TIDMATC
RNS Number : 2089Q
All Things Considered Group PLC
27 June 2022
27 June 2022
All Things Considered Group Plc
("ATC", the "Company" or the "Group")
Final Results
Solid growth demonstrating strength of integrated business
model
All Things Considered Group Plc (AQSE: ATC), the independent
music company housing talent management, live booking,
livestreaming and talent services, is pleased to announce audited
results for the year ended 31 December 2021.
Financial Highlights
-- Revenue increased 28% to GBP9.1m (2020: GBP7.1m)
-- Revenue and other operating income increased 37% to GBP10.3m (2020: GBP7.5m)
-- Adjusted loss before tax* (and before non-controlling
interest) of GBP2.7m (2020: loss of GBP0.3m), partly due to a
non-recurring loss in H1 2021 resulting from a technical outage at
the Glastonbury 'Live at Worthy Farm' livestreamed event which was
disrupted by some technical issues caused by a third-party
supplier. This resulted in customer refunds and a reduction in
ticket sales
-- Adjusted loss before tax for H2 2021 of GBP0.1m,
demonstrating a solid performance during the prevailing
Covid-constrained environment
-- Improved cash position with net cash, after short term debt,
of GBP4.4m as at 31 December 2021 (2020: GBP1.6m)
*adjusted loss is the loss before tax adjusted to exclude
GBP0.6m of IPO and related costs
Operational Highlights
-- GBP2m strategic investment by Deezer into Driift, the Group's
pay-per-view livestreaming service, and five-year exclusive
collaboration arrangement with Dreamstage to leverage technical and
commercial potential
-- Significant number of new clients added to ATC's Management
and Live Agency rosters, despite market disruption from
Covid-related restrictions
-- Strengthened Board and management team, including appointment
of CFO post period end, providing capacity to scale
-- Further expansion into North American market with addition of
new services and larger footprint, including opening of New York
office post period end
-- Milestone listing on the Apex segment of the AQSE Growth
Market in December 2021, providing funding for further organic and
acquisitive growth
Current Trading and Outlook
-- Performance in line with management expectations, with good momentum into 2022
-- Significant upturn in live music activity following
relaxation of Covid-19 restrictions, benefitting ATC's Live Agency
and Management divisions
-- Strong and growing pipeline for the Group's evolving hybrid
live performance formats delivered by Driift, expected to generate
higher margin business going forward. Exemplified by the Little Mix
direct from the O2 livestream which generated substantial
livestream ticket sales alongside a broadcast into cinemas that was
number 5 in that weekend's UK cinema charts
Adam Driscoll, Chief Executive Officer of ATC Group plc,
commented :
"We are pleased to report on a year of significant advancements
for the Group, which saw double digit revenue growth despite
significant disruption from Covid-19 restrictions, the further
establishment of our new service offerings, an expanding market
footprint, and culminating in our successful IPO.
"The Group's unique business model based on an integrated
service approach for artists, or 'one-stop-shop,' and deep culture
of innovation, has demonstrated resilience and adaptability within
the rapidly changing music industry. An example of this is the
Driift produced and directed for-mobile performance for Westlife
that attracted a record-breaking online audience of 28 million
concurrent viewers in China alone.
"Strong momentum has continued through 2022 as market conditions
return to more normalised levels with the opening up of live events
and related activity. The music industry continues its path of
structural change, driven by new technologies, changing music
consumption behaviour, and artists' ownership over their commercial
interests, leaving the Group positioned to capitalise on new growth
opportunities. Supported by a healthy pipeline of opportunities,
the Board looks forward to a year of growth and with confidence in
achieving market expectations."
-S-
For more information, please contact:
ATC Group Via Alma PR
Adam Driscoll, CEO
Rameses Villanueva, CFO
Canaccord Genuity +44(0)20 7523 8000
Aquis Corporate Adviser and Broker
Adam James / Patrick Dolaghan
Alma PR +44(0)20 3405 0205
Financial PR
Hilary Buchanan / Susie Hudson / Lily
Soares Smith
Notes to Editors
ATC Group is a prominent independent music company offering live
rights, live agency, production, artist management and investment
and a range of other music artist services. ATC Group is the only
independently owned company in the industry housing talent
management, live booking, livestreaming and talent services within
the same group.
The Company has an established, long-standing client base with
over 60 artists on its management roster and over 400acts on the
live roster. One of its livestreaming offerings, Driift, has
delivered shows with Niall Horan, Andrea Bocelli, Kylie, Johnny
Marr, The Smile and others, selling over 600,000 tickets across 190
countries since being established in June 2020.
The Group's five key divisions, grouped under two segments,
are:
-- Artist management and development
-- ATC Management - artist management
-- ATC Live- live event booking agency for artists
-- ATC Services
-- Polyphonic - an artist partnerships venture
-- Live streamed events
-- Driift, a global livestreaming business, and Flymachine, a livestreaming platform
The Group is headquartered in London, with offices in Los
Angeles, New York and Copenhagen and is led by an experienced
management team who have operated across multiple music industry
sectors.
For more information see: www.atcgroupplc.com
Co-Chairs' Statement
We are pleased to present our first Annual Report and Accounts
as a listed business, reporting on a year of significant milestones
and solid growth. The results achieved reflect both the challenges
and opportunities that came with 2021. Despite the impact of
COVID-19 restrictions on the earnings potential for our Live Agency
and Artist Management divisions, the early-mover establishment of
Driift proved a strategic success, driving overall Group revenue
growth of 28% compared to the prior year.
The Group ended the year in an improved cash position following
two significant rounds of investment: the IPO, together with a
Deezer investment of GBP2m into Driift. This provides the Group
with greater resources and flexibility to pursue its organic and
acquisitive growth strategy as trading conditions normalise through
2022.
People
It was pleasing that we were able to retain the services of
nearly all of the Group's dedicated employees during the pandemic
and strengthen the senior management team in readiness for the IPO.
It is a testament to everyone in the Group that we ended two tough
years in a significantly better place and our thanks go out to all
our people.
In particular, it would be remiss not to thank the Group's CEO,
Adam Driscoll as he was instrumental in attracting investment into
the business and getting the Group prepared for a public
listing.
Board and Governance
In preparation for the IPO we established a new Board and
implemented governance procedures appropriate for a listed
business. We welcomed Andy Glover and Shirin Foroutan to the Board
as non-executive directors who bring strong experience across
finance and the music industry. Post the listing of the Group on
AQSE, the Board was further enhanced by the recruitment of our
Chief Financial Officer, Ram Villanueva. We have established a good
working relationship across the Board and the Group is beginning to
see the benefits of our collaboration.
Summary and Outlook
Despite the significant consequences to the music sector of
COVID-19 lockdown strategies, the Group closed 2021 in a stronger
position with a strengthened operating platform, a further
diversified offering and an enhanced geographic reach.
Worthy of note is the foothold the Group has established in the
important North American market. The office in Los Angeles
increased its management footprint, opened up the important
promotion business through the acquisition of 100 per cent.
Interest in Your Army USA (a US-based electronic promotions
business) and established digital technology capability through the
development of namethemachine (a software and media development
company with a focus on emerging technology and transmedia
solutions). The opening of an office in New York in early 2022 is
an important step, not just for accessing the East Coast USA market
but also for signalling the Group's intent generally.
Driift continues to mature and evolve its business model now
that fans are able to return to watching live music in person. The
Smile's 'Full Circle' show performed and recorded at the end of
January 2022 proved to be an important watershed moment for Driift,
a concept that took in ticket purchasers from both around the world
to watch remotely and locally in-person.
The US and UK markets were the first to properly open up to live
touring with the EU lagging a couple of months behind. Whilst this
impacted the Group's first quarter, the important summer festival
season is largely untouched and we are confident that the autumn
touring season will not suffer as it did in 2021. Whilst business
is returning to normal, it is worth noting that the two-year gap in
touring as a result of the COVID-19 pandemic has created a
short-term over-supply of talent which is allowing promoters to
competitively price their offers. Ticket sales are yet to return to
their pre-COVID-19 levels for many shows, not just because of the
oversupply but also because there is still some fan nervousness to
purchase.
Against this backdrop, the strength of the Group's proposition,
unique holistic approach and pipeline of opportunities enables the
Board to be confident in continued growth for ATC Live and ATC
Management in the current year. Both divisions are looking to add
executive talent to strengthen their propositions and are focused
on attracting established artists to their rosters, as well as
growing and breaking new acts.
Importantly, the 10-person executive management team is working
well together and are committed to the Group's future. As the
market recovers from the last two years this will help us win new
business and continue our growth. The team is well diversified in
respect of gender and race and we are committed to ensuring that
balance of representation is maintained as we expand.
Brian Message and Craig Newman
Co-chairs
CEO Review
Overview
The Group's resilient business model and embedded culture of
innovation was demonstrated throughout 2021, a year that challenged
the global music industry with the effects of the COVID-19
pandemic. The Group delivered solid turnover growth, despite the
substantial downturn in revenues in the industry as a whole.
The Group's performance was achieved through the continued
development of our livestreaming business alongside the great work
delivered by our artist management and artist services' divisions.
At ATC Live, our live agency business, the gradual removal of
restrictions around live events in the second half of the year is
delivering growth in 2022 and beyond. The completion of our IPO in
December was a substantial achievement and has positioned the Group
for growth and expansion over the coming years.
Key operational highlights for 2021 included the production and
delivery of the global livestream of 'Live at Worthy Farm' which
was the livestream replacement of the COVID-19-cancelled 2021
edition of the Glastonbury Festival; the acquisition of the
remaining 51 per cent. Stake in Your Army in North America that
wasn't previously held by the Group; the investment by Deezer of
GBP2m into the Driift business; the delivery of the ground-breaking
Kid Amnesiac Radiohead project in conjunction with Epic Games (a
first for the platform with the launch of a non-game application on
the Epic Game Store. The application delivered access to a digital
Radiohead exhibition which generated over 6 million downloads
within weeks of being available); the addition of a significant
number of new clients to our management and live agency rosters;
and the growth of our composer division. 2022 has continued to see
substantial Group-wide developments which are detailed below.
We successfully completed our IPO on December 21, 2021 with
admission onto the Aquis Growth Market in London. The IPO was
supported by both institutional and retail investors and the
Company raised a total of GBP4.15 million (before expenses). The
net proceeds are being used to invest into each of ATC's five
business divisions and to support the Directors' growth strategy
for the Group. As the fundraising was completed only 10 days before
our financial year end, the results reported here were effectively
delivered ahead of the Group bringing in the new financing which is
set to spur future growth and development.
I am very pleased that our management team remains so well
represented in the shareholder table. Our executive board directors
and senior managers held 42 per cent. of the shares as at 31
December 2021.
Current Trading
The completion of the IPO in the final days of 2021 gave the
Group a great opportunity to start 2022 with a huge sense of
positivity and ambition. The first few months of the year have
continued in the same spirit and we are seeing good developments in
our existing businesses and some clear opportunities to broaden
their scope and reach. Additionally, strong new partnerships are
emerging for the Group that will further strengthen our position as
the music industry experiences further digital transformation in
the coming years.
As part of those developments, we have been quick to strengthen
our management team and I was delighted to welcome Rameses
Villanueva to the Board as Group CFO on 28 February 2022 to provide
support for the next stage of the growth strategy.
Reassuringly, the live music industry is continuing to see a
significant upturn in activity following the relaxation of COVID-19
restrictions and, as a result, ATC's Live Agency and Management
divisions are benefitting.
At ATC Management, hotly tipped band The Goa Express joined the
roster while 2021 additions, The Smile and Amaarae, have made a
strong impact in 2022 with successful tours, music releases and
sold-out shows.
At ATC Live we have seen 93 new clients join the roster since
the beginning of 2021 including Nation of Language, Connie
Constance and Billy Nomates and many of our existing clients have
won industry plaudits. At SXSW, a leading international industry
event in Texas, ATC Live clients won the prestigious Grulke prizes
for both US and International artists, while at The Great Escape
festival in the UK, The Times' review of the event listed '5 key
artists to watch' - 4 of which were represented by ATC Live.
Business indicators are increasingly strengthening; in three
consecutive weeks in January and February, three of ATC Live's
clients achieved Top 3 UK album chart status in the week of
release. Whilst the re-establishment of the live market is a work
in progress in 2022, navigating differing international
restrictions and customer caution, the longer-term view remains
very positive.
The Group's livestreaming division, Driift, successfully
delivered the first of its 'Full Circle' events in January with ATC
Management client 'The Smile', which garnered a number of '5 star'
reviews and wide audience acclaim. This new hybrid format brought
together a live ticketed audience in a bespoke venue designed
specifically for a global livestreaming audience and demonstrated
that Driift can benefit from a diversified revenue mix, as the
Directors anticipated. This format is expected to generate higher
margin business for Driift, and further demonstrates that the
Company remains at the forefront of the evolution of the growing
livestreaming sector. More recently Driift delivered a livestream
for Little Mix direct from the O2 and generated substantial numbers
of livestream tickets alongside a broadcast into cinemas that saw
the company take the number 5 position for that weekend's UK cinema
charts.
Since its inception in mid-2020 Driift has now sold over 600,000
tickets in more than 190 countries around the world. We continue to
see substantial interest from globally recognised artists who are
looking to integrate a livestream into their more traditional
business activities and recent partnerships with organisations like
the Tate Museums continue to show that this innovative format will
continue to be a growth sector for the music industry.
Our service businesses are trading in line with management
expectations and are seeing growth as the global music market
emerges from the challenges of the pandemic. The Group recently
opened an office in New York to facilitate the continued expansion
of the US management and services businesses.
We announced on 7 April 2022, that following receipt of a
short-term promissory note loan of $6m, the Group had made a
minority investment into a newly formed company, alongside a number
of other parties. The funding group's total investment of $80m
enabled the new venture to acquire Napster, with the aim of
bringing blockchain and web3 to artists and fans via future
developments in the Napster business. Our equity interests in the
newly formed company were subject to a pledge in favour of the
lender, as sole security against ATC's obligations under the loan
arrangement. The recent volatility in the crypto markets has led us
to reassess the Company's capacity to refinance the original loan.
We have therefore taken the decision to hand back our equity
interests to the original loan holder with negligible financial
impact to the Group. We continue to believe that blockchain
technology and non-fungible tokens (NFTs) will increasingly have an
impact on the holding and distribution of copyrights in the medium
and long term and we continue to have an option to invest into the
new Napster venture. It is beneficial to us to be able take a
little more time to assess the landscape and determine what level
of participation might be achievable whilst also taking stock of
other opportunities that are being presented in this space.
In summary, 2022 business activity is delivering upon the aims
we set ourselves when completing the IPO. These were to use the new
capital to increase our pool of agents, managers and clients to
drive profitability; to enable Driift to scale its offering and
drive revenue growth and margin; to invest in our service
businesses and to seek out new opportunities and participate in key
music industry developments. With current trading in line with
expectations, I look forward to further expanded activity and
strong developments during the rest of the year.
Adam Driscoll
CEO
CFO Review
Overview
During the year, the Group's results were in line with
management expectations and demonstrated resilience during the
Covid-restrained environment, with revenue and other operating
income of GBP10.3 million representing growth of 37% from 2020
(GBP7.5 million) and adjusted loss before tax and non-controlling
interests ('NCI') of GBP2.7 million (2020: GBP0.34 million loss
before tax and NCI).
Following the successful fundraise at the Group's IPO in
December 2021, ATC retains a healthy net cash position (after
current debt) of GBP4.2 million and net cash position (after
current and long-term debt) at year end of GBP2.3 million.
Revenue and other operating income
The Group's consolidated revenue and other operating income was
up 37% to GBP10.3m (2020: GBP7.5m). Core revenue (excluding other
operating income) accounted for 89% (2021: GBP9.1m vs 2020:
GBP7.1m) and posted 28% growth.
2021 2020
Live streamed events
- Core revenue 4,642,212 4,716,692
- Other operating income 545,979 0
5,188,191 4,716,692
--------------------------- ----------- ----------
Artist management and development
- Core revenue 4,501,426 2,383,493
- Other operating income 617,517 434,762
5,118,943 2,818,255
--------------------------- ----------- ----------
Total 10,307,134 7,534,947
=========================== =========== ==========
Despite the impact on the artist management and development
businesses as a consequence of the COVID-19 pandemic and associated
global lockdowns, the increase in revenue and other operating
income was driven by the following:
-- Livestreamed events - Driift tapped into the consumer desire
to remain connected with artists and live performances by
delivering shows in-home via a streaming mechanism. Driift
generated GBP5.2 million in 2021, a 10% increase over the previous
year (2020: GBP4.7 million) and represented 50% of the consolidated
revenue and other operating income (2020: 63%).
-- Artist management and development - The consolidation of ATC
Artist Management Inc. (formerly known as Courtyard Productions,
Inc), which became a wholly owned subsidiary on 19 February 2021
also contributed to a 12% increase (GBP0.9 million) in consolidated
revenue and other operating income in 2021.
During the year, the Group also received COVID related
government grants amounting to GBP0.52 million in 2021 (2020:
GBP0.42 million).
Administrative expenses
Administrative expenses, excluding IPO listing related costs,
increased from GBP1.4 million in 2020 to GBP4.8 million in
2021.
2021 2020
Artist management and
development 3,652,198 1,166,200
Live streamed events 1,121,944 242,187
Total 4,774,142 1,408,387
======================= ========== ==========
The increase is due to the additional overheads of businesses
that were acquired in 2021, which increased expenses by GBP2.3
million (2020: nil), and because Driift traded for only 6 months in
2020 (2021: GBP1.1 million vs 2020: GBP0.2 million).
Excluding these items, consolidated administrative expenses
increased by 40% to GBP2.6 million in 2021 (2020: GBP1.2 million),
principally due to the following:
-- New hirings in the UK management business with the objective
of growing the artist, writer, producer and composer rosters which
resulted in an increase in salary cost of approximately GBP0.3
million; and,
-- An increase in Polyphonic's expenses of approximately GBP0.2
million resulting from the release of 'Sticky', the fourth album by
Frank Carter and the Rattlesnakes on 15 October 2021. This release
was tied to a significant tour across the UK and Europe from
November 2021 through to February 2022.
Following the receipt of the proceeds from the IPO in December
2021, the Group has been able to invest in further improving its
internal systems, procedures and processes as a result of being
publicly listed.
IPO and net cash/(debt)
The Group listed on the Apex segment of the Aquis Growth Market
in December 2021 and raised a total of GBP4.1m, before costs, from
both institutional investors and individual investors. As a result
of the IPO, the Group's net cash position has improved from a net
debt to net cash position.
The placing shares represented approximately 25.7% of the
enlarged share capital at the time. Alongside the funds raised, a
director's loan and a loan to Beggars Group Limited was repaid
2021 2020
Current
Cash and cash equivalents 5,532,272 2,178,505
Funds held on behalf of
clients (1,027,793) 0
Borrowings (ST) (124,068) (582,230)
Right of use liabilities
(ST) (140,287) (136,865)
Net cash/(debt) after
current debt 4,240,124 1,459,410
--------------------------- ------------ ------------
Long term
Borrowings (LT) (1,676,986) (1,725,548)
Right of use liabilities
(LT) (248,238) (388,525)
(1,925,224) (2,114,073)
--------------------------- ------------ ------------
Net cash/(debt) 2,314,900 (654,663)
=========================== ============ ============
At the year end, the Group's net cash position was GBP2.3
million (2020: net debt GBP0.65 million), which will allow the
Group to further grow the Live and Management businesses by hiring
new agents, and managers. It also provides additional working
capital to further develop Driift, Polyphonic and the Services
division and to pursue the Group's acquisition plans.
Financing costs of GBP0.097m (2020: GBP0.099m) was comprised
mainly of interest expenses on loans of GBP0.083 million (2020:
GBP0.082 million).
Adjusted loss before tax
The loss before IPO and related costs increased to GBP2.7
million (2020: loss GBP0.34 million)
2021 2020
Loss before tax (3,306,518) (340,831)
IPO and related costs 616,735 0
Loss before listing fees (2,689,783) (340,831)
========================== ============ ==========
The increase in the loss was due to the substantial investment
into Driift, principally to deliver the Glastonbury 'Live at Worthy
Farm' event which was disrupted by some technical issues caused by
a third-party supplier. This resulted in customer refunds and a
reduction in ticket sales . The loss incurred by segment was as
follows:
2021 2020
Artist management and
development (546,538) (469,476)
Live streamed events (2,143,245) 128,646
Total (2,689,783) (340,831)
======================= ============ ==========
Earnings per share
Basic and diluted earnings per share was (34.51) pence per share
(2020: (4.25) pence per share)
Reconciliation between the statutory consolidated income
statement vs. consolidated income statement in the Prospectus for
the 12 months to 31 December 2020
The FY20 comparatives differ from those in the Growth Prospectus
('Prospectus') dated 14 December 2021 due to the inclusion in the
Prospectus of the results of ATC Artist Management Inc (previously
Courtyard Productions, Inc) as it was under common control for that
period. As required under IFRS 3 business combinations, the FY20
comparatives reported in the annual report and accounts (and
preliminary announcement) include the results from the date of
acquisition, 19 February 2021.
The differences in Revenue, Administrative expenses, Loss before
tax and Net assets (excluding NCI) and Earnings (loss) per share
lines are shown in the table below:
Statutory accounts Prospectus Differences
Revenue 7,100,185 7,489,436 (389,251)
Administrative expenses (1,408,387) (1,778,168) 369,781
Loss before tax (340,831) (412,739) 71,908
Equity attributable to
the shareholders of the
parent company (964,613) (1,196,639) 232,026
Earnings (loss) per share
- In pence (4.25) (5.29) 1.04
Going Concern
The accounts have been prepared on a going concern basis. The
Directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable
future, based on projections for at least twelve months from the
date of approval of the financial statements.
Rameses Villanueva
CFO
Consolidated statement of comprehensive
income Consolidated statements
of comprehensive income
For
For the year ended 31 December 2021 2021 2020
Notes GBP GBP
Revenue 3 9,143,638 7,100,185
Cost of sales (8,297,894) (6,207,950)
Gross profit 845,744 892,235
Other operating income 1,163,496 434,762
Administrative expenses 4 (5,390,877) (1,408,387)
Provision for amounts owed by associates
and joint ventures - (235,250)
Operating loss 3 (3,381,637) (316,640)
Share of results of associates
and joint ventures 167,568 40,012
Finance income 4,852 34,652
Finance costs (96,968) (98,855)
Provision against amounts owed
by participating interests (333) -
Adjusted loss before tax (2,689,783) (340,831)
IPO and related costs (616,735) -
-------------------------------------------------- ------------ -------------
Loss before taxation (3,306,518) (340,831)
Income tax expense 5 (1,256) (966)
Loss for the year (3,307,774) (341,797)
Other comprehensive income:
Items that will not be reclassified to
profit or loss
Revaluation gain on unlisted investments 139,061 -
Currency translation differences (5,208) (189)
Total items that will not be reclassified
to profit or loss 133,853 (189)
Total other comprehensive income for
the year 133,853 (189)
Total comprehensive income for the year (3,173,921) (341,896)
Loss for the financial year is attributable
to:
- Owners of the parent company (2,353,468) (291,792)
- Non-controlling interests (954,306) (50,005)
(3,307,774) (341,797)
Total comprehensive income for the year
is attributable to:
- Owners of the parent company (2,219,615) (291,891)
- Non-controlling interests (954,306) (50,005)
(3,173,921)) (341,986)
Earnings per share
2021 2020
pence pence
Basic and diluted 6(34.51) (4.25)
======= ======
Consolidated statement of financial position
As at 31 December 2021 2021 2020
Notes GBP GBP
ASSETS
Non-current assets
Goodwill 7 1,135,403 -
Property, plant and equipment 398,506 500,672
Investments 244,604 726,017
1,778,513 1,226,689
Current assets
Trade and other receivables 2,558,201 1,506,709
Cash and cash equivalents 5,532,272 2,178,505
8,090,473 3,685,214
Total assets 9,868,986 4,911,903
EQUITY
Called up share capital 8 95,840 32,649
Share premium account 8 3,983,970 2,449,703
Merger reserve 2,883,611 -
Currency translation reserve (9,750) (4,542)
Retained earnings (4,898,864) (3,442,423)
Equity attributable to the shareholders
of the parent company 2,054,807 (964,613)
Non-controlling interests 197,649 10,395
Total equity 2,252,456 (954,218)
LIABILITIES
Non-current liabilities
Borrowings 1,676,986 1,725,548
Other creditors 53,085 9
Right of use lease liabilities 248,238 388,525
1,978,309 2,114,082
Current liabilities
Trade and other payables 5,373,866 3,032,944
Borrowings 124,068 582,230
Right of use lease liabilities 140,287 136,865
5,638,221 3,752,039
Total liabilities 7,616,530 5,866,121
Total equity and liabilities 9,868,986 4,911,903
Consolidated statement of changes in equity
For the year ended December Share Share Merger Currency Retained Total Non-controlling Total
2021 capital premium reserve translation earnings interest
account reserve
GBP GBP GBP GBP GBP GBP GBP GBP
At 1 January 2020 19,556 1,852,394 - (4,353) (3,240,482) (1,372,885) - (1,372,885)
Year ended 31 December 2020:
Loss for the year - - - - (291,791) (291,791) (50,005) (341,796)
Other comprehensive income:
Currency translation
differences on
overseas subsidiaries - - - (189) - (189) - (189)
Total comprehensive income for
the
year - - - (189) (291,791) (291,980) (50,005) (341,985)
Issue of share capital 13,093 597,309 - - - 610,402 - 610,402
Acquisition of non-controlling
interests - - - - 89,850 89,850 60,400 150,250
At 31 December 2020 32,649 2,449,703 - (4,542) (3,442,423) (964,613) 10,395 (954,218)
Year ended 31 December 2021:
Loss for the year - - - - (2,353,468) (2,353,468) (954,306) (3,307,774)
Other comprehensive income:
Revaluation gain on unlisted
investments 139,061 139,061 - 139,061
Currency translation
differences on
overseas subsidiaries - - - (5,208) - (5,208) - (5,208)
Total comprehensive income for
the
year - - - (5,208) (2,214,407) (2,219,615) (954,306) (3,173,921)
Issue of share capital of
previous
parent 1,709 399,550 - - 401,259 - 401,259
Issue of share capital 95,840 3,983,970 - - 4,079,810 - 4,079,810
Merger reserve (34,358) (2,849,253) 2,883,611 - - - - -
Retained earnings movements
due to
increased investment by NCI - - - 757,966 757,966 - 757,966
Acquisition of non-controlling
interests - - - - - (58,796) (58,796)
Other movements in
non-controlling
interests - - - - - 1,200,356 1,200,356
Balance at 31 December 2021 2,883,611 2,054,807
95,840 3,983,970 (9,750) (4,898,864) 48 197,649 2,252,456
Other movements in non-controlling interest relate to additional
investments in Driift Holdings Limited in the year, a subsidiary of
All Things Considered Group Plc.
Consolidated statement of cash flows
For the year ended 31 December 2021 2021 2020
GBP GBP GBP GBP
Cash flows from operating activities
Loss for the year after tax (3,307,774) (341,797)
Adjustments for:
Taxation charged 1,256 966
Finance costs 96,968 98,855
Finance income (4,852) (34,652)
Loss on disposal of property,
plant and equipment - 6,143
Depreciation of property, plant
and equipment 133,023 127,549
Share of results of associates
and joint ventures (167,568) (40,012)
Provision against investment in
associates and joint ventures 333 226,282
Movements in working capital:
Increase in trade and other receivables (572,660) (366,982)
Increase in trade and other payables 1,136,345 2,182,495
Cash (absorbed by)/generated
from operations (2,684,929) 1,858,847
Interest paid (96,968) (98,855)
Tax paid (1,256) (1,246)
Net cash (outflow)/inflow
from operating activities (2,783,153) 1,758,746
Investing activities
Purchase of property, plant and
equipment (20,983) (8,642)
Purchase of subsidiaries
(net of cash acquired) 274,700 -
Investment in unlisted shares (53,085) -
Net amount withdrawn in associates
and joint ventures - 30,971
Interest received 4,852 34,653
Net cash generated from
investing activities 205,483 56,981
Financing activities
Proceeds from issue of shares
in subsidiary subscribed
by non-controlling interest - 150,250
Proceeds from issue of shares
in previous parent 300,025 -
Proceeds from issue of shares 4,011,094 610,402
Proceeds from borrowings 500,000 275,000
Repayment of borrowings (640,386) (839,729)
Proceeds from non-controlling
interest additional investment
(Driift) 2,000,000 -
Repayment of bank loans (95,414) (29,295)
Payment of lease liabilities (136,865) (127,430)
Net cash generated from
financing activities 5,983,453 39,198
Net increase in cash and cash
equivalents 3,360,784 1,854,925
Cash and cash equivalents at beginning
of year 2,178,505 309,640
Effect of foreign exchange
rates (7,017) 13,940
Cash and cash equivalents
at end of year 5,532,272 2,178,505
1 General information
All Things Considered Group Plc ("ATC Group plc") was incorporated
in England and Wales on 20 May 2021 as a public company limited
by shares under the Companies Act 2006.
ATC Group plc's registered office is The Hat Factory, 168 Camden
Street, London NW1 9PT. The Group's principal activity during
the year was music artist management and livestreamed events.
The Consolidated Group financial statements represents the consolidated
results of ATC Group plc and its subsidiaries, (together referred
to as the "Group"). The Parent Company financial statements present
information about the Company as a separate entity and not about
its Group.
These are the first consolidated financial statements of the
Group following the reorganisation of the Group to facilitate
the listing. The result of the application of the capital reorganisation
is to present the consolidated financial statements (including
comparatives) as if the Company has always owned the Group. The
share capital structure of the Company as at the date of the
Group reorganisation is pushed back to the first date of the
comparative period (1 January 2020). A Merger Reserve is created
as a separate component of equity, representing the difference
between the share capital of the Company at the date of the Group
reorganisation and that of the previous top organisation of the
Group .
Except for IFRS 16, the implementation of IFRS had no impact
on the consolidated financial information of the Group. The implementation
of IFRS 16 led to an increase in the loss for the year by GBP16,886,
an increase in assets by GBP323,758 and an increase in liabilities
of GBP388,525. There was no effect on cash flows.
2 Basis of preparation and measurement
2.1 Basis of preparation
The Consolidated Group Financial Information has been prepared
in accordance with International Financial Reporting Standards
in conformity with the requirements of the Companies Act 2006
("IFRS").
Unless otherwise state, the Consolidated Group Financial Information
is presented in Pounds Sterling (GBP) which is the currency of
the primary economic environment in which the Group operates.
Monetary amounts in these financial statements are rounded to
the nearest GBP.
The Consolidated Group Financial Information has been prepared
under the historical cost convention except for certain financial
instruments that have been measured at fair value. The principal
accounting policies adopted are set out below.
2.2 Basis of consolidation
The Consolidated Group Financial Information comprises the financial
statements of ATC Group plc and its subsidiaries listed in note
17 for "Subsidiaries" to the Consolidated Group Financial Information.
The financial statements of all Group companies are adjusted,
where necessary, to ensure the use of consistent accounting policies.
The Group was formed after the Company, prior to its IPO and
listing on AQSE, completed a share for share transaction with
All Things Considered Limited. The Board has taken the view that
the most appropriate way to account for this in line with IFRS
is to deem the share for share exchange as a group reconstruction.
This has been accounted for under the basis of merger accounting
given that the ultimate ownership before and after the transaction
remained the same. There is currently no specific guidance on
accounting for group reconstructions such as this transaction
under IFRSs. In the absence of specific guidance, entities should
select an appropriate accounting policy and IFRS permits the
consideration of pronouncements of other standard-setting bodies.
This group reconstruction as scoped out of IFRS 3 has therefore
been accounted for using predecessor accounting principles resulting
in the following practical effects;
(a) The net assets of the Company and the predecessor group,
All Things Considered Limited and its subsidiary undertakings
(the "Predecessor Group"), are combined using existing book values,
with adjustments made as necessary to ensure that the same accounting
policies are applied to the calculation of the net assets of
both entities;
(b) No amount is recognised as consideration for goodwill or
negative goodwill;
(c) The consolidated profit and loss account includes the profits
or losses of the company and the Predecessor Group for the entire
period, regardless of the date of the reconstruction, and the
comparative amounts in the consolidated financial statements
are restated to the figures presented by the Predecessor Group;
(d) The retained earnings reserve includes the cumulative results
of the Company and the Predecessor Group, regardless of the date
of the reconstruction, and the comparative amounts in the statement
of financial position are restated to those presented by the
Predecessor Group.
Acquisitions are accounted for under the acquisition method from
the date control passed to the Group. On acquisition, the assets
and liabilities of a subsidiary are measured at their fair values.
Any excess of the cost of acquisition over the fair values of
the identifiable net assets acquired is recognised as goodwill.
A subsidiary is defined as an entity over which ATC Group plc
has control. ATC Group plc controls an entity when the Group
is exposed to, or has rights to, variable returns from its involvement
with the entity and has the ability to affect those returns through
its power over the entity. Subsidiaries are fully consolidated
from the date on which control is transferred to the Group. They
are deconsolidated from the date that control ceases.
Changes in the Group's interest in a subsidiary that do not result
in a loss of control are accounted for as equity transactions.
The carrying amounts of the Group's interests and the non-controlling
interests are adjusted to reflect the changes in their relative
interests in the subsidiary. Any difference between the amount
by which the non-controlling interests are adjusted and the fair
value of the consideration paid or received is recognised directly
in equity and attributed to owners of the Company.
Intra-group transactions, balances and unrealised gains on transactions
are eliminated; unrealised losses are also eliminated unless
cost cannot be recovered. Where necessary, adjustments are made
to the financial statements of subsidiaries to ensure consistency
of accounting policies with those of the Group.
The total comprehensive income of non-wholly owned subsidiaries
is attributed to owners of the parent and to the non-controlling
interests in proportion to their relative ownership interests.
3 Segmental analysis
Artist management Live streamed
and development events Total
2021 2021 2021
GBP GBP GBP
Revenue 4,501,426 4,642,212 9,143,638
Cost of sales (2,088,401) (6,209,493) (8,297,894)
Gross profit 2,413,025 (1,567,281) 845,744
Other operating income 523,896 - 523,896
Other income 93,621 545,979 639,600
Administrative expenses (4,268,933) (1,121,944) (5,390,877)
Provision for amounts owed by associates
and joint ventures - - -
Operating profit/(loss) (1,238,391) (2,143,245) (3,381,636)
Share of results of associates and
joint ventures 167,568 - 167,568
Finance income 4,852 - 4,852
Finance costs (83,833) - (83,833)
Interest on finance leases (13,135) - (13,135)
Provision against amounts owed by
participating interests (333) - (333)
Adjusted loss before tax (546,538) (2,143,245) (2,689,783)
IPO and related costs (616,735) - (616,735)
-------------------------------------------- ----------------- ------------- -----------
Profit/(Loss) before taxation (1,163,273) (2,143,245) (3,306,518)
Income tax expense (1,256) - (1,256)
Profit/(Loss) for the year (1,164,529) (2,143,245) (3,307,774)
Assets and liabilities
Total assets 6,473,124 3,395,862 9,868,986
Total liabilities (5,432,212) (2,184,318) (7,616,530)
----------------- ------------- -----------
Net assets 1,040,912 1,211,544 2,252,456
================= ============= ===========
Artist management Live streamed
and development events Total
2020 2020 2020
GBP GBP GBP
Revenue 2,383,493 4,716,692 7,100,185
Cost of sales (1,862,392) (4,345,849) (6,207,950)
Gross profit 521,392 370,843 892,235
Other operating income 434,762 - 434,762
Administrative expenses (1,166,200) (242,187) (1,408,387)
Provision for amounts owed by associates
and joint ventures (235,250) - (235,250)
Operating loss (445,296) 128,656 (316,640)
Share of results of associates and
joint ventures 40,012 - 40,012
Finance income 34,652 - 34,652
Finance costs (98,845) (10) (98,855)
Loss before taxation (469,476) 128,646 (340,831)
Income tax expense (966) - (966)
Loss for the year (470,443) 128,646 (341,797)
Assets and liabilities
Total assets 2,317,095 2,594,808 4,911,903
Total liabilities (3,530,360) (2,335,761) (5,866,121)
----------------- ------------- -----------
Net assets (1,213,265) 259,047 (954,218)
================= ============= ===========
Revenue
2021 2020
GBP GBP
Revenue analysed by geographical market
United Kingdom 5,068,283 3,139,084
Europe 860,023 1,668,000
United States of America 2,631,178 1,373,101
Rest of the world 584,154 920,000
9,143,638 7,100,185
4 Administrative expenses by nature
2021 2020
GBP GBP
Staff costs 2,364,472 782,420
Rent, rates and services costs 367,960 35,472
IPO and related costs 616,735 -
Legal and professional fees 642,641 148,105
Consultancy fees 580,895 279,528
Depreciation of property, plant and equipment 133,023 127,549
Exchange losses 61,406 (12,517)
Profit or loss on sale of tangible assets (19,694) 6,143
Travelling expenses 120,476 19,536
Other expenses 522,963 22,151
5,390,877 1,408,387
.
5 Earnings per share
2021 2020
Basic and diluted earnings/(loss) (34.51) pence (4.25) pence
per share
Basic and diluted number of shares
in issue 9,584,020 6,871,599
Basic earnings per share is calculated by dividing the
profit/loss
after tax attributable to the equity holders of All Things
Considered
group plc by the numbers of shares in issue after the allotment
of ordinary shares on 14 December 2021. The same number of shares
is used for the corresponding period in order to provide a
meaningful
comparison.
6 Income tax expense
2021 2020
GBP GBP
Current tax
UK corporation tax on losses for the current
period - (280)
Foreign taxes and reliefs 1,256 1,246
1,256 966
The difference between the statutory income tax rate and the effective
tax rates are summarised as follows:
2021 2020
GBP GBP
Profit/(loss) before income taxes (3,307,774) (412,739)
------------- ------------------
Expected tax at statutory UK
corporation tax rate of 19% (628,477) (78,420)
Increase/(decrease) in tax
resulting
from:
117,50
Effect of different tax rates
in foreign jurisdictions (27,081) 12,913
Tax losses utilised 181,597 -12,412
Capital allowances less
depreciation (1,894) 680
Losses carried forward 471,027 23,347
Non-deductible expenditure 101,070 55,535
Other adjustments (94,985) (676)
1,256 966
============ ==================
At 31 December 2021the Group has GBP5,496,781 (2020:
GBP2,615,515)
of tax losses available to be carried forward against
future profits.
From April 2023, the corporation tax rate will increase
from 19% to 25%.
7 Goodwill
Goodwill
GBP
Cost
At 1 January 2021 -
Additions 1,135,403
-------------
At 31 December 2021 1,135,403
-------------
Impairment -
At 1 January 2021 -
Charge for the year -
-------------
At 31 December 2021 -
-------------
Net book value
At 31 December 2021 1,135,403
=============
At 31 December 2020 -
=============
On 1 January 2021, the group acquired a further 40% share in ATC Live
LLP, bringing the group's interest to 90%, for GBPnil consideration
resulting in goodwill of GBP517,438.
On 12 February 2021, the remaining 51% interest in Your Army LLC,
previously a 49% associate, was acquired by the Group for consideration
of $640,000 (equating to GBP474,179) resulting in goodwill of GBP354,188.
On 19 February 2021, 100% of ATC Artist Management Inc (formerly Courtyard
Productions Inc) was acquired for GBPnil consideration, resulting
in goodwill of GBP233,231.
On 12 April 2021, the group acquired a further 10% share in Familiar
Music Group LLC, bringing the group's interest to 55%, for GBPnil
consideration resulting in goodwill of GBP30,546.
ATC Live ATC Artist Your Army Familiar Total
LLP Management LLC Music Group
Inc LLC
GBP GBP GBP GBP GBP
Goodwill on acquisitions
Total consideration
(see below) - - 474,179 - 474,179
Plus: Fair value
of previously held
equity interest 434,506 - 115,257 - 549,763
Less: Share of fair
value of net
(assets)/liabilities
acquired (see below) 82,932 233,231 (235,248) 30,546 111,461
-------- ---------- ------------- ---------- ---------
Total goodwill 517,438 233,231 354,188 30,546 1,135,403
======== ========== ============= ========== =========
Consideration satisfied
by:
Cash - - 474,179 - 474,179
======== ========== ================= ========== =========
Share of fair value
of net assets/(liabilities)
acquired:
Cash and cash equivalents 566,897 10,571 166,827 4,583 748,878
Property, plant and
equipment 8,065 946 68 - 9,079
Trade and other receivables 11,793 391,892 71,529 3,618 478,832
Trade and other payables (628,901) (636,640) (3,176) (63,740) (1,332,457)
Borrowings (50,000) - - - (50,000)
-----------
(92,146) (233,231) 235,248 (55,539) (145,668)
Percentage acquired 90% 100% 100% 55%
(82,932) (233,231) 235,248 (30,546) 111,461
============ ============ ============= =========== =========
Net cash inflow/(outflow)
arising on acquisition
Cash consideration - - (474,179) - (474,179-
Total cash and cash
equivalents acquired 566,897 10,571 166,827 4,583 748,879
----------- ----------------- ----------- ---------
566,897 10,571 307,352 4,583 274,700
============= =========== ================= =========== =========
On each of the acquisitions, no separate intangible assets were identified
and the difference between the consideration and the fair value of
assets acquired was all attributed to goodwill.
Impairment testing was undertaking using projections for three years
and a terminal value. Applying an appropriate discount rate, there
was adequate headroom for each element of goodwill.
8 Reserves
2021 2020 2021 2020
Ordinary share capital Number Number GBP GBP
Issued and fully paid
Ordinary shares of GBP0.01
(2020: GBP1) each 95,840,020 32,649 95,840 32,649
Number
of shares Share capital
No. GBP
Issued share capital in All
Things Considered Ltd at 31
December 2020 34,358 34,358
At 31 December 2020 34,358 34,358
=========== =============
Exchanged for shares in All
Things Considered Group Plc 6,871,599 68,716
Share issued on incorporation 1 -
Shares issued 14 December
2021 2,712,420 27,124
----------- -------------
At 31 December 2021 9,584,020 95,840
=========== =============
The company has one class of Ordinary shares. The Ordinary shares
have full voting, dividend and capital distribution (including on
winding up) rights. They do not confer any rights of redemption or
carry any right to fixed income.
During the year ended 31 December 2020, 13,093 Ordinary shares of
GBP1 each were issued for proceeds of GBP610,402 to provide additional
working capital for All Things Considered Limited, a subsidiary of
All Things Considered Group plc.
On 11 November 2021, All Things Considered plc issued 6,871,599 Ordinary
shares of GBP0.01 each in exchange for the entire share capital of
All Things Considered Limited.
On 14 December 2021, 2,712,420 shares were issued leading to a further
GBP27,412 of share capital and share premium of GBP3,983,970, net
of share issue costs.
On 14 December 2021, 119,800 warrants were granted to Canaccord Genuity
Limited to subscribe for Ordinary Shares of GBP0.01 each in All Things
Considered Group Plc. The charge to the profit and loss account in
respect of these is immaterial for 2021 .
Merger reserve
A merger reserve is created as a separate component of equity, representing
the difference between the share capital of the Company at the date
of the Group reorganisation and that of the previous parent company
of the Group .
Currency translation reserve
The currency translation reserve represents cumulative foreign exchange
differences arising from the translation of the financial statements
of foreign subsidiaries.
9 Related party transactions
Transactions with related parties for the year ended 31 December
2021
During the year, the Group paid rent of GBP150,000 (2020: GBP150,000)
to Pagham Investments Limited, a company which close family members
of two of the directors Craig Newman and Brian Message have a
significant interest in. The Group also paid rent of GBP178,240
(2020: GBP23,370) to Craig Newman during the year.
During the year the Group recharged overheads totalling GBP20,554
(2020: GBP79,903) to the following LLPs that the Group is a member
of and has a significant interest in:
* ATC 9 LLP: GBP20,554 (2020: GBP27,535)
* ATC Live LLP: GBPnil (2020: GBP52,368).
In turn the group was recharged overheads totalling GBP800,468
(2020: GBP204,069) by the following LLPs that the Group is a
member of and has a significant interest in:
* ATC 4 LLP: GBP798,898 (2020: GBP87,482)
* ATC 9 LLP: GBP1,570 (2020: GBP13,143)
* ATC Live LLP: GBPnil (2020: GBP103,444).
During the year, the Group paid interest of GBP5,389 (2020: GBP3,363)
to director Craig Newman and GBP5,389 (2020: GBP3,363) to director
Brian Message.
The remuneration of the directors and key management personnel
is set out in note 11.
Balances with related parties as at 31 December 2021
At 31 December 2021, the Group owed GBP1,015,027 (2020: GBP1,000,000)
to Pagham Investments Limited, a company which close family members
of two of the directors, Craig Newman and Brian Message, have
a significant interest in.
At 31 December 2021, the following represent the amount of members
capital in LLPs and LLCs attributable to the Group and shown
in 'investments in associates and joint ventures':
2021 2020
Members Provision Conversion Net Members Provision Net
capital to capital
subsidiaries
GBP GBP GBP GBP GBP GBP GBP
ATC 1
LLP - - - - 53,451 (53,451) -
ATC 3
LLP - - - - 90,755 (90,755) -
ATC 4
LLP - - - - 171,337 (53,109) 118,228
ATC 7
LLP 398 - - 398 26,283 (25,251) 1,032
ATC 9
LLP 52,060 - - 52,060 40,060 - 40,060
ATC Live
LLP 434,406 - (434,406) - 467,478 - 467,478
One Eskimo
LLC - - - - 3,716 (3,716) -
Your
Army
LLC 115,272 - (115,272) - 132,182 132,182
952,290 - (549,678) 52,458 952,290 (226,282) 726,008
10 Events after the reporting date
On 30 March 2022 the Group secured and received a short-term
promissory note loan of $6m. On the same date the Group invested
the $6m into a new company, Hypnos Capital, formed with the
express intention of investing in the music digitisation,
blockchain and web3 spaces. The minority investment was made
alongside a number of other parties who together with the
Group have invested over $80m in the new venture. On 10 May
2022, Hypnos Capital announced that it acquired Napster.
The Group's equity interest in the newly formed company is
subject to a pledge in favour of the lender, as sole security
against the Group's obligations under the loan arrangement.
Due to the recent volatility in the crypto markets, the Directors
have reassessed the Company's capacity to refinance the original
loan. The Directors have therefore taken the decision to
transfer the equity interest back to the original loan holder
with negligible financial impact to the Group. The Directors
continue to believe that blockchain technology and non-fungible
tokens (NFTs) will increasingly have an impact on the holding
and distribution of copyrights in the medium and long term
and the Group continues to have an option to invest into
the new Napster venture. It is beneficial to the Group to
be able to take a little more time to assess the landscape
and determine what level of participation might be achievable
whilst also taking stock of other opportunities that are
being presented in this space.
11 Notice of AGM and Posting of Annual Report
The Company's Annual General Meeting ("AGM") will be held
virtually on 27 July 2022 at 9:30am. The Company's Annual
Report and Accounts and Notice of AGM will be published on
the Company's website shortly.
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END
NEXSEAEFMEESEFM
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