REG - Time Out Group plc - Half-year Report
31/03/2022 07:00
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RNS Number : 6757G Time Out Group plc 31 March 2022
31 March 2022
Time Out Group plc
("Time Out," the "Company" or the "Group")
Unaudited results for the six months ended 31 December 2021
Time Out Group plc, the global media and hospitality business, today announces
its unaudited results for the six months ended 31 December 2021.
Commenting on the results, Chris Ohlund, CEO of Time Out Group plc, said:
"We are encouraged by the progress made in the period, albeit in the face of
the emergence of the Omicron variant. Our digital audience grew as our content
remained relevant and engaging, footfall began returning to the Markets and
global brands advertised with us once again. Whilst the trading environment
remains challenging and uncertain, the Group's recovery is gaining momentum
and we are cautiously optimistic that now Omicron is receding, this will
continue over the coming months as normality returns and the key spring and
summer seasons begin.
There are many measures we are undertaking to further drive our growth and
profitability. These include expanding the format and publishing channels of
our content, a far greater focus on digital advertising solutions and more
resource committed to realising the potential of the Time Out Market as we
respond to landlords wishing to introduce this leading concept to key
properties in cities throughout the world."
Financial Summary
· Gross revenue((1)) increased by 141% to £32.0m (2020((5)):
£13.3m) and net revenue by 106% to £24.7m (2020: £12.0m)
· Gross profit((2)) increased 102% to £19.7m (2020: £9.8m)
· Group adjusted EBITDA loss((3)) narrowed significantly to £0.8m
(2020((5)): £6.2m loss)
· Group operating loss decreased to £8.5m (2020: £14.9m loss)
· Cash of £8.5m at 31 December 2021 and debt of £20.3m, resulted in
adjusted net debt((4)) of £11.8m. Reported net debt was £34.6m including
£22.7m of IFRS 16 lease liabilities
· Refinancing of existing loan facility in progress and the Board
remains confident of completion on acceptable terms
Operational Summary
· The Group's global brand audience increased 19% to a monthly
average of 76.2m (2020: 64.1m) driven by increased unique visitors (up 14%)
and social followers (up 24%)
· Time Out Market: Whilst trading was disrupted in the period, all
Markets are now open and trading is recovering with further momentum expected
as tourism expands further and people return to the workplace.
· Time Out Media: There was a notable recovery in advertising spend,
tempered by the Omicron surge towards the period end, as advertisers responded
to consumers' willingness to engage in leisure and travel activities.
Outlook:
This period represents the beginning of our transition to a post-pandemic
world. As more of the global economy unlocks, international tourism recovers
and people head out, we are encouraged by the direct benefit to our trading
and prospects. We are in advanced discussions with partners regarding new Time
Out Market management agreements, and evaluating a growing pipeline of further
signings, which offer a recurring earnings stream without the need for further
capital expenditure.
(1) See note 4 for the explanation of gross and net revenue
(2) Gross margin calculated as gross profit as a percentage of net
revenue
(3) Adjusted EBITDA is stated before interest, taxation,
depreciation, amortisation, share based payments, and exceptional items. This
is a non-GAAP alternative performance measure that management uses to aid
understanding of the underlying business performance.
(4) Adjusted net cash/(debt) excludes lease-related liabilities
under IFRS 16.
(5) All comparative information relates to the six-month period to
31 December 2020. EBITDA has been restated to include the impact of IFRS 16
Leases.
For further information, please contact:
Time Out Group plc Tel: +44 (0)207 813 3000
Chris Ohlund, CEO
Steven Tredget, Investor Relations Director
Liberum (Nominated Adviser and Broker) Tel: +44 (0)203 100 2222
Andrew Godber / Clayton Bush / Edward Thomas
FTI Consulting LLP Tel: +44 (0)203 727 1000
Edward Bridges / Stephanie Ellis / Fiona Walker
Notes to editors
About Time Out Group
Time Out Group is a global media and hospitality business that curates and
creates the best of the world's greatest cities through its two divisions -
Time Out Media and Time Out Market. Time Out launched in London in 1968 with a
magazine to help people discover the exciting new urban cultures that had
started up all over the city. Today, across the Group's digital and physical
platforms, Time Out's professional journalists curate the best things to do,
see and eat in 333 cities in 59 countries.
Time Out Market is the world's first editorially curated food and cultural
market, bringing a city's best chefs, restaurateurs and unique cultural
experiences together under one roof. The first Time Out Market opened in
Lisbon in 2014, followed in 2019 by Miami, New York, Boston, Chicago and
Montreal, and Dubai in 2021. A further pipeline of openings includes Porto,
Abu Dhabi, Prague, London and more. Time Out Group PLC, listed on AIM, is
headquartered in the United Kingdom.
Chief Executive's Review
Group overview
Financial summary
Unaudited Unaudited((4))
6 months to 31 6 months to 31 Change
December 2021 December 2020
£m £m %
Market 11,867 3,007 295%
Media 12,836 8,957 43%
Group net revenue((1)) 24,703 11,964 106%
Gross profit 19,694 9,773 102%
Gross margin %((2)) 80% 82% (2)%
Divisional adjusted operating expenses((3,4)) (19,423) (15,431)
Divisional adjusted EBITDA((3,4)) 271 (5,658)
Market (619) (4,847)
Media 890 (811)
Corporate costs (1,120) (559)
Group adjusted EBITDA (849) (6,218)
(1) See note 4 for the explanation of net revenue
(2) Gross margin calculated as gross profit as a percentage of net
revenue
(3) Adjusted measures are stated before interest, taxation,
depreciation, amortisation, share based payments, and exceptional items.
(4) Prior period operating expenses and EBITDA have been restated to
include the impact of IFRS 16 Leases.
The first half of the financial year marked the slow transition to something
approaching normality across the world and in our trading environments. As
consumers returned to socialising, offices reopened and some travel resumed,
we experienced a gradual increase in revenue in our Markets and noticeable
increases in advertising spend in the Media business. This represents a
promising start to an anticipated longer recovery period, which will include
the regaining some of the momentum lost following the emergence of the
Omicron variant at the end of this period.
The Group's net revenue increased by 106% to £24.7m (2020: £12.0m), albeit
from a comparative period severely impacted by Covid-19. Gross margin declined
marginally from 82% to 80% as we resumed an element of our UK print products.
Adjusted operating expenses continue to benefit from the cost rationalisation
completed in previous periods but increased by 26% to £19.4m (2020: £15.4m)
in response to the increased trading in the period. These combined to produce
a 105% improvement in the adjusted divisional EBITDA to £0.3m (2020: £5.7m
EBITDA loss). Corporate costs increased to £1.1m against a comparative that
benefitted from temporary Covid-19 related cost savings.
Operating KPIs
6 months to 6 months to Change %
31 December 31 December
2021 2020
Global brand audience - monthly average((1)) 76.2m 64.1m 12.1m 19%
Market TTV((2)) £35.6m £5.7m £29.9m 525%
(1) Global brand audience is the estimated monthly average in the period
including all owned & operated cities and franchises. It includes print
circulation (O&O), unique website visitors, unique social users (as
reported by Facebook and Instagram with social followers on other platforms
used as a proxy for unique users), social followers (for other social media
platforms), opted in members and Market visitors.
(2) Total transaction value across all Time Out Markets including food,
drink and other retail sales
The pandemic has certainly altered how consumers behave, what information they
seek and how it is delivered. We have participated in this change and
increased our global brand audience by 19% with unique visitors up by 14% and
social followers up by 24%, with our content being key to driving these
increases as people began searching once again for the best things to do in
cities around the world.
Time Out's partnership with Apple News resulted in our World's Coolest
Neighbourhoods and Best Cities rankings attracting significant viewing numbers
in September and October. The period culminated with two 'Best of' awards: the
audience-nominated Love Local awards which featured their most loved venues
and our editorially curated Best of the City Awards which featured the best
venues in key Time Out cities. Both awards cemented our authority in the city
and reflect our ethos of enabling our audience to make the most of the cities
they love.
We also focussed on vertical video, content filmed in portrait mode, designed
for mobile consumption. These videos were published via Instagram Reels,
giving social videos an increased presence on our Instagram channels and drove
significant growth in our TikTok audience. We will continue to invest in this
shift to video and mobile formats to match our audience behaviour and
preferences. Our loyal and increasing audience in a period of disruption of
the leisure industry is testament to the continued relevance and authority of
our content.
The increase in Time Out Market TTV is a direct result of Markets re-opening
on a more consistent basis as the most severe restrictions ended.
Time Out Market trading overview
Unaudited Unaudited((3))
6 months to 31 6 months to 31 Change
December 2021 December 2020
£'000 £'000 %
Owned Operations 10,429 2,320 350%
Management Fees 1,438 687 109%
Net Revenue 11,867 3,007 295%
Gross profit 9,882 2,530 291%
Gross Margin % 83% 84% (1)%
Operating expenses (trading) (8,210) (5,706)
Trading EBITDA((1)) 1,672 (3,176)
Market central costs (2,291) (1,679)
Pre-opening costs - 8
Adjusted EBITDA (619) (4,847)
(1) Trading EBITDA represents the adjusted EBITDA from owned and
operated markets post opening, and the development fees relating to management
agreements. It is presented before pre-opening costs of new markets and other
central costs of the Market business
(2) Adjusted measures are stated before interest, taxation,
depreciation, amortisation, share based payments, and exceptional items.
(3) Prior period operating expenses and EBITDA have been restated to
include the impact of IFRS 16 Leases.
Time Out Market revenue increased by 295% as the business emerged from the
severe restrictions experienced during the comparative period. This reflects a
gradual return of customers to our Markets despite the requirement for
vaccination record checks and the continued use of masks. International travel
is now gathering some momentum and together with a return of office workers,
we are optimistic that this trend will accelerate into the spring and
summer. Operating expenses have increased in line with revenue and continues
to benefit from cost saving initiatives implemented in the previous periods.
Market central costs have increased as we invest in resource to continue to
develop and progress the strong pipeline of future markets.
As we emerge from the pandemic, our teams have been focussed on ensuring the
Markets doors have reopened with the highest quality line up of
concessionaires and activations and events that showcase our connection to the
local community all of which is attracting new customers who come back
regularly. These included the ever-popular drag bingo nights in
Miami, a ticketed Tupac vs. Biggie-themed event in Chicago which featured on
local television stations, whilst the DJ van on the patio went viral on Tik
Tok with 5.4m views and increased bar sales by 60% after 10pm. The New Year's
Eve celebrations across all North American Markets generated revenue close to
pre-pandemic levels.
Collectively these actions have resulted in the Markets being well placed to
capture the return to city life, as can be seen in the encouraging performance
of those Markets in regions which have been quickest to return to 'normality'.
Time Out Market continues to serve up the unique combination of a city's best
food, drink and cultural experiences, in a premium engaging environment,
supported by strong consumer-led marketing and a cost-effective structure for
restauranteurs. At a time when commercial landlords and real estate developers
face the increasing challenge of attracting customers, the Markets transform
spaces that become the anchor in prime locations to drive consumer footfall.
Our engagement with landlords has continued, albeit with the conclusion of new
agreements being delayed due to pandemic-related restrictions, most notably
the curbs on travel. As a result, we expect to sign more management agreement
sites in the year ahead, growing the Group's recurring earnings stream,
without the need for further capital expenditure.
Subject to any further Covid-19 related delays, the current opening schedule
for additional new Markets is:
· Porto (owned & operated) - calendar 2023
· Abu Dhabi (management agreement) - calendar 2024
· Prague (management agreement) - calendar 2025
· London Spitalfields (owned & operated) - Listed Building consent
application has been submitted and the Group awaits the outcome.
Time Out Media trading overview
Unaudited Unaudited((2))
6 months to 31 6 months to 31 Change
December 2021 December 2020
£'000 £'000 %
Digital advertising 8,894 5,492 62%
Print 1,673 1,453 15%
Live events 539 - 100%
Local Marketing Solutions 485 609 (20)%
Advertising sales 11,591 7,554 53%
Affiliates & Offers 1,006 1,101 (9)%
Franchises 239 302 (21)%
Net revenue 12,836 8,957 43%
Gross Profit 9,812 7,243 35%
Gross Margin % 76% 81% (5)%
Operating expenditure (8,922) (8,054)
Adjusted EBITDA((1)) 890 (811)
(1) Adjusted measures are stated before interest, taxation,
depreciation, amortisation, share based payments, and exceptional items.
(2) Prior period operating expenses and EBITDA have been restated to
include the impact of IFRS 16 Leases.
Time Out Media trading was encouraging in the period with net revenue up 43%
to £12.8m, generating and generated positive adjusted EBITDA of £0.9m.
Digital revenue continues to grow, supplemented by selective print products in
the UK, Spain and Portugal. Live events rebounded as we worked with clients on
multi-platform campaigns to engage consumers as they emerged from lockdown
restrictions. The affiliates and offers business is beginning to show similar
recovery as theatres and entertainment venues re-open consistently and
international travel resumes. We are doing much to increase the global
audience - generating compelling short-form video for rapidly growing social
media platforms such as TikTok and Instagram Reels; and creating partnerships
with leading media and content brands. And as people begin going out again,
they are coming back to the Time Out brand, one they trust to create and
recommend their experiences in the world's leading cities.
Gross margin reduced by 5% as lower margin print products returned while our
digital revenue is not yet at pre-pandemic levels. As we continue to be more
selective with our print activities, our focus has shifted to growing our
media revenue and profitability through our digital capabilities, driving
advertising activity through direct and agency sales and programmatic
partners. Mobile-optimised interactive digital content and video are
increasingly the preferred medium in which our audience engages with the world
around them - and we are investing to ensure we can adapt to our audience.
While this investment strategy will incur additional costs later this year, it
positions us to grow and evolve our digital offerings.
Our integrated Creative Solutions team continue to bring brands to life - in
the UK we crafted a 360(o) advertising programme for Green & Black's
culminating in a physical drinks and chocolate tasting event to truly engage
with our shared audience. In the US, we partnered with NY Lottery to construct
the 'One Good Thing To Do Today' campaign, capturing the attention of New
Yorkers through custom content, email, social and native promotion. Our strong
direct client relationships have led to original and engaging campaigns as
with Samsung where we worked with their in-house team to tailor and host over
100 ticketed events, sold through the Time Out platform drawing our audience
into activations in the flagship King's Cross store.
Financial Review
Revenue and gross profit
Group gross revenue for the period increased by 141% to £32.0m (2020:
£13.3m) as the business recovers from the effect of the Covid-19 pandemic.
Group net revenue and Group gross profit increased by 106% and 102%
respectively compared to the 141% increase in gross revenue reflecting the
greater relative increase in the gross revenues of Markets versus Media.
The decrease in Group gross profit as a percentage of net revenue from 82%
to 80% is primarily driven by the Media revenue mix in the period where lower
margin, print products diluted the gross margin from 81% to 76%. Time Out
Market gross margin as a percentage of net revenue declined slightly from 84%
to 83%.
Operating expenses
Adjusted Group operating expenses increased by £4.5m to £20.5m (2020:
£16.0m restated). In line with IFRS 16 Leases, operating expenses do not
include property lease costs, which are replaced by amortisation of
right-of-use assets and interest on lease liabilities in each period.
Market adjusted operating expenses increased by £3.1m to £10.5m (2020:
£7.4m), comprising trading operating expenditure increase (£2.5m) and
investment in the central Market team (£0.4m). Media adjusted operating
expenses increased by £0.8m to £8.9m (2020: £8.1m). Corporate costs
increased to £1.1m against a comparative that benefitted from temporary
Covid-19 related cost savings.
Adjusted EBITDA loss
Group Adjusted EBITDA loss, which is stated before interest, taxation,
depreciation, amortisation, share-based payments and exceptional items,
improved by 86% to a loss of £0.8m (2020: £6.2m loss restated). This loss is
measured including the impact of IFRS 16 Leases. The material decrease was
driven by the growth in revenue as the business begins to recover from the
impact of the pandemic.
Operating loss
The reported operating loss was £8.5m (2020: £14.9m loss). This includes the
IFRS 16 impact of lower property lease costs of £1.6m (2020: £2.2m), which
was previously reported in operating expenditure and higher depreciation of
£0.9m (2020: £2.0m) on the right-of-use assets recognised.
The net exceptional costs of £1.6m comprises costs related to a discontinued
corporate transaction (£0.8m), staff redundancy costs (£0.1m) and
contractual exit costs of the former Chief Executive (£0.7m). The prior
period exceptional costs of £1.1m all relate to staff redundancy costs.
The depreciation charge of £4.1m (2020: £5.0m) decreased by £0.9m, driven
principally by reduced Media office space in the UK and US.
The amortisation of intangible assets of £1.4m (2020: £2.1m) decreased by
£0.7m principally due to certain acquired intangible assets now being fully
amortised.
Net finance costs
Net finance costs of £2.0m (2020: £1.8m) primarily relates to interest on
debt (£1.3m), amortisation of deferred financing costs (£0.1m) and interest
cost in respect of lease liabilities (£1.1m), offset by the foreign exchange
gain on financial liabilities of £0.5m.
Foreign exchange
The revenue and costs of Group entities reporting in dollars have been
consolidated in these financial statements at an average exchange rate of
$1.37 (2020: $1.30). The operations reporting in euros have been consolidated
at a rate of €1.17 (2019: €1.11).
Cash and debt
Unaudited Audited Unaudited
31 December 30 June 31 December
2021 2021 2020
£'000 £'000 £'000
Cash and cash equivalents 8,459 19,070 10,394
Borrowings (20,328) (23,517) (22,976)
Adjusted net cash/(debt) (11,869) (4,447) (12,582)
IFRS 16 Lease liabilities (22,698) (22,453) (31,443)
Net cash/(debt) (34,567) (26,900) (44,025)
Cash and cash equivalents decreased by £10.6m since 30 June 2021 to £8.5m.
This was driven primarily by the adjusted EBITDA loss of £0.8m (2020: £6.2m
restated), net working capital outflow of £2.0m (2020: £2.7m), a net
decrease in borrowings of £3.9m (2020: £1.0m) and the repayment of lease
liabilities of £1.6m (2020: £2.1m).
Essential Market capital expenditure of £0.1m was undertaken to ensure the
markets remain Covid-safe and £0.5m invested in the initial stages of the
development of Time Out Market Porto. Media invested £0.3m (2020: £0.6m) in
capitalised software development costs to support the Group's increasingly
important digital platforms.
Borrowings now comprise principally the fully drawn Incus Capital Finance
facility which was £19.2m at period end, which is repayable in full on 30
November 2022. In September 2021, all remaining covenants were waived for the
remainder of the facility term.
Cash utilisation continues to be closely monitored. The next significant cash
requirement is the settlement of the Incus Capital Finance facility described
above. However, the Group is satisfied that this facility can be refinanced
within the existing timelines. The Group is therefore confident that it has
sufficient funding to cover its operational needs for the foreseeable future.
Further information is included below and in note 1.
Going concern
The financial statements have been prepared under the going concern basis of
accounting as the Directors have a reasonable expectation that the Group and
Company will continue in operational existence and be able to settle their
liabilities as they fall due for the foreseeable future, being a period of not
less than one year from the date of approval of the financial statements. In
making this determination, the Directors have considered the financial
position of the Group, projections of its future performance and the financing
facilities that are in place.
The Covid-19 pandemic has had a significant adverse impact on the Group's
recent trading and as we recover from the effects of the pandemic any
projection of future performance continues to be uncertain. The key drivers of
uncertainty include the ongoing impact of the global vaccination programme on
any further waves of the pandemic, the actions that may be taken by
governments to respond (which could restrict our ability to operate our
Markets business) and the response of our customers themselves to adverse
changes in their economic circumstances (which will impact on revenues in both
our Markets and Media businesses). We have taken, and will continue to take,
steps to control our discretionary expenditure and therefore the principal
driver of our future profitability and cash flows will be the revenue we are
able to generate from our two businesses. We have also agreed with our lender,
Incus Capital Finance, that the quarterly financial covenants that apply to
their loan will be waived for the balance of the facility term. Whilst the
facility is due to expire in November 2022, the Directors are confident that
the loan will be refinanced on acceptable terms.
The Group has modelled two financial scenarios over the next 12 months that
reflect the potential continued impact of the pandemic.
The base case assumes a cautious period of recovery across both Market and
Media. Market revenue is assumed to improve but be lower than the pre-pandemic
period while restrictions begin to be lifted and international travel resumes.
Markets overall are only assumed to reach full capacity during the 2022/23
financial year. Media revenue is assumed to gradually increase over the
period, with revenue levels excluding print, recovering to pre-pandemic levels
in the 2022/23 financial year. The changing revenue mix in Media is expected
to yield higher margins while maintaining the reduced cost base achieved
through strategic decisions taken in previous periods. This scenario does not
include the impact of further protracted lockdown periods.
The downside case assumes that the Market revenue underperforms the base case
by 30% for the rest of this financial year, with revenue returning to 80% of
budgeted levels in July 2022 and no corresponding reduction in budgeted costs
over this period. In addition, it assumed that only critical capital
expenditure is undertaken during this period. There was no change to Media
revenue and performance. The Directors consider the modelled reduction in
revenue for the Markets division to be unlikely given the recent performance
post restrictions being lifted and the Markets reopening. However, with the
continued uncertainty of new restrictions this scenario is considered severe
but plausible.
Under both scenarios there would be adequate cash available to the Group up
until November 2022 when the balance of the Incus Capital Finance facility
totalling £22.1 million will need to be repaid and given the Group currently
has insufficient funding in place to settle this contractual obligation in
full, the Group would need to seek additional funding by raising new equity or
by refinancing the debt within the going concern period in order to continue
in operational existence.
The Group intends to refinance the debt facility but as the refinancing has
yet to be completed, the Directors have concluded that attention should be
drawn to the fact that a material uncertainty exists which may cast
significant doubt on the Group and Company's ability to continue as a going
concern.
The global recovery from the impact of the pandemic is just beginning.
However, after consideration of the matters set out above, the Directors are
satisfied that there is a reasonable expectation that the Group and Company
have adequate funding to cover its operation needs for the foreseeable future
and therefore consider it appropriate to prepare the financial statements
under the going concern basis.
Outlook
This period represents the beginning of our transition to a post-pandemic
world. As more of the global economy unlocks, international tourism recovers
and people head out, we are encouraged by the direct benefit to our trading
and prospects. We are in advanced discussions with partners regarding new Time
Out Market management agreements, and evaluating a growing pipeline of further
signings, which offer a recurring earnings stream without the need for further
capital expenditure.
Chris Ohlund
Chief Executive
Condensed Consolidated Income statement
6 months ended 31 December 2021
Unaudited Unaudited Audited
Note 6 months 6 months 18 months
ended 31 ended 31 ended 30
December 2021 December 2020 June 2021
£'000 £'000 £'000
Gross revenue 1, 4 32,049 13,282 44,897
Cost of sales 4 (12,355) (3,509) (14,727)
Gross profit 19,694 9,773 30,170
Administrative expenses (28,202) (24,694) (90,717)
Operating loss (8,508) (14,921) (60,547)
Finance income 501 1,387 35
Finance costs (2,465) (3,165) (10,544)
Loss before income tax 4 (10,472) (16,699) (71,056)
Income tax (charge)/credit (16) 157 507
Loss for the period (10,488) (16,542) (70,549)
Loss for the period attributable to:
Owners of the parent (10,483) (14,407) (66,770)
Non-controlling interests (5) (2,135) (3,779))
(10,488) (16,542) (70,549)
Loss per share:
Basic and diluted loss per share (p) 6 3.1 5.1 27.9
Condensed Consolidated Statement of Other Comprehensive Income
6 months ended 31 December 2021
Unaudited Unaudited Audited
6 months 6 months 18 months
ended 31 ended 31 ended 30
December 2021 December 2020 June 2021
£'000 £'000 £'000
Loss for the period (10,488) (16,542) (70,549)
Other comprehensive income:
Items that may be subsequently reclassified to the profit or loss:
Currency translation differences 3,520 (9,082) (2,458)
Other comprehensive income/(expense) for the period, net of tax 3,520 (9,082) (2,458)
Total comprehensive expense for the period (6,968) (25,624) (73,007)
Total comprehensive expense for the period attributable to:
Owners of the parent (6,963) (22,998) (69,360)
Non-controlling interests (5) (2,626) (3,647)
(6,968) (25,624) (73,007)
Condensed Consolidated Statement of Financial Position
At 31 December 2021
Unaudited Audited
Note 31 December 30 June
2021 2021
£'000 £'000
Assets
Non-current assets
Intangible assets - Goodwill 29,404 28,911
Intangible assets - Other 9,274 10,253
Property, plant and equipment 37,287 39,037
Right-of-use assets 16,530 17,031
Other receivables 3,278 3,197
95,773 98,429
Current assets
Inventories 950 995
Trade and other receivables 12,573 9,932
Cash and cash equivalents 7 8,459 19,070
21,982 29,997
Total assets 117,775 128,426
Liabilities
Current liabilities
Trade and other payables (12,519) (11,286)
Borrowings (19,390) (5,395)
Lease liabilities (1,887) (985)
(33,796) (17,666)
Non-current liabilities
Trade and other payables (336) (1,158)
Borrowings (938) (18,122)
Lease liabilities (20,811) (21,468)
Deferred tax liability (1,129) (1,185)
(23,214) (41,933)
Total liabilities (57,010) (59,599)
Net assets 60,745 68,827
Equity
Called up share capital 9 336 332
Share premium 185,563 185,563
Translation reserve 5,009 3,057
Capital redemption reserve 1,105 1,105
Retained earnings / (losses) (131,228) (121,182)
Total parent shareholders' equity 60,785 68,875
Non-controlling interest (40) (48)
Total equity 60,745 68,827
Condensed Consolidated Statement of Changes in Equity
At 31 December 2021 (Unaudited)
Called up Share Translation Capital Retained Total parent Non- Total
share premium reserve Redemption earnings/ Shareholders' Controlling equity
capital reserve (losses) equity interest
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 July 2021 332 185,563 3,057 1,105 (121,182) 68,875 (48) 68,827
Changes in equity
Loss for the period - - - - (10,483) (10,483) (5) (10,488)
Other comprehensive income - - 1,952 - - 1,952 - 1,952
Total comprehensive income - - 1,952 - (10,483) (8,531) (5) (8,536)
Share based payments - - - - 450 450 - 450
Adjustment arising on change of non-controlling interest (13) (13) 13 -
Issue of new shares 4 - - - - 4 - 4
Balance at 31 December 2021 336 185,563 5,009 1,105 (131,228) 60,785 (40) 60,745
Condensed Consolidated Statement of Changes in Equity
At 31 December 2020 (Unaudited)
Called up Share Translation Capital Retained Total parent Non- Total
Share premium reserve Redemption earnings/ Shareholders' Controlling equity
capital reserve (losses) equity interest
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 July 2020 283 169,089 9,715 1,105 (62,684) 117,508 (6,945) 110,563
Changes in equity
Loss for the period - - - - (14,407) (14,407) (2,135) (16,542)
Other comprehensive income - - (8,591) - - (8,591) (491) (9,082
Total comprehensive income - - (8,591) - (14,407) (22,998) (2,626) (25,624)
Share-based payments - - - - 565 565 - 565
Issue of shares - - - - - - - -
Balance at 31 December 2020 283 169,089 1,124 1,105 (76,526) 95,075 (9,571) 85,504
Condensed Consolidated Statement of Changes in Equity
At 30 June 2021 (Audited)
Called up Share Translation Capital Retained Total parent Non- Total
Share premium reserve Redemption earnings/ Shareholders' Controlling equity
capital reserve (losses) equity interest
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 January 2020 148 123,290 5,647 1,105 (47,420) 82,770 (4,873) 77,897
Changes in equity
Loss for the period - - - - (66,770) (66,770) (3,779) (70,549)
Other comprehensive income - - (2,590) - - (2,590) 132 (2,458)
Total comprehensive income - - (2,590) - (66,770) (69,360) (3,647) (73,007)
Share-based payments - - - - 1,480 1,480 - 1,480
Adjustment arising on change of non-controlling interest - - - - (8,472) (8,472) 8,472 -
Issue of shares 184 62,273 - - - 62,457 - 62,457
Balance at 30 June 2021 332 185,563 3,057 1,105 (121,182) 68,875 (48) 68,827
Condensed Consolidated Statement of Cash Flows
6 months ended 31 December 2021
Unaudited Unaudited Audited
Note 6 months 6 months 18 months
ended 31 ended 31 ended 30
December 2021 December 2020 June 2021
£'000 £'000 £'000
Cash flows from operating activities
Cash used in operations 8 (4,511) (9,898) (20,219)
Interest paid (1,885) - (5,430)
Tax paid - - (311)
Net cash used in operating activities (6,396) (9,898) (25,960)
Cash flows from investing activities
Purchase of property, plant and equipment (531) 599 (3,108)
Purchase of intangible assets (288) (627) (2,145)
Interest received - 15 35
Net cash used in investing activities (819) (13) (5,218)
Cash flows from financing activities
Repayment of borrowings (2,084) - (22,500)
Advance of borrowings 257 - 3,865
Repayment of lease liabilities (1,578) (2,146) (6,731)
Costs relating to share issues - - (1,835)
Proceeds from share issue - - 64,148
Net cash from financing activities (3,405) (2,146) 36,947
Increase/(decrease) in cash and cash equivalents (10,620) (12,057) 5,769
Cash and cash equivalents at beginning of period 19,070 22,524 13,420
Effect of foreign exchange rate change 9 (73) (119)
Cash and cash equivalents at end of period 8,459 10,394 19,070
Notes to the condensed consolidated statements
1. Basis of preparation
The financial information ("condensed consolidated statements") set out in
this announcement represents the results of the Group and its subsidiaries for
the six months ended 31 December 2021. While the financial information
included in these condensed consolidated statements has been prepared in
accordance with the recognition and measurement criteria of International
Accounting Standards("IAS") in conformity with the requirements of the
Companies Act 2006, this announcement does not itself contain sufficient
information to comply with lASs and IFRSs. The condensed financial information
is unaudited and has not been reviewed by the Group's auditor. The financial
information for the 18 months ended 30 June 2021 is derived from the audited
financial statements for the 18 months ended 30 June 2021, which have been
delivered to the Registrar of Companies. The external auditor report in those
financial statements included reference to a material uncertainty in respect
of going concern due to the refinancing of the balance of the Incus Capital
Finance loan facilities of approximately £22.1m (comprising capital and
accrued interest to November 2022) which is due for repayment in full in
November 2022. The preliminary results for the 18 months ended 30 June 2021 do
not include the adjustments that would result if the Group was unable to
continue as a going concern.
The financial information is prepared under the historical cost basis, unless
stated otherwise in the accounting policies.
These statements were approved by the Board on 31 March 2022.
Alternative performance measures
The Group uses alternative performance measures to help management and
analysts to assess the underlying business before one-off and non-cash items.
These include:
· Adjusted EBITDA is calculated as profit or loss before interest,
taxation, depreciation, amortisation, share based payments and exceptional
items.
· Adjusted net debt excludes the lease liabilities recognised in
accordance with IFRS 16 "Leases"
· Net revenue is calculated as gross revenue less the share of
concessionaire revenue, further detailed in Note 4.
Going Concern
These condensed financial statements have been prepared under the going
concern basis of accounting as the Directors have a reasonable expectation
that the Group and Company will continue in operational existence and be able
to settle their liabilities as they fall due for the foreseeable future, being
a period of not less than one year from the date of approval of these
financial statements. In making this determination, the Directors have
considered the financial position of the Group, projections of its future
performance, and the financing facilities that are in place.
The Covid-19 pandemic has had a significant adverse impact on the Group's
recent trading and as we recover from the effects of the pandemic any
projection of future performance continues to be uncertain. The key drivers of
uncertainty include the ongoing impact of the global vaccination programme on
any further waves of the pandemic, the actions that may be taken by
governments to respond (which could restrict our ability to operate our
Markets business) and the response of our customers themselves to adverse
changes in their economic circumstances (which will impact on revenues in both
our Markets and Media businesses). We have taken, and will continue to take,
steps to control our discretionary expenditure and therefore the principal
driver of our future profitability and cash flows will be the revenue we are
able to generate from our two businesses. We have also agreed with our lender,
Incus Capital Finance, that the quarterly financial covenants that apply to
their loan will be waived for the balance of the facility term. Whilst the
facility is due to expire in November 2022, the Directors are confident that
the loan will be refinanced on acceptable terms.
The Group has modelled two financial scenarios over the next 12 months that
reflect the potential continued impact of the pandemic.
The base case assumes a cautious period of recovery across both Market and
Media. Market revenue is assumed to improve but be lower than the pre-pandemic
period while restrictions begin to be lifted and international travel resumes.
Markets overall are only assumed to reach full capacity during the 2022/23
financial year. Media revenue is assumed to gradually increase over the
period, with revenue levels excluding print, recovering to pre-pandemic levels
in the 2022/23 financial year. The changing revenue mix in Media is expected
to yield higher margins while maintaining the reduced cost base achieved
through strategic decisions taken in previous periods. This scenario does not
include the impact of further protracted lockdown periods.
The downside case assumes that the Market revenue underperforms the base case
by 30% for the rest of this financial year, with revenue returning to 80% of
budgeted levels in July 2022 and no corresponding reduction in budgeted costs
over this period. In addition, it assumed that only critical capital
expenditure is undertaken during this period. There was no change to Media
revenue and performance. The Directors consider the modelled reduction in
revenue for the Markets division to be unlikely given the recent performance
post restrictions being lifted and the Markets reopening. However, with the
continued uncertainty of new restrictions this scenario is considered severe
but plausible.
Under both scenarios there would be adequate cash available to the Group up
until November 2022 when the balance of the Incus Capital Finance facility
totalling £22.1 million will need to be repaid and given the Group currently
has insufficient funding in place to settle this contractual obligation in
full, the Group would need to seek additional funding by raising new equity or
by refinancing the debt within the going concern period in order to continue
in operational existence.
The Group intends to refinance the debt facility but as the refinancing has
yet to be completed, the Directors have concluded that attention should be
drawn to the fact that a material uncertainty exists which may cast
significant doubt on the Group and Company's ability to continue as a going
concern.
The global recovery from the impact of the pandemic is just beginning.
However, after consideration of the matters set out above, the Directors are
satisfied that there is a reasonable expectation that the Group and Company
have adequate funding to cover its operation needs for the foreseeable future
and therefore consider it appropriate to prepare the financial statements
under the going concern basis.
2. Accounting policies
The same accounting policies and methods of computation are followed in these
condensed set of financial statements as applied in the Group's latest annual
audited financial statements.
3. Exchange rates
The significant exchange rates to UK Sterling for the Group are as follows:
6 months ended 31 December 2021 6 months ended 31 December 2020 18 months ended 30 June 2021
Closing rate Average rate Closing rate Average rate Closing rate Average rate
US dollar 1.35 1.37 1.36 1.30 1.38 1.32
Euro 1.19 1.17 1.11 1.11 1.16 1.14
Australian dollar 1.86 1.86 1.77 1.81 1.84 1.85
Singaporean dollar 1.82 1.85 1.80 1.77 1.86 1.80
Hong Kong dollar 10.53 10.65 10.53 10.06 10.75 10.23
Canadian dollar 1.72 1.72 1.74 1.73 1.71 1.73
4. Segmental information
In accordance with IFRS 8, the Group's operating segments are based on the
figures reviewed by the Board, which represents the chief operating decision
maker. The Group comprises two operating segments:
· Time Out Market - this includes Time Out's share of concessionaires'
sales, revenues from Time Out operated bars and other revenues include retail,
events and sponsorship.
· Time Out Media - this includes the sale of digital and print
advertising, local marketing solutions, live events tickets and sponsorship,
commissions generated from e-commerce transactions, and fees from our
franchise partners.
6 months ended 31 December 2021
(Unaudited)
Time Out Market Time Out Media Corporate costs Total
£'000 £'000 £'000 £'000
Gross revenue 19,213 12,836 - 32,049
Concessionaire share (7,346) - - (7,346)
Net revenue 11,867 12,836 - 24,703
Gross profit 9,882 9,812 - 19,694
Administrative expenses (14,912) (10,624) (2,666) (28,202)
Operating loss (5,030) (812) (2,666) (8,508)
Operating loss (5,030) (812) (2,666) (8,508)
Amortisation of intangible assets 49 1,329 - 1,378
Depreciation of property, plant and equipment 3,209 66 - 3,275
Depreciation of right-of-use assets 908 - - 908
EBITDA (loss)/ gain (864) 583 (2,666) (2,947)
Share based payments 186 241 23 450
Exceptional items 59 66 1,523 1,648
Adjusted EBITDA (loss)/ gain (619) 890 (1,120) (849)
Finance income 501
Finance costs (2,465)
Loss before income tax (10,472)
Income tax credit (16)
Loss for the period (10,488)
Gross revenue represents the total value of all food, beverage and retail
sales transactions in relation to the North American markets, the Group's
share of sales transactions in relation to the Lisbon market and any
management agreement fees. Net revenue is calculated as gross revenue less the
concessionaires' share of revenue.
6 months ended 31 December 2020
(Unaudited)
Time Out Time Out Corporate Total
Market Media costs
£'000 £'000 £'000 £'000
Gross revenue 4,325 8,957 - 13,282
Concessionaire share (1,318) - - (1,318)
Net revenue 3,007 8,957 - 11,964
Gross profit 2,530 7,243 - 9,773
Administrative expenses (12,089) (11,832) (773) (24,694)
Operating loss (9,559) (4,589) (773) (14,921)
Operating loss (9,559) (4,589) (773) (14,921)
Amortisation of intangible assets 404 1,680 - 2,084
Depreciation of property, plant and equipment 2,804 129 - 2,933
Depreciation of right-of-use assets 1,468 576 - 2,044
EBITDA loss (4,883) (2,204) (773) (7,860)
Property lease costs (1,363) (872) - (2,235)
Share based payments - 565 - 565
Exceptional items 36 828 214 1,078
Adjusted EBITDA loss (6,210) (1,683) (559) (8,452)
Finance income 1,387
Finance costs (3,165)
Loss before income tax (16,699)
Income tax charge 157
Loss for the period (16,542)
18 months ended 30 June 2021
(Audited)
Time Out Market Time Out Media Corporate costs Total
£'000 £'000 £'000 £'000
Gross revenue 19,327 25,570 - 44,897
Concessionaire share (7,094) - - (7,094)
Net revenue 12,233 25,570 - 37,803
Gross profit 10,272 19,898 - 30,170
Administrative expenses (32,821) (55,909) (1,987) (90,717)
Operating loss (22,549) (36,011) (1,987) (60,547)
Operating loss (22,549) (36,011) (1,987) (60,547)
Amortisation of intangible assets 1,767 4,401 - 6,168
Depreciation of property, plant and equipment 10,038 411 - 10,449
Depreciation of right-of-use assets 3,548 1,404 - 4,952
EBITDA loss (7,196) (29,795) (1,987) (38,978)
Property lease costs (6,108) (1,401) - (7,509)
Share based payments - 1,480 - 1,480
Exceptional items (1,257) 20,786 365 19,894
Loss on disposal of fixed assets 35 1 - 36
Adjusted EBITDA loss (14,526) (8,929) (1,622) (25,077)
Finance income 35
Finance costs (10,544)
Loss before income tax (71,056)
Income tax charge 507
Loss for the period (70,549)
Gross revenue is analysed geographically by origin as follows:
Unaudited Unaudited Audited
6 months 6 months 18 months
ended 31 ended 31 ended 30
December 2021 December 2020 June 2021
£'000 £'000 £'000
Europe 10,386 7,005 20,097
Americas 18,972 4,890 19,870
Rest of World 2,691 1,387 4,930
32,049 13,282 44,897
5. Exceptional items
Exceptional items are analysed as follows:
Unaudited Unaudited Audited
6 months 6 months 18 months
ended 31 ended 31 ended 30
December 2021 December 2020 June 2021
£'000 £'000 £'000
Redundancy costs 819 1,078 1,224
Discontinued corporate transaction costs 829 - -
Time Out Market Waterloo exit costs - - 696
Property lease exit costs - - 163
Fundraising costs - - 96
Write-off of deferred financing costs - - 54
Impairment of goodwill - - 20,000
Gain on derecognition of right-of-use assets and related lease liabilities - - (2,339)
1,648 1,078 19,894
6. Loss per share
Basic loss per share is calculated by dividing the loss attributable to
shareholders by the weighted average number of shares during the period.
For diluted loss per share, the weighted average number of shares in issue is
adjusted to assume conversion for all dilutive potential shares. All potential
ordinary shares including options and deferred shares are antidilutive as they
would decrease the loss per share and are therefore not considered. Diluted
loss per share is equal to basic loss per share.
Unaudited Unaudited Audited
6 months 6 months 18 months
ended 31 ended 31 ended 30
December 2021 December 2020 June 2021
Number Number Number
Weighted average number of ordinary shares for the purpose of basic and 335,582,084 283,201,804 239,394,965
diluted loss per share
£'000 £'000 £'000
Losses from continuing operations for the purpose of loss per share 10,483 14,407 66,770
Pence Pence Pence
Basic and diluted loss per share 3.1 5.1 27.9
7. Cash and debt
Unaudited Unaudited Audited
31 December 2021 31 December 30 June
2020 2021
Cash and cash equivalents 8,459 10,394 19,070
Borrowings (20,328) (22,976) (23,517)
Adjusted net debt (11,869) (12,582) (4,447)
IFRS 16 Lease liabilities (22,698) (31,443) (22,453)
Net debt (34,567) (44,025) (26,900)
Borrowings comprise principally the Incus Capital Finance loan facility which
is fully repayable in November 2022.
8. Notes to the cash flow statement
Reconciliation of loss before income tax to cash used in operations
Unaudited Unaudited Audited
6 months 6 months 18 months
ended 31 ended 31 ended 30
December 2021 December 2020 June 2021
£'000 £'000 £'000
Loss before income tax (10,472) (16,699) (71,056)
Add back:
Net finance costs 1,964 1,778 10,509
Share based payments 450 565 1,480
Depreciation charges 4,183 4,977 15,401
Amortisation charges 1,378 2,084 6,168
Loss on disposal of property, plant and equipment - - 36
Impairment of goodwill - - 20,000
Time Out Market Waterloo exit costs - - 696
Gain on derecognition of right-of-use asset and related lease liability - - (2,339)
Other non-cash movements - (43) 54
Increase in inventories 104 311 325
Decrease/(increase) in trade and other receivables (2,796) 1,340 8,302
(Decrease)/increase in trade and other payables 678 (4,211) (9,795)
Cash used in operations (4,511) (9,898) (20,219)
9. Share capital
Unaudited Audited
Nominal value per share 31 December 30 June
2021 2021
Number Number
Ordinary shares 335,582,084 331,960,417
Aggregate amounts 335,582,084 331,960,417
£'000 £'000
Ordinary shares £0.001 336 332
Aggregate amounts 336 332
10. Principal risks and uncertainties
The 2021 Annual Report sets out on pages 34 and 35 the principal risks and
uncertainties that could impact the business. There are no changes to these
risks and uncertainties.
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