REG - Ten Lifestyle Group - Interim results for the 6 months ended 29 Feb 2024
22/04/2024 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240422:nRSV4130La&default-theme=true
RNS Number : 4130L Ten Lifestyle Group PLC 22 April 2024
22 April 2024
Ten Lifestyle Group plc
("Ten", the "Company" or the "Group")
Interim results for the six months ended 29 February 2024
Ten Lifestyle Group plc (AIM: TENG), the global concierge platform driving
customer loyalty for global financial institutions and other premium brands,
announces its unaudited interim results for the six months ended 29 February
2024 ("H1").
Financial highlights
· Net Revenue(1) at £30.9m in line with the first half of prior year
(H1 2023: £30.9m) and up £1.1m (4%) at constant currency
o corporate revenue(2) of £27.1m in line with the first half of prior year
(H1 2023: £27.5m)
o supplier revenue(3) of £3.8m up £0.5m (15%) on the first half of prior
year (H1 2023: £3.3m)
· Adjusted EBITDA(4) up £0.3m (7%) to £5.3m (H1 2023: £5.0m) and
up £0.5m (10%) at constant currency
o Adjusted EBITDA margin(5) increased to 17.2% (H1 2023: 16.1%)
· Profit before tax of £0.3m in line with the first half of prior
year (H1 2023: £0.4m)
· Cash and cash equivalents up on the first half of the prior year to
£8.0m (H1 2023: £7.2m, FY 2023: £8.2m). Net cash was £1.9m (H1 2023:
£0.5m; FY 2023: £3.7m)
Operational highlights
· Material Contract(6) developments expected to generate revenue
in the second half of the year, include:
o a multiple year extension of an existing Large contract on renegotiated
terms, with options to extend the scope of the current services
o Medium contract with a new global Private Bank client with customers
across AMEA(7)
· £6.4m (H1 2023: £7.1m) investment in proprietary digital
platforms, communications and technologies to continue to enhance member
experience and further extend competitive advantage
o developed a new Entertainment module of the Ten Digital Platform,
including Ten Box Office, allowing members to book tickets, including
exclusive inventory, on the platform
o launched and iterating generative AI solutions to improve service quality
and efficiency
· Record number of Active Members(8), up 13% on first half of the
prior year to 356k (H1 2023: 316k)
· Member satisfaction levels(9) have improved during the period, a
key indicator of repeat usage and of Ten's value to our corporate clients
CURRENT TRADING AND OUTLOOK
Since the end of the first half of the financial year, Ten has launched new
contracts, most notably a Medium contract with Emirates NBD Bank, and
continues to convert its strong pipeline of new business. These contract
developments at the beginning of H2 2024 are expected to underpin revenue
growth in the remainder of the year and into 2025.
Ten remains focused on delivering against its digital roadmap, leveraging
in-house generative AI to drive personalisation, service efficiency and
quality. The Group expects to generate net cash in the second half of the year
and the Board's expectations for the full financial year remain unchanged.
Alex Cheatle, CEO of Ten Lifestyle Group, said;
"We have continued to build on the step change in Net Revenue and
profitability achieved in FY 2023. This has been achieved whilst maintaining a
net cash position, improving service levels, enhancing our technology platform
and winning new corporate clients, underpinning expected revenue growth and
improved Adjusted EBITDA profitability in the remainder of the year and into
2025."
Analyst Presentation
An online analyst presentation will be held by video link today at 9:00am.
Investor Webinar
Additionally, an Investor Webinar tailored for current and prospective
investors will be presented on Thursday 25 April 2024 at 5:30 pm, providing
participants a deeper insight into the Group's interim results and a chance to
engage directly with the leadership team.
If you wish to attend either the Analyst Presentation or the Investor Webinar,
kindly email investorrelations@tengroup.com
(mailto:investorrelations@tengroup.com) . This will ensure that you receive
the necessary details and access information for these events.
For further information, please visit https://www.tenlifestylegroup.com/
(https://www.tenlifestylegroup.com/) or contact:
Ten Lifestyle Group plc +44 (0)20 7850 2796
Alex Cheatle, Chief Executive Officer
Alan Donald, Chief Financial Officer
Singer Capital Markets Advisory LLP, Nominated Advisor and Broker +44 (0) 20 7496 3000
Corporate Finance: James Moat / Oliver Platts
Corporate Broking: Charles Leigh-Pemberton / Tom Salvesen
( )
(1) Net Revenue includes the direct cost of sales relating to certain member
transactions managed by the Group.
(2) 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.
(3) Supplier revenue is Net Revenue from Ten's supplier base, such as hotels,
airlines and event promoters which sometimes pay commission to Ten.
(4) Adjusted EBITDA is operating profit/(loss) before interest, taxation,
amortisation, depreciation, share-based payment expense, and exceptional
items.
(5) Adjusted EBITDA margin is Adjusted EBITDA as a percentage of Net Revenue.
(6) 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".
(7) Asia Middle East and Africa.
(8) Ten measures member satisfaction using the Net Promoter Score management
tool, which gauges the loyalty of a firm's member relationships.
(9) 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".
OPERATING AND FINANCIAL REVIEW
CHIEF EXECUTIVE'S STATEMENT
Ten has maintained and, on a constant currency basis, built on the step change
in Net Revenue and profitability achieved in FY 2023, whilst maintaining a net
cash position. Ten has also continued to invest in technology, including
generative AI, and its overall proposition throughout the period. These
investments are succeeding in enhancing service levels, improving
efficiencies, and further strengthening Ten's competitive advantage,
ultimately driving improved member engagement and operating leverage at scale.
We have continued to support and grow with our existing corporate clients and
convert our strong pipeline of contract opportunities with global financial
institutions and premium brands, securing multiple new contract developments
since the start of the financial year, which are due to deliver revenues from
in the second half of the financial year.
Net Revenue remained in line with the first half of prior year (H1 2023:
£30.9m) but increased £1.1m (4%) at constant currency, with supplier revenue
up 15% on the first half of prior year (H1 2023: £3.3m). Active Members
continued to grow, up 13% on first half of the prior year to 356k (H1 2023:
316k).
Adjusted EBITDA increased by £0.3m (7%) to £5.3m on the prior year (H1 2023:
£5.0m), £0.5m (10%) at constant currency and Adjusted EBITDA margin
increased to 17.2% (H1 2023: 16.1%). A positive profit before tax (PBT), of
£0.3m was generated, marking the third consecutive half-year period of
positive PBT.
At the end of the period, Ten's cash and cash equivalents position was £8.0m
(FY 2023: £8.2m), with net cash of £1.9m (H1 2023: £0.5m; FY 2023: £3.7m).
This balance reflects the Group's normal seasonality, to consume working
capital in the first half of the year, and the timing of client receipts.
Delivering Adjusted EBITDA profitability and maintaining a net cash position,
whilst maintaining investments in technology, are key performance indicators
of the Group's strategic Growth Engine.
Corporate client developments
H2 2024 H1 2024 FY 2023*
Contract By Size (to date)
Extra Large 3 3 3
Large 7 7 6
Medium 20 19 19
30 29 28
Contract by Region
Europe 8 8 9
Americas 12 12 11
AMEA 9 8 7
Global 1 1 1
30 29 28
*FY 2023 contracts restated to reflect the appropriate classification by
region under the new reporting structure.
Since the end of FY 2023, Ten has upgraded two Medium contracts into Large
contracts and has secured three Medium contracts with new corporate clients,
in addition to significant contractual developments with existing corporate
clients and multiple Small contract wins. The contract wins have recently
launched or are expected to launch by the end of the financial year. These are
expected to generate revenue from the second half of the year and, based on
previous precedent, will likely increase in volume and value over time.
Most notably, Ten has secured and launched Medium contracts with a new global
Private Bank client with customers across AMEA and with Emirates NBD Bank in
the UAE. Ten has also partnered with Global Travel Collection to provide
luxury lifestyle expertise to their 1,300 travel advisors, enhancing their
global reach and premium travel services and is expected to be a Medium
contract in the first full year.
Ten has a Framework Agreement with a corporate client group, encompassing the
equivalent of two Large contracts. Ten has secured a multiple year extension
of one of the Large contracts on renegotiated terms, with options to extend
the scope of the current services. However, the client has chosen to withdraw
concierge services from its customer engagement strategy, under the other
contract. Consequently, Ten will lose a Large contract (c. 5.5% of Net Revenue
in FY 2023) from the end of this financial year, albeit we expect the loss of
this contract to be partially offset by initiatives that are underway to
increase our footprint within the existing client base as well as other
mitigations.
Some of the users of the exiting concierge services are expected to transition
to Ten's 'paid-for' Private Membership. This is expected to grow Ten's Private
Membership by the equivalent of a Medium contract during FY 2025. The combined
growth initiatives plus retention of the Large contract and Ten's Private
Membership is expected to mitigate the loss of the contract, such that the
total Net Revenue impact of this contract loss will be £1.5m to £2.5m in FY
2025.
We believe that Ten's pipeline of new business has never been stronger and
primarily consists of global financial institutions and premium brands aiming
to enhance their customer loyalty metrics, particularly since the conclusion
of the pandemic. The sales and launch cycle typically spans 12-24 months, and
Ten is currently in the process of converting this pipeline, which is
anticipated to generate revenue starting from the second half of this
financial year and continuing into 2025.
While the majority of recent contract wins are with first-time concierge
service adopters, Ten has a very strong record of winning competitive tenders
and re-tenders (>90% success rate over the last 5 years) and remains
confident in securing contracts with incumbent competitors when they come up
for tender.
We remain confident in the strength and depth of our partnerships with
corporate clients. These clients increasingly engage Ten to deliver premium
product marketing, customer engagement, and insight initiatives, alongside
technology integration, personalisation, and unique content projects that
enhance member experiences and reinforce Ten's position as the preferred
partner for financial institutions and premium brands seeking to attract and
retain affluent customers.
Our investments in technology, AI and content underpins enhanced member
proposition, satisfaction, and engagement
Ten continues to benefit from the operational, and competitive advantages of
our digital capability with £6.4m (H1 2023: £7.1m) invested in technology,
communications, and content in the period. We believe that our strategic focus
on market-leading digital capability clearly differentiates us from our
competitors and underpins our long-term "Growth Engine" strategy to become the
world's most trusted service.
Throughout the period, significant advancements in Ten's digital roadmap have
been achieved that we believe are driving member engagement as well as greater
efficiencies and scale. Notable improvements include enhanced personalisation,
user experience and the introduction of a new "Entertainment" module to the
Ten Digital Platform with a fully integrated "Ten Box Office". Ten's closed
user group of high-net-worth members can enjoy presales, preferential pricing,
and bespoke access to ticketing and VIP hospitality packages, alongside
publicly available inventory delivered via APIs with industry leading
distributors. From H2 2023, inventory will be managed through Ten's
proprietary digital ticketing technology. Some of our corporate clients have
held back on marketing entertainment tickets, fulfilled via high-touch
servicing, until the digital platform functionality is complete in H2 2024.
Clients are enthusiastic about ramping up marketing, once the digital
fulfilment is launched, because of the improved CX and lower cost per
interaction.
Work is underway to deliver on further planned releases throughout calendar
year (CY) 2024 aimed at improving Ten's digital offerings by leveraging Ten's
ever-improving "not available on the internet" inventory of offers, benefits
and access across restaurants, travel, entertainment and editorial content
with technology innovations, including in-house generative AI to drive
personalisation, service efficiency and quality.
Ten has joined Microsoft AI Cloud Partner Program to support our in-house AI
capabilities. This partnership has facilitated the development and expansion
of Ten's AI "CoPilot" tool for Lifestyle Managers. By combining data from
Ten's proprietary travel and dining inventory with AI technology, our
Lifestyle Managers can now provide faster and more efficient service,
improving overall service quality. Additionally, we are using large language
models to enhance the speed, cost-effectiveness, and efficiency of content
translation, as well as other business functions.
Member satisfaction, as measured by Net Promoter Score (NPS) has improved
during the period and the number of Active Members using the service is up 13%
on first half of the prior year to 356k (H1 2023: 316k). Member engagement and
satisfaction are key to building value for corporate clients, who want to
improve the engagement, retention, and acquisition of their most valued
customers. This, in turn, justifies increased corporate spending with us and
attracts new corporate clients and new supplier partners to work with us.
Notably, we have, in early 2024, attracted talent at all levels from the
luxury travel sector to help drive engagement with our most valuable members
in this profitable, cash generative area and this is likely to impact results
by CY 2025.
Since securing B Corp certification last year, we have re-doubled our efforts
to build a sustainable business. This includes broadening our ESG partners and
services across travel, dining, retail, and entertainment to give members more
choice. Promoting these choices through all channels encourages sustainable
decisions amongst our members.
During the period, changes were made to the Non-Executive Board. Jules
Pancholi, Non-Executive Director, has assumed the role as Chairman and Chair
of the Nomination Committee. Edward Knapp has been appointed as Non-Executive
Director and Chair of the Audit & Risk Committee, while Carolyn Jameson
has been appointed as Non-Executive Director and Chair of the Remuneration
Committee and, as of today, will also chair the Nomination Committee. On
behalf of the Board, I extend our sincere thanks to our former Chair, Bruce
Weatherill, and Gillian Davies, who both retired from the Board during the
period, for their dedication and invaluable guidance since the Company's IPO
in 2017.
FINANCIAL REVIEW
Results
£m H1 2024 H1 2023
£m £m
Revenue 33.3 32.4
Net Revenue 30.9 30.9
Operating expenses and other income (25.6) (25.9)
Adjusted EBITDA 5.3 5.0
Adjusted EBITDA % 17.2% 16.1%
Depreciation (1.4) (1.5)
Amortisation (2.8) (2.5)
Share based payments (0.4) (0.4)
Operating profit before interest and tax 0.7 0.6
Net finance expense and foreign exchange (0.4) (0.1)
Profit before taxation 0.3 0.4
Taxation charge (0.3) (0.6)
Profit / (loss) for the period - (0.2)
Revenue
Revenue for the period was £33.3m, a 3% increase on H1 2023 (£32.4m). Net
Revenue (which is our key revenue measure) for the period was £30.9m, which
was consistent with the prior period (H1 2023: £30.9m) and up 4% at constant
currency.
Corporate revenue for H1 2024 was £27.1m, a 1% decrease compared to the first
half of the prior year (H1 2023: £27.5m), mainly due to the fluctuation in
foreign exchange rates (3% growth at constant currency), with a Net Corporate
Revenue Retention Rate of 101% (H1 2023: 144%). Supplier revenue
(predominantly travel related) was £3.8m a 15% increase compared to the first
half of the prior year (H1 2023: £3.3m).
Operating expenses & other income excluding depreciation, amortisation,
share based payments and exceptional items
Operating expenses and other income for the period was £25.6m, a decrease of
£0.3m, compared to the first half of the prior year (H1 2023: £25.9m), as
the Group benefits from improved operational efficiencies offsetting cost and
wage inflation.
Adjusted EBITDA
Adjusted EBITDA, as reported, takes into account all Group operating costs,
other than depreciation of £1.4m (H1 2023: £1.5m), amortisation
of £2.8m (H1 2023: £2.5m), share-based payment expenses of £0.4m (H1
2023: £0.4m). On this basis, Adjusted EBITDA was £5.3m (H1 2023: £5.0m)
and EBITDA margin of 17.2% improved by 1.1% vs prior year.
Depreciation has slightly decreased by £0.1m, primarily due to a reduction in
leases as they reach the end of their useful lives, with the Group taking on
smaller office space following the change in working habits. Amortisation
increased by £0.3m, reflecting our continued investment in technology.
Profit before tax
Profit before tax of £0.3m (H1 2023: £0.4m). Net finance expenses increased
to £0.4m (H1 2023: £0.1m) due to interest on additional £1.1m of loan notes
secured during the period and FX differences of £0.2m year on year.
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 2024 H1 2023 % change % change at constant currency
Europe 12.9 12.4 4% 5%
Americas 12.5 13.1 -4% -1%
AMEA 5.5 5.4 3% 11%
Total 30.9 30.9 0% 4%
After fully allocating our indirect central costs including IT, platform
support, non-lease costs and management across the regions, the Adjusted
EBITDA profitability of each regional segment is:
£m H1 2024 H1 2023
Europe 4.6 4.0
Americas 0.2 0.8
AMEA 0.6 0.1
Total 5.3 5.0
Adjusted EBITDA % of Net Revenue 17.2% 16.1%
EUROPE
Net Revenue in the region increased by 4% to £12.9m (H1 2023: £12.4m) and by
5% at constant currency. The increase in Net Revenue of £0.5m is primarily
driven by both corporate and supplier revenue due to increased demand.
Adjusted EBITDA of £4.6m is higher than prior year of £4.0m through the Net
Revenue increase as well as continued operational efficiencies.
AMERICAS
Net Revenue from the region decreased by 4% to £12.5m (H1 2023: £13.1m) and
by 1% at constant currency (principally driven by US$). Adjusted EBITDA profit
of £0.2m is lower than prior year by £0.6m. The reduction is primarily
foreign exchange driven as well as additional set up costs incurred for
contracts due to launch in the second half of the year.
AMEA
Net Revenue increased by 3% to £5.5m (H1 2023: £5.4m) and by 11% at constant
currency (principally driven by Japanese Yen). Adjusted EBITDA profit of
£0.6m compared to an Adjusted EBITDA profit of £0.1m in the same period last
year. This has been driven by increased supplier revenue plus operational
efficiencies and cost saving measures taken across the region.
Cash flow
H1 - 2024
£m
Profit before tax 0.3
Net finance expense 0.4
Working capital changes (1.9)
Non-cash items (share-based payments, depreciation and amortisation charges, 4.6
exceptional items)
Operating cash flow 3.4
Capital expenditure (0.1)
Investment in intangibles (3.7)
Taxation paid (0.5)
Cash (outflow) (1.0)
Cash flows from financing activities
Receipts on exercising of options 1.0
Loan receipts 1.1
Invoice financing facility 0.6
Loan payments - loan notes (0.3)
Interest on loan paid (0.2)
Repayment of leases and net interest (1.4)
Net cash from financing activities 0.8
Net decrease in cash and cash equivalents (0.2)
Cash and cash equivalents at beginning of period 8.0
Net cash 1.9
Pre-tax operating cash inflows of £3.4m, reflected a profit before tax of
£0.3m, increased net working capital of £1.9m, and add back of non-cash
items of £4.6m.
Additionally, during the period, there was £3.7m (H1 2023: £3.7m) of capital
investment, in both our global content, our internal CRM platform (TenMAID)
and the continued development of our digital platform.
Additional loan notes of £1.1m were raised during the period and the invoice
financing facility was at £0.8m (H1 2023: £2.0m) at the end of the period.
Repayment of loans £0.3m (H1 2023: nil), and increased interest paid on the
outstanding borrowings, resulted in a decrease in cash and cash equivalents
during the period of £0.2m.
Balance sheet H1 2024 FY 2023
£m £m
Intangible assets 16.3 15.4
Property, plant and equipment 0.8 0.9
Right-of-use assets 2.4 1.9
Deferred tax asset 4.4 4.3
Cash 8.0 8.2
Other current assets 12.1 12.1
Current lease liabilities (1.5) (1.7)
Current liabilities (18.9) (21.0)
Short term borrowings (2.0) (1.6)
Non-current lease liabilities (1.1) (0.4)
Long-term borrowings (4.2) (3.0)
Net assets 16.3 15.2
Share capital/share premium 32.3 31.3
Reserves (16.0) (16.1)
Total equity 16.3 15.2
Net assets increased by £1.1m to £16.3m at 29 February 2024 compared to
£15.2m at 31 August 2023. This was primarily due to continued investment in
software development. Net assets of £16.3m includes cash of £8.0m as at 29
February 2024.
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 2023
Annual Report with no new risks or uncertainties being identified in the
period.
Alex Cheatle Alan Donald
Chief Executive Officer Chief Financial Officer
19 April 2024 19 April 2024
Consolidated statement of comprehensive income
Note 6 months to 29 Feb 2024 6 months to 28 Feb 2023
Unaudited Unaudited
£'000 £'000
Revenue 2 33,266 32,382
Cost of sales on principal member transactions (2,353) (1,528)
Net revenue 2 30,913 30,854
Other cost of sales (967) (849)
Gross profit 29,946 30,005
Administrative expenses (29,628) (29,767)
Other income 356 300
Operating profit before amortisation, depreciation, interest, share based 5,308 4,953
payments, exceptional items and taxation ("Adjusted EBITDA")
Depreciation (1,429) (1,473)
Amortisation 3 (2,846) (2,526)
Share-based payment expense (359) (416)
Operating profit 674 538
Net finance expense (413) (149)
Profit before taxation 261 389
Taxation expense 4 (259) (574)
Profit / (loss) for the period 2 (185)
Other comprehensive expense:
Foreign currency translation differences (96) (407)
Total comprehensive loss for the period (94) (592)
Basic and diluted profit / (loss) per ordinary share 5 0.0p (0.2)p
Diluted profit / (loss) per ordinary share 0.0p (0.2)p
Basic underlying (loss) per ordinary share (0.5)p (0.2)p
Diluted underlying (loss) per ordinary share (0.5)p (0.2)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 6 months to 29 Feb 2024 31 August 2023
Unaudited Audited
£'000 £'000
Non-current assets
Intangible assets 3 16,278 15,394
Property, plant and equipment 764 912
Right of use assets 2,442 1,911
Deferred tax asset 4,419 4,297
Total non-current assets 23,903 22,514
Current assets
Inventories 451 511
Trade and other receivables 11,614 11,608
Cash and cash equivalents 7,955 8,229
Total current assets 20,020 20,348
Total assets 43,923 42,862
Current liabilities
Trade and other payables (18,292) (20,059)
Provisions (597) (931)
Lease liabilities (1,491) (1,738)
Borrowings 6 (1,963) (1,622)
Total current liabilities (22,343) (24,350)
Net current liabilities (2,323) (4,002)
Non-current liabilities
Lease liabilities (1,087) (399)
Borrowings 6 (4,177) (2,950)
Total non-current liabilities (5,264) (3,349)
Total liabilities (27,607) (27,699)
Net assets 16,316 15,163
Equity
Called up share capital 86 85
Share premium account 32,256 31,272
Merger relief reserve 1,993 1,993
Foreign exchange reserve (1,207) (1,111)
Treasury reserve 606 606
Retained deficit (17,418) (17,682)
Total equity 16,316 15,163
Consolidated statement of changes in equity
Called up share capital Share premium account Merger relief reserve Foreign exchange reserve Treasury Retained deficit Total
reserve
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 September 2022 84 30,658 1,993 (547) 513 (22,858) 9,843
Period ended 31 August 2022:
Profit for the year - - - - - 4,547 4,547
Foreign Exchange - - - (564) - - (564)
Total comprehensive income for the year - - - (564) 4,547 3,983
Issue of new share capital 1 614 - - - - 615
Shares purchased by Employee Benefit Trust (EBT) - - - - 93 - 93
Equity-settled share-based payments charge - - - - - 629 629
Balance at 31 August 2023 (Audited) 85 31,272 1,993 (1,111) 606 (17,682) 15,163
Profit for the period - - - - - 2 2
Foreign exchange - - - (96) - - (96)
Total comprehensive income for the period - - - (96) - 2 (94)
Issue of new share capital 1 984 - - - - 985
Equity-settled share-based payments charge - - - - - 262
262
Balance at 29 February 2024 (Unaudited) 86 32,256 1,993 (1,207) 606 (17,418) 16,316
Condensed consolidated statement of cash flows
6 months to 29 Feb 2024 6 months to 28 Feb 2023
£'000 £'000
Cash flows from operating activities
Loss for the period, after tax 2 (185)
Adjustments for:
Taxation expense 259 574
Net finance expense 413 149
Amortisation of intangible assets 2,846 2,526
Depreciation of property, plant and equipment 245 254
Depreciation of right-of-use asset 1,184 1,219
Equity-settled share-based payment expense 359 416
Movement in working capital:
Decrease in inventories 60 51
Decrease/(Increase) in trade and other receivables 552 (1,689)
(Decrease)/Increase in trade and other payables (2,605) 205
Cash generated from operations 3,315 3,520
(525) (401)
Tax paid
Net cash from operating activities 2,790 3,119
Cashflows from investing activities
Purchase of intangible assets (3,730) (3,683)
Purchase of property, plant and equipment (101) (250)
Finance income 6 6
Net cash used by investing activities (3,825) (3,927)
Cash flows from financing activities
Lease Liability repayments (1,276) (1,280)
Loan receipts - invoice discounting 641 2,084
Interest paid (241) (178)
Interest paid on IFRS16 lease liabilities (108) (81)
Cash receipts from issue of share capital 985 15
Loan receipts - loan notes 1,075 1,185
Loan payments - loan notes (300) -
Net cash generated by financing activities 776 1,745
Foreign currency cash and cash equivalents movements (15) (363)
Net decrease in cash and cash equivalents (274) 574
Cash and cash equivalents at beginning of period 8,229 6,584
Cash and cash equivalents at end of period
Cash at bank and in hand 7,955 7,158
Cash and cash equivalents 7,955 7,158
Notes to the Interim Financial Information
1. Basis of preparation
These interim 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 2023 Annual
Report. The financial information for the half years ended 29 February 2024
and 28 February 2023 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 2023 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 2023 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 2023 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 2023 annual financial statements. 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 29 February 2024, the date of the interim consolidated financial
statements, the Group had cash of £8.0m. During the period, the Group
obtained an additional £1.1m of loan financing to replace existing debt as
and when it comes due.
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 severe but plausible scenarios reflecting a
potential reduction in variable revenue, as well as the potential failure to
successfully renew contracts in the forecast periods. In response, the
Directors have identified cost savings available to the Group should these
scenarios arise such that the reduction in revenues would be offset by
necessary costs savings. Having assessed these scenarios, the Group would be
able to continue to operate with its existing working capital facilities.
The Directors have evaluated the Groups ability to operate as a going concern
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.
The Board of Directors approved this interim report on 19 April 2024.
2. Segmental Information
The total revenue for the Group has been derived from its principal activity;
the provision of concierge services. Due to a change in management structure
as referred to in the 2023 Annual Report, we have changed our segmental
information to Europe, Americas and AMEA and both periods below reflect the
same.
6 months to 29 Feb 2024 6 months to 28 Feb 2023
(Unaudited) (Unaudited)
£'000 £'000
Europe 12,911 12,422
Americas 12,485 13,069
AMEA 5,517 5,362
Net revenue 30,913 30,854
Add back: Cost of sales on principal transactions 2,353 1,528
Revenue 33,266 32,382
Europe 4,557 3,989
Americas 188 825
AMEA 562 139
Adjusted EBITDA 5,308 4,953
Amortisation (2,846) (2,526)
Depreciation (1,429) (1,473)
Share-based payment expense (359) (416)
Operating profit 674 538
Other net finance expense (413) (149)
Profit before taxation 261 389
Taxation credit (259) (574)
Profit / (Loss) for the period 2 (185)
Net Revenue is a non-GAAP Group measure that includes 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 Company 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 Group level.
3. Intangible Assets
The Group capitalised £3.7m (H1 2023: £3.7m, FY 2023: £7.3m) 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 £16.3m (H1 2023: £14.6m, FY 2023: £15.4m) after an amortisation
charge of £2.8m (H1 2023: £2.5m, FY 2023: £5.3m).
4. Taxation
The income tax expense has been recognised based on the best estimate of the
weighted average annual effective UK corporation tax rate expected for the
full financial year. The income tax expense of £0.3m (H1 2023: £0.6m)
includes foreign taxes recognised by overseas Group companies on a
territory-by-territory basis using the expected effective tax rate for the
full year. The Group has an effective tax rate of 100% (H1 2023: 150%). This
is primarily the result of the geographical distribution of profits and the
tax rates in those regions, the effect of which is a charge of £0.7m. This
has been offset by the impact of recognition by deferred tax assets relating
to historical losses of £0.5m (H1 2023: nil).
5. Earnings Per Share
6 months to 29 Feb 2024 6 months to 28 Feb 2023
Basic EPS £'000 £'000
Profit / (loss) attributable to equity shareholders of the parent 2 (185)
Weighted average number of ordinary shares in issue (net of treasury) 85,038,465 83,808,935
Basic profit / (loss) per share (pence) 0.0p (0.2)p
Basic profit per ordinary share
Basic profit per ordinary share is calculated by dividing the net result for
the period attributable to shareholders by the weighted number of ordinary
shares outstanding during the period (H1 2023: -0.2p)
6 months to 29 Feb 2024 6 months to 28 Feb 2023
Diluted EPS £'000 £'000
Profit / (loss) attributable to equity shareholders of the parent 2 (185)
Weighted average number of ordinary shares in issue (net of treasury) 85,876,479 83,808,935
Basic profit / (loss) per share (pence) 0.0p (0.2)p
Diluted earnings per ordinary share
Diluted earnings per share is calculated as per IAS 33 by adjusting the
weighted average number of ordinary shares outstanding for the dilutive effect
of 'in the money' share options, which are the only dilutive potential common
shares for the Group. The net profit attributable to ordinary shareholders is
divided by the adjusted weighted average number of shares. 'Out of the money'
share options are excluded from the calculation as they are non-dilutive.
Where the Group has incurred a loss in the period, the diluted loss per share
is the same as the basic loss per share as the loss has an anti-dilutive
effect.
6 months to 29 Feb 2024 6 months to 28 Feb 2023
Underlying EPS £'000 £'000
Profit/(Loss) attributable to equity shareholders of the parent 2 (185)
Excluding Exceptional Items & Taxes
Exceptional Items - -
Recognition of historical tax losses (461) -
Underlying loss attributable to equity shareholders of the parent (459) (185)
Basic weighted average number of ordinary shares in issue (net of treasury) 85,038,465 83,808,935
Basic underlying loss per share (pence) (0.5)p (0.2)p
Diluted weighted average number of ordinary shares in issue (net of treasury) 85,038,465 83,808,935
Diluted underlying loss per share (pence) (0.5)p (0.2)p
Underlying earnings per ordinary share
Underlying earnings per share is calculated by adjusting the profit/(loss)
attributable to equity shareholders for exceptional items and associated taxes
along with non-underlying tax items such as deferred tax arising from the
recognition of historical losses. No changes are made to the weighted average
number of ordinary shares.
6. Borrowings
The Group has £6.1m of loans (FY 2023: £4.6m), which includes the 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£. At 29 February 2024 the invoice financing facilities was £0.8m (H1
2023: £2.1m). 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.
During the period, the Group obtained a further £1.1m in loans from private
lenders, interest is payable at a rate of 12% per annum.
7. Post-period events
The Company has evaluated subsequent events through the date of issuance of
these financial statements, and determined that there were no significant
events that occurred after the balance sheet date that would require
disclosure.
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.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR EAELFAFXLEFARecent news on Ten Lifestyle
See all newsREG - Ten Lifestyle Group - Total Voting Rights and Share Capital
AnnouncementREG - Ten Lifestyle Group - Interim results for the 6 months ended 29 Feb 2024
AnnouncementREG - Ten Lifestyle Group - Total Voting Rights and Share Capital
AnnouncementREG - Ten Lifestyle Group - Notice of Half-Year Results
AnnouncementREG - Ten Lifestyle Group - Ten wins new contract with Emirates NBD
Announcement