TIDMTENG
RNS Number : 0332Z
Ten Lifestyle Group PLC
15 May 2019
15 May 2019
Ten Lifestyle Group plc
("Ten" or "the Company" or "the Group")
Interim results for the six months ended 28 February 2019
Ten Lifestyle Group plc (AIM: TENG), a leading
technology-enabled lifestyle and travel platform for the world's
wealthy and mass affluent, announces its unaudited Interim Results
for the six months ended 28 February 2019 ("H1 2019", or "the
period").
Financial Highlights
-- Net Revenue(1) up 24% (H1 2018: 6%) to GBP21.5m (H1 2018:
GBP17.3m) with double digit growth in all three global regions.
-- Adjusted EBITA(2) of -GBP2.9m (H1 2018: -GBP1.4m) reflects
planned technology investment and global roll out.
-- Robust balance sheet with cash of GBP13.2m (FY 2018: GBP20.7m) and no debt.
Operational Highlights
-- Successful growth of existing contracts and three new
contract wins has led to Net Revenue growth of 24%.
-- Continued investment into technology and associated content
has helped win new contracts and improve operational
efficiencies.
-- Record member satisfaction levels(3) .
-- Ten's proprietary digital platform has now launched in over
100 countries, 14 languages, 36 currencies and with over 10 client
brands, creating a springboard for future growth.
(1) Net Revenue excludes the direct cost of sales relating to
certain member transactions managed by the Group.
2 Adjusted EBITA is operating (loss)/profit before interest,
taxation, amortisation, share-based payments and exceptional
costs.
3 Member satisfaction levels are measured by Net Promoter Scores
from member surveys undertaken by Ten.
Outlook
Trading since the end of the period is on track to deliver
further growth and is expected to be in line with market
expectations for the full year ending 31 August 2019. Since 28
February 2019, we have won three new contracts, including a
flagship Employee Loyalty contract, helping us establish Employee
Loyalty as a new vertical for Ten, and the Board remains confident
in the strong pipeline of new business. Our investments in
technology, as well as operational efficiencies, are anticipated to
deliver improved operating leverage. This will drive reduced cash
outflow in the second half of the year compared to the first half
and the Board is confident that the Group will retain a strong cash
position at year end.
The Board extends a warm welcome to Alan Donald as he is
appointed as Chief Financial Officer, effective 24 June 2019.
Alex Cheatle, CEO of Ten Lifestyle Group, said;
"In the first half of the year, we increased Net Revenue by 24%,
achieving double digit growth in all three of the global regions.
As we leverage our technology and content to deliver our service
more efficiently, we are delivering operational efficiencies in
newer markets in APAC and the Americas as they mature.
We continue to achieve record member satisfaction levels for our
offering. In addition, we have invested to enhance our technology
platform, communication systems and IT infrastructure. In
particular, the continued successful roll out of our proprietary
technology platform, which we believe is a world first in the
concierge market, creates a competitive advantage to grow existing
contracts and win new business.
The platform allows our members to self-serve their travel,
dining and tickets needs and redeem offers and benefits. By doing
so, it enables us to reduce the 'per-interaction' cost of serving
members and provides a more cost effective and powerful tool to
build brand loyalty and customer engagement.
Overall, we continue to make good progress towards our objective
of becoming the world's most trusted service platform."
Analyst Presentation
An analyst presentation will be held at 09:00am on 15 May 2019
at the offices of Tavistock, 1 Cornhill, London EC3V 3ND.
Please RSVP to tengroup@tavistock.co.uk.
Dial-in details for the presentation are also available:
Dial-in: +44 (0)800 358 9473
Participant pin: 58123604#
For further information please visit www.tengroup.com or
call:
Ten Lifestyle Group plc via Tavistock
Alex Cheatle, Chief Executive Officer +44 (0)20 7479
Sean Hegarty, Chief Financial Officer 3427
Jefferies International Limited, Nominated
Advisor
Simon Hardy +44 (0) 20 7029
Christopher Binks 8000
Peel Hunt LLP, Joint Broker
Edward Knight
Peter Stewart +44 (0) 20 7418
Nick Prowting 8900
Tavistock, Financial PR & IR
Jos Simson
Simon Hudson +44 (0) 20 7920
Jenny Boyd 3150
Operating and Financial Review
GBPm H1 2019 H1 2018
Revenue 22.6 18.2
-------- --------------
Net Revenue 21.5 17.3
-------- --------------
Operating expenses (excluding amortisation,
share based payments and exceptional items) (24.5) (18.7)
-------- --------------
Other income 0.1 -
-------- --------------
Adjusted EBITA (2.9) (1.4)
-------- --------------
Adjusted EBITA % of Net Revenue (13.3)% (8.1)%
-------- --------------
Amortisation (1.6) (1.4)
-------- --------------
Share-based payments and exceptional items
charge (0.2) (1.0)
-------- --------------
Operating loss before interest and tax (4.7) (3.8)
-------- --------------
Net finance expense (0.1) (1.0)
-------- --------------
Loss before taxation (4.8) (4.8)
-------- --------------
Taxation charge (0.4) (0.1)
-------- --------------
Loss for the period (5.2) (4.9)
-------- --------------
Revenue
Revenue for the six months to 28 February 2019 was GBP22.6m, up
24.3% on the six months to 28 February 2018. Net Revenue was
GBP21.5m, up 24.2% compared to the prior period.
This revenue growth reflects good organic growth of existing
contracts, supported by a series of new contract launches in H2
2018.
Development of corporate contracts
Contract Category(1) Signed as at Signed as at
28 February 2019 31 August 2018
Extra Large 1 0
------------------ ----------------
Large 6 6
------------------ ----------------
Medium 19 19
------------------ ----------------
Total 26 25
------------------ ----------------
(1) Ten categorises its corporate client contracts based on the
annualised value paid, or expected to be paid, by the corporate
client for the provision of concierge and related services by Ten
as: Small contracts (below GBP0.25m); Medium contracts (between
GBP0.25m and GBP2 million); Large contracts (over GBP2 million);
and Extra Large contracts (over GBP5 million). This does not
include the revenue generated from suppliers through the provision
of concierge services.
-- Growth of a contract in the Americas from Large to Extra Large.
-- Three new contracts won during H1 2019, namely, ICBC Bank
(Small), ABSA Bank (Small) and Royal Bank of Canada (Large).
-- One Small contract lost in the period.
-- Three further contracts won since the end of the period, to
be launched in 2019, including wins in new vertical Employee
Loyalty (expected to be Medium by the end of 2019) and Scandinavia
(expected to be Medium in FY 2020).
Operating expenses
The six month period to 28 February 2019 was, as expected, a
period of investment for the Group. Consequently, operating
expenses increased to GBP24.5m (H1 2018: GBP18.7m).
The majority of the increase in operating expenses was due to
increased payroll costs resulting from additional recruitment in
the second half of FY 2018, as the Group invested to deliver its
strategic objectives.
This included direct servicing headcount increases in all
regions to support the increase in the number and size of
contracts. However, due to improved operational efficiencies, as
Lifestyle Managers become more effective at managing requests, this
growth was at a lower rate than the increase in revenue for the
period. In addition, direct servicing headcount was increased to
support early stage roll outs into newer markets.
Headcount additions were also made to drive investment in the
enhanced technology platform, communications and IT infrastructure.
This increase in central costs has helped enable the Group to
establish robust, expert servicing hubs, create new content and
supplier relationships as well as invest in our market-leading
lifestyle and travel proprietary digital platform to drive member
engagement and transaction volumes in all markets. These 'launch'
investments continued throughout the first half of FY 2019 and we
are now reducing absolute central costs where appropriate, whilst
maintaining investment in our software development.
We are reaching operational maturity in the Americas and APAC
regions. We have not launched any new operating centres outside
EMEA in the period and we expect growth to be largely in markets in
which we have existing operations, which we expect to support more
profitable, and more cash-generative growth.
Our 22 offices cover eight of the top 10 countries in the world
by GDP and we can now provide 24/7 service to over 95% of the
world's population of High Net Worth Individuals(1) in a language
in which they are fluent. The 'initial build' content and
development of our digital platform is complete and live in all 10
of the languages(2) spoken most by High Net Worth Individuals.
(1) High-Net-Worth-Individuals with $1m in liquid financial
assets.
(2) Management consider the following languages to be the most
widely spoken by High Net Worth Individuals globally: English,
Mandarin, Spanish, French, Arabic, Russian, Portuguese, German,
Japanese and Cantonese.
Adjusted EBITA
Adjusted EBITA, as reported, takes into account all Group
operating costs, other than amortisation of GBP1.6m (H1 2018:
GBP1.4m), share-based payment expenses of GBP0.2m (H1 2018:
GBP0.6m) and exceptional costs of nil (H1 2018: GBP0.4m - mostly
attributed to the IPO listing on AIM). On this basis, Adjusted
EBITA was a loss of GBP2.9m (H1 2018: loss of GBP1.4m).
Regional performance
Segmental revenue reporting reflects our servicing location
rather than the location of our corporate clients. This allows us
to understand and track the efficiency and profitability of our
operations around the world.
GBPm H1 2019 H1 2018 % change
EMEA 9.5 7.9 20%
-------- -------- ---------
Americas 7.3 5.4 35%
-------- -------- ---------
APAC 4.7 4.0 18%
-------- -------- ---------
Total 21.5 17.3 24%
-------- -------- ---------
After fully allocating our indirect costs of IT, platform
support, property costs and management across the regions, the
Adjusted EBITA profitability of each regional segment is:
GBPm H1 2019 H1 2018
EMEA 0.4 1.9
-------- --------
Americas (2.3) (3.3)
-------- --------
APAC (1.0) -
-------- --------
Total (2.9) (1.4)
-------- --------
Adjusted EBITA % of Net
Revenue (13.3)% (8.1)%
-------- --------
EMEA
Net Revenue up 20% to GBP9.5m (H1 2018: GBP7.9m). Operating
efficiencies in this market continue to improve, however, some
investment into newer markets in the region (CEMEA and a first
office in Scandinavia) has partly impacted operating margin
percentage. More significantly, as central costs are allocated in
line with operating headcount in the regions, there has been
increased allocation of central costs to EMEA as operating
headcount in other regions have proportionately decreased. This has
reduced overall Adjusted EBITA in the region.
AMERICAS
Net Revenue from the Americas in the first half of the year
increased by 35% to GBP7.3m (H1 2018: GBP5.4m). Strong revenue
performance reflects recent contract wins and growth of existing
contracts in both North and Latin American markets. Investment in
training, service quality and developing our local expertise, as we
build scale in LATAM, has meant we now have established operations
at-scale, bringing direct headcount operating efficiencies broadly
into line with the more mature EMEA region. North America has also
steadily improved in efficiency during the period. Adjusted EBITA
increased by GBP1.0m to a GBP2.3m loss.
APAC
APAC's Net Revenue in the first half of the year increased by
18% to GBP4.7m (H1 2018: GBP4.0m) as activity in the region has
benefited from the launches of larger contracts in the second half
of FY 2018. Operating margins reflect investment during the early
stages of these launches. In addition, the allocation of increased
central costs has also impacted EBITA. Adjusted EBITA is down
GBP1.0m to a GBP1.0m loss.
Cash flow
GBPm H1 2019
Loss before tax (4.8)
--------
Net finance expense 0.1
--------
Movement in working capital (1.7)
--------
Non-cash items (share-based payments, depreciation
and amortisation charges) 2.3
--------
Pre tax operating cash out flows (4.1)
--------
Capital expenditure (0.7)
--------
Investment in intangibles (2.1)
--------
Taxation (0.4)
--------
Cash outflow (7.3)
--------
Funded by
---------------------------------------------------- --------
Purchase of Treasury shares (0.1)
--------
Repayment of finance leases and net interest (0.1)
--------
Net funding (0.2)
--------
Reduction in cash (7.5)
--------
Cash balance 13.2
--------
Pre tax operating cash outflows were GBP4.1m, reflecting the
operating loss previously noted, as well as an increase in net
working capital, mainly an increase in trade receivables of GBP1.2m
due to the timing of receipts for specific invoices, which have now
been received.
Additionally, as planned, there was GBP2.1m (H1 2018: GBP2.2m)
capital investment in the period in both our global content and the
continued development of our digital platform. Additionally,
GBP0.7m of capital investment in our IT infrastructure, which is
largely non-recurring resulted in an overall reduction in cash of
GBP7.5m.
Reduced cash outflow in the second half of the year means the
Group is anticipated to retain a strong cash position at year end,
in line with the Board's expectations.
Balance sheet
GBPm As at 28 February As at 31 August
2019 2018
Intangible assets 8.2 7.7
------------------ ----------------
Property, plant and equipment 2.0 1.7
------------------ ----------------
Cash 13.2 20.7
------------------ ----------------
Other current assets 10.2 9.1
------------------ ----------------
Current liabilities (10.0) (10.5)
------------------ ----------------
Net assets 23.6 28.7
------------------ ----------------
Share capital/Share premium 28.6 28.6
------------------ ----------------
Reserves (5.0) 0.1
------------------ ----------------
Total equity 23.6 28.7
------------------ ----------------
Net assets remain strong with a significant cash position after
the noted investment in our global content, our digital platform
and property, plant and equipment. The Group carries no debt at the
end of the period.
Principle Risks and Uncertainties
The principle risks and uncertainties facing the Group remain
consistent with the Principle Risks and Uncertainties reported in
Ten's 2018 Annual Report.
Alex Cheatle Sean Hegarty
Chief Executive Officer Chief Finance Officer
14 May 2019 14 May 2019
Consolidated statement of comprehensive income
GBP'000 Note 6 months to 6 months to
28 February 28 February
2019 2018
Unaudited Unaudited
Revenue 2 22,592 18,179
Air ticket cost of sales (1,134) (904)
------------ ------------
Net Revenue 2 21,458 17,275
Other cost of sales (406) (400)
Gross profit 21,052 16,875
Administrative expenses (25,784) (20,673)
Other income 75 -
Operating (loss)/profit before interest,
taxation, amortisation, share-based payments
and exceptional items ("Adjusted EBITA") (2,858) (1,401)
Amortisation 3 (1,639) (1,383)
Share-based payment expense (160) (597)
Exceptional items - (417)
----------------------------------------------- ----- ------------ ------------
Operating loss (4,657) (3,798)
Finance income 43 1
Finance expense (146) (1,044)
------------ ------------
Loss before taxation (4,760) (4,841)
Taxation expense 4 (395) (105)
------------ ------------
Loss for the period (5,155) (4,946)
============ ============
Other comprehensive income:
Foreign currency translation differences 90 272
Total comprehensive loss for the period (5,065) (4,674)
============ ============
Basic and diluted loss per ordinary share 5 (6.4)p (8.6)p
The consolidated statement of comprehensive income has been
prepared on the basis that all operations are continuing
operations.
Consolidated statement of financial position
At At
GBP'000 Note 28 February 31 August 2018
2019
Unaudited Audited
Non-current assets
Intangible assets 3 8,181 7,715
Property, plant and equipment 1,985 1,702
Total non-current assets 10,166 9,417
------------ ---------------
Current assets
Inventories 55 88
Trade and other receivables 10,175 9,014
Cash and cash equivalents 13,204 20,659
---------------
Total current assets 23,434 29,761
------------ ---------------
Total assets 33,600 39,178
============ ===============
Current liabilities
Trade and other payables (9,493) (10,027)
Obligations under finance leases (64) (64)
Provisions (396) (396)
Total current liabilities (9,953) (10,487)
------------ ---------------
Net current assets 13,481 19,274
============ ===============
Non-current liabilities
Obligations under finance leases - (32)
---------------
Total non-current liabilities - (32)
------------ ---------------
Total liabilities (9,953) (10,519)
============ ===============
Net assets 23,647 28,659
============ ===============
Equity
Called up share capital 81 81
Share premium account 28,480 28,480
Merger relief reserve 1,993 1,993
Treasury reserve (30) 77
Foreign exchange reserve (408) (498)
Retained deficit (6,469) (1,474)
Total equity 23,647 28,659
============ ===============
Consolidated statement of changes in equity
Share Merger Foreign
Share premium relief exchange Treasury Retained
GBP'000 capital account reserve reserve reserve deficit Total
Balance at 1 September 2017 (Audited) 6 9,743 1,993 (388) (84) (4,270) 7,000
-------- -------- -------- --------- --------- --------- --------
Period ended 31 August 2018:
Loss for the year - - - - - (8,112) (8,112)
Foreign exchange - - - (110) - - (110)
Total comprehensive income for the year - - - (110) - (8,112) (8,222)
Issue of share capital 14 18,248 - - - - 18,262
Bonus issue of share capital 44 (44) - - - - -
Cancellation of balance on share premium
account - (9,961) - - - 9,961 -
Costs relating to issue of shares on Initial
Public Offering (IPO) - (655) - - - - (655)
Exercise of share options 14 7,566 - - - - 7,580
Shares issued on conversion of convertible
loan 3 3,583 - - - - 3,586
Shares sold by Employee Benefit Trust (EBT) - - - - 161 - 161
Equity-settled share-based payments charge - - - - - 947 947
Balance at 31 August 2018 (Audited) 81 28,480 1,993 (498) 77 (1,474) 28,659
======== ======== ======== ========= ========= ========= ========
Period ended 28 February 2018:
Loss for the period - - - - - (5,155) (5,155)
Foreign exchange - - - 90 - - 90
Total comprehensive income for the period - - - 90 - (5,155) (5,065)
Shares purchased by Employee Benefit Trust
(EBT) - - - - (107) - (107)
Equity-settled share-based payments charge - - - - - 160 160
Balance at 28 February 2019 (Unaudited) 81 28,480 1,993 (408) (30) (6,469) 23,647
======== ======== ======== ========= ========= ========= ========
Condensed consolidated statement of cash flows
GBP'000 Note 6 months to 6 months to
28 February 2019 28 February
2018
Unaudited Unaudited
Cash flows from operating activities
Loss for the period, after tax (5,155) (4,946)
Adjustments for:
Taxation 395 105
Finance expense 146 856
Investment income (43) (1)
Amortisation of intangible assets 3 1,639 1,383
Depreciation of property, plant and
equipment 428 301
Equity-settled share-based payment
expense 160 597
Change in value of derivatives - 187
Movement in working capital:
Decrease/(Increase) in inventories 32 (72)
Increase in trade and other receivables (1,161) (2,135)
(Decrease)/Increase in trade and
other payables (566) 1,435
----------------- ------------
Cash used by operations (4,125) (2,290)
Tax paid (395) (426)
Net cash used by operating activities (4,520) (2,716)
----------------- ------------
Cashflows from Investing activities
Purchase of intangible assets 3 (2,104) (2,168)
Purchase of property, plant and equipment (712) (491)
Finance income 41 1
Net cash used by investing activities (2,775) (2,658)
----------------- ------------
Cash flows from financing activities
Proceeds from issue of shares - 25,229
Proceeds from Treasury shares - 186
Purchase of Treasury shares (107) -
Repayment of other loans - (3,977)
Payment of finance lease obligations (39) (41)
Interest paid (10) (139)
Finance lease interest paid (4) (7)
Net cash (used)/generated by financing
activities (160) 21,251
----------------- ------------
Net (decrease)/increase in cash and
cash equivalents (7,455) 15,877
Cash and cash equivalents at beginning
of period 20,659 7,886
Cash and cash equivalents at end
of period
Cash at bank and in hand 13,204 24,370
Invoice financing facility - (607)
Cash and cash equivalents 13,204 23,763
================= ============
Notes to the Interim Financial Information
1. Basis of preparation
These interim consolidated financial statements have been
prepared using accounting policies based on International Financial
Reporting Standards (IFRS and IFRIC Interpretations) issued by the
International Accounting Standards Board ("IASB") as adopted for
use in the EU. They do not include all disclosures that would
otherwise be required in a complete set of financial statements and
should be read in conjunction with the 31 August 2018 Annual
Report. The financial information for the half years ended 28
February 2019 and 28 February 2018 does not constitute statutory
accounts within the meaning of Section 434 (3) of the Companies Act
2006 and both periods are unaudited.
The annual financial statements of Ten Lifestyle Group plc ('the
Group') are prepared in accordance with IFRS as adopted by the
European Union. The comparative financial information for the year
ended 31 August 2018 included within this report does not
constitute the full statutory Annual Report for that period. The
statutory Annual Report and Financial Statements for year ended 31
August 2018 have been filed with the Registrar of Companies. The
Independent Auditors' Report in the Annual Report and Financial
Statements for the year ended 31 August 2018 was unqualified, did
not draw attention to any matters by way of emphasis and did not
contain a statement under 498(2)-(3) of the Companies Act 2006.
The Group has applied the same accounting policies and methods
of computation in its interim consolidated financial statements as
in its year ended 31 August 2018 annual financial statements,
except for those that relate to new standards and interpretations
effective for the first time for periods beginning on (or after) 1
January 2018, and will be adopted in the year ended 31 August 2019
financial statements. New standards impacting the Group that will
be adopted in the annual financial statements for the year ended 31
August 2019, and which have given rise to changes in the Group's
accounting policies are:
-- IFRS 9 Financial Instruments; and
-- IFRS 15 Revenue from Contracts with Customers
Details of the impact of these two standards are given below.
Other new and amended standards and interpretations issued by the
IASB that will apply for the first time in the next annual
financial statements are not expected to have a material impact on
the Group.
IFRS 9 Financial Instruments
IFRS 9 has replaced IAS 39 Financial Instruments: Recognition
and Measurement, and has had an effect on the Group in the
following areas:
-- The impairment provision on financial assets measured at
amortised cost (such as trade and other receivables) have been
calculated in accordance with IFRS 9's expected credit loss model,
which differs from the incurred loss model previously required by
IAS 39. No material differences were identified in the six-month
period to 28 February 2018 or 12 month period to 31 August
2018.
-- The Group held an embedded derivative within the convertible
loan notes issued in June 2017 which was converted into Equity on
IPO. There is no accounting impact of the transition as the
conversion took place in the six month period to 28 February 2018
and therefore the value on conversion was known.
IFRS 15 Revenue from Contract with Customers
IFRS 15 has replaced IAS 18 Revenue as well as various
Interpretations previously issued by the IFRS Interpretations
Committee, noting the Group has adopted the modified retrospective
approach. There is no material impact on any revenue stream for the
Group and there are no new revenue streams in the period.
There are a number of standards and interpretations which have
been issued by the International Accounting Standards Board that
are effective for periods beginning subsequent to 31 August 2019
(the date on which the Group's next annual financial statements
will be prepared up to) that the Group has decided not to adopt
early.
The most significant of these is IFRS 16 'Leases' (mandatorily
effective for periods beginning on or after 1 January 2019). For
leases classified as operating leases, under current accounting
requirements, the Group does not recognise related assets or
liabilities, and instead spreads the lease payments on a
straight-line basis over the lease term as an operating expense,
disclosing in its annual financial statements the total commitment.
On adoption of IFRS 16, for the Group being as at 1 September 2019,
this will result in the Group recognising an asset (a 'right of use
asset') and a liability (a 'lease liability') for all contracts
that are, or contain, a lease. The Group will measure the
right-of-use asset by reference to the measurement of the total
lease liability on the adoption date. Furthermore, instead of
recognising an operating expense for its operating lease payments,
the Group will instead recognise interest on its lease liabilities
and amortisation on its right-of-use asset. This will, on adoption,
increase reported EBITA and Adjusted EBITA by the amount of the
Group's current operating lease expense.
Going Concern
The consolidated financial statements have been prepared on a
going concern basis. In reaching their assessment, the directors
have considered a period extending at least 12 months from the date
of approval of this half-yearly financial report. This assessment
has included consideration of the forecast performance of the
business for the foreseeable future, the cash and financing
facilities available to the Group, and the repayment terms in
respect of the Group's borrowings.
The Board of Directors approved this interim report on 14 May
2019.
2. Segmental Information
The total revenue for the Group has been derived from its
principal activity; the provision of concierge services.
6 months to 6 months to
GBP'000 28 February 28 February
2019 2018
Unaudited Unaudited
EMEA 9,398 7,821
Americas 7,318 5,433
Asia 4,742 4,021
Segment Net Revenue 21,458 17,275
Add back: Air ticket cost of sales 1,134 904
Revenue 22,592 18,179
EMEA 418 1,909
Americas (2,270) (3,275)
Asia (1,006) (35)
------------ ------------
Adjusted EBITA (2,858) (1,401)
Amortisation (1,639) (1,383)
Share-based payment expense (160) (597)
Exceptional costs - (417)
------------
Operating loss (4,657) (3,798)
Foreign exchange (loss)/gain (136) (656)
Other net finance expense 33 (387)
Loss before taxation (4,760) (4,841)
============ ============
Net Revenue is a non-GAAP Company measure that excludes the
direct cost of sales relating to member transactions managed by the
Group, such as the cost of airline tickets sold under the Group's
ATOL licences. Net Revenue is the measure of the Group's income on
which segmental performance is measured.
Adjusted EBITA is a Company non-GAAP specific measure excluding
interest, taxation, amortisation, share-based payments and
exceptional costs, the latter being expenses which are considered
to be one-off and non-recurring in nature which relate to the IPO
in the previous period.
Adjusted EBITA is the main measure of performance used by the
Company's Chief Executive Officer, who is considered to be the
chief operating decision maker. Adjusted EBITA is the principal
profit measure for a segment.
The statement of financial position is not analysed between
reporting segment. Management and the chief operating
decision-maker consider the statement of financial position at
Group level.
3. Intangible Assets
The Group capitalised GBP2.1m (H1 2018: GBP2.2m, FY 2018:
GBP4.3m) of costs representing the development of Ten's global
digital platform during the period, resulting in a net book value
of GBP8.2m (H1 2018: GBP6.9m, FY 2018: GBP7.7m) after an
amortisation charge of GBP1.6m (H1 2018: GBP1.4m, FY 2018:
GBP2.8m).
No impairment charge was required in relation to intangible
assets in the period (H1 2018: GBPnil, FY 2018: GBPnil).
4. Taxation
The income tax expense has been recognised based on the best
estimate of the weighted average annual effective UK corporation
tax rate expected for the full financial year and any R&D tax
credits received by the group in the period. The Group currently
forecasts a loss for the financial year ending 31 August 2019 and
therefore no charge has been recognised in regard to UK corporation
tax in the period. In addition, no R&D tax credits were
received in the six month period to 28 February 2019.
The income tax expense of GBP0.4m (H1 2018: GBP0.3m credit)
includes foreign taxes recognised by overseas Group companies on a
territory by territory basis using the expected effective tax rate
for the full year. In the six months period to 28 February 2018,
the tax charge was offset by the receipt of an R&D tax credit
of GBP0.4m resulting in a credit to the profit and loss
account.
5. Earnings per Share
6 months to 6 months to
GBP'000 28 February 28 February
2019 2018
Unaudited Unaudited
Loss attributable to equity shareholders of
the parent (5,155) (4,946)
------------ ------------
Weighted average number of ordinary shares
in issue 80,650,049 13,762,686
Impact of bonus issue - 43,810,367
Weighted average number of ordinary shares
in issue adjusted for bonus issue 80,650,049 57,573,053
------------ ------------
Basic loss per share (pence) (6.4)p (8.6)p
------------ ------------
Where the Group has incurred a loss in the six month period to
28 February 2019, the diluted earnings per share is the same as the
basic loss per share as the loss has an anti-dilutive effect.
6. Cautionary Statement
This document contains certain forward-looking statements
relating to Ten Lifestyle Group plc. The Company considers any
statements that are not historical facts as "forward-looking
statements". They relate to events and trends that are subject to
risk and uncertainty that may cause actual results and the
financial performance of the Company to differ materially from
those contained in any forward-looking statement. These statements
are made by the Directors in good faith based on information
available to them and such statements should be treated with
caution due to the inherent uncertainties, including both economic
and business risk factors, underlying any such forward-looking
information.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR VZLFFKEFBBBF
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