TIDMPEL
RNS Number : 2279P
Paragon Entertainment Limited
30 August 2017
PARAGON ENTERTAINMENT LIMITED
Unaudited interim results for the six months ended 30 June
2017
Paragon Entertainment Limited (AIM: PEL), the AIM-listed
attractions design, production and fit-out business ("Paragon" or
"the Group"), is pleased to announce its unaudited interim results
for the six months ended 30 June 2017.
Highlights
- Revenue GBP8.0m (2016: GBP5.5m) representing a 45% increase on 2016.
- EBITDA increased to GBP0.6m representing a margin of 7.4% (2016: 5.1%).
- Gross Margin of GBP2.2m (27.2%) continues to improve (2016: GBP1.4m (25.8%)).
- Successful completion of projects including Madagascar, Kung
Fu Panda, Cloudy with a Chance of Meatballs and Hunger Games in
Dubai Parks & Resort, Cheshire and Manchester Fire Safety
Centres and a Pirates of the Caribbean refurbishment for Euro
Disney.
- Net debt of GBP877,000 as at 30 June 2017. Post period end a
debtor payment of GBP1.7M was received in early August 2017.
Financial Summary
Unaudited Unaudited Audited
Six months Six months Year to
to June to June December
2017 2016 2016
GBP000s GBP000s GBP000s
---------------------------- -------------------- ----------- ---------
Revenue 8,001 5,536 14,424
----------------------------- -------------------- ----------- ---------
Gross profit 2,174 1,429 3,762
----------------------------- -------------------- ----------- ---------
EBITDA (1) 595 282 1,188
----------------------------- -------------------- ----------- ---------
Underlying operating profit
(2) 584 106 1,924
----------------------------- -------------------- ----------- ---------
Profit for the year 331 106 311
----------------------------- -------------------- ----------- ---------
Cash balance (538) (246) 1,428
----------------------------- -------------------- ----------- ---------
Basic earnings per share 0.18 0.05 0.17
----------------------------- -------------------- ----------- ---------
Normalised earnings per
share (3) 0.18 0.12 0.48
----------------------------- -------------------- ----------- ---------
(1) EBITDA is defined as earnings before depreciation,
amortisation, impairment, interest, share based payments,
exceptional items and tax.
(2) Underlying operating profit is operating profit before
amortisation, impairment, share based payments and exceptional
items.
(3) Normalised earnings per share are earnings per share before
amortisation, impairment, share based payments and exceptional
items.
Mark Taylor, Chairman, commented:
"Paragon has again delivered a credible performance as we
continue to do what we say we will do. The hard work required to
achieve these results in spite of a volatile global environment
should not be underestimated and, on behalf of the board, I wish to
thank all our staff on the ground and in our workshops for the
wonderful, world-class creative work which they produce."
The information communicated within this announcement is deemed
to constitute inside information as stipulated under the Market
Abuse Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
For further information:
Paragon Entertainment Limited
Mark Taylor (Chairman)
finnCap Ltd 01904 680020
Julian Blunt / Simon Hicks
(corporate finance)
Alice Lane (corporate broking) 020 7220 0500
Notes to Editors:
Paragon Entertainment Limited (AIM: PEL) is an award-winning
provider of attraction services from initial design production and
consulting through to the fit out and installation of themed
attractions, heritage exhibits, museums, aquariums and water parks,
inter alia.
Paragon Entertainment is the holding company for Paragon
Creative Limited
The Group's projects have included:
- The build of Rolling Stones Exhibitionism at the Saatchi Gallery, London;
- The design and build of Kidzania, London;
- The design and build of galleries at the Olympic Museum for
the IOC in Lausanne, Switzerland;
- The design and build of the galleries at The National Museum of Kazakhstan;
- The design and build of Titanic Belfast;
- The thematic build of the Wallace and Gromit ride at Blackpool Pleasure Beach
The Group listed on AIM in 2011.
Further information can be found at:
http://www.paragonent.com/
REPORT OF THE CHIEF EXECUTIVE OFFICER
Corporate Update
We have continued through 2017 developing our business with our
core skill set which is the 'design & build' of attractions.
The focus on our "3P" commercial strategy also continues to
develop:
- Projects: Our traditional business of 'design & build.'
- Partnerships: We continue to develop stronger relationships
with key partners like Hamleys, focusing on their global
requirements for 'design & build.'
- Products: This segment is a small but growing part of our
business and we are already rolling out FECs (Family Entertainment
Centres) themed with quality third party brands for third party
operators.
Management update
The first half of 2017 has seen our turnover increase by 45% to
GBP8m (H1 2016: GBP5.5m). This has resulted in an increase in
EBITDA to GBP0.6m (H1 2016: GBP0.3m). Both key performance
indicators are in line with our expectations and we remain on
target to achieve our full year expectations.
The second half of 2017 will be focused on:
- Delivering existing projects, mainly in the Middle East.
- Continued investment in manufacturing capability.
Major Projects
We continue to see considerable demand for our talents. Our
current committed pipeline provides good forward visibility, both
supporting our performance expectations and improving our quality
of earnings. This position, coupled with the continued development
of the relationships we have with key business partners, means we
are confident of achieving our growth targets.
In 2017, we worked on several UK-originated projects. These
include:
- Hamleys Warsaw and South Africa. Our relationship with Hamleys is progressing well.
- GMFRS and Cheshire Fire Safety Centre. We continue to explore
and work on Safety Centres across the UK.
- SAASSC and SABIC. Two major Museum projects in Saudi Arabia and Kuwait.
- DXBE (Dubai Parks) including: Madagascar Mad Pursuit, Kung Fu
Panda, Cloudy with a Chance of Meatballs and Hunger Games.
- Majid Al Futtaim Little Explorers Projects (via PCME Interiors):
- Little Explorers: Mirdif Dubai, Riyadh Park and Mall of Egypt
Cairo.
- Max the Robot Riyadh Park.
- Astro Blasters in Kuwait and Bahrain.
Products
Products has developed significantly over the past 6 months with
the recruitment of a dedicated team. This part of our business,
although currently in its infancy, will become a steady contributor
to our future growth. We are currently developing Products for JCB,
DHX, Rubiks and Ninja Warriors.
We are seeing strong levels of opportunity in the market for
2018, however the market has become increasingly price sensitive
and Brexit remains an uncertain challenge.
Financial Performance
As discussed above, the Group is in line to achieve its 2017
targets. As at 30 June 2017, the Group had net debt of GBP877,000.
This however did not include a debtor payment received in early
August 2017 of GBP1,700,000. The Board is therefore confident that
the Group's cash position is in line with our expectations. The
Group already has confirmation from HSBC that it will extend its
banking facilities until July 2018.
John Dobson
Chief Executive Officer
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHSED 30 JUNE 2017
Six months Six months Year to
to June to June December
2017 2016 2016
Note GBP000s GBP000s GBP000s
=================================== ======= ============= =========== ==========
Revenue 3 8,001 5,536 14,424
Cost of sales (5,827) (4,107) (10,662)
=================================== ======= ============= =========== ==========
Gross Profit 2,174 1,429 3,762
Administrative and other
operating expenses (1,726) (1,333) (3,363)
=================================== ======= ============= =========== ==========
Analysed as:
EBITDA 3 595 282 1,188
Share based payment charges - - (8)
Exceptional and other items (11) (10) (45)
Amortisation of acquired
intangibles - (101) (197)
Impairment of goodwill - - (314)
Depreciation and other
amortisation (136) (75) (225)
=================================== ======= ============= =========== ==========
Operating profit from operations 448 95 399
Finance costs (10) (9) (25)
=================================== ======= ============= =========== ==========
Profit before income tax 438 87 374
Income tax (charge)/credit (107) 20 (63)
----------------------------------- ------- ------------- ----------- ----------
Profit from continuing
operations 331 106 311
Total comprehensive income
attributable to the owners
of the parent 331 106 311
=================================== ======= ============= =========== ==========
Earnings per share attributable to the equity holders of the
Company during the year (expressed in pence per share)
Basic earnings per share 4 0.18 0.05 0.17
Diluted earnings per
share 4 0.18 0.05 0.17
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2017
June 2017 June 2016 December
2016
Note GBP000s GBP000s GBP000s
=============================== ===== ========== ========== =========
Non-current assets
Intangible assets 1,282 1,692 1,282
Property, plant and
equipment 1,192 1,115 1,183
Deferred income tax
asset 55 126 55
=============================== ===== ========== ========== =========
Total non-current assets 2,529 2,932 2,520
=============================== ===== ========== ========== =========
Current assets
Inventories 32 35 32
Trade and other receivables 4,785 3,630 2,710
Cash and cash equivalents 5 - 29 1,428
=============================== ===== ========== ========== =========
Total current assets 4,817 3,694 4,170
=============================== ===== ========== ========== =========
Total assets 7,346 6,626 6,690
=============================== ===== ========== ========== =========
Current liabilities
Trade and other payables 1,686 1,205 1,569
Deferred income 735 1,136 838
Borrowings 6 764 543 461
Total current liabilities 3,185 2,884 2,868
=============================== ===== ========== ========== =========
Non-current liabilities
Borrowings 6 113 49 118
Deferred income tax
liabilities 65 192 52
=============================== ===== ========== ========== =========
Total non-current liabilities 178 241 170
=============================== ===== ========== ========== =========
Total liabilities 3,363 3,125 3,038
=============================== ===== ========== ========== =========
Equity attributable
to the owners of the
parent
Share capital 188 188 188
Share premium 9,638 9,638 9,638
Retained earnings (5,843) (6,324) (6,174)
=============================== ===== ========== ========== =========
Total equity 3,983 3,502 3,652
=============================== ===== ========== ========== =========
Total equity and liabilities 7,346 6,626 6,690
=============================== ===== ========== ========== =========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHSED 30 JUNE 2017
Share Share Accumulated Total
capital premium Losses
GBP000s GBP000s GBP000s GBP000s
Balance at 1 January
2016 188 9,638 (6,430) 3,396
Comprehensive income
Profit for the period - - 106 106
=============================== ========= ========= ============ =========
Total comprehensive
income - - 106 106
=============================== ========= ========= ============ =========
Transactions with - - - -
owners
Equity-settled share - - - -
based payment transactions
Transactions with - - - -
owners
============================= ========= ========= ============ =========
Balance at 30 June
2016 188 9,638 (6,324) 3,502
=============================== ========= ========= ============ =========
Balance at 1 January
2017 188 9,638 (6,174) 3,652
Comprehensive income
Profit for the period - - 331 331
=============================== ========= ========= ============ =========
Total comprehensive
income - - 331 331
=============================== ========= ========= ============ =========
Transactions with - - - -
owners
Equity-settled share - - - -
based payment transactions
Transactions with - - - -
owners
============================= ========= ========= ============ =========
Balance at 30 June
2017 188 9,638 (5,843) 3,983
=============================== ========= ========= ============ =========
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHSED 30 JUNE 2017
Six months
to June Six months Year
Note 2017 to June to December
GBP000s 2016 2016
GBP000s GBP000s
=================================== ======= ============= ============= ==============
Cash flows from operating
activities
Net cash (used in)/generated
by operating activities before
interest 7 (1,571) 86 1,769
Interest paid (10) (9) (25)
Net cash (used in)/generated
by operating activities (1,581) 77 1,744
=================================== ======= ============= ============= ==============
Cash flows from investing
activities
Purchase of property, plant
and equipment (146) (177) (231)
Net cash used in investing
activities (146) (177) (231)
=================================== ======= ============= ============= ==============
Cash flows from financing
activities
Proceeds from borrowings - - -
Repayments of borrowings (54) (36) (88)
=================================== ======= ============= ============= ==============
Net cash used in financing
activities (54) (36) (88)
=================================== ======= ============= ============= ==============
Net decrease in cash and
cash equivalents (1,781) (64) 1,425
Cash and cash equivalents
and bank overdrafts at beginning
of period 1,243 (182) (182)
=================================== ======= ============= ============= ==============
Cash and cash equivalents
at end of period 5 (538) (246) 1,243
=================================== ======= ============= ============= ==============
Notes to the Condensed Set of Financial Statements
1. General information
Paragon Entertainment Limited is a limited company incorporated
in the Cayman Islands, company registration number MC-234241, and
domiciled in the UK. The address of its registered office is PO Box
309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. The
company has its primary listing on the Alternative Investment
Market (AIM) on the London Stock Exchange. The company is
registered with Companies House in the United Kingdom as a UK
Establishment of an overseas company, company number FC030890.
The condensed consolidated interim financial information,
including the financial information for the year ended 31 December
2016 set out in this interim financial information does not
comprise statutory accounts within the meaning of section 434 of
the Companies Act 2006. The information for the period ended 30
June 2017 is derived from the unaudited non-statutory accounts for
that financial period.
The non-statutory accounts for the year ended 31 December 2016
were approved on 5 June 2017 and shall be delivered to the
Registrar of Companies. The Auditor's report on those accounts was
unqualified and did not draw attention to any matters by way of
emphasis of matter.
This condensed consolidated interim financial information is
unaudited and was approved for issue by the Board on 30 August
2017.
Basis of preparation
The condensed consolidated interim financial information for the
period ended 30 June 2017 has been prepared in accordance with
applicable accounting standards.
The condensed consolidated interim financial information should
be read in conjunction with the annual financial statements for the
period ended 31 December 2016 which have been prepared in
accordance with International Financial Reporting Standards
("IFRS") as adopted by the European Union.
Going concern
The financial information is prepared on a going concern basis
and, based on the current level of sales and workshop activity, the
directors are confident that the forecasts are achievable, and the
Group will operate within the banking facilities. The bank has
indicated that they will renew the facilities to the Group for
another year beyond the date on which this report was signed.
2. Accounting policies
The principal accounting policies of the Group are consistent
with those set out in the Group's 2016 Annual Report and
Accounts.
A number of new and amended standards have become effective
since the beginning of the previous financial year. None of the new
standards and amendments are expected to materially affect the
Group.
3. Segmental analysis
Management currently identifies the Group as having two active
operating segments ("Design and Build" and "Licensing and
Distribution"), and one historic operating segment that has been
closed (Attractions). These operating segments are monitored by the
Group's Chief Operating Decision Maker and used to make strategic
decisions on the basis of adjusted segment operating results. The
"Head Office" segment comprises the corporate activities which are
unrelated to the individual operating segments and are only
incidental to the activities of the Group as a whole.
Performance is measured based on EBITDA (as stated before share
based payments and exceptional items and head office recharges) as
management believes that such information is the most relevant in
evaluating the results of certain segments relative to other
entities that operate within these industries.
Inter-segment pricing is determined on an arm's length basis.
The information provided to the Board comprises the Statement of
comprehensive income for each segment, the Statement of financial
position and the Statement of cash flows and other financial and
non-financial information used to manage the business on a
consolidated basis.
Segment revenues comprise revenues made to external customers
and made between segments.
Segment information for the reporting periods is as follows:
Six months to 30 June 2017
Head
Projects Products Office Total
GBP000s GBP000s GBP000s GBP000s
Revenue
* External customers 7,543 458 - 8,001
- - - -
* From other segments
---------------------------- --------- --------- --------- ---------
Segment revenues 7,543 458 - 8,001
Segment EBITDA 548 47 - 595
============================ ========= ========= ========= =========
Six months to 30 June 2016
Head
Projects Products Office Total
GBP000s GBP000s GBP000s GBP000s
Revenue
* External customers 5,495 41 - 5,536
* From other segments - - 255 255
---------------------------- --------- --------- --------- ---------
Segment revenues 5,495 41 255 5,791
Segment EBITDA 163 30 89 282
============================ ========= ========= ========= =========
4. Earnings per share
Earnings per share have been calculated by dividing the profit
or loss attributable to shareholders by the weighted average number
of ordinary shares in issue during the six-month period/year.
The calculations of basic and diluted loss per share are:
Six months Six months Year to
to June to June December
2017 2016 2016
GBP000s GBP000s GBP000s
==================================== =========== =========== ==========
Profit for the period attributable
to shareholders 331 106 311
==================================== =========== =========== ==========
Weighted average number of ordinary shares in issue:
June June December
2017 2016 2016
Number Number Number
========= ============ ============ ============
Basic 187,680,550 187,680,550 187,680,550
========= ============ ============ ============
Diluted 187,680,550 188,240,221 187,680,550
========= ============ ============ ============
There are 2.5 million employee EMI options and further
Management Preference Options that vary in number and have been
excluded in the calculation of diluted EPS. The total number of
options and overview of the schemes is provided in note 8 of the
published Annual Report and Accounts for the year ended 31 December
2016.
Earnings per share: June June December
2017 2016 2016
Pence Pence Pence
per share per share per share
================================= =========== =========== ===========
Earnings per share attributable
to the equity holders of the
Company
* Basic and diluted 0.18 0.05 0.17
================================== =========== =========== ===========
Normalised earnings per share
Normalised earnings per share has been calculated by dividing
the profit or loss attributable to shareholders before
amortisation, impairment of goodwill, share based payment charges
and exceptional items by the weighted average number of ordinary
shares in issue during the period. The numbers used in calculating
the normalised basic earnings per share are reconciled below:
Six months Six months Year to
to June to June December
2017 2016 2016
GBP000s GBP000s GBP000s
============================== =========== =========== ==========
Profit before income
tax 438 87 374
Amortisation - 101 197
Impairment of goodwill - - 314
Share based payment
charges - - 8
Exceptional items 11 10 45
============================== =========== =========== ==========
Adjusted profit attributable
to shareholders 449 198 938
Current year tax (charge)/
credit excluding tax
effect of above items (109) 20 (39)
============================== =========== =========== ==========
Normalised earnings 340 218 899
============================== =========== =========== ==========
Normalised earnings
per share 0.18 0.12 0.48
============================== =========== =========== ==========
5. Cash and cash equivalents
Cash and cash equivalents in the statement of financial position
comprise the following:
June June December
2017 2016 2016
GBP000s GBP000s GBP000s
====================================== ========== ========= =========
Cash at bank - 29 1,428
====================================== ========== ========= =========
Cash and cash equivalents (excluding
overdrafts) - 29 1,428
====================================== ========== ========= =========
Cash and cash equivalents include the following for the purposes
of the statement of cash flows:
June June December
2017 2016 2016
GBP000s GBP000s GBP000s
====================================== ========= ========= =========
Cash and cash equivalents (excluding
overdrafts) - 29 1,428
Bank overdrafts (538) (275) (185)
====================================== ========= ========= =========
Cash and cash equivalents (538) (246) 1,243
====================================== ========= ========= =========
6. Borrowings
June June December
2017 2016 2016
GBP000s GBP000s GBP000s
=========================== ========= ========= =========
Current liabilities
Bank overdraft 538 275 185
Bank loans 193 229 211
Hire purchase liabilities 33 39 65
=========================== ========= ========= =========
764 543 461
=========================== ========= ========= =========
Non-current liabilities
Hire purchase liabilities 113 49 118
=========================== ========= ========= =========
113 49 118
=========================== ========= ========= =========
Total borrowings 877 592 579
=========================== ========= ========= =========
7. Cash (used in)/generated by operations
Year to
Six months Six months December
to June to June 2016
2017 2016 GBP000s
GBP000s GBP000s
=================================== ============= ============= ==========
Profit before income tax 438 87 374
Adjustments for:
- finance costs 10 9 25
- depreciation 136 75 225
- profit on the sale of property,
plant and equipment - - 35
- amortisation and impairment
of intangibles - 101 511
- share based payments - - 8
- inventories - - 4
- trade and other receivables (2,075) (455) 466
- trade and other payables
and deferred income (80) 269 121
=================================== ============= ============= ==========
Cash (used in)/generated by
operations (1,571) 86 1,769
=================================== ============= ============= ==========
This information is provided by RNS
The company news service from the London Stock Exchange
END
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