Source - RNS
RNS Number : 7530K
SpaceandPeople PLC
26 September 2016
 

 

SpaceandPeople plc

("SpaceandPeople" or the "Group")

 

Interim Results for the 6 months to 30 June 2016

 

SpaceandPeople (AIM:SAL), the retail, promotional and brand experience specialist which facilitates and manages the sale of promotional and retail merchandising space in shopping centres and other high footfall venues, announces interim results for the six months ended 30 June 2016.

 

 

Highlights

·      Consolidated gross revenue £11.1m (2015: £11.3m) - 1.8% down

 

·      Consolidated net revenue £4.65m (2015: £4.77m) - 2.5% down

 

UK promotional net revenue £1.50m (2015: £1.43m) - 5.4% up

 

UK retail and MPK net revenue £1.46m (2015: £1.42m) - 3.2% up

 

German promotional net revenue £544k (2015: £612k) - 11.1% down

 

German retail net revenue £1.07m (2015: £1.24m) - 13.7% down

 

·      Loss before taxation from continuing operations £174k (2015: profit £62k) -  £236k down

 

·      Basic earnings per share negative 2.96p (2015: positive 0.06p)

 

·      Successful start to Network Rail contract won in 2015

 

·      75 Mobile Promotions Kiosks ("MPKs") in operation in the UK

 

·      Commencement of kiosk pilot in France in January 2016

 

·      Closure of S&P+ due to insufficient prospects leading to a one off charge of £552k in the period

 

Contact details:

SpaceandPeople Plc

0845 241 8215

Matthew Bending, Gregor Dunlay


Cantor Fitzgerald Europe

020 7894 7000

David Foreman, Will Goode (Corporate Finance)


David Banks, Richard Sloss (Sales)


 

Chief Executive's Interim Operating Statement

Overview

 

2015 was a year of transition for SpaceandPeople with a focus on gaining new clients and delivering higher value services. The first half of 2016 has been a continuation of this process with the successful expansion of our MPK programme and "Pop Up kiosks" offsetting the termination of some other traditional RMU contracts that were known to be occurring. We have also continued to explore opportunities for geographic expansion of our offer by commencing a pilot project with Immochan in France.

 

Taking our key divisions in turn:

 

UK Divisions

 

MPKs

The expansion of our innovative MPK programme has continued during the first half of 2016 and by the half year end we had 75 kiosks installed in 56 venues throughout the UK including 9 Network Rail stations (2015: 37 kiosks). This area of the business will continue to grow and we anticipate having 80 kiosks in operation by the end of the year. MPK revenue in the first half was £661k compared with £260k in the same period in 2015. This was as a result of both an increase in the number of kiosks in operation as well as the improved sales performance of each kiosk.

 

RMUs

Revenue generated by the RMUs decreased in the first half of 2016 compared with the previous period as some contracts came to an end during 2015 and some other clients removed RMUs from their malls. The average number of RMUs trading in the first half year of 2016 was 123 compared with 128 in 2015. The movement away from the long term minimum guarantee business model by some clients has been as a result of them wanting more dynamism on their malls and retailers wanting more flexibility in duration and location for their operations. Our innovative Pop Up kiosk programme, where units can be deployed for shorter periods of time and at short notice, has been refined and should better satisfy the requirements of both venues and operators going forward. This Pop Up kiosk programme, combined with the well-received rebrand of "Retail Profile" as "POP Retail" demonstrates that temporary retailing in malls is vibrant and in demand.

 

The Pop Up kiosks allow short term trading, particularly at the Christmas period, which allows existing operators to up-sell into more units in different locations as well as removing barriers of entry into the venues for new retailers. In 2015 we deployed around 30 Pop Up kiosks and we aim to double that number this year.

 

Promotions

The core UK promotions division has performed well during the period with revenue increasing by 5% to £1.50 million. Within this division there has been a development of large scale Brand Experience campaigns into Network Rail stations, with high profile campaigns including the launch of the new Ghostbusters movie, the Renault Clio 25th Anniversary promotion and a campaign by Dubai Tourism.

 

German Divisions

 

Retail

Our retail business in Germany transacts almost exclusively with ECE's portfolio of managed shopping centres. When this contract was renewed at the start of 2016 there was an agreed reduction in the number of kiosks deployed as centres that had proven to be difficult to trade in were removed from the contract. As a result, the average number of kiosks in operation in the first half of this year was 112, down from 136 in the previous year. It had been expected that the reduction in the number of kiosks and their concentration in the more desirable centres from our perspective would lead to higher average prices and higher levels of occupancy. Unfortunately, poor weather during the Spring and an unseasonably hot Summer have not helped retailer demand overall. However, the team are currently building the Christmas pipeline which is the crucial trading period for the division.

 

Promotions

The German promotions business saw a fall away of long term promotions. These are long term promotions booked over three years and are now coming to an end as we exited from the ECE long term agreement hence the overall reduction of revenue, down 11%. Stripping this revenue out showed the underlying performance of short term promotions growing by 14% which is an excellent performance.

 

SpaceandPeople Ventures

 

This is the grouping of our overseas companies and also new businesses that we are developing.

 

SpaceandPeople India, which is 60% owned by the Company, saw trading in line with expectations despite the effects of a heavier monsoon period than usual which has impacted on some retailers. The overall contribution of this business to the profitability of the group is not significant.

 

The first half of 2016 saw the commencement of the pilot MPK programme with Immochan in France. This pilot is enabling us to learn a great deal about operating in the French market and the client is very happy with the product and the way it has improved the presentation of promotions within their malls. The costs of running the pilot are not inconsiderable with £94k being spent in the first six months of the year which has been fully recognised in these results. The pilot will conclude at the end of this year and a decision will be made in early 2017 on whether or not to continue and expand the roll-out.

 

In June this year the decision was taken to close S&P+, our London based Above-the-Line ("ATL") advertising support business. Although well received by our clients and despite a promising start in 2013, the company did not develop sales to a level that would enable it to be self-sustaining. In late June a number of contracts they had been working on were either cancelled or postponed. This meant that they required additional funding to be able to continue to trade and with their pipeline of business for the remainder of the year not being as strong as we would have hoped, the Board decided that the business did not have a viable future and that committing further cash was not in the best interests of the Group. The closure of this business caused a release of the non-controlling interest resulting in a £252k one-off charge to the Group in the first half of 2016.

 

Outlook

 

As we entered 2016 we were aware that a number of significant revenue streams that we had benefitted from in the past had either ended or were going to end during 2016. The development of the Pop Up kiosk concept along with the continued roll-out of MPKs and the new contracts with Network Rail and British Land means that our business has replaced the old revenue streams with new products that are attractive to both existing and new venues and customers alike.

 

The results for the first half year are in line with the results of the previous year excluding the costs associated with the closure of S&P+ and the running of the MPK pilot programme in France.

 

The continuing development of the MPK and Pop Up kiosk programmes in the UK as well as continuing to source and develop new products that are attractive to our clients is key to the growth in the second half of 2016.

 

The UK promotions division has a strong pipeline of business for the second half of this year. We have put new sales management in place and combined with a focused programme of staff incentives this should help this business develop further.

 

The Pop Up kiosk offer could see between 60 and 80 units trading this Christmas. This division's results are crucial to our achieving forecasts. There is a strong pipeline of business, but again transactions in October are historically when this business is done.

 

The German promotions division is currently negotiating a contract extension beyond 2016 with its key client. While this negotiation has been going on we have encountered a block on long term promotions being accepted. Hopefully once the contract is agreed we will be able to transact this business which is important to our second half year income.

 

In common with many retail related businesses, trading across the Group in the period since the half year end has been more subdued than we had anticipated. We will need to perform strongly over the remainder of the year in order to meet our expectations. We have a good team led by experienced managers who are all focused on delivering our objectives.

 

As a result of the one off costs of closing S&P+ and the need to invest further in the growth of the MPK programme next year, for the first time since being admitted to AIM in 2005, we do not intend to propose a dividend during the 2016 financial period. This is intended to be a one year pause with dividends recommencing during the 2017 financial period.

 

Matthew Bending

23 September 2016

 

 

Independent Review Report to SpaceandPeople plc

 

Introduction

 

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2016 which comprises, the consolidated statement of comprehensive income, the consolidated statement of financial position, the consolidated statement of cash flows, the consolidated statement of changes in equity and the related explanatory notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

 

This report is made solely to the company in accordance with the terms of our engagement. Our review has been undertaken so that we might state to the company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company for our review work, for this report, or for the conclusions we have reached.

 

Directors' Responsibilities

 

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the AIM Rules for Companies.

 

As disclosed in note 2, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting, as adopted by the European Union.

 

Our Responsibility

 

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

 

Scope of review

 

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity, issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 

Conclusion

 

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2016 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the AIM Rules for Companies.

 

 

Campbell Dallas LLP

Chartered Accountants

Statutory Auditors

Titanium 1

King's Inch Place

Renfrew

PA4 8WF

 

Date:  23 September 2016

 

 

Consolidated Group Statement of Comprehensive Income

For the 6 months ended 30 June 2016

 

 

 

               

Notes


6 months to   30 June '16

(Unaudited)

£'000


Restated -

6 months to 30 June '15

(Unaudited)

£'000


Restated -

12 months to   31 December '15

(Audited)

£'000









Revenue

5


4,646


4,766


11,433









Cost of Sales



(1,725)


(1,637)


(3,947)

 

Gross Profit

 

Administration expenses



 

2,921

 

(3,220)


 

3,129

 

(3,198)


 

7,486

 

(6,713)

Other operating income



114


131


295









Operating (loss) / profit

 



(185)


62


1,068









Finance income



31


14


-

Finance costs



(20)


(14)


(28)









(Loss) / Profit before taxation



(174)


62


1,040









Taxation



-


-


(197)









(Loss) / Profit after taxation from continuing operations



(174)


62

 


843









Discontinued Operations

6


(552)


(85)


21

















(Loss) / Profit after taxation

 

 

Other comprehensive income



(726)


(23)


864

Foreign exchange differences on translation of foreign operations



143

 

 


(10)


(39)

 

Total comprehensive income for the period



(583)


(33)


825

 

(Loss) / Profit attributable to:








Owners of the Company

Non-controlling interests



(578)

(148)


12

(35)


831

33




(726)


(23)


864

 

Total comprehensive income for the period attributable to:








Owners of the Company

Non-controlling interests



(435)

(148)


2

(35)


792

33




(583)


(33)


825

 

Earnings per share

14















Basic

 

Diluted



(2.96p)

 

(2.74p)


0.06p

 

0.06p


4.26p

 

3.89p

















 

Consolidated Group Statement of Financial Position

At 30 June 2016

 


Notes


30 June '16

(Unaudited)

£'000


30 June '15

(Unaudited)

£'000


31 December '15

 (Audited)

£'000

Assets








Non-current assets:








Goodwill

7


8,225


8,225


8,225

Other intangible assets

8


32


28


17

Property, plant & equipment

9


1,702


1,701


1,625




9,959


9,954


9,867

Current assets:








Trade & other receivables



3,685


3,648


4,205

Cash & cash equivalents

10


778


1,028


1,723




4,463


4,676


5,928









Total assets



14,422


14,630


15,795









Liabilities








Current liabilities:








Trade & other payables



3,807


4,657


4,506

Current tax payable



(96)


(142)


18

Other borrowings

11


-


250


250




3,711


4,765


4,774

Non-current liabilities:








Deferred tax liabilities



58


10


58

Long term loan

11


1,200


500


750




1,258


510


808









Total liabilities



4,969


5,275


5,582

 

 








Net assets



9,453


9,355


10,213

 

 








Equity








Share capital

13


195


195


195

Share premium



4,868


4,868


4,868

Special reserve



233


233


233

Retained earnings



3,883


3,957


4,747









Equity attributable to owners of the Company



9,179


9,253


10,043

Non-controlling Interest



274


102


170

Total equity



9,453


9,355


10,213

 

 

Consolidated Group Statement of Cash Flows

For the 6 months ended 30 June 2016

 


Notes


6 months to   30 June '16

(Unaudited)

£'000


Restated -

6 months to   30 June '15

(Unaudited)

£'000


Restated -

12 months to                31 December '15

(Audited)

£'000

Cash flows from operating activities








Cash (outflow) / inflow from operations



(290)


(448)


192

Interest paid



(20)


(14)


(28)

Taxation



(114)


28


39

Net cash (outflow) / inflow from operating activities



(424)


(434)


203









Cash flows from investing activities

Interest received



 

31


 

14

 

 

 

-

Purchase of intangible assets



(23)


(15)


(15)

Purchase of property, plant & equipment

9


(300)


(512)


(690)

Net cash outflow from investing activities



(292)


(513)


(705)









Cash flows from financing activities








Bank facility received

11


200


250


500

Dividends paid

12


(429)


(390)


(390)

Net cash outflow from financing activities



(229)


(140)


110

















(Decrease) in cash and cash equivalents



(945)


(1,087)


(392)

Cash at beginning of period



1,723


2,115


2,115

Cash at end of period

10


778


1,028


1,723

 

 

Reconciliation of operating profit to net cash flow from operating activities








Operating (loss) / profit



(185)


62


1,068

Operating (loss) / profit from discontinued

Amortisation of intangible assets

6


(300)

8


(85)

5


21

16

Depreciation of property, plant & equipment



223


185


439

Effect of foreign exchange rate moves



143


(10)


(39)

Decrease in receivables



520


573


16

(Decrease) in payables



(699)


(1,178)


(1,329)

Cash flow from operating activities



(290)


(448)


192

 

 

Consolidated Group Statement of Changes in Equity

For the 6 months ended 30 June 2016

 

 

6 months to 30 June '16

Share capital

 

£'000


Share premium

 

£'000


Special reserve 

 

£'000


Retained earnings

 

£'000


Non-controlling

Interest

£'000


Total equity

 

£'000













At 1 January '16

195


4,868


233


4,747


170


10,213

Foreign currency translation

-


-


-


143


-


143

Loss for the period

-


-


-


(578)


(148)


(726)

Elimination of non-controlling interest in S&P+

 

    -


 

-


 

-


 

-


 

252


 

252

Dividends paid

-


-


-


(429)


-


(429)

At 30 June '16

195


4,868


233


3,883


274


9,453

 

 

 

6 months to 30 June '15

Share capital

 

£'000


Share premium

 

£'000


Special reserve 

 

£'000


Retained earnings

 

£'000


Non-controlling

Interest

£'000


Total equity

 

£'000













At 1 January '15

195


4,868


233


4,345


137


9,778

Foreign currency translation

-


-


-


(10)


-


(10)

Profit / (Loss) for the period

-


-


-


12


(35)


(23)

Dividends paid

-


-


-


(390)


-


(390)

At 30 June '15

195


4,868


233


3,957


102


9,355

 

 

 

12 months to 31 December '15

Share capital

 

£'000


Share premium

 

£'000


Special reserve 

 

£'000


Retained earnings

 

£'000


Non-controlling

Interest

£'000


Total equity

 

£'000













At 1 January '15

195


4,868


233


4,345


137


9,778

Foreign currency translation

-


-


-


(39)


-


(39)

Profit for the period

-


-


-


831


33


864

Dividends paid

-


-


-


(390)


-


(390)

At 31 December '15

195


4,868


233


4,747


170


10,213

 

 

Notes to the financial statements

For the 6 months ended 30 June 2016

 

1.          General information

 

SpaceandPeople plc is a limited liability company incorporated and domiciled in Scotland (registered number SC212277) which is listed on AIM (ticker: SAL).

This condensed consolidated interim financial information has been reviewed, but not audited, by the auditors, and their independent review is set out in this announcement. It does not constitute statutory accounts as defined by Section 434 of the Companies Act 2006. The financial information for the 12 months to 31 December 2015 has been extracted from the statutory accounts for that period. These published accounts were reported on by the auditors without qualification or an emphasis of matter reference, and did not include a statement under section 498 of the Companies Act 2006, and have been delivered to the Registrar of Companies.

 

This condensed consolidated interim financial information was approved by the board on 23 September 2016.  

 

2.          Basis of preparation

 

This condensed consolidated interim financial information for the 6 months ended 30 June 2016 has been prepared in accordance with IAS 34 'Interim financial reporting'. The condensed consolidated interim financial information should be read in conjunction with the financial statements of the Group for the period ending 31 December 2015 which were prepared on a going concern basis under the historical cost convention in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union, and those parts of the Companies Act 2006 applicable to companies reporting under IFRS.

 

3.          Accounting policies

 

The accounting policies adopted in the preparation of the condensed consolidated interim financial information are consistent with those applied in the financial statements of the Group for the year ended 31 December 2015.

 

 

4.          Seasonality of operations

 

Due to the seasonal nature of the retail business, higher revenues and operating profits are usually expected in the second half of the year than in the first six months, particularly for subsidiary companies POP Retail Limited and Retail Profile Europe GmbH.

 

 

5.          Segmental reporting

 

The Group maintains its head office in Glasgow and an office in Hamburg, Germany. These are reported separately. The Group operates both Promotional Sales and Retail businesses in both the UK and Germany. The Group has determined that these are the principal operating segments as the performance of these segments is monitored separately and reviewed by the board.

 

The following table presents revenue and profit and loss information regarding the Group's two business segments - Promotional Sales and Retail, split by geographic area. Other segment represents the Groups investments in SpaceandPeople India and Retail Profile France.


Promotions

UK

 

£'000

Promotions Germany

 

£'000

Retail

 UK

 

£'000

Retail

Germany

 

£'000

Head

Office

 

£'000

Other

 

 

£'000

Group

 

 

£'000

6 months to

30 June '16








Revenue

1,502

544

1,462

1,068

-

70

4,646

Segment operating profit/(loss)

 

 

385

 

 

145

 

 

(169)

 

 

1

 

 

(456)

 

 

(80)

 

 

(174)









6 months to

30 June '15








Revenue

1,425

612

1,417

1,237

-

75

4,766

Segment operating profit/(loss)

328

279

27

60

(649)

(107)

(62)









12 months to        31 December '15








Revenue

3,063

2,438

3,151

2,632

-

149

11,433

Segment operating profit/(loss)

1,684

53

206

46

(1,039)

90

1,040









 

6.          Discontinued operations

 

During the period, the Group took decision to close its S&P+ business, which operated in a niche sector distinct from SpaceandPeople's core business. SpaceandPeople owned 51% of S&P+ and didn't consider it prudent to continue funding the venture beyond what had already been provided. The combined results of the discontinued operations included in the loss for the year are set out below. The comparative loss / profit from discontinued operations have been represented to include those operations classified as discontinued in the current year.

            

 

Profit / (Loss) for the year from discontinued operations

6 months to

30 June '16

£'000

6 months to

30 June '15

£'000

12 months to

31 December '15

£'000

 

Revenue

Cost of Sales

Gross Profit

Administration expenses

 

 

487

(343)

144

(444)

 

 

997

(744)

253

(338)

 

 

2,381

(1,738)

643

(622)

 

Results from operating activities (net of tax) to date of disposal

 

Non-controlling interest eliminated

 

(Loss) / profit for period from discontinued operations

 

 

 

(300)

 

(252)

 

(552)

 

 

 

 

(85)

 

-

 

(85)

 

 

 

 

21

 

-

 

21

 

 

 

 

7.          Goodwill

 

 

Net book value

6 months to

30 June '16

£'000

6 months to

30 June '15

£'000

12 months to

31 December '15

£'000

Opening Balance

8,225

8,225

8,225

Closing Balance

8,225

8,225

8,225

 

 

 

8. Other intangible assets

 

 

Net book value

6 months to

30 June '16

£'000

6 months to

30 June '15

£'000

12 months to

31 December '15

£'000

Opening Balance

17

18

18

Additions

23

15

15

Amortisation

(8)

(5)

(16)

Closing Balance

32

28

17

 

 

 

9.          Property, plant and equipment

 

Net book value

6 months to

30 June '16

£'000

6 months to

30 June '15

£'000

12 months to

31 December '15

£'000

Opening Balance

1,625

1,374

1,374

Additions

300

512

690

Depreciation

(223)

(185)

(439)

Closing Balance

1,702

1,701

1,625

 

 

10.        Cash & cash equivalents

 

 

30 June '16

£'000

30 June '15

£'000

31 December '15

£'000





Cash at Bank and on hand

778

1,028

1,723


778

1,028

1,723

 

11.        Non-current liabilities

As at 30 June 2016, SpaceandPeople had drawn down £1.2 million (June 2015: £750k) of its agreed bank facility of £2 million. The amount drawn is part of a revolving credit facility of which £1 million is repayable by 31 Jul 2017 and £1 million is repayable by 31 July 2019.

 

 

12.        Dividends

 

 

30 June '16

£'000

30 June '15

£'000

31 December '15

£'000





Paid during the period

429

390

390





 

 

13.        Called up share capital

 

Allotted, issued and fully paid

30 June '16

 

30 June '15

 

31 December '15

 

Class

Nominal value





Ordinary

1p

£

195,196

195,196

195,196



Number

19,519,563

19,519,563

19,519,563

 

 

 

14.        Earnings per share

Earnings per share has been calculated using the (loss) / profit after taxation for the period and the weighted average number of shares in issue.

 


30 June '16

£'000

30 June '15

£'000

31 December '15

£'000

(Loss) / profit after taxation

(578)

12

831





 

 

 

Weighted average number of shares in issue during the period

 

'000

 

'000

 

'000

-       1p ordinary shares

19,520

19,520

19,520

-       Share options

1,562

1,883

1,866

-       Diluted ordinary shares

21,082

21,403

21,386

 

 

 

SpaceandPeople plc

2nd Floor

100 West Regent Street

Glasgow

G2 2QD

Telephone:           0845 2418215

Email:                     [email protected]

 

 

www.spaceandpeople.com

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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