TIDMSAL
RNS Number : 4329N
SpaceandPeople PLC
25 September 2023
25 September 2023
SpaceandPeople plc
("SpaceandPeople" or the "Group")
Interim results for the six months ended 30 June 2023
SpaceandPeople (AIM:SAL), the retail, promotional and brand
experience specialist which facilitates and manages the sale of
promotional and retail merchandising space in shopping centres and
other high footfall venues, announces its interim results for the
six months ended 30 June 2023.
Highlights
Financial
o Group revenue up 5% to GBP2,537k (H1 2022: GBP2,413k)
due to German retail revenue increasing by 38% to GBP801k
(H1 2022: GBP582k), partially offset by a decline in UK
retail revenue of 23% to GBP468k (H1 2022: GBP609k).
o Operating loss increased by 11% to GBP355k (H1 2022: GBP320k)
due to an increase in administration expenses including
professional fees and staff costs.
o Loss after tax increased by 13% to GBP351k (H1 2022: GBP311k).
o Net cash outflow from operating activities of GBP1,058k
(H1 2022: GBP470k) primarily due to reduction in creditors
with a significant creditor as at 31 December 2022 being
paid during H1 2023.
o Facility headroom at 30 June 2023 of GBP1,306k (30 June
2022: GBP1,368k) which has been increased post period end
to GBP1,537k at 22 September 2023 (23 September 2022: GBP1,550k).
o Net bank debt as at 30 June 2023 has decreased by 25%
to GBP763k (30 June 2022: GBP1,024k), with bank debt repayments
of GBP323k since 30 June 2022.
Operational
o Transformation of UK retail division with the continued
roll-out of Rock Up and Pop Up concept.
o Growth in German retail division with average number of
RMUs in operation increasing to 95 during H1 2023 (H1 2022:
69).
o Further contract extension with Network Rail until September
2024.
o New trading relationship Multi Germany GmbH in Germany
agreed during September 2023.
Contact details:
SpaceandPeople Plc 0845 241 8215
Nancy Cullen, Gregor Dunlay
Zeus Capital Limited (Nominated Adviser
and Broker) 0203 829 5000
David Foreman, Jamie Peel, Ed Beddows
Chief Executive's Interim Operating Statement
It is fantastic to be able to produce a report which is
untainted by extraneous factors, such as Covid-19, for the first
time since 2019. This half year has been encouraging for
SpaceandPeople ("S&P"), with a drive to invest further across
the business both in the UK and in Germany in order to develop
products and services that are closely attuned to our customers
evolving needs. I am pleased, therefore, to report a 5% increase in
revenues from GBP2,413k in 2022 to GBP2,537k this period.
The growth in revenue in this first half year has been delivered
mainly by strong results in our German retail division and steady
performance in our UK promotions division, partially offset by a
slight reduction in UK retail, as this division transforms towards
our innovative Rock Up and Pop Up ("RUPU") concept of kiosk
retailing.
This increase in revenue has driven an improvement in the gross
profitability of the business, enabling us to invest in both staff
and IT systems that will improve our customer experience and drive
further revenue and profitability growth in H2 2023 and beyond.
UK
Pop up food and drink kiosks remain very popular as venue
activity, particularly in the UK. However, it has been pleasing to
see the growth of other fashion items such as eyewear, home
products and fragrance. Our latest service, RUPU, is proving to be
popular with both our venue clients and nascent businesses. During
the first six months of the year, we introduced ten new retailers
into our venues, including international, start-up and on-line only
retailers. None of these retailers were in a position to launch
their businesses in physical retail without the support that RUPU
offered them. This product, given its ability to provide vibrant
new names into our venues, is set to become an increasingly
important aspect of the S&P service and we look forward to
introducing many more new businesses into a widening portfolio of
venues over the coming year.
S&P now has the operational capability and experience to
take a business on the whole journey from being a pure play on-line
brand to supplying it with a fully installed on-mall kiosk,
designed to the brand's specification, with merchandising,
marketing and business planning support, access to agency staff if
required and all necessary equipment relating to the sale of its
products. This means that we can now support a whole new generation
of retailers who want to expand their businesses with a turnkey
operation.
Our Brand Ex division had a very strong end of year in 2022, but
the first quarter of 2023 produced lower revenue and activity
levels than we had anticipated. I am therefore delighted to say
that the second half of the year is looking significantly better
for this division and we are seeing a marked resurgence in the
scale of this activity across all venue types. Last year we
launched our on-line website www.experientialspace.co.uk , which
aims to provide brands and agencies with comprehensive information
about venues and their site details. This website has been further
developed this year with the addition of live on-line availability
calendars.
Additionally, the brand market continues to require more
sophisticated data regarding the sites they are purchasing and as a
business, we have introduced functionality to increase the data
available to buyers to grow this market further, along with working
with technology partners to assess GDPR-compliant behaviour
tracking mechanisms, which support brands' analysis of post event
behaviour and campaign success.
Germany
In Germany we have had a strong start to 2023 with revenue up
38% to GBP801k (H1 2022: GBP582k) across our shopping centre
portfolio. This was as a result of us having an average of 95
kiosks in operation compared with 69 in the first six months of
2022. The principal area of growth has been increasing the number
of kiosks operating in additional venues that we have not
previously had an agreement to trade in, along with an increase in
the occupancy rates in our fixed rent portfolio.
Additionally, having launched two kiosks in Austria at the end
of 2022, we have continued to trade successfully on these kiosks
and are looking to develop further international opportunities.
Costs and Profitability
Our overall costs increased over the first six months by 5% to
GBP3,004k (H1 2022: GBP2,865k) due to additional staff being
employed both in London and Glasgow to support the growth of the
business. As with all businesses, we are also not immune to
inflationary pressures and therefore, costs have increased across
the Group over the last few months and we have had some significant
one-off costs related to professional and recruitment fees.
Other income of GBP112k is lower than in the same period of
2022, however, a significant proportion of this income in 2022 was
made up of government grant support from Germany in relation to the
Covid pandemic, which has not been repeated in 2023.
The cash position of GBP556k is slightly lower than at the same
point last year (H1 2022: GBP618k) and headroom is correspondingly
lower at GBP1,308k (2022: GBP1,368k). However, net debt has fallen
from to GBP763k (H1 2022: GBP1,024k) as we have continued to repay
our term loans. We have achieved this reduction in net debt whilst
also clearing a large balance outstanding to a major client in this
period.
Outlook
We are pleased, therefore, to report a solid first half of the
year with stable results and we are seeing the investment in staff
across the business delivering further growth. We are confident
that plans are in place across both the UK and Germany to support
and drive the business forward and we are very excited by the
potential shown by new products such as RUPU.
We enter the second half of the year with confidence, as we have
put in place the venue infrastructure, the products and the
personnel to ensure that we can maximise the opportunities
available to us during the busiest and most profitable period of
the year.
I am absolutely delighted that we have recently agreed an
extension of our relationship with Network Rail until September
2024. We look forward to continuing to work closely with the
Network Rail team to deliver even more high quality brand events
into their stations over the coming year.
We are also pleased to announce an agreement to supply new units
into Centres operated by Multi Corporation in Germany, thus helping
us to expand our German business beyond our core customer base.
Finally, I would like to take this opportunity to sincerely
thank Steve Curtis, who served as a non-executive director with
S&P for 9 years and who retired in June from his role. Steve
provided invaluable support to the business throughout his tenure
and was a tremendous support to us, not least during the
lockdown/Covid affected period.
Nancy Cullen
22 September 2023
Independent Auditor's Review Report on Interim Financial
Information
Conclusion
We have reviewed the accompanying balance sheet of
Spaceandpeople plc as of June 30, 2023 and the related statements
of income, changes in equity and cash flows for the six-month
period then ended, and a summary of significant accounting policies
and other explanatory notes.
Based on our review, nothing has come to our attention that
causes us to believe that the accompanying interim financial
information does not present fairly, in all material respects the
financial position of the entity as at June 30, 2023, and of its
financial performance and its cash flows for the six-month period
then ended in accordance with UK adopted International Accounting
Standard 34, "Interim Financial Reporting".
Basis for Conclusion
We conducted our review in accordance with International
Standard on Review Engagements 2410 (UK), "Review of Interim
Financial Information Performed by the Independent Auditor of the
Entity". A review of interim financial information consists of
making inquiries, primarily of persons responsible for financial
and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing
and consequently does not enable us to obtain assurance that we
would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit
opinion.
As disclosed in note 2, the annual financial statements of the
group are prepared in accordance with United Kingdom adopted
International Accounting Standards. The condensed set of financial
statements included in this half yearly financial report has been
prepared in accordance with United Kingdom adopted international
Accounting Standard 34, "Interim Financial Reporting".
Conclusions Relating to Going Concern
Based on our review procedures, which are less extensive than
those performed in an audit as described in the Basis of Conclusion
section of this report, nothing has come to our attention to
suggest that management have inappropriately adopted the going
concern basis of accounting or that management have identified
material uncertainties relating to going concern that are not
appropriately disclosed.
This conclusion is based on the review procedures performed in
accordance with this ISRE, however future events or conditions may
cause the entity to cease to continue as a going concern.
Responsibilities of directors
Management is responsible for the preparation and fair
presentation of this interim financial information in accordance
with UK adopted International Accounting Standard 34, "Interim
Financial Reporting".
In preparing the half-yearly financial report, the directors are
responsible for assessing the company's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the company or to cease
operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the review of the financial
information
In reviewing the half-yearly report, we are responsible for
expressing to the Company a conclusion on the condensed set of
financial statement in the half-yearly financial report. Our
conclusion, including our Conclusions Relating to Going Concern,
are based on procedures that are less extensive than audit
procedures, as described in the Basis for Conclusion paragraph of
this report.
Use of our report
This report is made solely to the company in accordance with
International Standard on Review Engagements (UK) 2410 "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Financial Reporting Council. Our work
has been undertaken so that we might state to the company those
matters we are required to state to it in an independent review
report and for no other purpose. To the fullest extent permitted by
law, we do not accept or assume responsibility to anyone other than
the company, for our review work, for this report, or for the
conclusions we have formed.
Azets Audit Services
Chartered Accountants
Statutory Auditors
Titanium 1
King's Inch Place
Renfrew
PA4 8WF
22 September 2023
Consolidated Group Statement of Comprehensive Income
For the six months ended 30 June 2023
Notes 6 months 6 months 12 months
to 30 June to 30 June to 31 December
'23 '22 '22
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Revenue 4 2,537 2,413 5,529
Cost of sales (866) (869) (1,644)
Gross profit 1,671 1,544 3,885
Administration expenses (2,138) (1,996) (4,101)
Other operating income 112 132 207
Operating loss before
non-recurring charges (355) (320) (9)
Non-recurring charges - - (1,500)
Operating loss (355) (320) (1,509)
Finance costs (69) (57) (116)
Loss before taxation 4 (424) (377) (1,625)
Taxation 73 66 (89)
Loss after taxation
Other comprehensive
income (351) (311) (1,714)
Foreign exchange differences
on translation of foreign
operations (5) 11 (25)
Total comprehensive
loss for the period (356) (300) (1,739)
Loss per share 10
Basic (18.4)p (16.0)p (88.4)p
Diluted (18.4)p (16.0)p (88.4)p
Consolidated Group Statement of Financial Position
As at 30 June 2023
Notes 30 June 30 June 31 December
'23 '22 '22
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Assets
Non-current assets:
Goodwill 5 5,381 6,881 5,381
Property, plant & equipment 6 469 640 545
Deferred tax 281 364 208
-------------- -------------- -------------
6,131 7,885 6,134
Current assets:
Trade & other receivables 1,937 2,134 2,524
Cash & cash equivalents 7 556 618 1,885
-------------- -------------- -------------
2,493 2,752 4,409
Total assets 8,624 10,637 10,543
-------------- -------------- -------------
Liabilities
Current liabilities:
Trade & other payables 4,227 3,999 5,591
Lease liabilities 190 176 180
Borrowings repayable
within one year 8 322 322 322
4,739 4,497 6,093
Non-current liabilities:
Lease liabilities 192 284 240
Borrowings repayable
after one year 8 997 1,320 1,158
-------------- -------------- -------------
1,189 1,604 1,398
Total liabilities 5,928 6,101 7,491
-------------- -------------- -------------
Net assets 2,696 4,536 3,052
-------------- -------------- -------------
Equity
Share capital 9 195 195 195
Share premium 4,868 4,868 4,868
Special reserve 233 233 233
Own shares held (50) - (50)
Retained earnings (2,550) (760) (2,194)
Total equity 2,696 4,536 3,052
-------------- -------------- -------------
Consolidated Group Statement of Cash Flows
For the six months ended 30 June 2023
Notes 6 months 6 months 12 months
to 30 June to 30 June to 31 December
'23 '22 '22
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Cash flow from operating
activities
Cash (outflow) / inflow
from operations (989) (418) 1,216
Interest paid (69) (57) (116)
Taxation - 5 6
-------------- -------------- ----------------
Net cash (outflow) /
inflow from operating
activities (1,058) (470) 1,106
-------------- -------------- ----------------
Cash flows from investing
activities
Purchase of property,
plant & equipment 6 (28) (62) (87)
Disposal of property,
plant & equipment 6 - 68 -
Purchase of own shares - - (50)
Net cash (outflow) /
inflow from investing
activities (28) 6 (137)
-------------- -------------- ----------------
Cash flows from financing
activities
Bank loans repaid 8 (161) (137) (298)
Payment of finance lease
obligations (82) (161) (166)
Net cash outflow from
financing activities (243) (298) (464)
-------------- -------------- ----------------
(Decrease) / increase
in cash and cash equivalents (1,329) (762) 505
Cash at beginning of period 1,885 1,380 1,380
-------------- -------------- ----------------
Cash at end of period 7 556 618 1,885
-------------- -------------- ----------------
Reconciliation of operating
loss to net cash flow
from operating activities
Operating loss (355) (320) (1,509)
Goodwill impairment - - 1,500
Loss on disposal - - (6)
Depreciation of property,
plant & equipment 148 167 332
Effect of foreign exchange
rate moves (5) 13 (25)
Decrease / (increase)
in receivables 587 62 (328)
(Decrease) / increase
in payables (1,364) (340) 1,252
-------- ------ --------
Cash flow from operating
activities (989) (418) 1,216
-------- ------ --------
Consolidated Group Statement of Changes in Equity
For the six months ended 30 June 2023
Share Share Special Own Retained Total
Six months to capital premium reserve Shares earnings equity
30 June '23 Held
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January
'23 195 4,868 233 (50) (2,194) 3,052
Foreign currency
translation - - - - (5) (5)
Loss for the
period - - - - (351) (351)
--------- --------- --------- --------- ---------- ---------
At 30 June
'23 195 4,868 233 (50) (2,550) 2,696
--------- --------- --------- --------- ---------- ---------
Share Share Special Own Retained Total
Six months to capital premium reserve Shares earnings equity
30 June '22 Held
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January
'22 195 4,868 233 - (460) 4,836
Foreign currency
translation - - - - 11 11
Loss for the
period - - - - (311) (311)
----------- --------- --------- --------- ---------- ---------
At 30 June
'22 195 4,868 233 - (760) 4,536
----------- --------- --------- --------- ---------- ---------
Notes to the financial statements
For the six months ended 30 June 2023
1. General information
SpaceandPeople plc is a limited liability company incorporated
and domiciled in Scotland (registered number SC212277) which is
quoted on AIM (ticker: SAL).
This condensed consolidated interim financial information has
been reviewed, but not audited, by the auditors, and their
independent review is set out earlier in this report. It does not
constitute statutory accounts as defined by Section 434 of the
Companies Act 2006. The financial information for the 12 months to
31 December 2022 has been extracted from the statutory accounts for
that period. These published accounts were reported on by the
auditors without qualification or an emphasis of matter reference
and did not include a statement under section 498 of the Companies
Act 2006 and have been delivered to the Registrar of Companies.
This condensed consolidated interim financial information was
approved by the board on 22 September 2023.
2. Basis of preparation
This condensed consolidated interim financial information for
the six months ended 30 June 2023 has been prepared in accordance
with IAS 34 'Interim financial reporting'. The condensed
consolidated interim financial information should be read in
conjunction with the financial statements of the Group for the
period ending 31 December 2022 which were prepared on a going
concern basis under the historical cost convention in accordance
with International Financial Reporting Standards (IFRS) as adopted
by the UK, and those parts of the Companies Act 2006 applicable to
companies reporting under IFRS.
3. Accounting policies
The accounting policies adopted in the preparation of the
condensed consolidated interim financial information are consistent
with those applied in the financial statements of the Group for the
year ended 31 December 2022.
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.
Management information tools including budgets and cash flow
forecasts are used to monitor and manage current and future
liquidity.
The current and future financial position of the Group,
including its cash flows and liquidity, continue to be reviewed by
the Directors. They take a prudent view on the continuing recovery
in the Group's business post Covid and in light of current
inflationary and other macroeconomic factors impacting on the
business, its customers and suppliers. They have also considered
the Group's ability to withstand the loss of key contracts and any
mitigating actions that would be available to them.
The Group has term loans in place that mature in 2025 and 2027
along with overdraft facilities available until 2024. Financial
covenants are in place that reflect the current and budgeted
trading position and the Directors are confident of renewing the
overdraft facilities in the normal course of business.
The Group continues to manage its cash flows prudently and the
Directors are confident that the current resources and available
funding facilities will provide sufficient headroom to meet the
forecast cash requirements whilst remaining within its financial
covenants.
As such, the Directors consider that it is appropriate to
prepare the financial statements on the going concern basis.
4. Segmental reporting
The Group splits its business into two main areas, being
promotions and retail. The retail business is further sub-divided
into both UK and German territories. The Group maintains its head
office in Glasgow and has a subsidiary office in Hamburg, Germany.
The Group has determined that these, along with head office
functions, are the principal operating segments as the performance
of these segments is monitored separately and reviewed by the
Board.
The following tables present revenues and loss/profitability
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.
Promotions Retail Retail Head Group
UK UK Germany Office
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Six months to 30 June
'23
Revenue 1,268 468 801 - 2,537
----------- --------- --------- --------- ---------
Segment (loss) / profit
before tax 174 (52) (36) (510) (424)
----------- --------- --------- --------- ---------
Six months to 30 June
'22
Revenue 1,222 609 582 - 2,413
----------- --------- --------- --------- ---------
Segment profit / (loss)
before tax 244 16 (32) (605) (377)
----------- --------- --------- --------- ---------
12 months to 31 December
'22
Revenue 3,011 1,236 1,282 - 5,529
----------- --------- --------- --------- ---------
Segment profit / (loss)
before tax 944 (1,312) 31 (1,455) (1,625)
----------- --------- --------- --------- ---------
5. Goodwill
30 June 30 June '22 31 December
Net book value '23 GBP'000 '22
GBP'000 GBP'000
Opening and closing balance 5,381 6,881 5,381
--------- ------------ ------------
6. Property, plant and equipment
30 June 30 June '22 31 December
Net book value '23 GBP'000 '22
GBP'000 GBP'000
Opening balance 545 690 690
IFRS16 Lease additions 44 123 168
Additions 28 62 87
Disposals - (68) (68)
Depreciation (148) (167) (332)
Closing balance 469 640 545
--------- ------------ ------------
The right of use lease liabilities are secured against the right
of use assets.
7. Cash & cash equivalents
30 June '23 30 June '22 31 December
GBP'000 GBP'000 '22
GBP'000
Cash at bank and on hand 556 618 1,885
------------ ------------ ------------
8. Borrowings
At the reporting date the Group had the following
borrowings:
30 June '23 30 June '22 31 December
GBP'000 GBP'000 '22
GBP'000
Bank loans:
Less than one year 322 322 322
Greater than one year 997 1,320 1,158
------------ ------------ ------------
1,319 1,642 1,480
------------ ------------ ------------
As at 30 June 2023, SpaceandPeople plc had GBP1.32 million
(2022: GBP1.64 million) of CBILS term loans, GBP0.44 million of
which expire in April 2025 and GBP0.88 million expire in January
2026. SpaceandPeople plc also had GBP0.75 million of overdraft
facilities of which GBPnil was used as at 30 June 2023 (2022:
GBPnil). The bank facilities are secured by floating charge over
the Group's assets and are subject to interest between 3.25% to
3.8% plus base.
9. Called up share capital
Allotted, issued and fully 30 June '23 30 June '22 31 December
paid '22
Class Nominal
value
Ordinary 10p GBP 195,196 195,196 195,196
Number 1,951,957 1,951,957 1,951,957
10. Earnings per share
Earnings per share (EPS) has been calculated using the loss
after taxation attributable to owners of the company for the period
and the weighted average number of shares in issue.
30 June '23 30 June '22 31 December
GBP'000 GBP'000 '22
GBP'000
Loss after tax for the
period (351) (311) (1,714)
Non-recurring charges - - 1,500
Loss after tax for the
period before non-recurring
costs (351) (311) (214)
Weighted average number
of shares in issue during '000 '000 '000
the period
* Number of shares in issue during the period 1,952 1,952 1,952
* Impact from purchase of own shares on
28 September 2022 (50) - (13)
* Weighted average number of 10p ordinary shares 1,902 1,952 1,939
* Weighted average number of share options 182 110 137
* Weighted average number of diluted ordinary 10p
shares 2,084 2,062 2,076
There are share options outstanding as at the end of each period
which, if exercised, would increase the number of shares in issue.
However, in these periods, there is an anti-dilutive effect and as
such the effects of anti-dilutive potential ordinary shares are
ignored in calculating diluted EPS.
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IR KZGZLNZDGFZM
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