TIDMESC
RNS Number : 0449B
Escape Hunt PLC
18 September 2018
18 September 2018
Escape Hunt plc
("Escape Hunt", the "Company" or the "Group")
Unaudited Half Year Results for the Six Months ended 30 June
2018
Escape Hunt plc (AIM: ESC), a global leader in the high growth
escape rooms sector, is pleased to announce its interim results for
the half year ending 30 June 2018.
Half year ended Half year ended
30 June 2017 30 June 2018
(GBP'000)* (GBP'000)
Revenue 193 800
---------------- ----------------
Gross Profit 107 60
---------------- ----------------
Adjusted EBITDA (139) (1,375)
---------------- ----------------
Loss per share (7.88p) (18.57p)
---------------- ----------------
* The results for the half year 2017 only include two months of
trading of the Escape Hunt business which was acquired in May
2017.
H1 2018 OPERATIONAL AND FINANCIAL HIGHLIGHTS
-- Escape Hunt's first three UK owner-operated sites opened in
March with trading in line with expectations
-- On target to have nine UK owner operated sites open before the year end
-- Developed higher quality, deeply immersive escape room games
all achieving #1 TripAdvisor scores
-- Secured 5 year exclusive licence agreement with BBC Worldwide
to create Doctor Who themed escape rooms
-- Franchise network increased revenues by 12%, in constant
currencies, in the first half of the year
-- Adjusted EBITDA loss of GBP1.38m (2017: GBP0.139m)
-- Loss in line with expectation and relates to advance build up
of Head Office resource and initial site trading losses
-- Net cash position of GBP6.4m at 30 June 2018 (31 December 2017: GBP10.6m)
-- Basic loss per share ('EPS') of 18.57p (2017 loss per share: 7.88p)
CHAIRMAN'S STATEMENT
The strategic change from a pure play franchise model to a
hybrid model, involving the roll out of owner-operated sites, has
made very significant strides. There have been challenges along the
way, which is perhaps not unexpected given that Escape Hunt is a
relatively early stage business, and that it is raising the
barriers to entry in what has been a "Ma & Pa" industry. The
management's decision, post the acquisition, to rebrand the
business and develop higher specification industry leading games
came to fruition during the period. The objective is to provide a
strong platform to differentiate the group from its competitors and
to establish Escape Hunt as the premier brand in the rapidly
evolving escape room sector.
Whilst we have had challenges to overcome, both in obtaining
planning permission for our new UK sites as well as putting
together a reliable supply chain for games production, we have now
made good progress in both securing sites and finding production
partners.
Since the agreement with the BBC, we are receiving much inbound
interest from retail property operators, since experiential leisure
is regarded as an attractive addition to the landscape to drive
interest and footfall.
Although still at an early stage of its journey, Escape Hunt is
beginning to reap the rewards of the repositioning of the business.
We are particularly proud that all of our newly opened UK sites are
already ranked at #1 on the TripAdvisor scores for the "Fun &
Games" sector in their respective cities. The Group is delighted to
report that, relative to the number of rooms opened, sales at the
new UK sites is in line with expectations and EBITDA is ahead of
expectations on the same basis. The focus in the short term is to
ensure that performance across all of the Group's UK venues
continues to show strong growth and also to ensure the smooth roll
out of the remaining five sites this year. Together with the site
at Bournemouth which was acquired in December 2017, Escape Hunt
expects to have nine sites open by the end of this year.
The Group's premium games, coupled with the professionalism of
the team, led to BBC Worldwide entering into an exclusive agreement
with Escape Hunt to roll out and operate Doctor Who branded escape
rooms over the next five years. Escape Hunt believes that the
longer-term success of this industry, and the ability to achieve
strong returns for stakeholders, is intertwined with the use of
branded intellectual property. The business is greatly encouraged
by the very positive response from the public to July's Doctor Who
announcement, which bodes well for future sales and occupancy
levels at the venues.
Management will concentrate on larger leisure/property partners
for new franchising opportunities. They have the financial
resources to develop multiple sites and support the production of
more valuable games and higher marketing budgets.
As mentioned in the July trading update the strategic work
referred to above took time to complete but plans are now being
executed at pace. Given the evidence of the newly opened sites, the
Group is reassured that the resultant format is producing the
desired customer response and financial result and I am confident
that Escape Hunt is building the foundations for a successful, high
quality business.
Richard Rose
Non-Executive Chairman
18 September 2018
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) no 596/2014.
Enquiries
Escape Hunt plc
Richard Harpham (Chief Executive Officer) +44 (0) 7584
173958
Alistair Rae (Chief Financial Officer) +44 (0) 7736 883934
Mustapha Omar (Commercial Director) +44 (0) 7767 697596
Stockdale Securities Ltd - Nominated Advisor and Joint
Broker
Daniel Harris, David Coaten, Fiona Conroy +44 (0) 20 7601
6100
Peel Hunt LLP - Joint Broker
George Sellar, Guy Pengelley +44 (0) 20 7418 8900
Yellow Jersey PR Ltd.- Financial Public Relations
Tim Thompson
+44 (0) 7710 718649
Harriet Jackson +44 (0) 7544 275882
Henry Wilkinson +44 (0) 7951 402336
About Escape Hunt plc
The Escape Hunt Group is a global leader in providing live
escape-the-room experiences. Since its first branch opened in 2013,
the business has grown rapidly, building a global network of
franchised outlets. The Company was re-admitted to AIM in May 2017
and has begun rolling out owner-operated branches, together with
creating higher quality games and experiences, which incorporates a
branded IP content strategy.
CHIEF EXECUTIVE'S REPORT
UK Roll Out - Escape Hunt commenced its UK roll out in March
2018, opening owner-operated sites in Birmingham, Bristol and
Leeds. The Company's in-house design studio developed innovative,
premium and deeply immersive escape games which were launched at
these venues. Within only a few months of opening, all three
locations had risen to #1 on TripAdvisor "Fun and Games"
attractions in their respective cities. The strong ratings were
accompanied by customer reviews saying that "Escape Hunt is
redefining the industry" and its games are "exceeding
expectations".
The Company is delighted that in the wake of the strategic
review, which culminated in the rebranding and the development of
higher quality games, it has delivered the desired results by
differentiating Escape Hunt from its rivals and securing its
position as the premier offering in the escape room sector.
The impressive customer reviews for the three locations have led
to site revenue, relative to the number of rooms opened, being in
line with expectations. EBITDA, on the same basis, is ahead of
expectations for the three sites in the first half of the year.
Escape Hunt identified the strategic importance of branded IP in
driving occupancy at its venues and chose not to fill all available
rooms with games initially, instead deciding to retain capacity for
branded content. With the rebrand completed and the new website
launched in July, Escape Hunt is now starting to market weekday
capacity to corporates, which should further increase occupancy
levels.
Whilst the precise timings of openings and early trading
patterns are difficult to predict in early stage companies, Escape
Hunt will be opening its next three sites in the coming weeks and
will end the year with nine owner operated sites trading. As stated
in the July trading update, the decision to hold back rooms for
branded content impacted our original opening schedule, but we are
now executing our plans at pace. The BBC deal has raised our
profile amongst retail landlords and operators who regard us as
valuble partners to attract customers and so drive their footfall.
Accordingly, we believe there will be some good site opportunities
and on attractive commercial terms for 2019. As these opportunities
shape up, and once all this year's sites are operational and their
trading record (including over the Christmas period) have been
established and analysed the board will determine exactly how many
sites and of what size / location they plan to open next year.
Branded IP Content - A key milestone for the Company has been
the signing of a five year exclusive licence agreement with BBC
Worldwide to create "Doctor Who" branded escape rooms. Escape Hunt
will be rolling them out across its network, with the first due to
open in December 2018 in Bristol, following the autumn launch of
the new Doctor Who television series, with the rest expected to
open in the following two months.
IP branded content deals such as this are an important element
of Escape Hunt's strategy. Not only do they boost the brand appeal
to the public and to corporate clients and help to drive increased
occupancy levels, but the IP plays a significant part in
differentiating Escape Hunt from the market and helps establish the
Company as an entertainment player. The reaction to this
announcement has been overwhelmingly positive with a sharp increase
in Escape Hunt's following on all of its social media platforms and
a near five-fold increase in people signing up to the Company's
mailing list.
Team - Escape Hunt closed its Bangkok office in July 2018,
following the establishment of a creative studio team in London.
This small team is led by a recently recruited Creative Director
who joined Escape Hunt from Merlin Entertainments PLC, and all key
positions within the Company have now been filled with high calibre
individuals from a variety of backgrounds in the television and
entertainment space.
Game Rooms Production - Game construction has been a challenge
for the Company, as the industry is still nascent, and there are
very few professionalised, scalable design and build companies
specialising in the Escape Room sector. Management has carried out
a detailed evaluation of set-build contractors and has now
identified a handful of businesses with the requisite skillset to
produce higher quality games on time and to budget. There are
currently five games in production, and with Escape Hunt's game
design team now working much more collaboratively with the external
production teams, the Company expects to see this integrated
approach achieve a more effective result.
Franchise Network - Escape Hunt's franchise revenues during the
period increased 12%, in constant currencies, to US$752k (GBP541k)
compared to US$669k (GBP523k) for the corresponding six months of
last year. Escape Hunt acquired the business on 2 May 2017 so only
two months of the Escape Hunt business' revenue were consolidated
in the first half of last year and which amounted to GBP193k
The Company had 45 franchise sites at the end of last year.
There were 43 at 30 June 2018 as three underperforming franchisees
were closed and one new site opened. Four more sites have been
contracted by our master franchisees and are scheduled to open in
the second half of the year to take the total to 47.
Daily requests to open single site franchises are still being
received by Escape Hunt but management is targeting property
companies and experienced leisure franchisees as potential
partners, who have the financial resources to open multiple sites.
Such franchise partners are more able to support the increased
costs of the new higher specification games and to spend more on
local marketing, both of which will increase standards across the
network, and ultimately the revenue share to Escape Hunt.
Outlook
While it is still early days, the Company is greatly encouraged
by the performance of its UK sites and is particularly excited by
the opportunity with the BBC. Management's focus in the short term
is to open the five new sites and to maximise their performance. It
is anticipated that the launch of Doctor Who themed games and the
effort on B2B marketing to corporates will further drive
occupancy.
As referenced above, once all the information from all our UK
sites has been assimilated and analysed, the Company will then make
a decision in the early part of 2019 about the number and location
of site openings in the UK next year, but in the meantime we are
developing a pipeline of good sites.
FINANCIAL REVIEW
Group reported revenue was GBP800k in the first half of 2018.
The reported revenue however was only GBP193k for the two months
from the date of acquisition of the Escape Hunt business on 2 May
2017 to 30 June 2017. A more meaningful comparison is that of the
franchise revenues for the first six months of 2017 and 2018, which
shows a growth of 12%, in constant currencies, from $669k (GBP523k)
to $752k (GBP541k). Given that there were fewer franchise outlets
during the period, which fell from 45 to 43 branches, this was a
creditable performance. Four new franchise outlets, which are all
sub-franchisees of our existing master franchises, are scheduled to
open in the second half of this year to increase the network to
47.
Owner-operated revenues were modest during the period at GBP259k
reflecting the contribution from our Bangkok branch, and the three
UK sites which only produced sales for three months following their
opening in March. The Bangkok branch was closed at the end of
July.
The adjusted EBITDA loss was GBP1,375k and is stated before
deducting GBP144k of site pre-opening costs and GBP291k relating to
the costs and provisions for closing the Bangkok premises. The
EBITDA loss reflects the build-up of head office resource to
support the opening and operation of multiple sites, and the post
operating losses for the sites until they start to generate
profits. The pre-opening costs are the direct property, site staff
and direct marketing costs in the period up to the month of the
site opening. The total costs relating to the closure of the
Bangkok office and branch amount to GBP291k, of which GBP45k is the
write-off of assets in Bangkok and GBP246k is the cost of
termination payments to the staff and the former Chief Creative
Officer and also a provision for exiting the two properties.
The headline operating loss of GBP3,784k (2017: GBP1,057k) was
largely inflated by the GBP1,823k amortisation of intangibles. This
was derived from the GBP10.2m intellectual property acquired on the
purchase of Escape Hunt last year, and GBP291k relating to the
closure of the Bangkok office and branch and GBP144k of pre-opening
costs. Only GBP1k was paid in taxation taking the loss after tax to
GBP3,762k, which translates into a loss per share of 18.57p (2017
loss per share: 7.88p).
As at 30 June 2018 the Group had net cash of GBP6.4m compared
with GBP10.6m at the start of the period. Capital expenditure of
GBP2.2m, predominantly linked to the roll out of UK sites, and a
GBP1.8m operating cash outflow accounted for most of the GBP4.2m
decrease in net cash.
Richard Harpham
Chief Executive Officer
18 September 2018
STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE
CONDENSED INTERIM REPORT AND CONDENSED FINANCIAL STATEMENTS
The directors confirm that the condensed consolidated interim
financial information has been prepared in accordance with
International Accounting Standard 34, 'Interim Financial
Reporting', as adopted by the European Union and that the Interim
Report includes a fair review of the information required by DTR
4.2.7R and DTR 4.2.8R, namely:
-- an indication of important events that have occurred during
the first six months and their impact on the condensed consolidated
interim financial information, and a description of the principal
risks and uncertainties for the remaining six months of the
financial year; and
-- material related-party transactions in the first six months and any material changes in the related-party transactions described in the last Annual Report.
By order of the Board
Richard Rose
Non-Executive Chairman
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHSED 30 JUNE 2018
Six Six
months months
ended ended
30 June 30 June
2018 2017
Note Unaudited Unaudited
GBP'000 GBP'000
Continuing operations
Revenue 5 800 193
Cost of sales (740) (86)
Gross profit 60 107
Transaction expenses - (870)
Administrative expenses (3,844) (294)
Operating loss (3,784) (1,057)
Adjusted EBITDA (1,375) (139)
Amortisation of intangibles (1,823) (1)
Depreciation (143) (4)
Write-off of assets (45) -
Branch closure costs (246) -
Site pre-opening costs (144) -
Transaction costs - (870)
Share-based payment expense (8) (43)
--------- ---------
Operating loss (3,784) (1,057)
--------------------------------------- ---- --------- ---------
Interest received 23 1
Loss before taxation (3,761) (1,056)
Taxation 7 (1) (1)
Loss after taxation (3,762) (1,057)
Other comprehensive income:
Items that may or will be reclassified
to profit or loss:
Exchange differences on translation
of foreign operations 23 -
Total comprehensive loss (3,739) (1,057)
Loss attributable to:
Equity holders of Escape Hunt plc (3,762) (1,057)
Total comprehensive loss attributable
to:
Equity holders of Escape Hunt plc (3,739) (1,057)
--------- ---------
Loss per share attributable to equity
holders:
Basic (Pence) 6 (18.57) (7.88)
--------- ---------
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30
JUNE 2018
As at As at
20122012 20122012
30 June 31 December
2018 2017
Note Unaudited Audited
GBP'000 GBP'000
ASSETS
Non-current assets
Property, plant and equipment 8 2,681 670
Intangible assets 9 8,610 10,280
Rental deposits 58 32
Loans receivable 107 -
11,456 10,982
Current assets
Trade receivables 19 15
Other receivables and prepayments 441 305
Cash and bank balances 6,385 10,645
6,845 10,965
TOTAL ASSETS 18,301 21,947
LIABILITIES
Current liabilities
Trade payables 282 507
Deferred income 79 83
Other payables and accruals 825 478
1,186 1,068
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30
JUNE 2018 (continued)
As at As at
30 June 31 December
2018 2017
Note Unaudited Audited
GBP'000 GBP'000
Non-current liabilities
Deferred income 423 456
423 456
TOTAL LIABILITIES 1,609 1,524
NET ASSETS 16,692 20,423
EQUITY
Capital and reserves attributable to
equity holders of Escape Hunt Plc
254
Share capital 10 21,076 254
Share premium account 21,076
Merger relief reserve 4,756 4,756
Accumulated losses (9,499) (5,737)
Currency translation reserve 8 (15)
Capital redemption reserve 46 46
Share-based payment reserve 51 43
TOTAL EQUITY 16,692 20,423
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Merger Currency Capital Share-based
Share premium relief translation redemption payment Accumulated
capital account reserve reserve reserve reserve losses Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------- -------- -------- ------------ ----------- ------------ ------------ ----------------
For the six
months ended
30 June 2018:
Balance as at
1 January
2018 254 21,076 4,756 (15) 46 43 (5,737) 20,423
Loss for the
period - - - - - - (3,762) (3,762)
Other
comprehensive
income - - - 23 - - - 23
-------- -------- -------- ------------ ----------- ------------ ------------ ----------------
Total
comprehensive
loss - - - 23 - - (3,762) (3,739)
-------- ------------ ----------- ------------ ------------ ----------------
Share-based
payment
charge - - - - - 8 - 8
-------- -------- -------- ------------ ----------- ------------ ------------ ----------------
Transactions
with owners - - - - - 8 - 8
-------- -------- -------- ------------ ----------- ------------ ------------ ----------------
Balance as at
30 June
2018 254 21,076 4,756 8 46 51 (9,499) 16,692
-------- -------- -------- ------------ ----------- ------------ ------------ ----------------
For the
six
months
ended
30 June
2017:
Balance
as at 1
January
2017 125 8,941 - - - - (1,608) 7,458
Loss for the period - - - - - - (1,057) (1,057)
Other comprehensive -
income - - - - - - -
----- -------- ---- --- --- -------- -------------
Total comprehensive
loss - - - - - - (1,057) (1,057)
----- -------- ---- --- --- -------- -------------
Issue of shares 174 18,626 - - - - - 18,800
Share issue costs - (1,689) - - - - - (1,689)
Buy-back of shares (46) - - - 46 - (46) (46)
Share-based payment
charge - - - - - 43 - 43
----- -------- ---- --- --- -------- -------------
Transactions with owners 128 16,937 - - 46 43 (46) 17,110
----- -------- ---- --- --- -------- -------------
Balance as at 30 June
2017 253 25,878 - - 46 43 (2,711) 23,509
----- -------- ---- --- --- -------- -------------
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHSED 30 JUNE 2018
Six Six
Months months
Ended ended
30 June 30 June
2018 2017
Unaudited Unaudited
GBP'000 GBP'000
Cash flows from operating activities
Loss before income tax (3,761) (1,056)
Adjustments:
Depreciation of property, plant and
equipment 143 4
Amortisation of intangible assets 1,823 1
Write-off of property, plant and equipment 34
Write-off of goodwill 11
Share-based payment expense 8 43
Interest income (23) (1)
Operating cash flow before working
capital changes (1,765) (1,009)
Increase in trade and other receivables (141) (197)
Foreign currency translation differences 23 -
Increase in trade and other payables 124 557
Decrease in deferred income (37) (21)
Cash used in operations (1,796) (670)
Income taxes paid (3) (27)
Net cash generated from / (used in)
operating activities (1,799) (697)
Cash flows from investing activities
Purchase of plant and equipment (2,189) (59)
Purchase of intangibles (165) -
Payment of deposits (26) -
Loans advanced to franchisees (107) -
Acquisition of subsidiary, net of
cash acquired - (7,023)
Interest received 23 1
Net cash used in investing activities (2,464) (7,081)
Cash flows from financing activities
Proceeds from issue of ordinary shares
(net of buy-back) - 13,953
Proceeds from issue of G shares - 1
Share issue costs - (1,689)
Net cash from financing activities - 12,265
Net (decrease) / increase in cash
and bank balances (4,263) 4,487
Cash and cash equivalents at beginning
of period / year 10,645 7,923
Effects of exchange rate changes on
the balance of cash held in foreign
currencies 3 1
Cash and cash equivalents at end of
period / year 6,385 12,411
NOTES TO THE UNAUDITED INTERIM REPORT
FOR THE SIX MONTHSED 30 JUNE 2018
1. General information
The Company was incorporated in England on 17 May 2016 under the
name of Dorcaster Limited with registered number 10184316 as a
private company with limited liability under the Companies Act
2006. The Company was re-registered as a public company on 13 June
2016 and changed its name to Dorcaster Plc on 13 June 2016. On 8
July 2016, the Company's shares were admitted to AIM.
Until its acquisition of Experiential Ventures Limited on 2 May
2017, the Company was an investing company (as defined in the AIM
Rules for Companies) and did not trade.
On 2 May 2017, the Company completed the acquisition of the
entire issued share capital of Experiential Ventures Limited.
Experiential Ventures Limited was the holding company of the Escape
Hunt group which is is a global provider of live 'escape the room'
experiences.
On 2 May 2017, the Company's name was changed to Escape Hunt
plc.
The Company's registered office is 3 Pear Place, London SE1
8BT.
2. Basis of preparation
These interim consolidated financial statements have been
prepared in accordance with IAS 34 Interim Financial Reporting.
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 2017 annual report. The statutory
financial statements for the year ended 31 December 2017 were
prepared under IFRS and IFRIC interpretations as adopted by the
European Union and in accordance with the requirements of the
Companies Act 2006. The auditors reported on those financial
statements; their Audit Report was unqualified.
The interim financial information is unaudited and does not
constitute statutory accounts as defined in the Companies Act
2006.
The interim financial information was approved and authorised
for issue by the board of directors on 17 September 2018.
3. Going concern
The financial statements have been prepared on a going concern
basis which contemplates the continuity of normal business
activities and the realisation of assets and the settlement of
liabilities in the ordinary course of business.
The directors have assessed the Company's ability to continue in
operational existence for the foreseeable future in accordance with
the Financial Reporting Council's Guidance on the going concern
basis of accounting and reporting on solvency and liquidity risks
issued in April 2016.
The Company has prepared forecasts and projections which reflect
the expected trading performance of the Company and the Group on
the basis of best estimates of management using current knowledge
and expectations of trading performance.
As at 30 June 2018, the Company had GBP6.4 million in cash which
is considered sufficient for its present needs.
Based on the above, the Directors consider there are reasonable
grounds to believe that the Company will be able to pay its debts
as and when they become due and payable, as well as to fund the
Company's future operating expenses. The going concern basis
preparation is therefore considered to be appropriate in preparing
these condensed financial statements.
4. Significant accounting policies
Other than as noted below, the Company has applied the same
accounting policies, presentation, methods of computation,
significant judgements and the key sources of estimation of
uncertainties in its interim consolidated financial statements as
in its audited financial statements for the period ended 31
December 2017, which have been prepared in accordance with
International Financial Reporting Standards as adopted for use by
the European Union.
These accounting policies will be adopted in the Group's full
financial statements for the year ending 31 December 2018.
Changes in accounting policy
The Group has adopted the following new standards and
interpretations which became effective on 1 January 2018 with no
significant impact on its consolidated financial in these financial
statements:
- IFRS 9 'Financial instruments'.
- IFRIC 22 'Foreign currency transactions and advance consideration'.
- IFRIC 23 'Uncertainty over income tax treatments'.
- Amendments to IFRS 2 'Classification and measurement of share-based payment transactions'.
- Annual improvements to IFRS standards 2014-2016 cycle: IFRS 1 and IAS 28.
Impact of accounting standards to be applied in future
periods
IFRS 16 'Leases' has been issued by the International Accounting
Standards Board that is effective for periods beginning subsequent
to 31 December 2018 (the date on which the Company's next annual
financial statements will be prepared up to) which the Company has
decided not to adopt early.
IFRS 16 supersedes IAS 17 Leases and introduces a new single
lessee accounting model which eliminates the current distinction
between operating and finance leases for lessees. IFRS 16 requires
lessees to capitalise all leases on the statement of financial
position by recognising a 'right-of-use' asset and a corresponding
lease liability for the present value of the obligation to make
lease payments, except for certain short-term leases and leases of
low-value assets. Subsequently, the lease assets will be amortised
and the lease liabilities will be measured at amortised cost.
From the perspective of the Group, the classification and
accounting for operating and finance leases remains substantially
unchanged under IFRS 16. IFRS 16 also requires enhanced disclosures
by both lessees and lessors.
On initial adoption of this standard, there is likely to be a
potentially significant impact on the accounting treatment for the
Group's leases, particularly rented properties, which the Group, as
lessee, currently accounts for as operating leases. On initial
adoption of IFRS 16 the Group will be required to capitalise its
rented properties at the lease commencement date in the statement
of financial position by recognising them as right-of-use assets
and their corresponding lease liabilities. The right-of use asset
will be amortised over the term of each lease and a finance charge
will be made by reference to the lease liability and discount rate.
The liability is initially to be measured at the present value of
future minimum lease payments. The discount rate is the rate
implicit in the lease, if readily determinable.
The Group plans to adopt the standard in the financial year
beginning on 1 January 2019 with full retrospective effect in
accordance with the transitional provisions and will include
required additional disclosures in its financial statements for
that financial year. The Group will make a detailed assessment of
the impact of this standard prior to transition.
The right-of use asset will be amortised over the term of each
lease and a finance charge will be made by reference to the lease
liability and discount rate. The liability is initially to be
measured at the present value of future minimum lease payments. The
discount rate is the rate implicit in the lease, if readily
determinable. As at 30 June 2018, the Group had entered into 11
property leases which had commenced prior to the period end (31
December 2017: five).
5. Segment information
The Company was an investing company and did not trade until its
acquisition of Experiential Ventures Limited on 2 May 2017. Since
the acquisition, management considers that the enlarged group has
two operating segments. Revenues are reviewed based on the nature
of the services provided as follows:
1. The franchise business, where all franchised branches are
operating under effectively the same model; and
2. The owner-operated branch business, which consists of Bangkok
and the UK.
The Group operates on a global basis. At present, the Company
has active franchisees in over 20 countries. The Company does not
presently analyse or measure the performance of the franchising
business into geographic regions or by type of revenue, since this
does not provide meaningful analysis to managing the business.
Segment results, assets and liabilities include items directly
attributable to a segment as well as those that can be allocated on
a reasonable basis.
Owner Franchise
operated operated Unallocated Total
Six months ended 30 June
2018 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 259 541 - 800
Cost of sales (530) (210) - (740)
--------- --------- -------------------- -------------
Gross profit / (loss) (271) 331 - 60
Profit/(loss) from operations:
Interest income - - 23 23
Expenses
* Administrative (254) (271) (909) (1,434)
* Depreciation and amortisation (152) (1,727) (87) (1,966)
* Write-off of assets - (45) - (45)
* Closure of Bangkok operation (36) (211) - (247)
* Pre-opening costs (144) - - (144)
* Share-based payment expenses - - (8) (8)
Profit/(loss) from operations
before tax (857) (1,923) (981) (3,761)
Taxation - (1) - (1)
--------- --------- -------------------- -------------
Profit / (loss) for the
period (857) (1,924) (981) (3,762)
--------- --------- -------------------- -------------
Other information:
Segment assets 2,960 173 15,168 18,301
--------- --------- -------------------- -------------
Segment liabilities 359 760 490 1,609
--------- --------- -------------------- -------------
Owner Franchise
operated operated Unallocated Total
Six months ended 30
June 2017 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 21 172 - 193
Cost of sales (15) (71) - (86)
--------- --------- ----------- -----------
Gross profit 6 101 - 107
Profit/(loss) from operations
Expenses:
- Administrative (7) (52) (191) (250)
-Transaction - - (870) (870)
-Share-based payment
expense - - (43) (43)
Profit/(loss) from operations
before tax (1) 49 (1,104) (1,056)
Taxation - (1) - (1)
--------- --------- ----------- -----------
Profit/(loss) for the
period (1) 48 (1,104) (1,057)
--------- --------- ----------- -----------
Other information:
Segment assets 146 1,139 24,024 25,309
--------- --------- ----------- -----------
Segment liabilities 8 1,166 625 1,799
--------- --------- ----------- -----------
6. Loss per share
Basic loss per share is calculated by dividing the loss
attributable to equity holders by the weighted average number of
ordinary shares in issue during the period. Diluted loss per share
is not presented as the potential ordinary shares from the exercise
of warrants are not dilutive.
Six months Six months
ended ended
30 June 30 June
2018 2017
Unaudited Unaudited
GBP GBP
Loss after tax (GBP000) (3,762) (1,057)
Weighted average number of
shares:
* Basic 20,259,258 13,419,752
Loss per share
* Basic 0.1857 0.0788
7. Taxation
The tax charge is based on the expected effective tax rate for
the year. The Group estimates it has tax losses of approximately
GBP2m as at 30 June 2018 which, subject to agreement with taxation
authorities, would be available to carry forward against future
profits. The estimated tax value of such losses amounts to
approximately GBP400k.
8. Property, plant and equipment
Escape
Leasehold Furniture games Total
property Office equipment Computers and fixtures
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 31 December 2017 575 15 36 5 59 690
Additions 1,517 15 46 69 542 2,189
Amounts written off (20) (16) (21) (5) - (62)
Currency translation
differences - - 1 - - 1
------------ ------------------ --------- ---------------- ---------- ---------
As at 30 June 2018 2,072 14 62 69 601 2,818
------------ ------------------ --------- ---------------- ---------- ---------
Accumulated depreciation
At 31 December 2017 (4) (3) (11) (1) (1) (20)
Depreciation charge (76) (3) (11) (3) (50) (143)
Released on write-off
of assets 7 5 14 2 - 28
Currency translation
differences (1) - (1) - - (2)
------------ ------------------ --------- ---------------- ---------- ---------
As at 30 June 2018 (74) (1) (9) (2) (51) (137)
Carrying amounts
At 31 December 2017 571 12 25 4 58 670
============ ================== ========= ================ ========== =========
At 30 June 2018 1,998 13 53 67 550 2,681
============ ================== ========= ================ ========== =========
Amounts written-off relate to the closure of the Bangkok
branch.
9. Intangible assets
Goodwill Trademarks Intellectual Franchise App Portal Total
and patents property Business Quest
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 January - - - - - - -
2017
Additions 1,304 32 10,195 802 100 - 12,433
At 30 June
2017 1,304 32 10,195 802 100 - 12,433
Additions 100 - - - 122 222
Transfers - (19) - - - 19 -
----------- ------------- ------------- ---------- --------
At 31 December
2017 1,404 13 10,195 802 100 141 12,655
Additions - 31 90 - - 44 165
Amounts written-off (11) - - - - - (11)
As at 30 June
2018 1,393 43 10,285 802 100 185 12,809
----------- ------------- ------------- ---------- -------- -------- --------
Accumulated
amortisation
At 1 January - - - - - - -
2017
Amortisation - (12) - - - - (12)
As at 30 June
2017 - (12) - - - - (12)
Amortisation - - (2,266) (76) (21) - (2,363)
Transfers - 12 - - (12) - -
At 31 December
2017 - - (2,266) (76) (33) - (2,375)
Amortisation - (3) (1,715) (57) (25) (23) (1,823)
At 30 June
2018 - (3) (3,981) (133) (58) (23) (4,199)
=========== ============= ============= ========== ======== ======== ========
Carrying amounts
At 30 June
2017 1,304 19 10,195 802 100 - 12,420
=========== ============= ============= ========== ======== ======== ========
At 31 December
2017 1,404 13 7,929 726 67 141 10,280
========
At 30 June
2018 1,393 40 6,304 669 42 162 8,610
=========== ============= ============= ========== ======== ======== ========
Goodwill written-off relates to the closure of the Bangkok
branch.
10. Share capital
Six months Year
ended ended
30 June 31 December
2018 2017
Unaudited Audited
GBP'000 GBP'000
As at beginning of period /
year 254 125
Issued during the period /
year - 175
Buy-back of shares - (46)
As at end of period / year 254 254
----------- --------------------------
During the six months ended 30 June 2018, there were no changes
in the issued share capital of the Company
11. Key management personnel compensation
Six months Six months
ended ended
30 June 30 June
2018 2017
Unaudited Unaudited
GBP'000 GBP'000
Salaries and benefits (including directors) 304 58
Share-based payments 8 -
Social security costs 35 -
Other post-employment benefits 6 -
Less amounts capitalised (56) -
Total 297 58
------------- -------------
12. Seasonality of the Group's business
There are no seasonal factors which materially affect the
operations of any company in the Group.
13. Events after the reporting period
In July 2018, the Group signed a five-year licence with BBC
Studios to roll out Doctor Who themed rooms across the UK.
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 LRMMTMBABTJP
(END) Dow Jones Newswires
September 18, 2018 02:01 ET (06:01 GMT)
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