REG - Time Out Group plc - Half-year Report
30/03/2023 07:00
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RNS Number : 6705U Time Out Group plc 30 March 2023
30 March 2023
Time Out Group plc
("Time Out," the "Company" or the "Group")
Unaudited results for the six months ended 31 December 2022
Continued momentum post pandemic delivers positive Group Adjusted EBITDA
Time Out Group plc (AIM: TMO), the global media and hospitality business,
today announces its unaudited results for the six months ended 31 December
2022.
Commenting on the results, Chris Ohlund, CEO of Time Out Group plc, said:
"We are encouraged by the momentum and progress we have seen across the
business, continuing to deliver positive Group Adjusted EBITDA and improved
margins, positioning Time Out Group for further profitable growth. We have
built out an experienced management team across the Group to continue our
momentum.
"Our digital-first multi-platform strategy has resulted in Time Out Media
exceeding our expectations across key areas such as audience growth,
higher-margin digital advertising and higher-value bespoke campaigns - in a
performance founded on Time Out's content which inspires and enables people to
experience the best of the city all of which continues to attract leading
brands advertising with us. The same mission is at the heart of Time Out
Market, which continues to successfully build its following and offering -
giving us further confidence in our unique proposition, which we are bringing
to more cities around the world. Since October 2022, we have signed four new
agreements, increasing our pipeline to eight new sites, with more in advanced
negotiations as landlords recognise Time Out Market's ability to turn a
property into a destination. As part of our ongoing expansion, our focus
remains on signing Management Agreements, which generate a recurring earnings
stream, without the need for the Company to fund capex."
Financial highlights
● Gross revenue increased by 68% to £53.8m (2021: £32.0m) and net
revenue((1)) by 60% to £39.5m (2021: £24.7m)
● Gross profit increased 61% to £31.8m (2021: £19.7m)
● Group Adjusted EBITDA(()(2)()) increased to £2.4m (2021: £0.8m loss)
with both divisions positive
● Group operating loss reduced to £6.8m (2021: £8.5m loss)
● Cash of £5.3m at 31 December 2022 (2021: £8.5m) and borrowings of
£31.3m (2021: £20.3m), resulted in Adjusted net debt(()(3)()) of £26.0m
(2021: £11.9). Reported net debt was £52.7m (2021: £34.6m) including
£26.7m (2021: £22.7m) of IFRS 16 lease liabilities
● Refinancing completed in November 2022 with a new four-year term loan
facility of €35.0m; €5.8m of the facility remains undrawn and the
agreement allows an extension to €47.5m by mutual consent
Operational highlights
● Time Out Market: continued revenue growth and accelerated signing of
new Management Agreements
o First reporting period of uninterrupted trading with net revenue growth of
78% to £21.2m (2021: £11.9m)
o Growing portfolio includes 15 open and contracted sites with Cape Town,
Vancouver and Riyadh Management Agreements signed in the period, Barcelona
lease agreement signed post period end and a strong pipeline of locations in
advanced negotiations
o Construction under way in both the Porto and Cape Town sites, which are set
to open towards the end of calendar 2023
● Time Out Media: exceeding management expectations with digital-first
strategy driving benefits
o 65% growth in digital revenue following the completed transition from print
to a digital-first strategy
o Success in higher-margin digital advertising space and with higher-value
bespoke campaigns including unique 'digi-physical' advertising propositions
combining the power of Time Out Media and Time Out Market
o Strong relationships with an expanding advertising client base in both
existing and new sectors
Outlook
The progress made in calendar year 2022 was the beginning of the Time Out
rebuild; the reopening of Markets which barely had an opportunity to establish
themselves after opening in 2019, the ability to continue signing new Markets
again, the full transition of Media from print to digital and the leveraging
of the complete Time Out platform to create high value marketing solutions.
Whilst the Board remains cautious in light of current economic uncertainty,
due to the actions taken, we expect to gain significant further traction in
the year ahead as we continue to grow momentum. We are encouraged by Time Out
Media's progress with further revenue growth expected in the second half as
advertisers seek access to our large global dynamic audience, in a positive
brand-safe environment. Whilst the Time Out Market portfolio of 15 existing
and future Time Out Markets includes eight Management Agreements which, once
all open and with a term of at least 10 years, will deliver a recurring
minimum earnings stream contributing c.£13m to EBITDA every year. Given
current interest levels from landlords, we are confident of signing further
Management Agreements over the short and medium term.
(1) Net revenue is calculated as gross revenue less the concessionaires'
share of revenue. See note 4 to the condensed consolidated statements.
(2) Adjusted EBITDA is operating loss stated before interest, taxation,
depreciation, amortisation, share-based payments, exceptional items and
profit/(loss) on the disposal of fixed assets. This is a non-GAAP alternative
performance measure ("APM") that management uses to aid understanding of the
underlying business performance. See note 4 for reconciliation to statutory
numbers.
(3) Adjusted net cash/(debt) excludes lease-related liabilities under
IFRS 16. This is an APM. See note 7 to the condensed financial statements for
a reconciliation to statutory numbers.
For further information, please contact:
Time Out Group plc Tel: +44 (0)207 813 3000
Chris Ohlund, CEO
Patrick Foley, CFO
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 inspires and
enables people to experience the best of the city through its two divisions -
Time Out Media and Time Out Market. Time Out launched in London in 1968 to
help people discover the exciting new urban cultures that had started up all
over the city - today it is the only global brand dedicated to city life.
Expert journalists curate and create content about the best things to Do, See
and Eat across 333 cities in 59 countries and across a unique multi-platform
model spanning both digital and physical channels. 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 portfolio includes seven open Markets, several new locations with
expected opening dates in 2023 and beyond, in addition to a pipeline of
further locations in advanced discussions. Time Out Group PLC, listed on AIM,
is headquartered in the United Kingdom.
FORWARD-LOOKING STATEMENTS
This document contains "forward-looking statements", which include all
statements other than statements of historical facts, including, without
limitation, any statements preceded by, followed by or that include the words
"targets", "believes", "expects", "aims", "intends", "will", "may",
"anticipates", "would", "could" or similar expressions or the negative
thereof. Such forward-looking statements involve known and unknown risks,
uncertainties and other important factors beyond the Group's control that
could cause the actual results, performance or achievements of the Group to be
materially different from future results, performance or achievements
expressed or implied by such forward-looking, including, among others, the
achievement of anticipated levels of profitability, growth, the impact of
competitive pricing, volatility in stock markets or in the price of the
Group's shares, financial risk management and the impact of general business
and global economic conditions. Such forward-looking statements are based on
numerous assumptions regarding the Group's present and future business
strategies and the environment in which the Group will operate in the future.
By their nature, forward-looking statements involve risks and uncertainties
because they relate to events and depend on circumstances that may or may not
occur in the future. These forward-looking statements speak only as at the
date as of which they are made, and each of Time Out Group Plc and the Group
expressly disclaims any obligation or undertaking to disseminate any updates
or revisions to any forward-looking statements contained herein to reflect any
change in Time Out Group Plc's or the Group's expectations with regard thereto
or any change in events, conditions or circumstances on which any such
statements are based. Neither the Group, nor any of its agents, employees or
advisors intends or has any duty or obligation to supplement, amend, update or
revise any of the forward-looking statements contained in this document.
Chief Executive's Review
Group overview
Financial summary
Unaudited Unaudited Change
6 months to 6 months to
31 December 2022 31 December 2021
£'000 £'000 %
Market 21,154 11,867 78%
Media 18,353 12,836 43%
Group net revenue((1)) 39,507 24,703 60%
Gross profit 31,752 19,694 68%
Gross margin %((2)) 80% 80% -
Divisional Adjusted operating expenses((3)) (28,205) (19,423) 45%
Divisional Adjusted EBITDA((3)) 3,547 271
Market 1,455 (619) 335%
Media 2,092 890 135%
Corporate costs (1,172) (1,120) 5%
Group Adjusted EBITDA((3)) 2,375 (849) 380%
(1) Net revenue is calculated as gross revenue less the concessionaires'
share of revenue. See note 4.
(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, exceptional items and profit/(loss) on the
disposal of fixed assets. These are APMs that management uses to aid
understanding of the underlying business performance. See note 4 for
reconciliation to statutory numbers.
The first half of the financial year - the first reporting period of
uninterrupted trading since 2019 - saw the Group make a substantial and
sustained post pandemic recovery and progress across both business divisions.
Following the relaunch of the Markets and their restored curation in full year
2022, this period has seen further operational improvements, increased
footfall and continued revenue growth in this division while the Media
business reaped the benefits from its full transition from print to digital
and winning big ticket, high-profile campaigns.
The Group's net revenue increased by 60% to £39.5m (2021: £24.7m), albeit
from a comparative period that was still impacted by Covid-19 restrictions.
Gross margin was maintained at 80%. Operating expenses continue to be
constantly reviewed as we remain focused on profitable growth. These combined
to produce an improvement in the Divisional Adjusted EBITDA of £3.5m (2021:
£0.3m) and resulted in a positive Group Adjusted EBITDA of £2.4m (2021:
£0.8m Group Adjusted EBITDA loss).
Time Out Market trading overview
Unaudited Unaudited Change
6 months to 6 months to
31 December 2022 31 December 2021
£'000 £'000 %
Owned operations 19,061 10,429 83%
Management fees 2,093 1,438 46%
Net revenue 21,154 11,867 78%
Gross profit 17,393 9,882 76%
Gross margin % 82% 83% (1)%
Adjusted operating expenditure (trading)((2)) (11,290) (8,210) 38%
Trading EBITDA((1)) 6,103 1,672 265%
Market central costs (4,648) (2,291) 103%
Adjusted EBITDA((2)) 1,455 (619) 335%
(1) Trading EBITDA represents the Adjusted EBITDA from owned and operated
markets post opening, Management Agreement fees, 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, exceptional items and profit/(loss) on the
disposal of fixed assets. These are APMs that management uses to aid
understanding of the underlying business performance. See note 4 for
reconciliation to statutory numbers.
Time Out Market net revenue increased significantly and by 78% to £21.2m
(2021: £11.9m) generating an Adjusted EBITDA of £1.5m (2021: £0.6m Adjusted
EBITDA loss) in the first reporting period of uninterrupted trading and with
the comparative period still impacted by some restrictions. Operating expenses
continue to be managed and improvements, as well as commercial initiatives to
optimise margins, are being implemented to further drive profitability.
Central costs increased to further strengthen the Time Out Market team's focus
on driving growth in our existing Markets and accelerating our global
expansion including sourcing new locations and preparing several upcoming
openings.
Time Out Market is a food and cultural market that brings the best of the city
together under one roof - as such, we regularly update our curated mix and
continue to attract high calibre chefs and restaurateurs. New concessions in
the period include in Lisbon O Frade, a MICHELIN Bib Gourmand; in New York
foodie favourites Bark, Dough Doughnuts and La Bella Ferrara; and Time Out
Market Chicago launched its first standalone fine dining concept, Valhalla,
with award-winning Chef Stephen Gillanders to outstanding reviews.
Alongside the culinary curation, each Market offers cultural and seasonal
activations to drive differentiation and footfall. Examples include Time Out
Market Dubai and New York revealing murals by local artists; Football World
Cup viewings across all sites, Time Out Market Chicago's Oktoberfest and a
Formula 1 event with driver Nico Hülkenberg at Time Out Market Dubai. For
the first time, a coordinated approach to events across all locations for the
holiday season was implemented and an enhanced corporate and group events
strategy helped drive further revenues.
In line with our strategy, Time Out Market's ongoing global expansion is
focused on Management Agreements under which the Group receives a share of
revenues and profits (subject to a guaranteed fee) but does not contribute to
the capital cost of the site. To accelerate the rate of new signings, we have
evolved our commercial formats allowing us to target more opportunities and
the internal development team - also supported by external real estate
partners - is engaging with an increasing pool of landlords and developers
interested in Time Out Market proposition. This was underlined in November
2022, when Time Out Market was recognised as Hospitality Operator of the Year
at the Global RLI Awards.
Alongside seven existing Markets, we have eight contracted sites and a strong
pipeline of locations in advanced negotiations. Between October 2022 and
January 2023, four new agreements were signed: Time Out Market Cape Town
(Management Agreement with V&A Waterfront Holdings Ltd); Time Out Market
Vancouver (Management Agreement with QuadReal Property Group and Westbank);
Time Out Market Riyadh (Management Agreement with Diriyah Gate Development
Authority); and in January 2023 we entered into a lease agreement with
Klépierre Real Estate España S.L.U., a member of the Klépierre Group, to
open Time Out Market Barcelona. While the ongoing expansion is focused on
Management Agreements, Time Out Market Barcelona is a lease agreement and as a
result will be an Owned & Operated Market, with Time Out receiving 100%
of site profits. The majority of the construction capex will be covered by a
contribution from the landlord, as well as a sponsorship provided by beer
brand Estrella Damm.
The current opening pipeline of eight new Markets includes:
● Porto (Owned & Operated) - calendar 2023 (construction under
way)
● Cape Town (Management Agreement) - calendar 2023 (construction
under way)
● Barcelona (Owned & Operated) - calendar 2024
● Vancouver (Management Agreement) - calendar 2024
● Abu Dhabi (Management Agreement) - calendar 2025
● Prague (Management Agreement) - calendar 2025
● Osaka (Management Agreement) - calendar 2025
● Riyadh (Management Agreement) - calendar 2027
In February 2023, we confirmed that we will not proceed with the development
of a Time Out Market at 106 Commercial Street in London. Although recommended
for approval by planning officers, the Tower Hamlets Development Committee
chose to defer its decision on our application in 2022 after a process which
had already taken several years. With an expectation of the process being
drawn out by further delays we have decided to no longer proceed with our
application but focus our resources on other opportunities.
Time Out Media trading overview
Unaudited Unaudited Change
6 months to 6 months to
December 2022 December 2021
£'000 £'000 %
Digital advertising 14,685 8,894 65%
Print 554 1,673 (67)%
Live events 499 539 (7)%
Local Marketing Solutions 743 485 53%
Advertising sales 16,481 11,591 42%
Affiliates & offers 1,337 1,245 33%
Franchises 535 239 124%
Net revenue 18,353 12,836 43%
Gross profit 14,359 9,812 46%
Gross margin % 78% 76% 2%
Adjusted operating expenditure((1)) (12,267) (8,922) 37%
Adjusted EBITDA((1)) 2,092 890 135%
(1) Adjusted measures are stated before interest, taxation,
depreciation, amortisation, share-based payments, exceptional items and
profit/(loss) on the disposal of fixed assets. These are APMs that management
use to aid understanding of the underlying business performance. See note 4
for reconciliation to statutory numbers.
Time Out Media trading saw significant growth with net revenue up 43% to
£18.4m (2021: £12.8m) generating Adjusted EBITDA of £2.1m (2021: £0.9m).
Digital revenue grew by 65% to £14.7m (2021: £8.9m) in what were the first
six months of Time Out being digital-only in the UK and in which we continued
our digital growth in North America as well as in other regions. This
demonstrates a successful replacement of print with digital revenue as part of
our digital-first multi-platform strategy which also led to improved gross
margin of 78% (2021: 76%). With the last regular Time Out London print
magazine published in June 2022, almost all of the 333 Time Out cities in
which we cover content are now fully digital with print issues only in
Barcelona (monthly), Madrid and Lisbon (quarterly) and in a few cities within
our franchise network. We continue to closely manage our operating expenditure
with the 37% increase representing investment in people with the appropriate
skills to drive our digital and video product offerings.
This digital-first strategy has positioned the Media division to increasingly
tap into higher-value campaigns from leading brands and the higher-margin
growing digital advertising space. We continue to believe that our brand-safe
content environment is increasingly attractive to major brands. As a result,
we have been able to take advantage of post-pandemic advertising spend -
something we first achieved in our North America business, followed recently
in our revitalised UK business and this is now gathering pace across other
regions too.
The Media division globally - including franchises - is now led by Stacy
Bettman who was appointed Time Out Media CEO in March 2023, reporting to Group
CEO Chris Ohlund. Her appointment follows her success in leading the North
American business from loss making in 2019 to EBITDA of £3.7m in the period.
The recent progress has been founded on successfully offering bespoke - and
therefore higher-value - advertising solutions to premium global brands and
informs the direction of the division going forward. Rooted in our unique
content, the client campaigns we delivered spanned multiple digital channels
including website, social media, video, newsletters as well as live events
which we increasingly host at Time Out Markets to add 'in real life' campaign
elements. This combined power of Time Out Media (high-quality content) plus
Time Out Market (real-life experiences) proves to be a differentiator that no
other media brand can offer, giving us pricing authority for these types of
"digi-physical" campaigns.
Furthermore, strong relationships with both direct and agency partners enabled
us to attract more clients in existing and new sectors. We delivered campaigns
- in some cases repeatedly or as part of long-term partnerships - for clients
including drinks brands Bacardi, Glen Grant and Pernod Ricard; travel,
transport and mobility brands such as P&O Cruises, TAP Portugal and
FreeNow; Mastercard, Nickelodeon as well as in new sectors such as cosmetics
(Maybelline New York) and gaming (DraftKings).
Time Out's global monthly brand audience((1)) grew to 73.1m (2021: 71.6m) and
we achieved several milestones in reach, engagement and creativity. We
reimagined the way we share content on social media, unveiled new video
formats, launched new email formats, expanded our national footprints which
enhanced our proposition for advertisers and in September 2022 delivered the
third biggest growth of all UK news publishers((2)).
A key element of bringing Time Out's "best of the city" content to life across
digital channels is a continued investment in the production of our own
videos, which is a media our audience increasingly engages with. We use these
videos across TikTok, our fastest growing social channel, and Instagram where
we more than doubled video views. As we produce more original Time Out videos,
we have upgraded our onsite video capabilities via a partnership with JW
Player. This enables us to use our videos across our own website (not only
across social media) and to leverage our video content strategy in line with
client demands, both in terms of direct and programmatic revenue.
(1) Global brand audience is the estimated monthly average in the period
including all Owned & Operated cities and franchises. It includes print
circulation and unique website visitors (Owned & Operated), 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) Source: Press Gazette using data from © Ipsos, Ipsos iris, 1-30 September
2022
Financial Review
Unaudited Unaudited Change
6 months to 6 months to
December 2022 December 2021
£'000 £'000 %
Gross revenue 53,801 32,049 68%
Concessionaire share (14,294) (7,346) 95%
Net revenue 39,507 24,703 60%
Gross profit 31,752 19,694 61%
Gross margin 80% 80%
Administrative expenses (38,561) (28,202) 45%
Operating loss (6,809) (8,508) (20)%
Operating loss (6,809) (8,508) (20)%
Depreciation & amortisation
- Intangible assets 1,126 1,378 (18)%
- Property, plant and equipment 3,679 3,275 12%
- Right-of-use assets 1,046 908 15%
Loss on disposal of fixed assets 2 - -
Share-based payments 1,029 450 129%
Exceptional items 2,302 1,648 40%
Adjusted EBITDA((1)) 2,375 (849) 380%
Finance income 11 501 (98)%
Finance costs (5,704) (2,465) 131%
Loss before tax (12,502) (10,472) 19%
(1) Adjusted EBITDA is operating loss stated before interest, taxation,
depreciation, amortisation, share-based payments, exceptional items and
profit/(loss) on the disposal of fixed assets. This is an APM that management
uses to aid understanding of the underlying business performance. See note 4
for reconciliation to statutory numbers.
Group gross revenue for the period increased by 68% to £53.8m (2021: £32.0m)
driven by the uninterrupted trading across all Time Out Markets and the
successful delivery of Time Out Media's print to digital strategy. This
allowed the gross margin as a percentage of net revenue to be maintained at
80%. Despite this, the current trading environment is being buffeted by the
challenges of cost inflation, political uncertainty and rising interest rates.
Adjusted Group operating expenses (excluding corporate costs, depreciation,
amortisation, share-based payments and exceptional items) increased by £8.8m
to £28.2m (2021: £19.4m) reflecting the increased activity in the period. In
line with many companies, the macro challenges mentioned above led us to a
review of all ongoing operating costs. This resulted in the deferral of some
initiatives (Metaverse) and some staff redundancies. Optimisation of our cost
base is an on-going exercise and may result in further changes over the second
half of the year. The benefits of these changes will be fully realised in the
next financial year. Corporate costs of £1.2m are largely in line with the
previous period.
Group Adjusted EBITDA((1)) improved to £2.4m (2021: £0.8m Group Adjusted
EBITDA loss).
The net exceptional costs of £2.3m (2021: £1.6m) includes staff redundancy
costs £(1.3m) and the write-off of capitalised costs relating to Time Out
Market Spitalfields which we have exited of (£1.0m).
Net finance costs of £5.7m (2021: £2.0m) primarily relates to interest on
debt of £2.5m (2021: £0.9m) and lease liabilities of £1.6m (2021: £1.1m).
In addition, it includes a charge of £1.6m in respect of fair value of share
warrants granted to lenders following the new loan arrangements concluded in
November 2022.
The depreciation charge of £4.7m increased by £0.6m (2021: £4.1m). The
amortisation of intangible assets of £1.1m decreased by £0.3m (2021:
£1.4m). The share-based payments charge of £1.0m increased by £0.5m
(2021: £0.5m) as a result in new grants in the period.
These non-cash costs results in a reporting operating loss of was £6.8m
(2021: £8.5m).
Cash and debt
Unaudited Audited Unaudited
31 December 30 June 31 December
2022 2022 2021
£'000 £'000 £'000
Cash and cash equivalents 5,344 4,849 8,459
Borrowings (31,362) (21,978) (20,328)
Adjusted net debt (26,018) (17,129) (11,869)
IFRS 16 Lease liabilities (26,712) (27,420) (22,698)
Net cash debt (52,730) (44,549) (34,567)
Cash and cash equivalents decreased by £0.5m since 30 June 2022 to £5.3m.
This was driven primarily by the Group Adjusted EBITDA of £2.4m (2021: £0.8m
Group Adjusted EBITDA loss), exceptional costs cash outflow of £1.3m (2021:
£1.6m), net working capital outflow of £0.3m (2021: £2.9m outflow), capital
expenditure of £1.6m (2021: £1.9m), net cash inflow following refinancing of
the Incus Capital facility of £6.2m (2021: £3.7m outflow), taxation payments
of £0.3m and the repayment of lease liabilities of £2.8m (2021: £4.0m).
Capital expenditure of £1.3m principally comprises £0.6m investment in the
construction of Time Out Market Porto and £0.5m invested by Media in on-going
technology development costs. In addition, £1.4m was used to fund the cash
collateral required to secure a new facility to fund the remaining Time Out
Market Porto construction.
The Incus Capital Finance facility of £20.9m was fully repaid on 30 November
2022.
On 24 August, the Group agreed an unsecured loan facility of up to £8.0
million with Oakley Capital Investments Limited ("OCI"). The drawn balance on
this facility as 30 November 2022 of £5.2m has been converted to a loan note
("OCI Loan Note") and extended to 31 December 2023. Interest will be charged
at a 90 day average SONIA rate plus 10% per annum, with an arrangement fee of
2% and an exit premium.
On 24 November 2022, the Group agreed a new €35.0m secured four-year term
loan facility with Crestline Europe LLP ("Crestline facility") was used to
refinance the Incus Capital Facility. The facility has a term of four years,
with the right to settle in full after two years. Interest may be capitalised
or paid in cash, at the election of the Company, during the first year at a
rate of 9.5% plus 3-month EURIBOR and from the second year onwards interest
will be paid in cash at a rate of 8.5% plus 3-month EURIBOR. There will
separately be an exit premium payable upon full repayment of the facility,
calculated by reference to the principal amount drawn. The facility is subject
to quarterly financial covenants based on minimum liquidity levels (quarterly
testing commencing on 31 March 2023) and target leverage ratio (quarterly
testing commencing on 30 June 2023).
The Company has also executed an equity warrant instrument and agreed to issue
11,400,423 equity warrants on 30 November 2022 and a further 2,264,468 at full
drawdown of the Loan Note Facility (in total representing approximately 3.6%
of its fully diluted share capital) to the Crestline subscribers. The
five-year equity warrants, which have customary anti-dilution protections,
have an exercise price of 39 pence per ordinary share.
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 condensed financial
statements ("forecast period"). 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.
As set out earlier, the Group has successfully refinanced the Incus Capital
loan facility which was fully settled on 30 November. €5.8m of the new
€35.0m Crestline facility remains undrawn and the agreement allows for the
facility to be extended to €47.5m by mutual consent. All related covenant
tests are expected to be met over the forecast period.
The Board is satisfied that the Group will be able to operate within the level
of its current debt and financial covenants and will have sufficient liquidity
to meet its financial obligations as they fall due for a period of at least 12
months from the date of signing these financial statements. For this reason,
the Group and Company continue to adopt the going concern basis in preparing
its financial statements.
Outlook
The progress made in calendar year 2022 was the beginning of the Time Out
rebuild; the reopening of Markets which barely had an opportunity to establish
themselves after opening in 2019, the ability to continue signing new Markets
again, the full transition of Media from print to digital and the leveraging
of the complete Time Out platform to create high value marketing solutions.
Whilst the Board remains cautious in light of current economic uncertainty,
due to the actions taken, we expect to gain significant further traction in
the year ahead as we continue to grow momentum. We are encouraged by Time Out
Media's progress with further revenue growth expected in the second half as
advertisers seek access to our large global dynamic audience, in a positive
brand-safe environment. Whilst the Time Out Market portfolio of 15 existing
and future Time Out Markets includes eight Management Agreements which, once
all open and with a term of at least 10 years, will deliver a recurring
minimum earnings stream contributing c.£13m to EBITDA every year. Given
current interest levels from landlords, we are confident of signing further
Management Agreements over the short and medium term.
Chris Ohlund
Group Chief Executive
30 March 2023
Consolidated Income statement
6 months ended 31 December 2022
Note Unaudited Unaudited Audited
6 months ended 31 December 6 months ended 31 December Year ended
2022 2021 30 June
2022
£'000 £'000 £'000
Gross revenue 1, 4 53,801 32,049 72,933
Cost of sales 4 (22,049) (12,355) (28,350)
Gross profit 31,752 19,694 44,583
Administrative expenses (38,561) (28,202) (58,724)
Operating loss (6,809) (8,508) (14,141)
Finance income 11 501 8
Finance costs (5,704) (2,465) (5,329)
Loss before income tax 4 (12,502) (10,472) (19,462)
Income tax (charge)/credit (518) 16 (97)
Loss for the period (13,020) (10,488) (19,559)
Loss for the period attributable to:
Owners of the parent (13,016) (10,483) (19,553)
Non-controlling interests (4) (5) (6)
(13,020) (10,488) (19,559)
Loss per share:
Basic and diluted loss per share (p) 6 3.9 3.1 5.9
Consolidated Statement of Other Comprehensive Income
6 months ended 31 December 2022
Unaudited Unaudited Audited
6 months ended 31 December 6 months ended 31 December Year ended
2022 2021 30 June
2022
£'000 £'000 £'000
Loss for the period (13,020) (10,488) (19,559)
Other comprehensive income:
Items that may be subsequently reclassified to the profit or loss:
Currency translation differences 536 3,520 4,803
Other comprehensive income/(expense) for the period, net of tax 536 3,520 (4,803)
Total comprehensive expense for the period (12,484) (6,968) (14,756)
Total comprehensive expense for the period attributable to:
Owners of the parent (12,480) (6,963) (14,748)
Non-controlling interests (4) (5) (8)
(12,484) (6,968) (14,756)
Condensed Consolidated Statement of Financial Position
At 31 December 2022
Note Unaudited Audited
31 December 30 June
2022 2022
£'000 £'000
Assets
Non-current assets
Intangible assets - Goodwill 30,200 29,893
Intangible assets - Other 7,663 8,219
Property, plant and equipment 35,549 37,851
Right-of-use assets 19,692 20,490
Other receivables 1,773 3,554
94,877 100,007
Current assets
Inventories 971 986
Trade and other receivables 19,300 14,906
Cash and cash equivalents 7 5,344 4,849
25,615 20,741
Total assets 120,492 120,748
Liabilities
Current liabilities
Trade and other payables (17,475) (14,872)
Borrowings 7 (5,254) (21,131)
Lease liabilities 7 (4,701) (5,056)
(27,430) (41,059)
Non-current liabilities
Deferred tax liability (1,079) (1,158)
Borrowings 7 (24,500) (847)
Warrants liabilities 7 (1,607) -
Lease liabilities 7 (22,011) (22,364)
(49,197) (24,369)
Total liabilities (76,627) (65,428)
Net assets 43,865 55,320
Equity
Called up share capital 9 336 336
Share premium 185,563 185,563
Translation reserve 8,398 7,862
Capital redemption reserve 1,105 1,105
Retained earnings / (losses) (151,509) (139,522)
Total parent shareholders' equity 43,893 55,344
Non-controlling interest (28) (24)
Total equity 43,865 55,320
Condensed Consolidated Statement of Changes in Equity
At 31 December 2022 (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 2022 336 185,563 7,862 1,105 (139,522) 55,344 (24) 55,320
Changes in equity
Loss for the period - - - - (13,016) (13,016) (4) (13,020)
Other comprehensive income - - 536 - - 536 - 536
Total comprehensive income - - 536 - (13,016) (12,480) (4) (12,484)
Share-based payments - - - - 1,029 1,029 - 1,029
Adjustment arising on change of non-controlling interest - - - - - - - -
Issue of shares - - - - - - - -
Balance at 31 December 2022 336 185,563 8,398 1,105 (151,509) 43,893 (28) 43,865
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
Balance 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 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 30 June 2022 (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 July 2021 332 185,563 3,057 1,105 (121,182) 68,875 (48) 68,827
Changes in equity
Loss for the period - - - - (19,553) (19,553) (6) (19,559)
Other comprehensive income - - 4,805 - - 4,805 (2) 4,803
Total comprehensive income - - 4,805 - (19,553) (14,748) (8) (14,756)
Share-based payments - - - - 1,817 1,817 - 1,817
Adjustment arising on change of non-controlling interest (604) (604) 32 (572)
Issue of new shares 4 - - - - 4 - 4
Balance at 30 June 2022 336 185,563 7,862 1,105 (139,522) 55,344 (24) 55,320
Condensed Consolidated Statement of Cash Flows
6 months ended 31 December 2022
Note Unaudited Unaudited Audited
6 months ended 31 December 2022 6 months ended 31 December 2021 Year ended 30 June
2022
£'000 £'000 £'000
Cash flows from operating activities
Cash generated from/ (used in) operations 8 755 (4,511) (4,544)
Interest paid (1,027) (1,885) (2,497)
Tax paid (329) - -
Net cash used in operating activities (601) (6,396) (7,041)
Cash flows from investing activities
Purchase of property, plant and equipment (1,141) (1,173)
(531)
Purchase of intangible assets (499) (288) (740)
Interest received 11 - 2
Net cash used in investing activities (1,629) (819) (1,911)
Cash flows from financing activities
Repayment of borrowings (21,651) (2,084) (1,505)
Proceeds from borrowings 30,220 257 254
Costs of refinancing (1,378) - -
Restricted Cash (1,749) - -
Repayment of lease liabilities (2,758) (1,578) (4,035)
Acquisition of minority interest - - (203)
Net cash from financing activities 2,684 (3,405) (5,489)
Increase/(decrease) in cash and cash equivalents 454 (10,620) (14,441)
Cash and cash equivalents at beginning of period 4,849 19,070 19,070
Effect of foreign exchange rate change 31 9 220
Cash and cash equivalents at end of period 5,334 8,459 4,849
Notes to the condensed consolidated statements
1. Preliminary Information
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 2022. 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 year ended 30 June 2022
is derived from the audited financial statements for the year ended 30 June
2022, which have been delivered to the Registrar of Companies. The external
auditor has reported on the accounts and their report did not contain any
statements under Section 498 of the Companies Act 2006.
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 ("APM") 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, exceptional items
and profit/(loss) on the disposal of fixed assets.
● 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
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 condensed financial
statements ("forecast period"). 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.
As set out earlier, the Group has successfully refinanced the Incus Capital
loan facility which was fully settled on 30 November. €5.8m of the new
€35.0m Crestline facility remains undrawn and the agreement allows for the
facility to be extended to €47.5m by mutual consent. All related covenant
tests are expected to be met over the forecast period.
The Board is satisfied that the Group will be able to operate within the level
of its current debt and financial covenants and will have sufficient liquidity
to meet its financial obligations as they fall due for a period of at least 12
months from the date of signing these financial statements. For this reason,
the Group and Company continue to adopt the going concern basis in preparing
its financial statements.
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 6 months ended Year ended
31 December 31 December 30 June
2022 2021 2022
Closing rate Average rate Closing rate Average rate Closing rate Average rate
US dollar 1.21 1.18 1.35 1.37 1.21 1.34
Euro 1.13 1.16 1.19 1.17 1.16 1.18
Australian dollar 1.78 1.75 1.86 1.86 1.76 1.84
Singaporean dollar 1.62 1.65 1.82 1.85 1.69 1.82
Hong Kong dollar 9.45 9.24 10.53 10.65 9.52 10.45
Canadian dollar 1.64 1.56 1.72 1.72 1.56 1.69
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 2022
(Unaudited)
Time Out Market Time Out Media Corporate costs Total
£'000 £'000 £'000 £'000
Gross revenue 35,448 18,353 - 53,801
Concessionaire share (14,294) - - (14,294)
Net revenue 21,154 18,353 - 39,507
Gross profit 17,393 14,359 - 31,752
Administrative expenses (22,066) (14,219) (2,276) (38,561)
Operating (loss)/ profit (4,673) 140 (2,276) (6,809)
Operating (loss)/ profit (4,673) 140 (2,276) (6,809)
Amortisation of intangible assets 4 1,122 - 1,126
Depreciation of property, plant and equipment 3,580 99 - 3,679
Depreciation of right-of-use assets 900 146 - 1,046
Loss on disposal of fixed assets - 2 - 2
EBITDA (loss)/ gain (189) 1,509 (2,276) (956)
Share-based payments - - 1,029 1,029
Exceptional items 1,644 583 75 2,302
Adjusted EBITDA gain/ (loss) 1,455 2,092 (1,172) 2,375
Finance income 11
Finance costs (5,704)
Loss before income tax (12,502)
Income tax charge (518)
Loss for the period 13,020
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 (864) 583 (2,666) (2,947)
Share-based payments 186 241 23 450
Exceptional items 59 66 1,523 1,648
Adjusted EBITDA loss (619) 890 (1,120) (849)
Finance income 501
Finance costs (2.465)
Loss before income tax (10,472)
Income tax charge (16)
Loss for the period (10,488)
Year ended 30 June 2022
(Audited)
Time Out Market Time Out Media Corporate costs Total
£'000 £'000 £'000 £'000
Gross revenue 46,454 26,479 - 72,933
Concessionaire share (17,530) - - (17,530)
Net revenue 28,924 26,479 - 55,403
Gross profit 24,081 20,502 - 44,583
Administrative expenses (29,921) (22,728) (6,075) (58,724)
Operating loss (5,840) (2,226) (6,075) (14,141)
Operating loss (5,840) (2,226) (6,075) (14,141)
Amortisation of intangible assets 14 2,526 - 2,540
Depreciation of property, plant and equipment 6,425 150 - 6,575
Depreciation of right-of-use assets 2,017 48 - 2,065
Loss on disposal of fixed assets - 47 - 47
EBITDA (loss)/ gain 2,616 545 (6,075) (2,914)
Share-based payments - - 1,817 1,817
Exceptional items (391) 1,159 1,548 2,316
Adjusted EBITDA (loss)/ gain 2,225 1,704 (2,710) 1,219
Finance income 8
Finance costs (5,329)
Loss before income tax (19,462)
Income tax credit (97)
Loss for the period (19,559)
Gross revenue is analysed geographically by origin as follows:
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
31 December 31 December 30 June
2022 2021 2022
£'000 £'000 £'000
Europe 14,636 10,386 25,826
Americas 34,893 18,972 41,703
Rest of World 4,272 2,691 5,404
53,801 32,049 72,933
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.
5. Exceptional items
Exceptional items are analysed as follows:
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
31 December 31 December 30 June
2022 2021 2022
£'000 £'000 £'000
Restructuring costs 1,253 819 1,958
Time Out Market Spitalfields exit costs 1,049 - -
Gain on recognition / derecognition of right-of-use asset and related lease - 829 (475)
liability
Discontinued corporate transaction costs - - 833
2,302 1,648 2,316
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 ended 6 months ended Year ended
31 December 31 December 30 June
2022 2021 2022
Number Number Number
Weighted average number of ordinary shares for the purpose of basic and 335,937,085 335,582,084 334,198,517
diluted loss per share
£'000 £'000 £'000
Losses from continuing operations for the purpose of loss per share 13,016 10,483 19,553
Pence Pence Pence
Basic and diluted loss per share 3.9 3.1 5.9
7. Cash and debt
Unaudited Unaudited Audited
31 December 31 December 30 June
2022 2021 2022
£'000 £'000 £'000
Cash and cash equivalents 5,344 8,459 4,849
Borrowings (31,362) (20,328) (21,978)
Adjusted net debt (26,018) (11,869) (17,129)
IFRS 16 Lease liabilities (26,712) (22,698) (27,420)
Net debt (52,730) (34,567) (44,549)
Borrowings comprise principally the Crestline four-year loan facility, which
refinanced the Incus Capital Finance loan facility on the 30 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 ended 6 months ended Year ended
31 December 31 December 30 June
2022 2021 2022
£'000 £'000 £'000
Loss before income tax (12,502) (10,472) (19,462)
Add back:
Net finance costs 5,693 1,964 5,321
Share-based payments 1,029 450 1,817
Depreciation charges 4,725 4,183 8,640
Amortisation charges 1,126 1,378 2,540
Loss on disposal of property, plant and equipment 2 - 47
Impairment of market assets 1,049 - -
Gain on recognition / derecognition of right-of-use asset and related lease - - (475)
liability
Other non-cash movements (22) (67)
Decrease in inventories 17 104 18
Increase in trade and other receivables (982) (2,796) (3,961)
Increase/ (decrease) in trade and other payables 620 678 1,038
Cash generated from/ (used in) operations 755 (4,511) (4,544)
9. Share capital
Nominal value per share Unaudited Audited
31 December 30 June
2022 2022
Number Number
Ordinary shares 335,937,085 335,870,417
Aggregate amounts 335,937,085 335,870,417
£'000 £'000
Ordinary shares £0.001 336 336
Aggregate amounts 336 336
10. Principal risks and uncertainties
The 2022 Annual Report sets out on pages 60 and 61 the principal risks and
uncertainties that could impact the business.
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