6.5 +102%
APAC 4.5 4.3 +6%
Total 30.9 20.8 +49%
After fully allocating our indirect central costs including IT, platform
support, non-lease costs and management across the regions, in line with
headcount, the Adjusted EBITDA profitability of each regional segment is:
£m H1 2023 H1 2022
EMEA 4.0 1.8
Americas 1.0 (1.1)
APAC (0.1) 0.2
Total 5.0 0.9
Adjusted EBITDA % of Net Revenue 16.1% 4.3%
EMEA
Net Revenue in the region during the period increased by 33% compared to the
first half of the prior year, to £13.3m (H1 2022: £10.0m). The increase in
Net Revenue was primarily driven by a recovery of the base business, new
business launched together with higher supplier revenue due to increased
member requests across dining, entertainment, travel and events. We also
improved operational efficiency across the region. This has resulted in
Adjusted EBITDA of £4.0m (H1 2022: £1.8m), an increase of £2.2m.
Americas
Net Revenue from the region during the period increased by 102% compared to
the first half of the prior year, to £13.1m (H1 2022: £6.5m). The £6.6m
increase in revenue in the region reflected the recovery in base business
activity and new business launched together with an increase in supplier
revenue as travel activity returned. As the region grew it drove operational
efficiencies as we leveraged the Net Revenue growth. As a result, Adjusted
EBITDA was a profit of £1.0m (H1 2022 loss: £(1.1)m).
APAC
Net Revenue from the region during the period has increased by 6% compared to
the first half of the prior year, to £4.5m (H1 2022: £4.3m). Adjusted EBITDA
loss for the region was £(0.1)m (H1 2022: £0.2m),slightly below prior year
as we invested additional resources specifically in Japan to service the post
Covid increase in activity.
Cash flow
H1 2023
£m
Profit before tax 0.4
Net finance expense 0.1
Working capital changes (1.4)
Non-cash items (share-based payments, depreciation and amortisation) 4.4
Operating cash flow 3.5
Capital expenditure (0.2)
Investment in intangibles (3.7)
Taxation (0.4)
Cash outflow (0.8)
Cash flows from financing activities
Interest on loan paid (0.2)
Loan Receipts - Invoice financing 2.1
Loan Receipts - Loan notes 1.2
Repayment of leases and net interest (1.4)
Net cash generated by financing activities 1.7
Foreign currency movements (0.3)
Net increase in cash and cash equivalents 0.6
Cash and cash equivalents 7.2
The pre-tax operating cash inflows of £3.5m reflected a profit before tax of
£0.4m, decreased net working capital of £1.4m (due to a specific late client
receipt of £1.0m; now received) and add-back of non-cash items of £4.4m.
Additionally, during the period, we made £3.7m of capital investment into our
global content, internal CRM platform (TenMAID) and the continued development
of our digital platform.
Additional loan notes of £1.2m were issued during the period and a new £2.1m
invoice financing facility was entered into during the period with the Group's
bank. Repayment of leases and net interest of £1.4m resulted in an increase
in cash and cash equivalents during the period of £0.6m.
Balance sheet
H1 2023 FY 2022
£'m £'m
Intangible assets 14.5 13.4
Property, plant and equipment 0.9 0.9
Right-of-use assets 1.9 2.2
Cash 7.2 6.6
Other current assets 11.7 10.1
Current lease liabilities (1.8) (1.8)
Current liabilities (17.6) (17.3)
Short term borrowings (3.6) (1.5)
Long term borrowings (3.1) (1.9)
Non-current lease liabilities (0.4) (0.9)
Net assets 9.7 9.8
Share capital/Share premium 30.8 30.7
Reserves (21.1) (20.9)
Total equity 9.7 9.8
Net assets decreased slightly to £9.7m at 28 February 2023 compared to £9.8m
at 31 August 2022. This was primarily due to an increase in long term
borrowings, increasing to £3.1m (FY 2022: £1.9m) and short-term borrowings,
increasing to £3.6m (FY 2022: £1.5m) to support the continued growth in the
business.
Principal Risks and Uncertainties
The principal risks and uncertainties facing the Group remain broadly
consistent with the principal risks and uncertainties reported in Ten's 2022
Annual Report. Regional inflation and cost of living pressures have increased
costs and led to some price increases with corporate clients in the year.
Macroeconomic changes in each region are monitored by the Senior Leadership
Team as well as by the Board. The Group reviews its pricing in line with
changes in the macroeconomic environment and external cost pressures.
Alex Cheatle Alan Donald
Chief Executive Officer Chief Finance Officer
03 May 2023 03 May 2023
Consolidated statement of comprehensive income
Note 6 months to 28 Feb 2023 6 months to 28 Feb 2022
Unaudited Unaudited
£'000 £'000
Revenue 2 32,382 21,326
Cost of sales on principal member transactions (1,528) (574)
Net Revenue 2 30,854 20,752
Other cost of sales (849) (638)
Gross profit 30,005 20,114
Administrative expenses (29,767) (23,139)
Other income 300 150
Operating profit before amortisation, depreciation, interest, share based 4,953 886
payments, exceptional items and taxation ("Adjusted EBITDA")
Depreciation (1,473) (1,305)
Amortisation 3 (2,526) (2,156)
Share-based payment expense (416) (300)
Exceptional items - -
Operating profit 538 (2,875)
Net finance (expense) / income (149) 36
Profit / (loss) before taxation 389 (2,839)
Taxation expense 4 (574) (316)
Loss for the period (185) (3,155)
Other comprehensive (expense)/income:
Foreign currency translation differences (407) (174)
Total comprehensive loss for the period (592) (3,329)
Basic and diluted loss per ordinary share 5 (0.2)p (3.8)p
The consolidated statement of comprehensive income has been prepared on the
basis that all operations are continuing operations.
Consolidated statement of financial position
Note 28 Feb 2023 31 August 2022
Unaudited Audited
£'000 £'000
Non-current assets
Intangible assets 3 14,554 13,397
Property, plant and equipment 886 939
Right-of-use assets 1,880 2,274
Total non-current assets 17,320 16,610
Current assets
Inventories 67 118
Trade and other receivables 11,619 9,930
Cash and cash equivalents 7,158 6,584
Total current assets 18,844 16,632
Total assets 36,164 33,242
Current liabilities
Trade and other payables (16,759) (16,459)
Provisions (850) (846)
Borrowings 6 (3,591) (1,500)
Lease Liabilities (1,755) (1,834)
Total current liabilities (22,955) (20,639)
Net current liabilities (4,111) (4,007)
Non-current liabilities
Borrowings 6 (3,086) (1,940)
Lease liabilities (441) (820)
Total non-current liabilities (3,527) (2,760)
Total liabilities (26,482) (23,399)
Net assets 9,682 9,843
Equity
Called up share capital 84 84
Share premium account 30,673 30,658
Merger relief reserve 1,993 1,993
Treasury reserve 513 513
Foreign exchange reserve (954) (547)
Retained deficit (22,627) (22,858)
Total equity 9,682 9,843
Consolidated statement of changes in equity
Share capital Share premium account Merger relief reserve Foreign exchange reserve Treasury reserve Retained deficit Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 September 2021 (Audited) 82 29,356 1,993 (410) 5 (19,079) 11,947
Loss for the year - - - - - (4,316) (4,316)
Foreign exchange - - - (137) - - (137)
Total comprehensive income for the year - - - (137) - (4,316) (4,453)
Shares purchased by Employee Benefit Trust (EBT) - - - - 508 - 508
Issue of share capital 2 1,302 - - - - 1,304
Equity-settled share-based payments charge - - - - - 537 537
Balance at 31 August 2022 (Audited) 84 30,658 1,993 (547) 513 (22,858) 9,843
Loss for the period - - - - - (185) (185)
Foreign exchange - - - (407) - - (407)
Total comprehensive income for the period - - - (407) - (185) (592)
Issue of share capital - 15 - - - - 15
Equity-settled share-based payments charge - - - - - 416 416
Balance at 28 February 2023 (Unaudited) 84 30,673 1,993 (954) 513 (22,627) 9,682
Condensed consolidated statement of cash flows
6 months to 28 Feb 2023 6 months to 28 Feb 2022
£'000 £'000
Cash flows from operating activities
Loss for the period, after tax (185) (3,155)
Adjustments for:
Taxation expense 574 316
Net finance expense 149 (36)
Amortisation of intangible assets 2,526 2,156
Depreciation of property, plant and equipment 254 229
Depreciation of right-of-use asset 1,219 1,076
Equity-settled share-based payment expense 416 300
Movement in working capital:
Decrease in inventories 51 28
Increase/(Decrease) in trade and other payables 205 (2,723)
(Increase)/Decrease in trade and other receivables (1,689) 3,201
Cash from/(used in) by operations 3,520 1,392
Tax paid (401) (236)
Net cash from by operating activities 3,119 1,156
Cashflows from Investing activities
Purchase of intangible assets (3,683) (2,927)
Purchase of property, plant and equipment (250) (457)
Finance income 6 -
Net cash used by investing activities (3,927) (3,384)
Cash flows from financing activities
Lease Liability repayments (1,280) (1,093)
Sale of treasury shares - 518
Interest paid (178) -
Loan Receipts - Invoice financing 2,084 -
Loan Receipts - Loan notes 1,185 -
Interest paid on IFRS 16 lease liabilities (81) (93)
Cash receipts from issue of share capital 15 1,302
Net cash used by financing activities 1,745 634
Foreign currency movements (363) 54
Net increase /(decrease) in cash and cash equivalents 574 (1,540)
Cash and cash equivalents at beginning of period 6,584 6,662
Cash and cash equivalents at end of period
Cash at bank and in hand 7,158 5,122
Cash and cash equivalents 7,158 5,122
Notes to the Interim Financial Information
1. Basis of preparation
These condensed consolidated financial statements have been prepared using
accounting policies based on International Financial Reporting Standards (IFRS
and IFRIC Interpretations) issued by the International Accounting Standards
Board ("IASB") as contained in UK-adopted IFRS. They do not include all
disclosures that would otherwise be required in a complete set of financial
statements and should be read in conjunction with the 31 August 2022 Annual
Report. The financial information for the half years ended 28 February 2023
and 28 February 2022 does not constitute statutory accounts within the meaning
of Section 434 (3) of the Companies Act 2006 and both periods are unaudited.
The annual financial statements of Ten Lifestyle Group plc ('the Group') are
prepared in accordance with International standards in conformity with the
requirements of the Companies Act 2006 ('IFRS') and with those parts of the
Companies Act 2006 applicable to companies reporting under IFRS (except as
otherwise stated). The comparative financial information for the year ended 31
August 2022 included within this report does not constitute the full statutory
Annual Report for that period. The statutory Annual Report and Financial
Statements for year ended 31 August 2022 have been filed with the Registrar of
Companies. The Independent Auditors' Report in the Annual Report and Financial
Statements for the year ended 31 August 2022 was unqualified, did not draw
attention to any matters by way of emphasis and did not contain a statement
under 498(2)-(3) of the Companies Act 2006.
The Group has applied the same accounting policies and methods of computation
in its interim consolidated financial statements as in its year ended 31
August 2022 annual financial statements other than the Groups tax charge is
not accounted for under the same basis as IAS 34. The tax charge is calculated
using the expected effective tax rate at the reporting date. There are no new
standards effective yet and that would be expected to have a material impact
on the entity in the current period.
Going Concern
The ability of the Group to continue as a going concern is contingent on the
ongoing viability of the Group. The Group meets its day-to-day working capital
requirements through its cash balances and wider working capital management.
As at 28 February 2023, the date of the interim consolidated financial
statements, the Group had cash of £7.2m. The Group also has loans totalling
£4.6m, of which £1.5m is short term and due to be repaid in June 2023 and
£3.1m which are long term and due to be repaid in August 2025. Additionally,
£2.1m of debt was raised during the period under a new invoice financing
facility, which was entered into in January 2023, to support the Group's
working capital requirements
To evaluate the Group's ability to operate as a going concern, the Directors
have reviewed the cash flow forecasts covering a period of at least twelve
months from the date of approval of the interim consolidated financial
statements. The Group's forecasts and projections, taking account of
reasonably possible changes in trading performance for the principal risks,
show that the Group expects to be able to operate as a going concern within
the level of its current cash resources.
The Directors have considered the following scenarios when considering
forecasts to support their going concern conclusion
· Base case cashflow forecast to 31 August 2024
· Downside cashflow forecast to 31 August 2024 and mitigating actions
available
Base Case Scenario
The Base Case forecast reviewed by the Directors is in line with expectations
for the current financial year and FY 2024. The Net Revenue assumptions are
consistent with growth trends around base business growth, net contract wins
and supplier revenue growth. Cost assumptions reflect changes in Net Revenue
as well as continual improvements in operational efficiencies.
Downside scenario and mitigating actions
This scenario assumes a reduction of 20% in our variable Net Revenue for the
year to 31(st) August 2024. If this scenario was to develop. The Group has a
number of mitigating actions available to it, including reducing direct
operating costs to align to Net Revenue growth rates as well as reducing
indirect costs supporting the business. Note, as per base case long term debt
of £3.1m (repayable in August 2025) and invoice discounting facility of
£2.1m remains in place with short term debt of £1.5m repaid in June 2023.
Conclusion
The Directors have evaluated the Groups ability to operate as a going concern
under the above scenarios and has determined that it has adequate resources to
continue in operational existence for the foreseeable future. The Group's cash
flow forecasts show that it expects to be able to operate as a going concern
within the level of its current cash resources. The Group has also identified
cost savings available to it should it experience a reduction in revenue. The
Group has assessed the principal risks and other matters discussed in
connection with the going concern statement and has a reasonable expectation
that it has adequate resources to continue in operational existence for the
foreseeable future. Accordingly, the consolidated financial statements have
been prepared on a going concern basis.
The Board of Directors approved this interim report on 3 May 2023.
2. Segmental Information
The total revenue for the Group has been derived from its principal activity;
the provision of concierge services.
6 months to 28 Feb 2023 6 months to 28 Feb 2022
(Unaudited) (Unaudited)
£'000 £'000
EMEA 13,278 10,014
Americas 13,069 6,483
APAC 4,507 4,255
Net Revenue 30,854 20,752
Add back: Cost of sales on principal transactions 1,528 574
Revenue 32,382 21,326
EMEA 4,036 1,830
Americas 1,007 (1,143)
APAC (90) 199
Adjusted EBITDA 4,953 886
Amortisation (2,526) (2,156)
Depreciation (1,473) (1,305)
Share-based payment expense (416) (300)
Operating profit / (loss) 538 (2,875)
Foreign exchange (loss)/gain 106 129
Other net finance expense (255) (93)
Profit / (loss) before taxation 389 (2,839)
Taxation expense (574) (316)
Loss for the period (185) (3,155)
Net Revenue is a non-GAAP Group measure that excludes the direct cost of sales
relating to member transactions managed by the Group, such as the cost of
airline tickets sold under the Group's ATOL licences. Net Revenue is the
measure of the Group's income on which segmental performance is measured.
Adjusted EBITDA is a non-GAAP Company specific measure excluding interest,
taxation, amortisation, depreciation, share-based payment, and exceptional
costs. Adjusted EBITDA is the main measure of performance used by the Board,
who are considered to be the chief operating decision makers. Adjusted EBITDA
is the principal operating metric for a segment.
The statement of financial position is not analysed between reporting
segments. Management and the chief operating decision-maker consider the
statement of financial position at a Group level.
3. Intangible Assets
The Group capitalised £3.7m (H1 2022: £2.9m, FY 2022: £6.6m) of costs
representing the development of Ten's global digital platform, TenMAID (Ten's
proprietary customer relationship management system) resulting in a net book
value of £14.6m (H1 2022: £12.3m, FY 2022: £13.4m) after an amortisation
charge of £2.5m (H1 2022: £2.2m, FY 2022: £4.6m).
4. Taxation
The income tax expense has been recognised based on the best estimate of the
weighted average annual effective Group tax rate expected for the full
financial year. The income tax expense of £0.6m (H1 2022: £0.4m) includes
foreign taxes recognised by overseas Group companies on a
territory-by-territory basis using the expected effective tax rate for the
full year.
5. Earnings Per Share
6 months to 28 Feb 2023 6 months to 28 Feb 2022
£'000 £'000
Loss attributable to equity shareholders of the parent (185) (3,155)
Weighted average number of ordinary shares in issue (net of treasury) 83,808,935 83,195,255
Basic loss per share (pence) (0.2)p (3.8)p
Where the Group has incurred a loss in the six-month period to 28 February
2023, the diluted earnings per share is the same as the basic loss per share
as the loss has an anti-dilutive effect.
6. Borrowings
In addition to the Group's £4.6m of loans (FY 2022: £3.4m), on the 25(th) of
January 2023 the Group entered an invoice financing facility available up to a
maximum of £2.1m, of which the full facility of £2.1m has been utilised at
28 February 2023. The Group has invoice financing facilities in place relating
to trade receivables due from large corporate clients of Ten Lifestyle
Management Ltd that are denominated in USD$ and GBP£. The trade receivables
guaranteed under the arrangement totalled £3.3m (PY: £nil). The Group
retains the credit risk associated to these trade receivables and therefore
presents these trade receivables gross within the reported current assets. The
liability arising from the invoice financing is presented as borrowings within
current liabilities. The invoice financing facility is guaranteed to the value
of the debts advanced and accrues interest at a rate of 2% over the base rate.
8. Cautionary Statement
This document contains certain forward-looking statements relating to Ten
Lifestyle Group plc. The Company considers any statements that are not
historical facts as "forward-looking statements". They relate to events and
trends that are subject to risk and uncertainty that may cause actual results
and the financial performance of the Company to differ materially from those
contained in any forward-looking statement. These statements are made by the
Directors in good faith based on information available to them and such
statements should be treated with caution due to the inherent uncertainties,
including both economic and business risk factors, underlying any such
forward-looking information.
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