EMAN Everyman Media Group Plc

25 September 2024

Everyman Media Group PLC

("Everyman" or the "Group")

Interim Results

Strong growth in revenue, EBITDA and market share, with financial performance on track for full year

Everyman Media Group PLC, the independent, premium cinema group, reports its unaudited interim results for the 26 weeks ended 27 June 2024.

Summary of financial performance

Strategic and operational progress

Momentum building into the second half

¹Adjusted for pre-opening costs, acquisition expenses, depreciation, amortization and share based payments.

² Current market forecasts for the year ended 2 January 2025 are revenue of £108.0m and Adjusted EBITDA of £19.3m.

Alex Scrimgeour, Chief Executive of Everyman Media Group PLC, said:

"Despite weathering the full impact of last year's actor and writer strikes, we are pleased to report another period of financial and operational progress.  We achieved strong growth in revenue, increased EBIDTA and record market share, driven by rising demand for Everyman's unique brand of hospitality. 

The expansion of our footprint continues, with one new venue opened in the period and two more openings to look forward to in the year, further consolidating our position as the market leader in premium cinema.

We move into the second half with confidence, and look forward to an exciting slate of high profile releases to come through the remainder of the year."

The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018 (as amended) ("UK MAR").

About Everyman Media Group PLC:

Everyman is the fourth largest cinema business in the UK by number of venues, and is a premium, high growth leisure brand. Everyman operates a growing estate of venues across the UK, with an emphasis on providing first class cinema and hospitality.

Everyman is redefining cinema. It focuses on venue and experience as key competitive strengths, with a unique proposition:

For more information visit http://investors.everymancinema.com/

Chief Executive's Statement

Trading in the first half of 2024 was in line with management expectations, with revenue of £46.9m (H1 2023: £38.3m) and EBITDA of £6.2m (H1 2023: £5.8m).

The results reflect the impact of last year's WGA and SAG-AFTRA strikes, which lasted for several months, and delayed the production and release of a number of key titles during the first half of the year. Chief amongst these was Deadpool & Wolverine, originally scheduled for a March 2024 release and subsequently pushed back until July.

The Group has continued to gain significant market share during the first half of the year, increasing to 5.6% (H1 2023: 4.2%), demonstrating the enduring strength of the Everyman proposition.

With the impact of the strikes beginning to ease, the Group expects a strong H2 weighting to the 2024 film slate, with a particularly strong pipeline of titles scheduled for Q4. These include Joker: Folie à Deux in October, Gladiator II, Paddington in Peru, Wicked and Moana 2 in November, and Mufasa: The Lion King in December. As a result of this, the Group continues to have confidence in the full year outlook.

Elevating the Everyman experience

During the period we have remained committed to investing in and elevating the Everyman experience. Recognising that our most loyal customers are our strongest advocates, we identified an opportunity to increase our membership base and increase customer engagement. This has seen remarkable success, with 45,684 active members at the end of H1 2024, up from 26,024 at the end of H1 2023, a 76% increase.

As ever, we continue to invest in technology. Our new iOS and Android app brings a whole host of new features to customers, including the ability to purchase memberships and gift cards, multiple venue and seat-first selection, and the ability to add future releases to a watchlist. With a unique design and simplified framework, the new app promises to deliver a much improved user experience.

We've made exciting innovations in our film programming, introducing new concepts like Everyman Beyond, which showcases lesser-known films that our Film team believe will resonate with the Everyman audience. Additionally, over the Summer, and in partnership with Apple TV+, we invited guests to a series of Children's Hour screenings, complete with juice boxes and popcorn. These successful events introduced the Everyman experience to thousands of young families, expanding this audience ahead of a series of blockbuster family releases later this year.

We focus, as ever, on enhancing the Everyman brand. Our signature partnership with Jaguar Land Rover continues to flourish, as demonstrated by Discovery's sponsorship of our pop-up cinema at The Grove Hotel over the summer. This year, we expanded our popular outdoor venues by launching a new screen at Brentford Lock, setting the stage for the opening of a new cinema in this location in Q1 2025. Screen on the Canal at King's Cross also made another successful comeback, drawing thousands of visitors to Granary Square over the summer and introducing popular new food and beverage options, including crowd-favourite ice cream sundaes.

Continued organic expansion

Everyman currently has 45 cinemas and 155 screens. During the period, a three-screen venue in Bury St Edmunds opened and is trading in line with management expectations. Additionally, a new five-screen venue will open in Cambridge in November followed by three-screen venue in Stratford International (London) in December 2024. During 2025, new venues are planned to open at The Whiteley in Bayswater, Brentford Lock and Lichfield.

We continually evaluate our rate of expansion whilst maintaining a prudent approach to funding requirements. The reduced number of FY25 openings will ensure availability of capital for a number of key projects scheduled for 2026, whilst maintaining a strong Balance Sheet.

Performance review

The Group uses the key performance indicators of Admissions, Paid-for Average Ticket Price and Food & Beverage Spend per Head to monitor progress of the Group's activities.

Admissions

Admissions in H1 2024 were 1.9m, compared to 1.6m in the same period last year. The increase was driven in the main by a strong Q1 awards season, with titles such as Poor Things, The Holdovers, One Life and All of Us Strangers playing particularly well to the Everyman audience. We also saw further benefit from high quality, original content, with key titles being Bob Marley: One Love in February and Dune: Part Two in March. The Group also saw further benefit from the four venues opened in the intervening period (Marlow, Bath, Tivoli Cheltenham and Bury St Edmunds).

The increase in admissions, revenue and EBITDA would have been greater if it hadn't been for the adverse impact of a reduced Q2 film slate, driven by last year's WGA and SAG-AFTRA strikes.

As was the case in 2023, the Group expects a significant H2 weighting to admissions in 2024.

Average Ticket Price and Food & Beverage Spend per Head

Spend per Head increased to £10.47 compared to £10.25 in 2023, a 2.1% increase. This was driven mainly by investment in new functionality to enable our guests to order food and beverage to their seats from mobile devices which has driven a higher proportion of second orders.

Paid-for Average Ticket Price increased to £11.76 compared to £11.49 in 2023, a 2.3% increase. This was pleasing given that four new venues opened between H1 2023 and the end of the period. With some exceptions, new venues open in lower pricing tiers, which can temporarily reduce average ticket price until those venues mature.

Outlook

We remain optimistic about the future. Performance in the first half of the year has been strong, with growth in admissions, revenue, EBITDA and market share, despite disruption from last year's well documented WGA and SAG-AFTRA strikes, and demonstrating the enduring appeal of the Everyman offer.

Having carefully evaluated our expansion opportunity, we are comfortable that continuing to scale at current levels - three new venues in 2024, and four in 2025 - will provide a robust increase in footprint. Whilst this level of openings will naturally reduce the rate of growth in 2025 from current market expectations, this allows the company to strengthen its balance sheet and reduce net debt moving forward. This will give us the scope and flexibility to take advantage of excellent pipeline opportunities in 2026 and beyond.

The impact of the strikes is now easing, and we are excited about the robust pipeline of content for the remainder of the year. Looking further ahead, we anticipate a return to a full, uninterrupted film slate in 2025. As the volume of content continues to improve, Everyman, with its distinctive, premium offering, remains uniquely positioned to benefit.

Alex Scrimgeour
Chief Executive
25 September 2024

Finance Director's Statement

*Adjusted EBITDA refers to Operating Profit adjusted for the removal of depreciation, amortisation, profit / loss on disposal of fixed assets, pe-opening expenses, lease termination costs, impairment charges and share-based payment expenses.

Revenue and operating profit

Group Revenue in H1 2024 was £46.9m (H1 2023: £38.3m). The increase was driven by higher admissions, which grew to 1.9m (H1 2023: 1.6m), as a result of a strong Q1 awards season and high-quality original releases such as Dune: Part Two and Bob Marley: One Love. This was compounded by the four new venues that opened in the second half of 2023 and first half of 2024.

Gross Profit Margin increased to 66.5% (H1 2023: 65.6%). This was as a result of a stronger film margin, mainly due to the mix of content, which skewed towards smaller awards titles that typically carry a higher margin than larger blockbuster releases. We also saw improvement in our Food & Beverage margin, owing both to the growth in spend per head, as well as strong cost control by our Procurement team.

Administrative Expenses increased to £33.2m (H1 2023: £27.0m). This was driven by the number of venues growing from 41 at the end of H1 2023 to 45 at the end of H1 2024, contributing to an increase in the Group's fixed cost base, depreciation, and associated pre-opening expenses. It is also worth noting that new venues in Salisbury, Northallerton and Plymouth opened during May and June 2023, and as a result did not have a significant impact on the Group's fixed cost base in the first half of last year.

The Group's largest cost increase was labour, a £2.6m increase vs. H1 2023, due to the aforementioned new openings, as well as a 9.8% increase in the National Living Wage driving pay increases across our teams.

Net finance costs

The Group's finance charge included £2.1m (H1 2023 £1.6m) representing  interest charges relating to the unwinding of the IFRS 16 lease liability during the period and £1.1m of bank interest (H1 2023: £1.0m). The increase is due predominantly due to the number of new venues opened in the intervening period.

Taxation

The Group's tax credit was £1.1m (H1 2023: Nil) and relates to the recognition of an increase in the Group's deferred tax asset as a result of further unrelieved carried forward taxable losses. The recognition of the deferred tax asset is supported by sufficient forecast future taxable profits.

Share based payments

The share-based payment expense for the period was £0.6m (H1 2023: £0.6m) reflecting share option incentives provided to the Group's management and employees.

Cash flows

Cash held at the end of the period was £2.2m (H1 2023: £1.7m).

Net cash generated in operating activities was £3.3m (H1 2023: £7.2m). The higher prior year balance was mainly driven by a £3.3m working capital movement relating to an increase in trade and other payables. This arose due to the high level of capital expenditure at the end of H1 2023, with three new venues opening during May and June 2023, as well as the timing of payments.

Net cash used in investing activities was £5.3m (H1 2023: £8.5m) and mainly represents spend on the new venue in Bury St Edmunds, which opened in February 2024, as well as initial payments for venues currently under construction in Cambridge and Stratford International

Net cash used in financing activities was £2.4m (H1 2023: £0.6m). The higher balance is predominantly driven fewer landlord contributions received during the period, as a result of the lower level of capital activity in the current year and the timing of receipts.

As a result of the above, the net cash outflow for the period was £4.5m (H1 2023: £2.0m outflow).

The Board does not recommend the payment of a dividend at this stage in the Group's development.

Net Debt

Net debt at the end of the period was £25.8m, mainly as a result of the timing of content, with the Group expecting a strong H2 weighting to the 2024 film slate. As a result, the Group is forecasting net debt and leverage at year end to be reduced from the current position.

Will Worsdell

Finance Director
25 September 2024

Consolidated statement of profit and loss and other comprehensive income for the period ended 27 June 2024 (unaudited)

Consolidated balance sheet at 27 June 2024 (unaudited)

Consolidated statement of changes in equity for the period ended 27 June 2024 (unaudited)

Consolidated cash flow statement for the period ended 27 June 2024 (unaudited)

Notes to the financial statements

In the 26-week period ended 27 June 2024, £0.2m Other Operating Income was received (H1 2023: £0.3m). This consisted mainly of landlord compensation payments.