TIDMSAL
RNS Number : 8006A
SpaceandPeople PLC
04 June 2021
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Company's obligations under Article 17 of MAR.
SpaceandPeople plc
("SpaceandPeople" or the "Group")
Final Results for the year ended 31 December 2020
SpaceandPeople (AIM:SAL) the retail, promotional and brand
experience specialist, is pleased to announce its final results for
the year ended 31 December 2019.
Financial Highlights
-- Revenue of GBP2.8 million (2019: restated GBP7.7 million)
-- Operating loss before non-recurring costs of GBP2.1 million
(2019: restated profit of GBP0.1 million)
-- Basic Earnings per Share before non-recurring costs and
discontinued operation loss of 7.2p (2019: restated profit of
0.3p)
-- Borrowings net of cash at year end of GBP0.9 million with
additional available facilities of GBP1.3 million (2019: net cash
of GBP0.5 million)
Operational Highlights
-- Nancy Cullen appointed as Chief Executive Officer
-- Extended periods of lockdown in the UK and Germany had a
fundamental impact on trading during the year
-- GBP1.0 million CBILS term loan obtained in the first half of 2020
-- Significant new business agreements won for former Intu venues
Post Year End Highlights
-- Further lockdowns in the UK and Germany continuing to have an impact on trading
-- Long term refinancing of business secured using additional government CBILS lending
-- Extension of major Landsec agreement in the UK
-- Improved new five-year agreement with ECE in Germany
Chairman's Statement
There has not been a more turbulent period for the markets in
which we operate than the one we have faced since March 2020 and
this is reflected in the financial performance of the business in
the year ended 31 December 2020 and continues into the 2021
financial year. It is through the hard work and resilience of all
of our staff and management that SpaceandPeople has not only
survived these difficult market conditions, but has actually built
a stronger base as we hopefully head into a period of more
stability and economic recovery.
The hard decisions have been made and actions taken to ensure
costs have been aligned to new operating levels and cash conserved.
SpaceandPeople India has been exited and a significant non-cash
write down of Retail Profile's goodwill made to reflect the new
environment.
However, new contract wins in the UK, particularly of many
former Intu venues and the recently announced extension and
expansion of the ECE contract in Germany, together with the
successful re-financing of the Group's borrowing facilities,
provide confidence in the future of the business.
These developments and the financial performance of the Group
are covered in more detail in Nancy Cullen's CEO Report and Gregor
Dunlay's Operating and Financial Review.
This is Nancy's first report as CEO and I would like to take
this opportunity to record the Board's appreciation of her
predecessor, Matthew Bending. Matthew made an immense contribution
to the Group over 20 years and his dedication and passion helped
build the business including its expansion into Germany. We wish
him well for the future.
There were two other Board changes in the year. Graham Bird
joined as a non-executive director and his experience has been very
useful through the Covid-19 pandemic. Andrew Keiller stepped up to
the Board and was promoted to Chief Operating Officer during the
year and is a key member of the senior executive management team
alongside Nancy and Gregor.
Finally, on behalf of my Board colleagues, I would like to thank
all of our staff and management across the business for their hard
work and resilience in 2020 and their continued commitment to the
Group in the year ahead.
George Watt
Chairman
3 June 2021
Chief Executive Officer's Review
Introduction
The events of 2020, caused by Covid-19, had a profound effect on
the world and our business was impacted significantly by the
pandemic and the associated periods of lockdown across the
countries in which we operate. Since I wrote my report in the
Interim Financial Statements, lockdowns have continued to be a huge
impediment to our ability to carry out our business. It is fair to
say that steering the Group through this is not how I would have
ideally liked to begin as CEO, however, it has been extremely
encouraging to see how well our staff, clients, business partners
and promoters have responded to the unprecedented challenges and I
am extremely grateful for their ongoing help and support.
As we have previously discussed, since the start of the Covid-19
pandemic and the first announcement of retail closures in March
2020 there has been a major effect on our business, the
consequences of which were felt throughout the year, even during
periods when restrictions were eased and business was back up and
running. Buyer uncertainty regarding future lockdowns and differing
rules by nation led to a patchy and inconsistent return to business
during the year. Whenever lockdown was eased, trading in centres
was difficult and limited by social distancing. The effects of the
pandemic were felt across all our venues in both the UK and
Germany.
Throughout, the safety and security of our staff has been
paramount and we quickly and successfully managed the transition
from being an office-based company to working from home with the
appropriate support for staff in place. Over this period, we
adopted a three-phase strategy "Survive, Revive, Thrive" and I am
delighted that we are now coming out of the Revive phase and
looking to capitalise on an evolving market with plenty of
opportunities for growth. We have refocused our business to ensure
that our clients remain absolutely at the centre of everything we
do whilst keeping the Group strong, focused, relevant, and
secure.
Reorganisation
As previously reported in the 2019 Annual Report and 2020
Interim Report, SpaceandPeople took early and decisive action to
protect against the inevitable cashflow issues caused by the
pandemic. The key elements of this were:
-- Secure appropriate funding - In April 2020, we secured a GBP1
million CBILS term loan through our principal banking partner in
addition to our existing lending facilities. This allowed the
business to plan how to trade through and plan for the emergence
from the initial periods of lockdown. As the third period of
lockdown loomed, we worked with our lenders again to secure an
additional GBP0.5 million of lending and refinanced our previous
facilities that were due to mature in 2021 on a more long-term
basis. This has ensured that we continue to have good cash headroom
in the business and have been able to meet our liabilities as they
become due;
-- Utilise government support - In both the UK and Germany, we
have used the appropriate government salary support schemes
wherever possible to help protect employment and retain the
required members of staff at that time. This support has continued
into 2021, although we have now brought the majority of staff back
into the business;
-- Cost reductions - Along with additional funding and support,
we still needed to review our structure and overheads from the
perspective of what was required, what could be supported and what
the likely future scale of the business would be. It was clear to
us that when we emerged from the pandemic, the size and focus of
the business would be very different from before. A targeted number
of roles unfortunately had to be made redundant, overheads such as
office and travel costs were reduced significantly and detailed
consideration was given to simplifying, automating and
rationalising processes throughout the business. This has led to
annualised cost savings of over GBP1.0 million that will remain
even once the business grows again;
-- Cash management - Throughout 2020 and in to 2021, the
business ensured that strict cash management was implemented. There
was a moratorium on hiring new staff, capital expenditure and
discretionary expenditure. Offers of extended payment terms were
also taken up where appropriate and targeted revenue collection was
put in place.
Overall, these actions have played a huge part in securing the
current viability of our business without jeopardising the
future.
New business opportunities
Although business was extremely slow during the closure of
non-essential retail, there were plenty of opportunities to win new
clients and renew agreements with existing clients. We were
delighted, during 2020 and early 2021, to announce that we had
successfully entered into new agreements with significant venues
including the Metrocentre, Lakeside, Braehead and Victoria
Nottingham as well as over 900 regional railway stations (including
Thameslink, Southern, Northern, Gatwick Express, Merseyrail and
Greater Anglia) to complement our existing major Network Rail
portfolio.
We also successfully secured an extension to our contract with
Landsec until 2026 and we won several other venues such as The
Potteries, Stoke on Trent, Watford Shopping Centre (now Atria) and
Chapelfield, Norwich (now Chantry Place). As a business we now have
an unparalleled network of mall spaces in premium venues which we
exclusively manage.
Significantly, we have recently announced a further agreement
with ECE, our major German client, which secures our retail
business in Germany for the next 5 years. I am very grateful to our
two German managers Stefan Zwiechowski and Issam Chalghoumi for
their diligent work in securing this contract with Germany's most
prestigious property manager/owner. The executive team at
SpaceandPeople will continue to work closely with our German
colleagues to ensure that this business maximises the opportunity
of this new agreement.
SpaceandPeople India
Over the last few years management has been reviewing the core
proposition of the Group. Over time, the direction of the Indian
subsidiary has diverged from our specialisation in
commercialisation. This had become a distraction from our main
focus and our reluctance to follow the direction local management
were wanting to take was inhibiting their ability to secure the
viability and growth of that business. As a result, we took the
decision in early 2021 to dispose of our full shareholding in this
business. As the shareholding was disposed of for a nominal amount,
the carrying value of SpaceandPeople India has been provided for in
full as at the year end. On an emotional level, this was a very
difficult decision to make and I would like to take the opportunity
to thank the Managing Director, Paresh Khivesara, and his team for
their enthusiasm and hard work in establishing SpaceandPeople in
India and I wish them the very best of luck moving forward.
Outlook
As a result of all the above, we emerge from this difficult and
unprecedented year focussed, motivated and with a significantly
increased portfolio of venues. We have the prospect of increasing
our sales force over the coming months as business returns to fully
take advantage of revenue opportunities. We recognise the strategic
importance to our property partners of the activity which we
provide which brings vitality, individuality and income to their
venues and we are intent on bringing business back up and beyond
previous year levels as soon as possible using our significantly
enhanced venue portfolio as the lever for this.
Our business has evolved over the years and now holds increasing
relevance as the drive towards tactical and short-term physical
retailing is seen as an important aspect of brands' omnichannel
retail strategies, providing a seamless retail experiences to their
customers. Our ability to secure spaces in high footfall venues, to
provide kiosks in these spaces and to assist retailers to activate
physical retailing whenever they choose and with minimal
administration puts us in a unique position to support nascent,
online brands and entrepreneurs moving forward. We have proved over
the years that mall retail customers can become long term operators
and ultimately, we aim for some of the brands that we book to
become the retail unit tenants of the future in our partner
venues.
We are excited about the prospect of a world where pop
up/short-term retail and brand vibrancy are seen as critical
features of the property mix. We have a series of new initiatives
and products designed to support new retail offers and we are
looking to streamline sales with our systems including the ability
to book our spaces online via a new booking portal.
Summary
This is the first full year CEO review that I have prepared for
you and, as you can see, it has been an exceptionally challenging
time for the business. I can report that we are now emerging from
the last 12 months of stasis with a team in place that is focussed,
motivated and experienced. We also have a vastly strengthened
portfolio in the UK and an improved long-term contract with ECE in
Germany.
In the UK, with our venues all now open and trading we are
seeing business levels increasing on a daily basis and we are
cautiously optimistic about the prospects for the next 12 months on
the basis that promoter and retailer demand as well as consumer
behaviour returns as expected. As I write this, non-essential
retail remains closed in Germany, however, we have a pipeline of
occupiers looking to return to the malls as soon as they reopen and
there is some interesting cross fertilisation of retailers
occurring between the UK and Germany.
I would like to take this opportunity to pass a very big thank
you to all our staff across both countries for their incredible
resilience, adaptability and willingness to work across new sectors
and in new ways. Without their stoicism and hard work, we would not
be in the positive position we currently are.
As a result of our experiences and successes over the last 12
months we are excited about the prospects for 2021 and beyond,
focused on success both in the UK and Germany and committed to
returning SpaceandPeople to profitability as quickly and
efficiently as possible.
Nancy Cullen
Chief Executive Officer
3 June 2021
Operating and Financial Review
Due to the unprecedented challenges the Group faced during 2020
as a result of the Covid-19 pandemic, the focus of the business was
on ensuring that it had sufficient resources to survive the
enforced periods of lockdown. During these periods, the business
was unable to trade and used the Job Retention Scheme ("JRS") in
the UK, the equivalent scheme in Germany and the Coronavirus
Business Interruption Loan Scheme to minimise cash outflow and
secure sufficient working capital. The Group traded wherever
possible during the periods when restrictions were eased, however,
the associated uncertainty had an enormous impact on the desire and
ability of promoters and retailers to trade with us during this
time. The principal focus of the Group remains the concentration of
efforts on our core business units of promotions, Retail
Merchandising Units ("RMUs") and Mobile Promotions Kiosks ("MPKs")
in both the UK and Germany.
Group revenue was 64% lower than in the previous year, due to
the unavailability of venues for bookings for the majority of
2020.
Efforts to reduce costs resulted in a 65% reduction in UK cost
of sales where venues remained closed while German cost of sales
remained in line with revenue as trading resumed for periods of the
year. Group administrative expenses also fell by 12% compared with
the previous year.
As a result, the Group generated an operating loss before
non-recurring costs of GBP2.1 million compared with a profit of
GBP0.1 million in 2019.
The Group also had non-recurring charges during the year of
GBP1.4 million. These were in relation to a GBP1.1m impairment in
the carrying value of goodwill relating to the UK Retail sub-group
and costs incurred in relation to the reduction in the number of
staff in the UK and Germany of GBP0.3 million. With the exception
of costs in relation to the reduction in the number of staff, these
costs were non-cash items.
Revenue
Revenue generated in 2020 was GBP2.8 million, which was GBP4.9
million (64%) lower than in the previous year. Due to a change in
the revenue recognition policy, explained in note 3 to the
financial statements, this revenue amount of GBP2.8 million
includes GBP0.6 million of revenue in relation to bookings that
were taken in prior years, but were due to take place in 2020.
Of the GBP0.6 million included in 2020 revenue due to the change
in policy, GBP0.5 million was subsequently cancelled and credited
due to unavailability of venues due to lockdown periods during the
year. Therefore, only GBP0.1 million of the revenue generated in
2020 related to bookings brought forward as a result of the change
in policy.
UK promotional revenue fell by 77% to GBP0.8 million (including
the net GBP0.1 million due to the change in revenue recognition
policy less subsequent cancellations and credits) compared with
2019. This fall was entirely as a result of the lockdowns and
restrictions we faced as a result of the Covid-19 pandemic. UK
retail revenue fell by 67% to GBP0.9 million in 2020 for the same
reason. Due to lockdowns, the utilisation of RMUs in operation in
the UK fell by 59% and the availability of MPKs fell by 61%.
Revenue in the German retail division increased by 5% despite
the extensive lockdowns as a result of a 13% increase in the
average number of RMUs in operation during the year to 60 RMUs
(2019: 53 RMUs). This was due to the renewal of the agreement with
ECE in 2019, for a significantly increased number of RMUs during
2020.
German promotional revenue decreased by 85% compared with the
previous year as the remaining long-term bookings came to an end.
It is not anticipated that this division will generate any
significant new business for the foreseeable future.
Administrative Expenses
The focus on driving efficiency in the business through reducing
administrative expenses continued in 2020. The 12% reduction of
GBP0.6 million followed a GBP0.4 million (8%) reduction in the
previous year. Government support in both the UK and Germany to
support salaries during 2020 of GBP0.6 million is disclosed within
other operating income.
The average number of people employed in the business fell by 12
to 68 in 2020. This was primarily due to a reduction in the number
of telesales and commercial staff from 41 to 30, as a result of the
decision to reduce headcount during the summer of 2020.
Losses
The operating loss before non-recurring costs was GBP2.1 million
(2019: profit of GBP0.1 million).
Basic Earnings per Share ("EPS") fell to (17.2)p (2019: positive
0.3p). Fully diluted EPS fell to (17.2)p (2019: positive 0.3p).
Basic EPS is calculated as profit after tax and attributable to the
owners of the Company divided by the weighted average number of
shares in issue during the year which was 19,519,563 (2019:
19,519,563).
Basic EPS excluding non-recurring costs and discontinued
operations fell to (7.2)p (2019: positive 0.3p).
Fully diluted EPS excluding non-recurring costs and discontinued
operations fell to (7.2)p (2019: positive 0.3p).
Fully diluted EPS also takes into account the number of shares
that would be issued on the exercise of outstanding share options.
The weighted average number of shares used to calculate the diluted
EPS was 21,053,117 (2019: 20,990,883).
Cash Flow
The Group cash outflow from operations was GBP1.2 million (2019:
inflow of GBP0.2 million). This was due to EBITDA being a loss of
GBP2.5 million and there being an offsetting movement of GBP1.3
million in working capital. As at the end of 2020, the Group had
drawn down GBP1.75 million of its banking facilities (2019: GBP0.75
million). With the gross cash position being GBP0.4 million lower
at the end of 2020 than 2019 at GBP0.8 million (2019: GBP1.2
million), this resulted in borrowings net of cash being GBP0.9
million (2019: net cash asset of GBP0.5 million).
Gregor Dunlay
Chief Financial Officer
3 June 2021
Consolidated Statement of Comprehensive Income
For the 12 months ended 31 December 2020
Notes
12 months 12 months
to to
31 December 31 December
'20 '19
as restated
GBP'000 GBP'000
Continuing Operations
Revenue 4 2,813 7,655
Cost of sales 4 (1,417) (2,865)
Gross profit 1,396 4,790
Administration expenses (4,267) (4,838)
Other operating income 5 739 175
Operating (loss) / profit before
non-recurring costs (2,132) 127
Non-recurring charges 8 (1,442) -
Operating (loss) / profit (3,574) 127
Finance costs 9 (27) (23)
(Loss) / profit before taxation (3,601) 104
------------ -------------
Taxation 10 519 (21)
(Loss) / profit after taxation (3,082) 83
-------- ---------
Loss from discontinued operation 12 (512) (41)
(Loss) / profit for the period (3,594) 42
Other comprehensive income
Foreign exchange differences on translation
of foreign operations (30) (21)
Total comprehensive income for the
period (3,624) 21
-------- ---------
(Loss) / profit for the period attributable
to
Owners of the Company (3,355) 60
Non-controlling interests (239) (18)
-------- ---------
(3,594) 42
-------- ---------
Total comprehensive income for the
period attributable to
Owners of the Company (3,385) 39
Non-controlling interests (239) (18)
-------- ---------
(3,624) 21
-------- ---------
(Loss) / earnings per share 26
Basic - before non-recurring charges
and discontinued operation (7.2)p 0.3p
Basic - after non-recurring charges
and discontinued operation (17.2)p 0.3p
Diluted - before non-recurring charges
and discontinued operation (7.2)p 0.3p
Diluted - after non-recurring charges
and discontinued operation (17.2)p 0.3p
Consolidated Statement of Financial Position
At 31 December 2020
Notes 31 December '20 31 December '19
as restated
GBP'000 GBP'000
Assets
Non-current assets:
Goodwill 14 6,881 7,981
Other intangible assets 15 - -
Property, plant & equipment 16 1,028 894
Deferred tax asset 160 -
8,069 8,875
Current assets:
Trade & other receivables 17 1,990 3,428
Current tax receivable 176 -
Deferred tax asset 18 47 3
Cash & cash equivalents 19 839 1,227
---------------- ----------------
3,052 4,658
Total assets 11,121 13,533
---------------- ----------------
Liabilities
Current liabilities:
Trade & other payables 20 4,222 4,231
Borrowings repayable within
one year 21 972 -
Current tax payable 20 - 82
5,194 4,313
Non-current liabilities:
Lease liabilities 22 464 160
Other borrowings 21 778 750
1,242 910
Total liabilities 6,436 5,223
---------------- ----------------
Net assets 4,685 8,310
---------------- ----------------
Equity
Share capital 24 195 195
Share premium 4,868 4,868
Special reserve 233 233
Retained earnings (587) 2,799
Equity attributable to
owners of the 4,709 8,095
Company
Non-controlling interest (24) 215
---------------- ----------------
Total equity 4,685 8,310
---------------- ----------------
The financial statements were approved by the Board of Directors
and authorised for issue on 3 June 2021.
Signed on behalf of the Board of Directors by:
Nancy Cullen - Director
Consolidated Statement of Cash Flows
For the 12 months ended 31 December 2020
Notes 12 months to 12 months to
31 December '20 31 December '19
as restated
GBP'000 GBP'000
Cash flows from operating
activities
Cash generated from operations (1,185) 252
Interest received - discontinued
operation 12 6 4
Interest paid 9 (27) (23)
Taxation 57 (262)
Net cash outflow from
operating (1,149) (29)
activities
---------------- ----------------
Cash flows from investing
activities
Purchase of intangible
assets 15 - (1)
Purchase of property,
plant & equipment 16 (32) (47)
Net cash outflow from
investing (32) (48)
activities
---------------- ----------------
Cash flows from financing
activities
Bank facility drawn 1,000 750
Payment of lease obligations (207) (191)
Dividends paid 13 - (98)
---------------- ----------------
Net cash inflow from 793 461
financing activities
---------------- ----------------
(Decrease) / increase
in cash and cash equivalents (388) 384
Cash and cash equivalents
at beginning of 1,227 843
Period
---------------- ----------------
Cash and cash equivalents
at end of 19 839 1,227
period
---------------- ----------------
Reconciliation of operating
profit to net
cash flow from operating
activities
Operating (loss) / profit (4,092) 82
Write off of goodwill 14 1,100 -
Amortisation of intangible
assets 15 - 5
Depreciation of property,
plant & 16 326 551
Equipment
Effect of foreign exchange
rate moves (33) (13)
Decrease in receivables 1,438 133
Decrease in payables 76 (506)
-------- ------
Cash (outflow) / inflow
from operating activities (1,185) 252
-------- ------
Consolidated Statement of Changes in Equity
For the 12 months ended 31 December 2020
Share Share Special Retained Non- Total
capital premium reserve Earnings controlling equity
GBP'000 GBP'000 GBP'000 GBP'000 interest GBP'000
GBP'000
At 31 December
2018 as originally
stated 195 4,868 233 3,822 233 9,351
Prior period
adjustment * - - - (964) - (964)
-------- -------- -------- --------- ------------ --------
At 31 December
2018 195 4,868 233 2,858 233 8,387
as restated
Comprehensive
income:
Foreign currency
translation - - - (21) - (21)
Profit/(loss)
for the period
as restated * - - - 60 (18) 42
-------- -------- -------- --------- ------------ --------
Total comprehensive - - - 39 (18) 21
income
Transactions
with
owners:
Dividends paid - - - (98) - (98)
-------- -------- -------- --------- ------------ --------
Total transactions
with - - - (98) - (98)
owners
At 31 December
2019 as originally
stated 195 4,868 233 3,771 215 9,282
Prior period
adjustment - - - (972) - (972)
-------- -------- -------- --------- ------------ --------
At 31 December
2019 as restated 195 4,868 233 2,799 215 8,310
-------- -------- -------- --------- ------------ --------
Comprehensive
income:
Foreign currency
translation - - - (30) - (30)
Loss for the
period - - - (3,356) (239) (3,595)
---- ------ ---- -------- ------ --------
Total comprehensive - - - (3,386) (239) (3,625)
income
Transactions
with
owners:
Dividends paid - - - - - -
---- ------ ---- -------- ------ --------
Total transactions - - - - - -
with
owners
At 31 December
2020 195 4,868 233 (587) (24) 4,685
---- ------ ---- -------- ------ --------
* See note 2 for details regarding the restatement as the result
of the change in revenue recognition policy.
Notes to the Financial Statements
For the 12 months ended 31 December 2020
1. General information
SpaceandPeople plc is a public limited company incorporated and
domiciled in Scotland (registered number SC212277) which is listed
on AIM (dealing code SAL).
2. Basis of preparation
The Group's financial statements for the period ended 31
December 2020 and for the comparative period ended 31 December 2019
have been 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 (EU)
and International Financial Reporting Interpretations Committee
(IFRIC) interpretations, and with those parts of the Companies Act
2006 applicable to companies reporting under IFRS.
Going Concern
The Directors are required to prepare the statutory financial
statements on the going concern basis unless it is inappropriate to
presume that the Group will continue in business. In satisfaction
of this responsibility the Directors have considered the Group 's
ability to meet its liabilities as they fall due.
The Group meets its day-to-day cash requirements through working
capital management and the use of existing bank overdraft and loan
facilities. Management information tools including budgets and cash
flow forecasts are used to monitor and manage current and future
liquidity.
The Group continues to pay special attention to the ongoing
Covid-19 pandemic and the associated impact on the business,
including:
- The availability of venues and space to sell on behalf of our customers;
- Interruption to operations due to an absence of staff for a
period due to either contracting the virus or government measures
implemented to control outbreaks; and
- A fall in revenue and decreased cash flow due to lockdowns.
The current and future financial position of the Group, its cash
flows and liquidity position continue to be reviewed by the
Directors. They take a prudent view on the likely recovery in each
of the Group's divisions and have stress tested these assumptions
to ensure that cash flows and liquidity are sufficiently robust to
allow the Group to continue to trade during this period.
The Group continues to manage its cash flows prudently through a
number of methods, including:
-- The JRS in the UK and the German equivalent for staff based there;
-- Availability of GBP2.0 million of term loans and GBP0.75
million of overdraft facilities through the CBIL scheme;
-- Suspension of minimum income guarantees with landlords; and
-- Pausing planned discretionary capital expenditure.
Since the end of 2020, the Group has refinanced its facilities
with its principal banker. The Group now has term loans in place
that mature in 2025 and 2027 along with three-year overdraft
facilities that are repayable on demand. New covenants are in place
that reflect the current trading position and a prudent view of
recovery from the pandemic.
The Directors are confident that the additional funding
facilities and support from our bankers will provide sufficient
headroom to meet the forecast cash requirements. The Group's
current and long-term forecast outlook has provided further
assurance to the Directors regarding its financial position.
As such, the Directors consider that it is appropriate to
prepare the financial statements on the going concern basis.
Accounting developments
New and revised IFRSs applied
Title Implementation Effect on Group
Amendments to 'References Annual periods beginning There is no material
to the Conceptual on or after 1 January impact on the financial
Framework in IFRS 2020 statements.
Standards'
Interest Rate Benchmark Annual periods beginning There is no material
Reform (Amendments on or after 1 January impact on the financial
to IFRS 9, IAS 39 2020 statements.
and IFRS 7)
Definition of a Business Annual periods beginning There is no material
(Amendments to IFRS on or after 1 January impact on the financial
3) 2020 statements.
Definition of Material Annual periods beginning There is no material
(Amendments to IAS on or after 1 January impact on the financial
1 and IAS 8) 2020 statements.
The following amendments will be introduced in future
periods
Title Implementation Effect on Group
COVID-19 Related Rent Annual period beginning The Board does not
Concessions (Amendments on or after 1 June anticipate any material
to IFRS16) 2020 impact on the financial
statements
Interest Rate Benchmark Annual periods beginning The Board does not
Reform - Phase 2 (Amendments on or after 1 January anticipate any impact
to IFRS 9, IAS 39 2021 on the financial statements.
and IFRS 7, IFRS 4
and IFRS 16)
Onerous Contracts Annual periods beginning The Board does not
- Cost of Fulfilling on or after 1 January anticipate any impact
a Contract (Amendment 2022 on the financial statements.
to IAS 37)
Annual Improvements Annual periods beginning The Board does not
to IFRS Standards on or after 1 January anticipate any impact
2018 - 2020 2022 on the financial statements.
Property, Plant and Annual periods beginning The Board does not
Equipment: Proceeds on or after 1 January anticipate any impact
Before Intended Use 2022 on the financial statements.
(Amendments to IAS
16)
Reference to the Conceptual Annual periods beginning The Board does not
Framework (Amendments on or after 1 January anticipate any impact
to IFRS 3) 2022 on the financial statements.
Classification of Annual periods beginning The Board does not
Liabilities as Current on or after 1 January anticipate any impact
or Non-current (Amendments 2023 on the financial statements.
to IAS 1)
IFRS 17 Insurance Annual periods beginning The Board does not
Contracts and Amendments on or after 1 January anticipate any impact
to IFRS 17 Insurance 2023 on the financial statements.
Contracts
Management anticipates that the standards and interpretations in
issue, but not yet effective will be adopted in the financial
statements when they become effective and currently foresee no
material impact by the adoptions on the financial statements of the
Group in the period of initial application. However, this will be
assessed further upon implementation.
3. Accounting policies
Statement of compliance
The consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards.
Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the Company and entities controlled by the Company
(its subsidiaries). Control is achieved where the Company has the
power to govern the financial and operating policies of an entity
so as to obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the
period are included in the consolidated statement of comprehensive
income from the effective date of acquisition and up to the
effective date of disposal, as appropriate. Total comprehensive
income of subsidiaries is attributed to the owners of the Company
and to the non-controlling interests, even if this results in the
non-controlling interests having a deficit balance.
When necessary, adjustments are made to the financial statements
of subsidiaries to bring their accounting policies into line with
those used by other members of the Group.
All intra-group transactions, balances, income and expenses are
eliminated in full on consolidation.
Goodwill
Goodwill arising on an acquisition of a business is carried at
cost as established at the date of acquisition of the business less
accumulated impairment losses, if any.
For the purpose of impairment testing, goodwill is allocated to
each of the Group's cash-generating units (or groups of
cash-generating units) that is expected to benefit from the
synergies of the combination.
A cash-generating unit to which goodwill has been allocated is
tested for impairment annually, or more frequently when there is
indication that the unit may be impaired. If the recoverable amount
of the cash-generating unit is less than its carrying amount of any
goodwill allocated to the unit and then to the other assets of the
unit pro rata based on the carrying amount of each asset in the
unit. Any impairment loss of goodwill is recognised directly in the
consolidated statement of comprehensive income. An impairment loss
recognised for goodwill is not reversed in subsequent periods.
On disposal of the relevant cash-generating unit, the
attributable amount of goodwill is included in the determination of
the profit or loss on disposal.
The Group's policy for goodwill arising on the acquisition of an
associate is described below.
Investments in subsidiaries
The parent Company's investments in subsidiary undertakings are
included in the Company statement of financial position at cost,
less provision for any impairment in value.
Revenue
Revenue is measured at the fair value of consideration received
or receivable. Revenue is shown net of value-added tax, rebates and
discounts and after eliminating intergroup sales. Revenue is
recognised when the amount of revenue can be measured reliably, it
is probable that future economic benefits will flow to the Group
and when the relevant performance obligation is satisfied. The
performance obligation is considered to be when the promotional or
retail booking occurs. This performance obligation is satisfied
over time. Revenue does not contain a financing component nor any
element of variable consideration.
Promotion divisions
Revenue in the UK promotion division is recognised at the point
at which a promotion takes place and is agreed by all parties. This
policy is adopted as our contractual right to commission income is
crystallised at this point. Payment of a deposit is typically due
when the booking is made with the balance payable 30 days prior to
the promotion taking place or in instalments if the promotion is of
a duration longer than 30 days.
Revenue in the German promotion division is in relation to
historic multi-year bookings ending in 2021. The right to recognise
this revenue has already crystalised and therefore it is considered
appropriate to recognise this revenue in 2020.
Retail divisions
Revenue in the UK and German retail divisions is recognised in
the month during which the booking takes place. This is due to the
requirement to match the revenue with performance obligations.
Payment is due in advance on a monthly basis.
Change in accounting policy relating to revenue recognition
Under the previous accounting policy, revenue in the UK promotion division
was recognised at the point at which a booking was confirmed and was agreed
by the promoter and the venue. This was when the contractual right to commission
was deemed to occur and payment of a deposit was typically due upon confirmation
from which commissions were collected.
Contract renewals and new customer contracts have typically seen the introduction
of further requirements on the division in terms of managing the booking,
including communications with venue and promoter in advance of and during
the promotion. Commercial terms have also evolved so that it is now typical
that commission due to the division only becomes due at the date of promotion
or in instalments during the promotion rather than at the date the booking
was confirmed.
As such, recognising the commission at and during the promotion is the appropriate
policy for the division as a whole with revenue being recognised only once
the promotion has commenced and the commission amount becomes receivable.
The following table summarises the impact of the change in policy on the
profit and net assets of the division and Group.
12 months 12 months
to December to December
'20 '19
GBP,000 GBP'000
Consolidated statement of profit or
loss
Revenue - previous
policy 196 3,519
Increase / (decrease) in revenue 600 (8)
------------- -------------
Revenue - new policy 796 3,511
31 December 31 December
Consolidated statement of financial '20 '19
position GBP'000 GBP'000
Deferred revenue - previous policy - -
Increase in deferred revenue 372 972
------------- -------------
Deferred revenue - new policy 372 972
Under the new revenue recognition policy, deferred revenue at 31 December
2018 has increased to GBP964k from GBPnil. The impact of this is shown in
the Statement of Changes in Equity.
Interest income
Interest income from a financial asset is recognised when it is
probable that the economic benefits will flow to the Group and the
amount of income can be measured reliably. Interest income is
accrued on a time basis, by reference to the principal outstanding
and at the effective interest rate applicable, which is the rate
that exactly discounts estimated future cash receipts through the
expected life of the financial asset to the asset's net carrying
amount on initial recognition.
Leasing
IFRS 16 requires capitalisation of all leasing agreements with
duration exceeding 12 months, whereas the previous regulations only
required capitalisation of finance leases. The right-of-use asset
and liability to be recognised for each leasing agreement is the
present value of the lease payments.
The Group has adopted IFRS 16 retrospectively from 1 January
2019 using the modified retrospective approach, as permitted under
the specific transitional provisions in the standard.
The Group applied the following practical expedients as
permitted by the standard on transition:
-- non recognition of right of use assets and liabilities for
leases of low value or for which the lease term ends within 12
months of the date of transition
-- the use of a single discount rate to a portfolio of leases
with reasonably similar characteristics
-- the exclusion of initial direct costs for the measurement of
the right of use asset at the date of initial application
-- the use of hindsight in determining the lease term where the
contract contains options to extend or terminate the lease.
At inception, the Group assesses whether a contract is, or
contains, a lease within the scope of IFRS 16. A contract is, or
contains, a lease if the contract conveys the right to control the
use of an identified asset for a period of time in exchange for
consideration. Where a tangible asset is acquired through a lease,
the Group recognises a right-of-use asset and a lease liability at
the lease commencement date. Right-of-use assets are included
within property, plant and equipment.
The right-of-use asset is initially measured at cost, which
comprises the present value of minimum lease payments determined at
the inception of the lease. The right-of-use asset is subsequently
depreciated using the straight-line method from the commencement
date to the earlier of the end of the useful life of the
right-of-use asset or the end of the lease term. The estimated
useful lives of right-of-use assets are determined on the same
basis as those of other property, plant and equipment. The
right-of-use asset is periodically reduced by impairment losses, if
any, and adjusted for certain remeasurements of the lease
liability.
The lease liability is initially measured at the present value
of the lease payments that are unpaid at the commencement date,
discounted using the interest rate implicit in the lease or, if
that rate cannot be readily determined, the Group's incremental
borrowing rate. Lease payments included in the measurement of the
lease liability comprise fixed payments, variable lease payments
that depend on an index or a rate, amounts expected to be payable
under a residual value guarantee, and the cost of any options that
the Group is reasonably certain to exercise, such as the exercise
price under a purchase option, lease payments in an optional
renewal period, or penalties for early termination of a lease.
The lease liability is remeasured when there is a change in:
future lease payments arising from a change in an index or rate;
the Group's estimate of the amount expected to be payable under a
residual value guarantee; or the Group's assessment of whether it
will exercise a purchase, extension or termination option. When the
lease liability is remeasured in this way, a corresponding
adjustment is made to the carrying amount of the right-of-use asset
or is recorded in profit or loss if the carrying amount of the
right-of-use asset has been reduced to zero.
The Group has elected not to recognise right-of-use assets and
lease liabilities for short-term leases of machinery that have a
lease term of 12 months or less, or for leases of low-value assets
including IT equipment. The payments associated with these leases
are recognised in profit or loss on a straight-line basis over the
lease term.
The Group has made judgements in adopting IFRS 16 such as
identifying contracts in scope for IFRS 16, determining the
interest rate used for the discounting of future cashflows, and the
determining lease terms where the lease has extension or
termination options.
Property, plant & equipment
Depreciation is provided at the annual rates below in order to
write off each asset over its estimated useful life.
Plant & equipment - 12.5% of cost
Fixtures & fittings - 25% of cost
Computer equipment - 25% of cost
Computer software - 33% of cost
Property, plant & equipment is stated at cost less
accumulated depreciation to date.
Intangible assets
Website development costs
The Group capitalises all costs directly attributable to further
developing its websites, while costs which relate to on-going
maintenance are expensed as they arise. The capitalised costs are
depreciated over three years.
Patents and trademarks
The costs of obtaining patents and trademarks are capitalised
and written off over the economic life of the asset acquired.
Impairment of non-current assets
The need for any non-current asset impairment is assessed by
comparison of the carrying value of the asset against the higher of
realisable value and the value in use or, in the case of intangible
assets, the anticipated future cash flows arising from the
asset.
Taxation
The tax credit or expense represents the sum of tax and deferred
tax currently recoverable or payable. Tax currently recoverable or
payable is based on the taxable loss or profit for the period. The
Group's asset or liability for current tax is calculated using
rates that have been enacted or substantially enacted at the
balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used in
computation of taxable profits and is accounted for using the
liability method. Deferred tax liabilities are recognised for all
temporary timing differences and deferred tax assets are recognised
to the extent that it is probable that taxable profits will be
available against which deductible temporary differences can be
utilised. Such assets and liabilities are not recognised if the
temporary difference arises from the initial recognition, other
than in a business combination, of other assets and liabilities in
a transaction that affects neither the taxable profit nor the
accounting profit.
The carrying amount of deferred tax assets is reviewed at each
balance sheet date and reduced to the extent it is no longer
probable that sufficient taxable profits will be available to allow
all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled or the asset is
realised based on tax laws and rates that have been enacted at the
balance sheet date. Deferred tax is charged or credited in the
income statement, except when it relates to items charged or
credited in other comprehensive income, in which case the deferred
tax is also dealt with in other comprehensive income.
Foreign exchange
Items included in the Group's financial statements are measured
using Pounds Sterling, which is the currency of the primary
economic environment in which the Group operates and is also the
Group's presentational currency.
Transactions denominated in foreign currencies are translated
into Sterling at the rates ruling at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies
at the balance sheet date are translated at the rates at that date.
These translation differences are dealt with in the profit and loss
account.
The income and expenditure of overseas operations are translated
at the average rates of exchange during the period. Monetary items
on the balance sheet are translated into Sterling at the rate of
exchange ruling on the balance sheet date and fixed assets at
historical rates. Exchange difference arising are treated as a
movement in reserves.
Financial instruments
Financial assets and liabilities are recognised in the Group's
balance sheet when it becomes a party to the contractual provisions
of the instrument.
Trade and other receivables
Trade and other receivables are carried at original invoice
value less an allowance for any uncollectable amounts. An allowance
for bad debts is made when there is objective evidence that the
Group will not be able to collect the debts. Bad debts are written
off in the income statement when identified.
Cash and cash equivalents
Cash and cash equivalents are carried in the balance sheet at
cost and comprise cash in hand, cash at bank and deposits with
banks.
Trade and other payables
Trade and other payables are carried at amortised costs and
represent liabilities for goods or services provided to the Group
prior to the period end that are unpaid and arise when the Group
becomes obliged to make future payments in respect of these goods
and services.
Equity instruments
Equity instruments issued by the Group are recorded at the
proceeds received, net of direct issue costs.
Share based payments
The Group operates a number of equity settled share-based
payment schemes under which share options are issued to certain
employees. The fair value determined at the grant date of the
equity settled share-based payment, where material, is expensed on
a straight-line basis over the vesting period. For schemes with
only market-based performance conditions, those conditions are
considered in arriving at the fair value at grant date.
Pensions
The Group pays contributions to the personal pension schemes of
the majority of employees. Contributions are charged to the income
statement in the period in which they fall due.
Critical accounting judgements and estimates
The preparation of financial statements in conformity with IFRS
requires the use of accounting estimates and assumptions that
affect the reported amounts of assets and liabilities at the date
of the financial statements and the reported amounts of income and
expenditure during the period. Although these estimates are based
on management's best knowledge of current events and actions,
actual results may differ from those estimates. IFRS also requires
management to exercise its judgement in the process of applying the
Group's accounting policies.
The areas where significant judgements and estimates have been
made in the preparation of these financial statements are the
useful lives and impairment of non-current and intangible assets,
impairment of the value of investment in associates and taxation.
Explanations of the methodology and the resultant assumptions are
detailed in the relevant accounting policies above and the
respective notes to the financial statements.
Borrowing costs
Borrowing costs are amortised over the duration of the loan and
recognised throughout the term of the loan.
4. Segmental reporting
The Group maintains its head office in Glasgow and a subsidiary
office in Hamburg, Germany. These are reported separately. In
addition, the retail business, now trading as POP Retail, has a
subsidiary in 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 tables present revenues, results and asset and
liability information regarding the Group's two core business
segments - Promotional Sales and Retail, split by geographic area,
after licence fees and management charges made between Group
companies. The Other segment incorporates SpaceandPeople India.
Segment revenues Promotion Promotion Retail Retail Head Other Group
and
Results UK Germany UK Germany Office
for 12 months GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
to
31 December '20
Revenue 796 46 925 1,046 - - 2,813
Cost of sales - - (753) (664) - - (1,417)
Administrative
expenses (1,955) (136) (250) (1,069) (857) - (4,267)
Other revenue 439 5 - 295 - - 739
Non-recurring
charges
Loss associated (18) (111) - - (1,313) - (1,442)
with discontinued
operation - - - - - (518) (518)
------------ ------------ --------- --------- -------- -------- --------
Segment operating
loss (738) (196) (78) (392) (2,170) (518) (4,092)
Finance costs
- continuing operations (27) - - - - - (27)
Finance income
- discontinued
operation - - - - - 6 6
Segment loss (765) (196) (78) (392) (2,170) (512) (4,113)
before taxation
------------ ------------ --------- --------- -------- -------- --------
Segment assets Promotion Promotion Retail Retail Other Group
and
Liabilities UK Germany UK Germany
as at 31 December GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
'20
Total segment
assets 5,327 89 4,735 545 525 11,221
Total segment
liabilities (5,175) (45) (714) (561) (41) (6,536)
Total net assets 152 44 4,021 (16) 484 4,685
---------- ---------- -------- -------- -------- --------
Segment revenues Promotion Promotion Retail Retail Head Other Group
and results
for
12 months UK Germany UK Germany Office
to
31 December GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
'19
as restated
Revenue 3,511 312 2,839 993 - - 7,655
Cost of sales - - (2,160) (705) - - (2,865)
Administrative
expenses (2,436) (303) (272) (986) (841) - (4,838)
Other revenue - 74 - 101 - - 175
Loss associated
with discontinued
operation - - - - - (45) (45)
Segment operating
profit/(loss) 1,075 83 407 (597) (841) (45) 82
Finance costs
- continuing operations (23) - - - - - (23)
Finance income
- discontinued
operation - - - - - 4 4
Segment profit/(loss) 1,052 83 407 (597) (841) (41) 63
before taxation
-------- ---------- -------- -------- -------- -------- --------
Segment assets Promotion Promotion Retail Retail Other Group
and
liabilities UK Germany UK Germany
as at 31 December GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
'19
as restated
Total segment
assets 6,253 285 4,714 738 568 12,558
Total segment
liabilities (2,897) (72) (764) (489) (26) (4,248)
Total net assets 3,356 213 3,950 249 542 8,310
---------- ---------- -------- -------- -------- --------
5. Other operating income
Other operating income is comprised of:
12 months 12 months
to to
December '20 December '19
GBP'000 GBP'000
Government grants 595 -
Ancillary charges 144 175
739 175
------------- -------------
6. Operating (loss) / profit
The operating (loss) / profit is stated after charging:
12 months 12 months
to to
December '20 December '19
GBP'000 GBP'000
Amortisation of intangible
assets - 5
Impairment of goodwill 1,100 -
Depreciation of property,
plant and equipment 234 350
Depreciation of right of
use assets 263 201
Interest charges in relation
to finance lease obligations 61 33
============= =============
Auditor's remuneration:
Fees payable for:
Audit of Company 27 23
Audit of subsidiary undertakings 16 17
Tax services 7 13
Other services 19 18
------------- -------------
69 71
------------- -------------
Directors' remuneration 887 525
------------- -------------
7. Staff costs
The average number of employees in the Group during the period
was as follows:
12 months 12 months
to to
December '20 December '19
Executive Directors 4 3
Non-executive Directors 3 2
Administration 25 27
Telesales 25 33
Commercial 5 8
Maintenance 7 7
------------- -------------
69 80
------------- -------------
12 months 12 months
to to
December '20 December '19
GBP'000 GBP'000
Wages and salaries 2,500 2,960
Social Security costs 276 361
Pensions 67 75
------------- -------------
2,843 3,396
------------- -------------
Details of Directors' emoluments, including details of share
option schemes, are given in the remuneration report. These
disclosures form part of the audited financial statements of the
Group.
8. Non-recurring charges
Following the annual impairment review of goodwill based on the
discounted cash flow projections of the UK Retail division, the
value of the goodwill in this CGU has been impaired by GBP1.10
million. Details of the impairment review are disclosed at note
12.
The Group also incurred redundancy and severance costs of
GBP0.34 million during the year as it restructured staffing and
management due to the Covid-19 pandemic.
Following a review of the carrying value of assets and
liabilities in S&P India Pvt Limited during the year, debtors
with a previous book value of GBP0.50 million were deemed to be
impaired and were written down in full. As the investment in this
business was disposed of following the year end, this charge is
included within discontinued operations.
The Directors consider all of these costs to be
non-recurring.
9. Finance income and costs
12 months 12 months to
to
December '20 December '19
GBP'000 GBP'000
Finance costs:
Interest payable (27) (23)
10. Taxation
12 months 12 months
to to
December December '19
'20
GBP'000 GBP'000
Current tax expense:
Current tax on (losses) / profits
for the year - 130
Adjustment for under/(over) provision
in prior periods (315) (4)
---------- -------------
Total current tax (315) 126
Foreign tax:
Current tax on foreign income for
the period - 46
Adjustment for under/(over) provision
in prior periods - (47)
---------- -------------
Total foreign tax - (1)
Deferred tax:
Charge in respect of temporary timing
differences - (19)
Adjustment for under/(over) provision
in prior periods (204) (85)
---------- -------------
Total deferred tax (204) (104)
Income tax (credit) / expense as
reported in the income statement (519) 21
---------- -------------
The tax assessed for the period is higher than the standard rate
of corporation tax in the UK. The differences are explained
below:
12 months 12 months
to to
December December '19
'20
GBP'000 GBP'000
(Loss) / profit on ordinary activities
before tax (3,874) 71
---------- -------------
Profit on ordinary activities at
the standard rate of corporation
tax in
the UK of 19% (2019: 19%)
Jan - Dec 2019: 19% - 13
Jan - Dec 2020: 19% (736) -
Tax effect of:
- Adjustment for (over)/under provision
in prior periods (353) (136)
- Effect of losses carried back 180 -
- Effect of foreign tax 112 -
- Disallowable items 278 5
- Tax losses - 139
Income tax expense as reported in
the Income Statement (519) 21
---------- -------------
11. Loss for the period
The Company has taken advantage of the exemption allowed under
Section 408 of the Companies Act 2006 and has not presented its own
Income Statement in these financial statements. The Group profit
for the period includes a Company loss after tax of GBP1,397k after
the incorporation of all UK head office costs (2019 restated
profit: GBP143k) which is dealt with in the financial statements of
the parent Company.
12. Discontinued operation
On 15 January 2021, the Group disposed of its entire holding in
SpaceandPeople India (Pvt) Limited and is reported in the current
period as a discontinued operation. Financial information relating
to the discontinued operation is disclosed below.
The financial performance for the periods ended 31 December 2020
and 31 December 2019.
12 months 12 months to
to
December December '19
'20
GBP'000 GBP'000
Revenue - 72
Administrative expenses (1) (518) (117)
Finance income 6 4
Loss from discontinued operation (512) (41)
---------- -------------
(1) Includes GBP497k provision against recoverability of trade
debtors in 2020.
13. Dividends
12 months to 12 months to
December '20 December '19
GBP'000 GBP'000
Paid during the period - 98
Recommended final dividend - -
Equity - The Directors do not recommend a final dividend for
2020 (2019: GBPnil).
14. Goodwill
Cost GBP'000
At 31 December 2018 8,225
Additions -
--------
At 31 December 2019 8,225
Additions -
--------
At 31 December 2020 8,225
--------
Accumulated impairment losses
At 31 December 2018 244
Charge for the period -
------
At 31 December 2019 244
Charge for the period 1,100
At 31 December 2020 1,344
------
Net book value
At 31 December 2018 7,981
------
At 31 December 2019 7,981
------
At 31 December 2020 6,881
------
Goodwill acquired in a business combination is allocated at
acquisition to the cash-generating units (CGUs) that are expected
to benefit from that business combination. The Directors consider
that the businesses of the UK Retail sub-group are an identifiable
CGU and the carrying amount of Goodwill is allocated against this
CGU.
The recoverable amount of the cash generating unit was
determined based on value-in-use calculations, covering a detailed
forecast, followed by an extrapolation of expected cash flows based
on the targeted and expected growth rate over the next five years
followed by a terminal factor determined by management.
The present value of the future cash flows is then calculated
using a discount rate of 8.08%. This discount rates include
appropriate adjustments to reflect, in the directors' judgement,
the market risk and specific risk of the GGU.
The growth rate utilised in calculation of the terminal factor
is based on expected inflationary growth in the UK beyond the
period of forecasting. The growth rate used was 2.5%.
Cash flow projections during the budget period are based on an
average growth in EBITDA which the Directors consider to be
conservative given the plans for the businesses and the potential
increased returns particularly in relation to the pipeline of new
business opportunities, offset by the short and medium-term issues
caused by Covid-19. The discount rates reflect appropriate
adjustments relating to market risk and specific risk factors of
each CGU.
Based on this cash flow projection, the Directors have concluded
that the value of the goodwill in this CGU has been impaired by
GBP1,100,000 and as a result, the value of the goodwill for the UK
Retail sub-group is now GBP6,881,000.
The estimate of recoverable amount for the CGU is sensitive to
the discount rate, the cash flow projections and the growth
rate.
If the discount rate used is increased beyond 8.08%, for each
further movement of 1% an impairment loss of GBP0.45 million would
have to be recognised and written off against goodwill.
If the annual growth rate beyond 2021, used in the cash flow
projection, is decreased below 2.5%, for each further movement of
1% an impairment loss of GBP0.86 million would have to be
recognised and written off against goodwill.
15. Other intangible assets
Cost Website Product Patents Total
&
development development trademarks
GBP'000 GBP'000 GBP'000 GBP'000
At 31 December
2018 284 137 115 536
Additions - - 1 1
At 31 December
2019 284 137 116 537
Additions - - - -
------------ ------------ ----------- --------
At 31 December
2020 284 137 116 537
------------ ------------ ----------- --------
Amortisation Website Product Patents Total
&
Development development Trademarks
GBP'000 GBP'000 GBP'000 GBP'000
At 31 December
2018 284 137 111 532
Charge for the
period - - 5 5
At 31 December
2019 284 137 116 537
Charge for the - - - -
period
------------ ------------ ----------- --------
At 31 December
2020 284 137 116 537
------------ ------------ ----------- --------
Net book value Website Product Patents Total
&
development Development Trademarks
GBP'000 GBP'000 GBP'000 GBP'000
At 31 December
2018 - - 4 4
------------- ------------- ----------- --------
At 31 December - - - -
2019
------------- ------------- ----------- --------
At 31 December - - - -
2020
------------- ------------- ----------- --------
16. Property, plant and equipment
The Group movement in property, plant & equipment assets
was:
Cost Plant Fixture Computer Right Right of Total
& equipment & fittings equipment of use use assets
assets plant &
property equipment
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 31 December
2018 3,054 286 766 - - 4,106
Additions on application
of IFRS 16 - - - 243 85 328
Additions - 4 43 177 52 276
Forex (8) - - - - (8)
------------- ------------ ----------- ---------- ------------ --------
At 31 December
2019 3,046 290 809 420 137 4,702
------------- ------------ ----------- ---------- ------------ --------
Additions 15 3 14 568 39 639
Disposals - - - (166) (15) (181)
Forex - 2 - - - 2
------------- ------------ ----------- ---------- ------------ --------
At 31 December
2020 3,061 295 823 822 161 5,162
------------- ------------ ----------- ---------- ------------ --------
Depreciation Plant & Fixture Computer Right Right of Total
equipment & fittings equipment of use use assets
assets plant &
property equipment
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 31 December
2018 2,353 263 641 - - 3,257
Charge for the
period 243 12 95 156 45 551
At 31 December
2019 2,596 275 736 156 45 3,808
Charge for the
period 171 5 58 209 54 497
Depreciation on
disposals - - - (165) (6) (171)
----------- ------------ ----------- ---------- ------------ --------
At 31 December
2020 2,767 280 794 200 93 4,134
----------- ------------ ----------- ---------- ------------ --------
Net book value Plant & Fixture Computer Right Right of Total
equipment & fittings equipment of use use assets
assets plant &
property equipment
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 31 December
2018 701 23 125 - - 849
----------- ------------ ----------- ---------- ------------ --------
At 31 December
2019 450 15 73 264 92 894
----------- ------------ ----------- ---------- ------------ --------
At 31 December
2020 294 15 29 622 68 1,028
----------- ------------ ----------- ---------- ------------ --------
The right of use lease liabilities are secured against the right
of use assets.
17. Trade and other receivables
31 December 31 December
'20 '19
GBP'000 GBP'000
Trade debtors 1,545 2,840
Other debtors 110 339
Prepayments 335 249
Total 1,990 3,428
============ ============
Amounts falling due
after more than one
year included above
are: 92 417
The maximum exposure to credit risk at the balance sheet date is
the carrying amount of receivables detailed above. The Group does
not hold any collateral as security.
The Directors do not believe that there is a significant
concentration of credit risk within the trade receivables balance.
As of 31 December 2020, trade receivables of GBP1.1 million (2019:
GBP1.2 million) were past due but not impaired.
The ageing of trade debtors:
Current 0 - 30 31 - 60 61 Days Total
Days Days +
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
31 December '20 445 313 292 495 1,545
31 December '19 1,640 487 227 486 2,840
18. Deferred tax
31 31
December December
'20 '19
GBP'000 GBP'000
Deferred tax liability:
Deferred tax liability to
be recognised after more
than 12 months
Deferred tax assets: - (44)
Deferred tax asset to be
recognised after less than
12 months
Deferred tax asset to be 47 47
recognised after more than
12 months 160 -
Deferred tax asset 207 3
==================== ====================
At 1 January 2020 3 (101)
Adjustment in respect of
losses 188 -
Adjustment in respect of
previous year - 85
Charge in respect of temporary
timing differences on property,
plant and equipment 16 19
At 31 December 2020 207 3
==================== ====================
19. Cash and cash equivalents
31 December 31 December
'20 '19
GBP'000 GBP'000
Cash at bank and
on hand 839 1,227
839 1,227
============ ============
20. Trade and other payables
31 December 31 December
'20 '19
as restated
GBP'000 GBP'000
Trade creditors 672 419
Other creditors 1,244 1,391
Lease liabilities 286 206
Social Security and
other taxes 185 301
Accrued expenses 1,108 657
Deferred income 727 1,257
Trade and other payables 4,222 4,231
Corporation tax - 82
------------ -------------
Total 4,222 4,313
============ =============
All trade and other payables are short term. The carrying values
of trade and other payables are considered to be a reasonable
approximation of fair value.
21. Other borrowings
31 December 31 December
'20 '19
GBP'000 GBP'000
Bank loan:
Less than one year 972 -
Greater than one
year 778 750
------------ ------------
1,750 750
============ ============
As at 31 December 2020, SpaceandPeople plc had drawn down
GBP0.75 million (2019: GBP0.75 million) of its agreed bank
revolving credit facility of GBP1.0 million which expires in
October 2021. Additionally, a GBP1.0 million CBILS loan with a term
of five years was drawn down as at 31 December 2020 (2019: GBPnil).
SpaceandPeople plc also had a GBP0.25 million overdraft facility of
which GBPnil was used as at 31 December 2020 (2019: GBPnil).
22. Leases
Amounts recognised in the balance sheet:
The balance sheet shows the following amounts relating to
leases:
31 December 31 December
'20 '19
GBP'000 GBP'000
Right of use assets
Property 622 264
Plant and equipment 68 92
690 356
Lease liabilities
Current 286 206
Non-current 464 160
------------ ------------
Total 750 366
============ ============
Amounts recognised in the statement of profit or loss:
The statement of profit or loss shows the following amounts
relating to leases:
12 months 12 months
to December to December
'20 '19
GBP'000 GBP'000
Depreciation charge of right
of use assets
Property 209 156
Plant and equipment 54 45
263 201
Below is a reconciliation of changes in liabilities arising from
financing activities:
1 January Cash New Other 31 December
2020 flows Leases 2020
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Current lease liabilities 206 (267) 122 225 286
Non-current lease liabilities 160 - 477 (173) 464
---------- -------- -------- -------- ------------
Total liabilities from
financing activities 366 (267) 599 52 750
========== ======== ======== ======== ============
The "Other" column includes the effect of reclassification of
non-current leases to current due to the passage of time, the
effect of the disposal of lease assets with their related creditors
and the effect of the unwinding of the discounted ROU creditors
over time.
23. Financial instruments and risk management
The Group has no material financial instruments other than cash,
current receivables and liabilities, in both this and the prior
period, all of which arise directly from its operations. The net
fair value of its financial assets and liabilities is the same as
their carrying value as detailed in the balance sheet and related
notes.
Credit risk - The Group's credit risk relates to its receivables
and is managed by undertaking regular credit evaluations of its
customers. The Group is aware that customers' financial strength
may have been adversely affected by the Covid-19 pandemic and
endeavours to work with them and our venue partners to provide
appropriate discounts and payment plans to enable them to continue
to trade and repay any amounts owed in an agreed manner. The Group
does not routinely offer credit terms to the majority of
customers.
Liquidity risk - The Group usually operates a cash-generative
business and has significant cash headroom. The Directors consider
the funding structure to be adequate for the Group's current
funding requirements and this is expected to strengthen during
future years.
Borrowing facilities - As at the balance sheet date, t he Group
has agreed facilities of GBP2.25 million, of which GBP1.75 million
was utilised at the year end. These facilities are secured by a
floating charge.
Financial assets - These comprise cash at bank and in hand. All
bank deposits are floating rate.
Financial liabilities - These include short-term creditors, a
revolving credit facility of GBP1 million, of which GBP0.75 million
was utilised at the year end and a CBILS five-year term loan of
GBP1 million. All financial liabilities will be financed from
existing cash reserves and operating cash flows.
Foreign currency risk - The Group is exposed to foreign exchange
risk primarily from Euros due to its German operations and Euro
denominated licensing income as detailed in note 4 - Segmental
Reporting. The Group monitors its foreign currency exposure and
manages the position where appropriate. In addition, the Group has
investments in a subsidiary in India.
24. Called up share capital
Allotted, issued and fully paid 31 December 31 December
'20 '19
Class Nominal
value
Ordinary 1p GBP 195,196 195,196
Number 19,519,563 19,519,563
25. Related party transactions
Compensation of key management personnel
Key management personnel of the Group are defined as those
persons having authority and responsibility for the planning,
directing and controlling the activities of the Group, directly or
indirectly. Key management of the Group are therefore considered to
be the directors of SpaceandPeople plc. There were no transactions
with the key management, other than their emoluments, which are set
out in the remuneration report.
26. Earnings per share
12 months to 12 months to
31 December '20 31 December '19
as restated
Pence per share Pence per share
Basic (loss) / earnings per
share
Before non-recurring charges
and discontinued operation (7.2)p 0.3p
After non-recurring charges
and discontinued operation (17.2)p 0.3p
Diluted (loss) / earnings
per share
(7.2)p 0.3p
Before non-recurring charges
and discontinued operation
After non-recurring charges
and discontinued operation (17.2)p 0.3p
Basic earnings per share
The earnings and weighted average number of ordinary shares used
in the calculation of basic earnings per share are as follows:
12 months to 12 months to
31 December '20 31 December '19
as restated
GBP'000 GBP'000
(Loss) / profit after tax
for the period attributable
to owners of the Company (3,355) 60
Non-recurring charges
Discontinued operation 1,442 -
(Loss) / profit after tax
for the period before non-recurring 512
charges attributable to owners
of the company (1,401) 60
12 months to 12 months to
31 December '20 31 December '19
'000 '000
Weighted average number of
ordinary shares 19,520 19,520
for the purposes of basic
earnings per share
Diluted earnings per share
The earnings and weighted average number of ordinary shares used
in the calculation of diluted earnings per share are as
follows:
12 months to 12 months to
31 December '20 31 December '19
GBP'000 GBP'000
(Loss) / profit after tax
for the period attributable
to owners of the Company (3,355) 60
Non-recurring charges
Discontinued operation
1,442 -
(Loss) / profit after tax
for the period before non-recurring 512 -
charges attributable to owners
of the company (1,401) 60
12 months to 12 months to
31 December '20 31 December '19
'000 '000
Weighted average number of
ordinary shares 19,520 20,991
for the purposes of diluted
earnings per share
The weighted average number of ordinary shares for the purposes
of diluted earnings per share reconciles to the weighted average
number of ordinary shares used in the calculation of basic earnings
per share as follows.
12 months to 12 months to
31 December '20 31 December '19
'000 '00
Weighted average number of
shares in issue 19,520 19,520
during the period
Weighted average number of
ordinary shares - 1,471
used in the calculation of
basic earnings per
share deemed to be issued
for no
consideration in respect
of employee options
Weighted average number of
ordinary shares 19,520 20,991
used in the calculation
of diluted earnings per
Share
As set out in notes 27, there are share options outstanding as
at 31 December 2020 which, if exercised, would increase the number
of shares in issue. However, the diluted loss per share is the same
as the basic loss per share in the year to 31 December 2020, as the
loss for the year has an anti-dilutive effect.
27. Share options
The Group has established a share option scheme that senior
executives and certain eligible employees are entitled to
participate in at the discretion of the Board which is advised on
such matters by the Remuneration Committee.
In aggregate, share options have been granted under the share
option scheme over 1,300,818 ordinary shares exercisable within the
dates and at the exercise prices shown below, being the market
value at the date of the grant.
Date of grant Number Option period Price
12 January 2018 - 12 January
12 January 2015 376,000 2025 47.4p
1 July 2019 824,818 1 July 2022 - 1 July 2029 12.0p
1 October 2022 - 1 October
1 October 2019 100,000 2029 13.5p
The movement in the number of options outstanding under the
scheme over the period is as follows:
12 months 12 months
to to
31 December 31 December
'20 '19
Number of options outstanding as at
the beginning of the period 1,815,325 769,325
Granted - 1,100,000
Lapsed (300,000) -
Forfeited (214,507) (54,000)
------------ ------------
Number of options outstanding as at
the end of the period 1,300,818 1,815,325
In total, 1,300,818 options were outstanding at 31 December 2020
(1,815,325 at 31 December 2019) with a weighted average exercise
price of 22.3p (21.8p at 31 December 2019).
The total share-based payment charge for the year, calculated in
accordance with IFRS2 on share-based payments, was GBPnil (2019:
GBPnil).
28. Save As You Earn Scheme
The Group had a Save As You Earn ("SAYE") scheme that all UK
based employees were entitled to participate in. The scheme ran for
three years from 1 July 2017 with the opportunity to buy shares at
a price of 19.5p, a 20% discount on the average closing share price
on the three working days from 20 to 24 April 2017.
Share options had been granted under the SAYE scheme over 59,072
ordinary shares exercisable within the dates and at the exercise
prices shown below, being the market value at the date of the
grant.
Date of grant Number Option period Price
1 July 2020 - 31 December
18 May 2017 59,072 2020 19.5p
The movement in the number of options outstanding under the
scheme over the period is as follows:
12 months 12 months
to to
31 December 31 December
'20 '19
Number of options outstanding as at
the beginning of the period 59,072 376,604
Granted - -
Lapsed (59,072) -
Forfeited - (317,532)
------------ ------------
Number of options outstanding as at
the end of the period - 59,072
In total, no options were outstanding at 31 December 2020
(59,072 at 31 December 2019) with an average exercise price of
GBPnil (19.5p at 31 December 2019).
The total share-based payment charge for the year, calculated in
accordance with IFRS2 on share-based payments, was GBPnil (2019:
GBPnil).
29. Post Balance Sheet Events
Following the end of the financial year, the Group disposed of
its entire shareholding in SpaceandPeople India Pvt Limited for a
nominal amount. The value of SpaceandPeople India Pvt Limited to
the Group has been provided for during 2020 and as a result, there
will be no material gain or loss on the disposal of this
investment.
As mentioned elsewhere in this report, the Directors decided to
refinance the Group's borrowing facilities with its principal
banker ahead of their planned maturity in October 2021. The GBP1.0
million five-year term loan obtained during 2020 through the CBILS
remains in place. The GBP1.0 million Revolving Credit Facility that
was due to mature in October 2021 was cancelled in March 2021 and
replaced by an additional GBP1.0 million six-year CBILS term loan,
repayable between 2022 and 2027. The Group's GBP0.25 million annual
overdraft facility that was due to mature in October 2021 has been
replaced by a new GBP0.25 million facility and an additional GBP0.5
million overdraft facility. Both of these facilities were obtained
under the CBILS, are repayable on demand and are available for
three years. The increase in facilities along with the lengthened
maturity periods gives the Group better financial security and
certainty.
For further information, please contact:
SpaceandPeople plc 0845 241 8215
Nancy Cullen / Gregor Dunlay
Zeus Capital Limited (Nominated Adviser and Broker) 020 3829 5000
David Foreman, Jamie Peel, Rishi Majithia
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END
FR ZZGGVNFMGMZM
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June 04, 2021 02:00 ET (06:00 GMT)
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