TIDMSAL
RNS Number : 8837A
SpaceandPeople PLC
30 May 2023
SpaceandPeople plc
("SpaceandPeople" or the "Group")
Final Results for the year ended 31 December 2022
SpaceandPeople (AIM:SAL) the retail, promotional and brand
experience specialist, is pleased to announce its final results for
the year ended 31 December 2022.
Financial Highlights
-- Revenue of GBP5.5 million (2021: GBP4.0 million and 2020: GBP2.8 million)
-- Operating loss of GBP9k (2021: profit of GBP0.15 million and 2020: loss of GBP3.57 million)
-- EBITDA before government grant support of GBP0.3 million (2021: negative GBP0.1 million)
-- Basic Loss per Share before non-recurring charges and
discontinued operation of 11.0p (2021: earnings of 8.8p)
-- Cash at the year-end of GBP1.9 million (2021: GBP1.4
million). Cash available (including undrawn facilities) at the
year-end of GBP2.6 million (2021: GBP2.1 million)
Operational Highlights
-- Continued recovery in both UK and German markets
-- Launch of Rock Up and Pop Up kiosk programme
-- First kiosks operational in Austria
Chair's Statement
2022 witnessed the end of the lockdowns that had so affected
your company over the last few years and I again wish to thank all
of our staff and management across the business for their hard work
and support in 2022 as well as their continued commitment to the
Group.
While profitability was slightly lower compared with the prior
year, this masks a significant return to top line growth across the
UK and German businesses as operations returned to closer to
pre-pandemic norms. The focus on ensuring the business was in the
best shape it could be for the recovery has been rewarded in the
shape of the revenue growth achieved of 38% to GBP5.5m. At a profit
level, the significant levels of government support seen in prior
years were phased out and have been offset by the contribution from
the revenue increase resulting in operating performance being
almost break even for the year.
Key business developments and the financial performance of the
Group are covered in more detail in Nancy Cullen's CEO Report and
Gregor Dunlay's Operating and Financial Review.
Management is clear on the strategic growth opportunities in the
UK and Europe and there is the necessary capital, resource, skills
and ambition within the business to achieve these. A major focus in
2023 will be on retaining the Group's contract to provide services
to Network Rail, which it is anticipated will be re-tendered during
2023.
Your business is a strongly cash generative one which has
limited capital expenditure needs and, as I noted last year, we
will look to return to paying dividends at a suitably prudent time
when reserves permit.
There have been a number of changes in the composition of your
Board with John Scott and Michael Brown joining as non-executive
directors, bringing extensive relevant experience in the retail and
marketing sectors. I would also like to thank Steve Curtis, who
steps down at the upcoming Annual General Meeting, for his
significant contribution to the Group across his nine years on the
Board. I would again like to thank all colleagues for their support
and input throughout the year and hope to continue that success in
growing the business in the year ahead.
George Watt
Chair
26 May 2023
Chief Executive Officer's Review
Introduction
I write this report with huge sense of relief as it is my first
time as Chief Executive that our figures have only been slightly
affected by Covid. I am also happy to report that these results
show strong revenue growth and have been accomplished this year
without the substantial levels of government support that were
received in 2021. This represents a major achievement for this
business which was so badly affected by lockdowns during the
pandemic.
During the year we have built back business strongly in the UK
and Germany to the point where, in December 2022, the UK
promotional business experienced its strongest sales month on
record as well as introducing a new product to our market which is
already showing good growth potential.
We are also starting to look at European expansion and, in
October 2022 installed the first of our mall kiosks in Austria,
using our German business as the hub for this operation.
UK
Trading started relatively slowly in 2022 across both the UK and
German businesses due to fears over the new omicron variant of
Covid which affected both our retail and brand businesses. However,
unlike 2021, this was short lived and by the end of Q1 we began to
see demand build back positively across all sectors.
Our brand business was badly affected by Covid in 2020 and 2021
and has taken some time to rebuild to 2019 levels, however, a long
hot summer led to multiple requests from brands for outdoor sites
and then, during the second half of 2022, we recorded some of the
best revenues that we have seen in the 23 year history of
SpaceandPeople. This business is an important and high profile
aspect of our work and therefore seeing demand for this media build
back has been significant for both our client venues and for
SpaceandPeople.
We also launched our new website www.experientialspace.co.uk in
January 2022. This is an online platform enabling media buyers and
agencies to view our venues, promotional sites, prices,
demographics and footfall in real time. This is proving to be a
successful planning tool for agency clients and we look forward to
providing further enhanced services for brand and media agencies
over the coming 12 months.
The mall retail business has remained steady since our venues
reopened post Covid and has proved remarkably resilient in the face
of competition presented by vacant shop units. Many of the
operators that were trading pre Covid have remained in the malls
and we have been delighted to see so many new concepts in retail
now taking mall space - this includes products, services and
food/drink retailing.
We were excited to roll out our new retail solution aimed at
stimulating new and online retail businesses to trial physical
retail. Rock Up and Pop Up offers a complete solution to nascent
retailers providing them with an end-to-end retail solution
including a fully designed and installed kiosk, space at top UK
Shopping Centres and, if required, retail staff. At the end of
2022, we had three kiosks trading and we are looking to expand this
service throughout 2023 and beyond. As at the date of this report
we have four kiosks in operation with a further four being
installed in June 2023. The Rock Up service allows us to appeal to
a whole new generation of retailers with the ultimate aim of
creating new long-term retail unit tenants at our clients'
centres.
During the year we also renewed our ISO 9001,14001 and 45001
accreditations which relate to the quality of our business
processes, operational expertise and management. SpaceandPeople's
rigour relating to compliance is unique in our marketplace and our
absolute attention to providing venues with compliant, timely and
detailed paperwork is something that offers our client venues real
reassurance regarding the quality of bookings that take place in
their venues.
Germany
Our German business was significantly affected by Covid
restrictions and the emergence of the omicron variant in January
2022. However, similar to the UK, it built the retail business back
in 2022 with overall revenue of GBP1.3 million (2021: GBP0.9
million).
With business returning to more normal levels, we started
looking at European expansion and, during the year, began our first
trial within Austria with an initial two retail units with ECE. We
are now in discussions with other property companies in respect of
the Austrian opportunity.
We are ever mindful of the cost impact of our operations in both
countries and in 2022 our German team moved into cheaper, central
Hamburg offices which contributed to a GBP0.2 million reduction in
administration costs.
Outlook
It has been fantastic to see revenues grow back in both the UK
and Germany after a prolonged period of turbulence for
SpaceandPeople. We have rebuilt the business, won significant new
venues, developed new products and produced a near break-even
operating result without the support of Government money, so there
is much to celebrate.
I am also delighted that we significantly added to our team in
the year - recruiting additional staff across both marketing and
sales enabling us to continue to service our venue base.
We have started 2023 in a strong position with the staffing,
venue opportunity and business structure in place to continue our
drive to dominate the UK market and to continue to grow across
Europe with our new business concepts.
SpaceandPeople throughout its 23-year history has been a strong
and resilient business and we are able, in 2023, to continue this
growth trajectory without adding significantly to our cost base. We
look to 2023 and beyond with confidence.
Nancy Cullen
Chief Executive Officer
26 May 2023
Operating and Financial Review
We were pleased to see a gradual return to more normal trading
conditions during 2022 compared with the "stop/start" nature of
lockdowns and restrictions that had continued into 2021. At the
start of 2022, promoter sentiment was still affected by the
government messaging in December 2021 that pandemic cases were
surging again, even though venues remained open. In Germany, the
requirement to wear facemasks and provide proof of vaccination
continued into the Spring of 2022, again, acting as a constraint on
the return to normal trading. Thankfully, as the year progressed,
these issues did not recur and confidence in booking promotions
returned both in the UK and Germany.
Although the effects of the pandemic dissipated during the year,
retailers and promoters were not immune to increased costs, wage
inflation and interest rate increases. This had a material effect
on a number of retailers, especially those who sell lifestyle
products. One of the benefits of the Group's business model is that
we are focused on refreshing the offer in the venues we trade with
on a regular basis. The sales teams and venue managers work hard to
replace traders who are struggling or are no longer attractive to
the venues and therefore look to mitigate the risk from business
failure. The Group has been prudent in recognising revenue from
traders who are potentially distressed.
Pleasingly, the positive effect of not having any lockdowns and
restrictions outweighed more recent macroeconomic challenges and
revenue increased by 38% to GBP5.5 million and gross profit
increased by 37% to GBP3.9 million, with all business areas
performing significantly better than in 2021.
An operating loss before non-recurring charges of GBP9k in 2022
is slightly lower than the profit of GBP0.15 million achieved in
2021, however, this was achieved with GBP0.61 million less of Covid
salary support and grants and demonstrates the continued resurgence
of business without continued reliance on government support.
Revenue
Revenue generated in 2022 was GBP5.5 million, which was GBP1.5
million (38%) higher than in the previous year. This was made up as
follows:
2022 2021
GBP million GBP million Movement
UK promotions 3.0 2.1 +43%
UK retail 1.2 1.0 +20%
German combined 1.3 0.9 +44%
Total 5.5 4.0 +38%
UK promotional revenue was up 43% to GBP3.0 million compared
with the previous year and was almost back to pre-pandemic levels.
Revenue from retailers who do not use our kiosks is included within
this revenue stream. This revenue stream showed good growth, with
retailers being able to trade without interruption throughout 2022.
Our Brand Experience business has taken longer to recover due to
longer development lead times for promotional activity than for
retail bookings. This area of spend also has to be attracted back
to our industry, having been diverted to other channels during the
pandemic. Customer acquisition business has been the slowest to
recover as many of the operators in this area have been constrained
by staff availability and the impact of inflationary pressures and
cost of living increases.
In the UK retail division, Retail Merchandising Unit ("RMU")
revenue increased by 35% from the previous year primarily due to
the absence of lockdowns.
The Mobile Promotions Kiosk ("MPK") element of UK retail revenue
continued to face headwinds with charity and customer acquisition
bookings being significantly lower due to macro-economic factors.
Revenue was 4% down as a result.
Within the retail division, the new Rock Up and Pop Up concept
delivered GBP41k of revenue from a standing start during the year
and this is forecast to grow significantly through 2023 and beyond
as this method of retailing surpasses traditional RMU trading.
Despite restrictions in Germany being eased more slowly than in
the UK, revenue recovered well to GBP1.3 million, which was 44% up
on 2021 and also above the pre-pandemic revenue of GBP1.0 million
achieved in 2019. This was due to there being an average of 78
kiosks operational during 2022 compared with 56 in 2021 and 53 in
2019.
Administrative Expenses
Administrative expenses increased by GBP0.6 million from the
previous year to GBP4.1 million. This was almost exclusively as a
result of increased staff costs, with additional staff, a return to
commission and bonus targets being met and wage inflation caused by
the competitive landscape for attracting good quality staff.
Other Operating Income
In 2022, other income in relation to fees generated by the
business increased by 11% to GBP0.15 million. The other component
is government grants and salary support in relation to the
pandemic. This dropped to GBP0.06 million in 2022, all arising in
Germany, compared with GBP0.67 million that had been received
during 2021.
Operating Results
During 2022, the Group made an operating loss before
non-recurring charges of GBP9k. Although this is lower than the
operating profit of GBP0.15 million achieved in 2021, it was
achieved with GBP0.6 million less government support and showed an
underlying improvement of GBP0.4 million in the Group's
profitability.
Non-recurring Charges
As at 31 December 2022, the Group recognised an impairment in
the carrying value of the goodwill in relation to the UK Retail
cash generating unit ("CGU") of GBP1.5 million. The principal
reasons for this are the increased borrowing costs of the Group as
a result of bank base rate increases during 2022 which caused a
significant increase in the discount factor used in relation to
future cash flows along with a slight decrease in the anticipated
growth rate due to macro-economic factors. The underlying
profitability and cash forecasts for this CGU were consistent with
previous expectations. This is explained more fully in note 12 to
the financial statements.
Basic Earnings per Share excluding non-recurring costs and
discontinued operations was a loss of (11.0)p (2021: profit per
share 8.8p).
Cash Flow
The Group cash inflow from operations was GBP1.1 million (2021:
inflow of GBP0.8 million). This was due to positive EBITDA of
GBP0.3 million with the remainder being due to movements in working
capital. As at the end of 2022, the Group had drawn down GBP1.5
million of its banking facilities (2021: GBP1.8 million). With the
gross cash position being GBP0.5 million higher at the end of 2022
than 2021 at GBP1.9 million (2021: GBP1.4 million), this resulted
in net cash being GBP0.4 million (2021: net borrowings of GBP0.4
million).
Gregor Dunlay
Chief Financial Officer
26 May 2023
Strategic Review
Key Performance Indicators
The main financial key performance indicators are profit before
taxation and non-recurring costs, EBITDA and cash headroom. During
the year, the loss before taxation and non-recurring costs was
GBP0.1 million (2021: profit of GBP0.1 million) and available cash
at 31 December 2022 was GBP2.63 million (2021: GBP2.13 million).
This is comprised of gross cash of GBP1.88 million and overdraft
facilities of GBP0.75 million. Basic EPS before non-recurring costs
and discontinued operations was a loss of 11.0p (2021: profit of
8.8p).
The Group continually monitors several key areas:
-- revenue against target and prior period;
-- profitability against target and prior period;
-- venue acquisition, performance and attrition;
-- promoter and operator types compared with historic bookings; and
-- commission and occupancy rates.
2022 2021
Revenue (GBP million) 5.5 4.0
Operating (loss) / profit before non-recurring
costs (GBP million) (0.0) 0.2
Basic (loss) / earnings per share before
non-recurring costs and discontinued operation
(p) (11.0) 8.8
Average number of Retail Merchandising
Units (RMUs) 115 79
Average number of Mobile Promotions Kiosks
(MPKs) 38 24
Consolidated Statement of Comprehensive Income
For the 12 months ended 31 December 2022
Notes
12 months 12 months
to to
31 December 31 December
2022 2021
GBP'000 GBP'000
Continuing Operations
Revenue 4 5,529 4,020
Cost of sales 4 (1,644) (1,211)
Gross profit 3,885 2,809
Administration expenses 4 (4,101) (3,456)
Other operating income 5 207 800
Operating (loss) / profit before
non-recurring charges (9) 153
Non-recurring charges 8 (1,500) -
Operating (loss) / profit (1,509) 153
Finance costs 9 (116) (78)
(Loss) / profit before taxation (1,625) 75
------------ ------------
Taxation 10 (89) 97
(Loss) / profit after taxation (1,714) 172
-------- -------
Profit from discontinued operation - 12
(Loss) / profit for the period (1,714) 184
Other comprehensive income
Foreign exchange differences on translation
of foreign operations (25) (38)
Total comprehensive income for the
period (1,739) 146
-------- -------
Earnings per share
Basic - before non-recurring charges
and discontinued operation 23 (11.0)p 8.8p
Basic - after non-recurring charges
and discontinued operation 23 (88.4)p 9.4p
Diluted - before non-recurring charges
and discontinued operation 23 (11.0)p 8.3p
Diluted - after non-recurring charges
and discontinued operation 23 (88.4)p 8.9p
Consolidated Statement of Financial Position
At 31 December 2022
Notes 31 December 2022 31 December 2021
GBP'000 GBP'000
Assets
Non-current assets:
Goodwill 12 5,381 6,881
Property, plant & equipment 13 545 690
Deferred tax asset 15 208 297
6,134 7,868
Current assets:
Trade & other receivables 14 2,524 2,196
Current tax receivable - 6
Cash & cash equivalents 16 1,885 1,380
----------------- -----------------
4,409 3,582
Total assets 10,543 11,450
----------------- -----------------
Liabilities
Current liabilities:
Trade & other payables 17 5,591 4,339
Borrowings repayable within
one year 18 322 297
Lease liabilities 19 180 189
6,093 4,825
Non-current liabilities:
Borrowings repayable after
one year 18 1,158 1,481
Lease liabilities 19 240 308
1,398 1,789
Total liabilities 7,491 6,614
----------------- -----------------
Net assets 3,052 4,836
----------------- -----------------
Equity
Share capital 21 195 195
Share premium 4,868 4,868
Special reserve 233 233
Own shares held 25 (50) -
Retained earnings (2,194) (460)
Total equity 3,052 4,836
----------------- -----------------
Consolidated Statement of Cash Flows
For the 12 months ended 31 December 2022
Notes 12 months to 12 months to
31 December 2022 31 December 2021
GBP'000 GBP'000
Cash flows from operating
activities
Cash generated from operations 1,216 680
Interest paid 9 (116) (78)
Taxation 6 177
Net cash inflow / (outflow)
from operating activities 1,106 779
Cash flows from investing
activities
Purchase of property,
plant & equipment 13 (87) (80)
Purchase of own shares 25 (50) -
Net cash outflow from
investing (137) (80)
activities
----------------- -----------------
Cash flows from financing
activities
Proceeds from new Bank
facility - 1,000
Bank facility payments (298) (972)
Payment of lease obligations 19 (166) (186)
Net cash (outflow) /
inflow from (464) (158)
financing activities
----------------- -----------------
Increase / (decrease)
in cash and cash equivalents 505 541
Cash and cash equivalents
at beginning of 1,380 839
Period
----------------- -----------------
Cash and cash equivalents
at end of 16 1,885 1,380
period
----------------- -----------------
Reconciliation of operating
profit to net
cash flow from operating
activities
Operating (loss) / profit (1,509) 153
Goodwill impairment 12 1,500 -
Loss on disposal (6) (28)
Depreciation of property,
plant & 13 332 375
Equipment
Effect of foreign exchange
rate moves (25) (33)
(Increase) in receivables (328) (271)
Increase in payables 1,252 484
-------- ------
Cash inflow from operating
activities 1,216 680
-------- ------
Consolidated Statement of Changes in Equity
For the 12 months ended 31 December 2022
Share Share Special Own Retained Non- Total
capital premium reserve Shares Earnings Controlling equity
held interest
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 31 December
2020 195 4,868 233 - (587) (24) 4,685
Comprehensive
income:
Foreign currency
translation - - - - (38) - (38)
Profit for the
period - - - - 184 - 184
-------- -------- -------- -------- --------- ------------ ----------
Total comprehensive - - - - 146 - 146
income
Other movement - - - - (24) 24 -
Equity settled
share-based payment - - - - 5 - 5
--------
At 31 December
2021 195 4,868 233 - (460) - 4,836
-------- -------- -------- -------- --------- ------------ ----------
Comprehensive
income:
Foreign currency
translation - - - - (25) - (25)
Loss for the
period - - - - (1,714) - (1,714)
----- ------ ---- ----- -------- --- -------------
Total comprehensive - - - - (1,739) - (1,739)
income
Purchase of own
shares - - - (50) - - (50)
Equity settled
share-based payment - - - - 5 - 5
-----
At 31 December
2022 195 4,868 233 (50) (2,194) - 3,052
----- ------ ---- ----- -------- --- -------------
Notes to the Financial Statements
For the 12 months ended 31 December 2022
1. General information
SpaceandPeople plc is a public company limited by shares
incorporated and domiciled in Scotland (registered number SC212277)
which is listed on AIM (dealing code SAL). The principal activities
of the company and its subsidiaries (the Group) and the nature of
its operations are set out in the Directors Report.
2. Basis of preparation
The Group's financial statements have been prepared under the
historical cost convention as described in the accounting policies
set out in note 3 below. These accounting policies are consistent
with those in the previous year. The financial statements are
presented in Sterling, which is the functional currency of the
Group and are rounded to thousands (GBP'000).
Compliance Statement
These financial statements have been prepared in accordance with
UK adopted International accounting standards (UK-adopted IAS).
Going Concern
The Directors are required to prepare the statutory financial
statements on the going concern basis unless it is inappropriate to
presume that the Group will continue in business. In satisfaction
of this responsibility the Directors have considered the Group's
ability to meet its liabilities as they fall due.
The Group meets its day-to-day cash requirements through working
capital management and the use of existing bank overdraft and loan.
Management information tools including budgets and cash flow
forecasts are used to monitor and manage current and future
liquidity.
The current and future financial position of the Group,
including its cash flows and liquidity, continue to be reviewed by
the Directors. They take a prudent view on the continuing recovery
in the Group's business post Covid and in light of current
inflationary and other macroeconomic factors impacting on the
business, its customers and suppliers. They have also considered
the Group's ability to withstand the loss of key contracts and any
mitigating actions that would be available to them.
The Group has term loans in place that mature in 2025 and 2027
along with overdraft facilities available until 2024. Financial
covenants are in place that reflect the current and budgeted
trading position and the Directors are confident of renewing the
overdraft facilities in the normal course of business.
The Group continues to manage its cash flows prudently and the
Directors are confident that the current resources and available
funding facilities will provide sufficient headroom to meet the
forecast cash requirements whilst remaining within its financial
covenants.
As such, the Directors consider that it is appropriate to
prepare the financial statements on the going concern basis.
Accounting developments
New and revised IFRSs applied
Title Implementation Effect on Group
Onerous Contracts - Annual periods beginning There is no material
Cost of Fulfilling a on or after 1 January impact on the financial
Contract (Amendment 2022 statements.
to IAS 37)
Annual Improvements Annual periods beginning There is no material
to IFRS Standards 2018 on or after 1 January impact on the financial
- 2020 2022 statements.
Property, Plant and Annual periods beginning There is no material
Equipment: Proceeds on or after 1 January impact on the financial
Before Intended Use 2022 statements.
(Amendments to IAS 16)
Reference to the Conceptual Annual periods beginning There is no material
Framework (Amendments on or after 1 January impact on the financial
to IFRS 3) 2022 statements.
The following amendments will be introduced in future
periods
Title Implementation Effect on Group
IFRS 17 Insurance Contracts Annual periods beginning No material impact
and Amendments to IFRS on or after 1 January to the financial statements
17 Insurance Contracts 2023 anticipated.
Disclosure of Accounting
Policies (Amendments Annual periods beginning Material rather than
to IAS 1 on or after 1 January significant accounting
and IFRS Practice Statement 2023 policies will be disclosed.
2)
Definition of Accounting Annual periods beginning No material impact
Estimate (Amendments on or after 1 January to the financial statements
to IAS 8) 2023 anticipated.
Deferred Tax Related Annual periods beginning No material impact
to Assets and Liabilities on or after 1 January to the financial statements
Arising from 2023 anticipated.
a Single Transaction
(Amendments to IAS 12
Income Taxes) Annual periods beginning No material impact
on or after 1 January to the financial statements
Lease liability in a 2024 anticipated.
Sale and Leaseback (Amendments
to IFRS 16) Annual periods beginning An impact assessment
on or after 1 January will be carried out
Non-current Liabilities 2024 in due course.
with Covenants (Amendments
to IAS 1) Annual periods beginning An impact assessment
on or after 1 January will be carried out
Classification of Liabilities 2024 in due course.
as Current or Non-current
(Amendments to IAS 1)
Management anticipates that all relevant pronouncements will be
adopted for the first period beginning on or after the effective
date of the pronouncement.
3. Accounting policies
Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the Company and entities controlled by the Company
(its subsidiaries). Control is achieved where the Company has the
power to govern the financial and operating policies of an entity
so as to obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the
period are included in the consolidated statement of comprehensive
income from the effective date of acquisition and up to the
effective date of disposal, as appropriate. Total comprehensive
income of subsidiaries is attributed to the owners of the Company
and to the non-controlling interests, even if this results in the
non-controlling interests having a deficit balance.
When necessary, adjustments are made to the financial statements
of subsidiaries to bring their accounting policies into line with
those used by other members of the Group.
All intra-group transactions, balances, income and expenses are
eliminated in full on consolidation.
Goodwill
Goodwill arising on an acquisition of a business is carried at
cost as established at the date of acquisition of the business less
accumulated impairment losses, if any.
For the purpose of impairment testing, goodwill is allocated to
each of the Group's cash-generating units (or groups of
cash-generating units) that is expected to benefit from the
synergies of the combination.
A cash-generating unit to which goodwill has been allocated is
tested for impairment annually, or more frequently when there is
indication that the unit may be impaired. If the recoverable amount
of the cash-generating unit is less than its carrying amount of any
goodwill allocated to the unit and then to the other assets of the
unit pro rata based on the carrying amount of each asset in the
unit. Any impairment loss of goodwill is recognised directly in the
consolidated statement of comprehensive income within
administration expenses. An impairment loss recognised for goodwill
is not reversed in subsequent periods.
On disposal of the relevant cash-generating unit, the
attributable amount of goodwill is included in the determination of
the profit or loss on disposal.
Investments in subsidiaries
The Parent Company's investments in subsidiary undertakings are
included in the Company statement of financial position at cost,
less provision for any impairment in value.
Revenue
Revenue is measured at the fair value of consideration received
or receivable. Revenue is shown net of value-added tax, rebates and
discounts and after eliminating intergroup sales. Revenue is
recognised when the amount of revenue can be measured reliably, it
is probable that future economic benefits will flow to the Group
and when the relevant performance obligation is satisfied. The
performance obligation is considered to occur when the promotional
or retail booking event takes place. This performance obligation is
satisfied over the period of the booked event. Revenue does not
contain a financing component nor any element of variable
consideration.
Promotion divisions
Revenue in the UK promotion division is recognised over the
period the promotion event takes place and is agreed by all
parties. This policy is adopted as our contractual right to
commission income is crystallised at this point. Payment of a
deposit is typically due when the booking is made with the balance
payable 30 days prior to the promotion taking place or in
instalments if the promotion is of a duration longer than 30
days.
Retail divisions
Revenue in the UK and German retail divisions is recognised in
the month during which the booking takes place. This is due to the
requirement to match the revenue with performance obligations.
Payment is due in advance on a monthly basis.
Interest income
Interest income from a financial asset is recognised when it is
probable that the economic benefits will flow to the Group and the
amount of income can be measured reliably. Interest income is
accrued on a time basis, by reference to the principal outstanding
and at the effective interest rate applicable, which is the rate
that exactly discounts estimated future cash receipts through the
expected life of the financial asset to the asset's net carrying
amount on initial recognition.
Government assistance
Grants from the government are recognised at their fair value
where there is a reasonable assurance that the grant will be
received and the Group will comply with all attached conditions.
Grants received in are reported within other operating income.
Leasing
IFRS 16 requires capitalisation of all leasing agreements with
duration exceeding 12 months, whereas the previous regulations only
required capitalisation of finance leases. The right-of-use asset
and liability to be recognised for each leasing agreement is the
present value of the lease payments.
The Group applied the following practical expedients as
permitted by the standard on transition:
-- non recognition of right of use assets and liabilities for
leases of low value or for which the lease term ends within 12
months of the date of transition
-- the use of a single discount rate to a portfolio of leases
with reasonably similar characteristics
-- the exclusion of initial direct costs for the measurement of
the right of use asset at the date of initial application
-- the use of hindsight in determining the lease term where the
contract contains options to extend or terminate the lease.
At inception, the Group assesses whether a contract is, or
contains, a lease within the scope of IFRS 16. A contract is, or
contains, a lease if the contract conveys the right to control the
use of an underlying identified asset for a period of time in
exchange for consideration.
Where a tangible asset is acquired through a lease, the Group
recognises a right-of-use asset and a lease liability at the lease
commencement date. Right-of-use assets are included within
property, plant and equipment.
The right-of-use asset is initially measured at cost, which
comprises the present value of minimum lease payments determined at
the inception of the lease. The right-of-use asset is subsequently
depreciated using the straight-line method from the commencement
date to the earlier of the end of the useful life of the
right-of-use asset or the end of the lease term. The estimated
useful lives of right-of-use assets are determined on the same
basis as those of other property, plant and equipment. The
right-of-use asset is periodically reduced by impairment losses, if
any, and adjusted for certain remeasurements of the lease
liability.
The lease liability is initially measured at the present value
of the lease payments that are unpaid at the commencement date,
discounted using the interest rate implicit in the lease or, if
that rate cannot be readily determined, the Group's incremental
borrowing rate. Lease payments included in the measurement of the
lease liability comprise fixed payments, variable lease payments
that depend on an index or a rate, amounts expected to be payable
under a residual value guarantee, and the cost of any options that
the Group is reasonably certain to exercise, such as the exercise
price under a purchase option, lease payments in an optional
renewal period, or penalties for early termination of a lease.
The lease liability is remeasured when there is a change in:
future lease payments arising from a change in an index or rate;
the Group's estimate of the amount expected to be payable under a
residual value guarantee; or the Group's assessment of whether it
will exercise a purchase, extension or termination option. When the
lease liability is remeasured in this way, a corresponding
adjustment is made to the carrying amount of the right-of-use asset
or is recorded in profit or loss if the carrying amount of the
right-of-use asset has been reduced to zero.
The Group has elected not to recognise right-of-use assets and
lease liabilities for short-term leases of machinery that have a
lease term of 12 months or less, or for leases of low-value assets
including IT equipment. The payments associated with these leases
are recognised in profit or loss on a straight-line basis over the
lease term.
The Group has made judgements in adopting IFRS 16 such as
identifying contracts in scope for IFRS 16, determining the
interest rate used for the discounting of future cashflows, and the
determining lease terms where the lease has extension or
termination options.
Property, plant & equipment
Depreciation is provided at the annual rates below in order to
write off each asset over its estimated useful life.
Plant & equipment - 12.5% of cost
Fixtures & fittings - 25% of cost
Computer equipment - 25% of cost
Computer software - 33% of cost
Property, plant & equipment is stated at cost less
accumulated depreciation to date.
Taxation
The tax credit or expense represents the sum of tax and deferred
tax currently recoverable or payable. Tax currently recoverable or
payable is based on the taxable loss or profit for the period. The
Group's asset or liability for current tax is calculated using
rates that have been enacted or substantially enacted at the
balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used in
computation of taxable profits and is accounted for using the
liability method. Deferred tax liabilities are recognised for all
temporary timing differences and deferred tax assets are recognised
to the extent that it is probable that taxable profits will be
available against which deductible temporary differences can be
utilised. Such assets and liabilities are not recognised if the
temporary difference arises from the initial recognition, other
than in a business combination, of other assets and liabilities in
a transaction that affects neither the taxable profit nor the
accounting profit.
The carrying amount of deferred tax assets is reviewed at each
balance sheet date and reduced to the extent it is no longer
probable that sufficient taxable profits will be available to allow
all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled or the asset is
realised based on tax laws and rates that have been enacted at the
balance sheet date. Deferred tax is charged or credited in the
income statement, except when it relates to items charged or
credited in other comprehensive income, in which case the deferred
tax is also dealt with in other comprehensive income.
Foreign exchange
Items included in the Group's financial statements are measured
using Pounds Sterling, which is the currency of the primary
economic environment in which the Group operates and is also the
Group's presentational currency.
Transactions denominated in foreign currencies are translated
into Sterling at the rates ruling at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies
at the balance sheet date are translated at the rates at that date.
These translation differences are dealt with in the profit and loss
account.
The income and expenditure of overseas operations are translated
at the average rates of exchange during the period. Monetary items
on the balance sheet are translated into Sterling at the rate of
exchange ruling on the balance sheet date and fixed assets at
historical rates. Exchange difference arising are treated as a
movement in reserves.
Financial instruments
Financial assets and liabilities are recognised in the Group's
balance sheet when it becomes a party to the contractual provisions
of the instrument.
Offsetting financial instruments
Financial assets and liabilities are offset and the net amount
reported in the Balance Sheet where there is a legally enforceable
right to offset the recognised amounts.
Trade and other receivables
Trade and other receivables where payment is due within one year
do not constitute a financing transaction and are recorded at
original invoice value less an allowance for any uncollectable
amounts.
If payment is due after more than one year or if there is any
other indication of a financing transaction, trade and other
receivables are recorded initially at fair value less attributable
transaction costs. In this situation, fair value is equal to the
amount expected to be received, discounted at a market-related
interest rate.
All trade and other receivables are subsequently measured at
amortised cost, net of impairment.
The Group recognises lifetime ECL (expected credit losses) for
trade receivables, which are estimated by reference to past default
experience of the debtor and an analysis of the debtor's current
financial position, adjusted for factors that are specific to the
debtors, general economic conditions and an assessment of both the
current as well as the forecast direction of conditions at the
reporting date, including the time value of money where
appropriate.
The Group writes off a receivable when there is information
indicating that the debtor is in severe financial difficulty and
there is no realistic prospect of recovery. Write offs are
recognised in the income statement when identified.
Cash and cash equivalents
Cash and cash equivalents are carried in the balance sheet at
cost and comprise cash in hand, cash at bank and deposits with
banks.
Trade and other payables
Trade and other payables are carried at amortised costs and
represent liabilities for goods or services provided to the Group
prior to the period end that are unpaid and arise when the Group
becomes obliged to make future payments in respect of these goods
and services.
Equity instruments
Equity instruments issued by the Group are recorded at the
proceeds received, net of direct issue costs.
Share based payments
The Group operates a number of equity settled share-based
payment schemes under which share options are issued to certain
employees. The fair value determined at the grant date of the
equity settled share-based payment, where material, is expensed on
a straight-line basis over the vesting period. For schemes with
only market-based performance conditions, those conditions are
considered in arriving at the fair value at grant date.
Pensions
The Group pays contributions to the personal pension schemes of
the majority of employees. Contributions are charged to the income
statement in the period in which they fall due.
Borrowing costs
Borrowing costs are amortised over the duration of the loan and
recognised throughout the term of the loan.
Employee Benefit Trust
The Company has an established Employee Benefit Trust ("EBT") to
which it is the sponsoring entity. Notwithstanding the legal duties
of the trustees, the Company considers that it has 'de facto'
control. The EBT is accounted for as assets and liabilities of the
Company and is included in the financial statements. The Company's
equity instruments held by the EBT are accounted for as if they
were the Company's own equity and are treated as treasury shares
("Own Shares Held"). No gain or loss is recognised in profit or
loss or other comprehensive income on the purchase, sale or
cancellation of the Company's own equity held by the EBT.
Non-recurring charges
Non-recurring charges are items that have been separately
identified to provide a better indication of the Group's underlying
operational performance. They are separately identified as a result
of their magnitude, incidence or nature.
Further details are disclosed in note 8 to the financial
statements.
Critical accounting judgements and estimates
The preparation of financial statements in conformity with IFRS
requires the use of accounting estimates and assumptions that
affect the reported amounts of assets and liabilities at the date
of the financial statements and the reported amounts of income and
expenditure during the period. Although these estimates are based
on management's best knowledge of current events and actions,
actual results may differ from those estimates. IFRS also requires
management to exercise its judgement in the process of applying the
Group's accounting policies.
The areas where significant judgements and estimates have been
made in the preparation of these financial statements are the
impairment of goodwill, impairment of the value of investment in
subsidiaries and taxation. Explanations of the methodology and the
resultant assumptions are detailed in the relevant accounting
policies above and the respective notes to the financial
statements.
4. Segmental reporting
The Group splits its business into two main areas, being
promotions and retail. The retail business is further sub-divided
into both UK and German territories. The Group maintains its head
office in Glasgow and has a subsidiary office in Hamburg, Germany.
The Group has determined that these, along with head office
functions, are the principal operating segments as the performance
of these segments is monitored separately and reviewed by the
Board.
The following tables present revenues, results and asset and
liability information regarding the Group's two core business
segments - Promotional Sales and Retail, split by geographic area,
after licence fees and management charges made between Group
companies.
Segment assets include goodwill, property, plant and equipment,
receivables and operating cash. Head office assets include deferred
tax and head office right of use assets. Segment liabilities
comprise operating liabilities. Head office liabilities include
corporate borrowings.
Prior year amounts have been re-presented in a format consistent
with the current year that reflects the basis of the entity's
internal management reporting that has been used by the Group to
monitor the performance of segments.
Segment revenues Promotion Retail Retail Head Group
and
Results UK UK Germany Office
for 12 months to GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
31 December 2022
Segment Revenue 3,011 1,236 1,282 - 5,529
Cost of sales - (830) (814) - (1,644)
Administrative expenses
excluding depreciation (2,006) (123) (635) (1,005) (3,769)
Other revenue - - 207 - 207
Depreciation (61) (95) (9) (167) (332)
------------ --------- --------- -------- --------
Segment Operating
profit / (loss) 944 188 31 (1,172) (9)
Non-recurring costs - (1,500) - - (1,500)
Finance costs - - - (116) (116)
Segment profit
/ (loss) 944 (1,312) 31 (1,455) (1,625)
------------ --------- --------- -------- --------
before taxation
Segment assets Promotion Retail Retail Head Group
and
liabilities UK UK Germany Office
as at 31 December GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
2022
Total segment assets 3,151 6,117 674 601 10,543
Total segment liabilities (4,651) (503) (430) (1,907) (7,491)
Total segment
net assets (1,500) 5,614 244 (1,306) 3,052
---------- -------- -------- -------- --------
Segment revenues Promotion Retail Retail Head Other Group
and
Results UK UK Germany Office
for 12 months GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
to
31 December 2021
Segment Revenue 2,132 1,022 866 - - 4,020
Cost of sales - (701) (510) - - (1,211)
Administrative
expenses excluding
depreciation (1,382) (152) (774) (773) - (3,081)
Other revenue 126 - 674 - - 800
Gain associated
with discontinued
operations - - - - 12 12
Depreciation (38) (107) (38) (192) - (375)
------------ --------- --------- -------- -------- --------
Segment Operating
profit / (loss)
including discontinued
operations 838 62 218 (965) 12 165
Finance costs - - - (78) - (78)
Segment profit
/ (loss) 838 62 218 (1,043) 12 87
------------ --------- --------- -------- -------- --------
before taxation
including discontinued
operations
Segment assets Promotion Retail Retail Head Group
and
liabilities UK UK Germany Office
as at 31 December GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
2021
Total segment
assets 2,439 7,617 750 644 11,450
Total segment
liabilities (3,339) (640) (443) (2,192) (6,614)
Total segment
net assets (900) 6,977 307 (1,548) 4,836
---------- -------- -------- -------- --------
5. Other operating income
Other operating income is comprised of:
12 months 12 months to
to
December December 2021
2022
GBP'000 GBP'000
Government grants 60 668
Ancillary charges 147 132
207 800
---------- --------------
6. Operating profit / (loss)
The operating profit / (loss) is stated after charging:
12 months 12 months to
to
December December 2021
2022
GBP'000 GBP'000
Impairment of goodwill 1,500 -
Depreciation of property, plant
and equipment 165 183
Depreciation of right of use assets 167 192
========== ==============
Auditor's remuneration:
Fees payable for:
Audit of Company 36 32
Audit of subsidiary undertakings 19 18
Audit related services 9 10
Tax compliance 5 10
Other tax services 10 4
Other services 5 5
---------- --------------
84 80
---------- --------------
Directors' remuneration 702 554
---------- --------------
7. Staff costs
The average number of employees in the Group during the period
was as follows:
12 months 12 months to
to
December December 2021
2022
Executive Directors 3 3
Non-executive Directors 3 3
Administration 17 16
Telesales 19 19
Commercial 4 3
Maintenance 6 6
---------- --------------
52 50
---------- --------------
12 months 12 months to
to
December December 2021
2022
GBP'000 GBP'000
Wages and salaries 2,329 1,785
Social Security costs 311 198
Pensions 98 112
---------- --------------
2,738 2,095
---------- --------------
8. Non-recurring charges
12 months 12 months to
to December 2021
December GBP,000
2022
GBP'000
Impairment of UK Retail CGU 1,500 -
1,500 -
---------- ---------------
Please refer to note 12 for further
information.
9. Finance income and costs
12 months 12 months to
to
December 2022 December 2021
GBP'000 GBP'000
Finance costs:
Interest payable on borrowings 77 30
Interest payable on lease obligations 39 48
-------------- --------------
116 78
-------------- --------------
10. Taxation
12 months 12 months
to to
December December 2021
2022
GBP'000 GBP'000
Current tax expense:
Current tax on profits/(losses) - -
for the year
Adjustment for under/(over) provision
in prior periods - (7)
---------- --------------
Total current tax - (7)
Deferred tax:
Charge in respect of change of rate - (66)
Charge in respect of temporary timing
differences 89 (24)
---------- --------------
Total deferred tax 89 (90)
Income tax charge / (credit) as
reported in the income statement 89 (97)
---------- --------------
The tax assessed for the period differs to the standard rate of
corporation tax in the UK. The differences are explained below:
12 months 12 months
to to
December December 2021
2022
GBP'000 GBP'000
(Loss) / profit on ordinary activities
before tax (1,625) 75
---------- --------------
(Loss) / profit on ordinary activities
at the standard rate of corporation
tax in the UK of 19% (2021: 19%) (309) 14
Tax effect of:
- Adjustment for (over)/under provision
in prior periods - (7)
- Over provision of deferred tax 61 -
- Use of recognised losses 45 -
- Disallowable items 300 1
- Change in tax rates substantively
enacted - (66)
- Use of tax losses previously
not recognised (8) (39)
Income tax charge / (credit) as
reported in the Income Statement 89 (97)
---------- --------------
11. Dividends
No dividends were paid during the current or prior year. The
Directors do not recommend a final dividend for 2022 (2021:
GBPnil).
12. Goodwill
Cost GBP'000
At 31 December 2020 8,225
Additions -
--------
At 31 December 2021 8,225
Additions -
--------
At 31 December 2022 8,225
--------
Accumulated impairment losses
At 31 December 2020 1,344
Charge for the period -
------
At 31 December 2021 1,344
Charge for the period 1,500
At 31 December 2022 2,844
------
Net book value
At 31 December 2020 6,881
------
At 31 December 2021 6,881
------
At 31 December 2022 5,381
------
Goodwill acquired in a business combination is allocated at
acquisition to the cash-generating units (CGUs) that are expected
to benefit from that business combination. The Directors consider
that the businesses of the UK Retail sub-group are an identifiable
CGU and the carrying amount of Goodwill is allocated against this
CGU.
The recoverable amount of the cash generating unit was
determined based on value-in-use calculations, covering a detailed
forecast, followed by an extrapolation of expected cash flows based
on the targeted and expected growth rate over the next five years
followed by a terminal factor determined by management.
The present value of the future cash flows is then calculated
using a discount rate of 11.84% (2021 - 7.83%).
This discount rate includes appropriate adjustments to reflect,
in the Directors' judgement, the market risk and specific risk of
the CGU. It is derived from the Group's weighted average cost of
capital. Changes in the discount rate compared to the prior year
reflect the latest market assumptions for the risk-free rate,
equity risk premium and the cost of debt.
The growth rate utilised in calculation of the terminal factor
is based on expected inflationary growth in the UK beyond the
period of forecasting. The growth rate used was 1.65% (2021 -
1.7%).
Cash flow projections during the budget period are based on an
average growth in EBITDA which the Directors consider to be
conservative given the plans for the businesses and the potential
increased returns particularly in relation to the pipeline of new
business opportunities.
Impairment testing resulted in a reduction to the estimated
recoverable amount of goodwill. The related goodwill impairment
loss of GBP1.5m for 2022 has been included in non-recurring
charges.
The estimate of recoverable amount for the CGU is sensitive to
the discount rate, the cash flow projections and the growth
rate.
If the discount rate used is increased beyond 11.84%, for each
further movement of 1% an impairment loss of GBP0.462 million would
be recognised and written off against goodwill.
If the annual growth rate beyond 2022, used in the cash flow
projection, is decreased by 0.25% an impairment loss of GBP0.166
million would be recognised and written off against goodwill.
13. Property, plant and equipment
The Group movement in property, plant & equipment assets
was:
Cost Plant Fixture Computer Right Right of Total
& equipment & fittings equipment of use use assets
assets plant &
property equipment
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 31 December
2020 3,061 295 823 822 161 5,162
Additions 52 4 34 - 8 98
Disposals (10) - - (82) (15) (107)
Forex - (3) - (2) - (5)
------------- ------------ ----------- ---------- ------------ --------
At 31 December
2021 3,103 296 857 738 154 5,148
------------- ------------ ----------- ---------- ------------ --------
Additions 39 16 32 124 44 255
Disposals - - - (151) - (151)
At 31 December
2022 3,142 312 889 711 198 5,252
------------- ------------ ----------- ---------- ------------ --------
Depreciation Plant & Fixture Computer Right Right of Total
equipment & fittings equipment of use use assets
assets plant &
property equipment
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 31 December
2020 2,767 280 794 200 93 4,134
Charge for the
period 155 8 20 153 39 375
Depreciation on
disposals - - - (36) (15) (51)
At 31 December
2021 2,922 288 814 317 117 4,458
Charge for the
period 128 8 29 142 25 332
Depreciation on
disposals - - - (83) - (83)
----------- ------------ ----------- ---------- ------------ --------
At 31 December
2022 3,050 296 843 376 142 4,707
----------- ------------ ----------- ---------- ------------ --------
Net book value Plant & Fixture Computer Right Right of Total
equipment & fittings equipment of use use assets
assets plant &
property equipment
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 31 December
2020 294 15 29 622 68 1,028
----------- ------------ ----------- ---------- ------------ --------
At 31 December
2021 181 8 43 421 37 690
----------- ------------ ----------- ---------- ------------ --------
At 31 December
2022 92 16 46 335 56 545
----------- ------------ ----------- ---------- ------------ --------
The right of use lease liabilities are secured against the right
of use assets.
14. Trade and other receivables
31 December 31 December
2022 2021
GBP'000 GBP'000
Net trade debtors 2,052 1,587
Other debtors 337 324
Prepayments 135 285
Total 2,524 2,196
============ ============
Amounts falling due
after more than one
year included above
are: 79 79
The maximum exposure to credit risk at the balance sheet date is
the carrying amount of receivables detailed above. The Group does
not hold any collateral as security. No interest is charged on
outstanding trade receivables. The carrying amount of trade and
other receivables approximates the fair value.
The Group applies the IFRS 9 simplified approach to measuring
expected credit losses on trade receivables which applies a credit
risk percentage based upon historical risk of default adjusted for
forward looking estimates against receivables that are grouped into
age brackets. To measure the expected credit losses, trade
receivables were considered on a days past due basis.
Trade receivables are written off where there is no reasonable
expectation of recovery. Indicators that there is no reasonable
expectation of recovery include the failure of a debtor to enter
into a repayment plan with the Group and a failure to make agreed
contractual payments. Impairment losses on trade receivables are
presented as net impairment losses within operating profit.
Subsequent recoveries of any amounts are credited against the same
line item.
31 December 31 December
2022 2021
GBP'000 GBP'000
Trade debtors 2,823 2,238
Loss allowance (771) (650)
Net trade debtors 2,052 1,587
============ ============
Movement in loss allowance:
31 December 31 December
2022 2021
GBP'000 GBP'000
1 January 650 1,197
Additional provisions 225 291
Utilised or released (104) (838)
31 December 771 650
============ ============
The Directors do not believe that there is a significant
concentration of credit risk within the trade receivables balance
on customers or geographical location.
As of 31 December 2022, trade receivables of GBP1.6 million
(2021: GBP1.1 million) were past due, but not impaired. The ageing
analysis of those debtors is as follows:
0 - 30 31 - 60 61 Days Total
Days Days +
GBP'000 GBP'000 GBP'000 GBP'000
Net amount at
31 December 2022 204 65 1,345 1,614
Net amount at
31 December 2021 140 78 878 1,095
15. Deferred tax
31 31
December December
2022 2021
GBP'000 GBP'000
Deferred tax assets:
Deferred tax asset to be
recognised after less than
12 months
Deferred tax asset to be - -
recognised after more than
12 months 208 297
Deferred tax asset 208 297
==================== ====================
Split as follows:
Fixed asset timing differences (5) 24
Tax losses 202 263
Other 11 10
Deferred tax asset 208 297
==================== ====================
Movement in the year:
At 1 January 297 207
Adjustment in respect of
losses (61) -
Change in tax rate substantively
enacted - 66
Charge in respect of temporary
timing differences on property,
plant and equipment
Other movements (29) 24
1 -
At 31 December 208 297
==================== ====================
The Finance Bill 202 was substantively enacted on 24 May 2021
changing the main rate of corporation tax from 19% to 25% after 1
April 2023. The closing deferred tax asset has been measured in
accordance with the rate substantively enacted at the Balance Sheet
date that would be expected to apply on reversal of the timing
differences.
The Group expects to fully utilise the UK deferred tax asset
recognised against future taxable profits as the future growth
strategy for the business is realised.
Deferred tax is not recognised in respect of tax losses in
Germany due to uncertainty over when they will be recovered against
the reversal of deferred tax liabilities or future taxable profits.
This is an unrecognised deferred tax asset of GBP260k (2021:
GBP291k).
16. Cash and cash equivalents
31 December 31 December
2022 2021
GBP'000 GBP'000
Cash at bank and
on hand 1,885 1,380
1,885 1,380
============ ============
17. Trade and other payables
31 December 31 December
2022 2021
Amounts payable GBP'000 GBP'000
within one year
Trade creditors 335 200
Other creditors 3,457 2,351
Social Security and
other taxes 447 157
Accrued expenses 838 1,088
Deferred income 514 543
Total 5,591 4,339
All trade and other payables are short term. The carrying values
of trade and other payables are considered to be a reasonable
approximation of fair value.
18. Other borrowings
31 December 31 December
2022 2021
GBP'000 GBP'000
Bank facilities:
Payable within one
year 322 297
Payable after one
year 1,158 1,481
------------ ------------
1,480 1,778
============ ============
As at 31 December 2022, SpaceandPeople plc had GBP1.48 million
(2021: GBP1.78 million) of CBILS term loans, GBP0.56 million of
which expire in April 2025 and GBP0.92 million expire in January
2027. SpaceandPeople plc also had GBP0.75 million of overdraft
facilities of which GBPnil was used as at 31 December 2022 (2021:
GBPnil). The bank facilities are secured by floating charge over
the Group's assets and are subject to interest between 3.25% to
3.8% plus base.
19. Leases
Amounts recognised in the balance sheet:
The balance sheet shows the following amounts relating to
leases:
31 December 31 December
2022 2021
GBP'000 GBP'000
Right of use assets
Property 335 421
Plant and equipment 56 37
391 458
Lease liabilities
Current 180 189
Non-current 240 308
------------ ------------
Total 420 497
============ ============
Amounts recognised in the statement of profit or loss:
The statement of profit or loss shows the following amounts
relating to leases:
12 months 12 months
to December to December
2022 2021
GBP'000 GBP'000
Depreciation charge of
right of use assets
Property 142 153
Plant and equipment 25 39
167 192
Interest expense on lease
liabilities 39 48
Below is a reconciliation of changes in liabilities arising from
financing activities:
1 January Cash New Other 31 December
2022 flows Leases 2022
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Current lease liabilities 189 (166) 55 102 180
Non-current lease liabilities 308 - 113 (181) 240
---------- -------- -------- -------- ------------
Total liabilities from
financing activities 497 (166) 168 (79) 420
========== ======== ======== ======== ============
The "Other" column includes the effect of reclassification of
non-current leases to current due to the passage of time, the
effect of the disposal of lease assets with their related creditors
and the effect of the unwinding of the discounted ROU creditors
over time.
The company does not face a significant liquidity risk with
regard to its lease liabilities and these are monitored as part of
the overall process of managing cash flows. There are no leases
subject to variable lease payment terms.
20. Financial instruments and risk management
The Group has no material financial instruments other than cash,
current receivables and liabilities, in both this and the prior
period, all of which arise directly from its operations. The net
fair value of its financial assets and liabilities is equivalent to
their carrying value as detailed in the balance sheet and related
notes.
Credit risk - The Group's credit risk relates to its receivables
and is managed by undertaking regular credit evaluations of its
customers. The Group is aware that customers' financial strength
may have been adversely affected by the Covid pandemic and current
economic circumstances and endeavours to work with them and our
venue partners to provide appropriate discounts and payment plans
to enable them to continue to trade and repay any amounts owed in
an agreed manner. The Group does not routinely offer extended
credit terms to the majority of customers.
Liquidity risk - The Group usually operates a cash-generative
business and has significant cash headroom. The Directors consider
the funding structure to be adequate for the Group's current
funding requirements and this is expected to strengthen during
future years. The following tables outline the Group's contractual
maturity of its financial liabilities:
Carrying On Demand/within Within Within Over 5 years
amount one year 1-2 years 2-5 years
2022 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Borrowings 1,480 322 322 836 -
Lease liabilities 420 180 157 83 -
Trade and other payables 5,591 5,591 - - -
--------- ----------------- ----------- ----------- -------------
Total 7,491 6,093 479 919 -
========= ================= =========== =========== =============
Carrying On Demand/within Within Within Over 5 years
amount one year 1-2 years 2-5 years
2021 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Borrowings 1,778 297 322 634 525
Lease liabilities 497 189 162 146 -
Trade and other payables 4,339 4,339 - - -
--------- ----------------- ----------- ----------- -------------
Total 6,614 4,825 484 780 525
========= ================= =========== =========== =============
Borrowing facilities - As at the balance sheet date, t he Group
has agreed facilities of GBP2.23 million, of which GBP1.48 million
was utilised at the year end. These facilities are secured by a
floating charge.
Financial assets - These comprise cash at bank and in hand. All
bank deposits are floating rate.
Financial liabilities - These include short-term creditors and
CBILS term loans of GBP1.48 million. All financial liabilities will
be financed from existing cash reserves and operating cash
flows.
Interest rate risk - The Group is exposed to interest rate risk
through the impact of rate changes on interest-bearing borrowings.
The interest rates and terms of repayment are disclosed in note 18
to the financial statements. Except as outlined above, the company
has no significant interest-bearing assets and liabilities. The
company does not use any derivative instruments to reduce its
economic exposure to changes in interest rates. An increase or
decrease of 1% in interest rate during the year would have resulted
in movement of GBP15k to the Income Statement.
Foreign currency risk - The Group is exposed to moderate foreign
exchange risk primarily from Euros due to its German operation and
Euro denominated licensing income as detailed in note 4 - Segmental
Reporting. The Group monitors its foreign currency exposure and
manages the position where appropriate. A 5% change in the Euro
rate at the year-end would have resulted in an additional gain or
loss of GBP26k.
21. Called up share capital
Allotted, issued and fully paid 31 December 31 December
2022 2021
Class Nominal
value
10p (2021
Ordinary - 1p) GBP 195,196 195,196
Number 1,951,957 19,519,563
On 13 June 2022 the company carried out a consolidation of the
Company's ordinary share capital, resulting in every 10 existing
ordinary shares of 1 pence each being consolidated into 1 new
ordinary share of 10 pence each.
Conversion ratio of Existing ordinary 10 Existing Ordinary Shares:
shares 1 New Ordinary Shares
Opening number of shares in issue
at 1p 19,519,563
Issue of shares prior to consolidation
at 1p 7
Total number of shares prior to
consolidation at 1p 19,519,570
Closing number of shares in issue
following consolidation at 10p 1,951,957
22. Related party transactions
Compensation of key management personnel
Key management personnel of the Group are defined as those
persons having authority and responsibility for the planning,
directing and controlling the activities of the Group, directly or
indirectly. Key management of the Group are therefore considered to
be the Directors of SpaceandPeople plc. There were no transactions
with the key management, other than their emoluments.
23. Earnings per share
12 months 12 months 12 months to
to to
31 December 31 December 31 December
2022 2021 2021
Pence per Pence per Pence per share
share share restated
for share
consolidation
Basic earnings / (loss)
per share
Before non-recurring charges
and discontinued operation (11.0)p 8.8p 0.9p
After non-recurring charges
and discontinued operation (88.4)p 9.4p 0.9p
Diluted earnings / (loss)
per share
(11.0)p 8.3p 0.8p
Before non-recurring charges
and discontinued operation
After non-recurring charges
and discontinued operation (88.4)p 8.9p 0.9p
Calculation of before non-recurring and discontinued
operations
12 months to 12 months to 12 months to
31 December 31 December 31 December
2022 2021 restated 2021
for share consolidation
GBP'000 GBP'000 GBP'000
(Loss) / profit after
tax for the period (1,714) 184 184
Non-recurring charges
Discontinued operation
1,500 - -
(Loss) / profit after
tax for the period - (12) (12)
before non-recurring
charges (214) 172 172
Weighted average number 31 December 31 December 31 December
of shares 2022 2021 restated 2021
for share consolidation
'000 '000 '000
Weighted average number
of ordinary shares
for the purpose of
basic 1,939 1,952 19,520
earnings per share
Weighted average number
of ordinary shares for
the purpose of diluted 2,077 2,075 20,752
earnings per share
The weighted average number of shares is calculated as
follows:
12 months to 12 months to 12 months to
31 December 31 December 31 December
2022 2021 restated 2021
for share consolidation
'000 '000 '000
Weighted average number
of shares in issue
during the period 1,952 1,952 19,520
Impact from purchase (13) - -
of own shares 28 September
2022
Weighted average number
of ordinary shares 1,939 1,952 19,520
----------------------------- ------------- ------------------------- -------------
Weighted average number
of ordinary shares
used in the calculation
of basic 137 123 1,232
earnings per share
deemed to be
issued for no consideration
in respect
of employee options
Weighted average number
of ordinary shares
used in the calculation
of 2,076 2,075 20,752
diluted earnings per
share
----------------------------- ------ ------ -------
As set out in note 24, there were share options outstanding as
at 31 December 2022 which, if exercised, would increase the number
of shares in issue. However, the diluted loss per share is the same
as the basic loss per share in the year to 31 December 2022, as the
loss for this year has an anti-dilutive effect.
24. Share options
The Group has established a share option scheme that senior
executives and certain eligible employees are entitled to
participate in at the discretion of the Board which is advised on
such matters by the Remuneration Committee.
In aggregate, share options have been granted under the share
option scheme over 183,350 ordinary shares exercisable within the
dates and at the exercise prices shown below, being the market
value at the date of the grant.
Date of grant Number Option period Price
12 January 2018 - 12 January
12 January 2015 24,350 2025 474p
30 June 2021 83,000 30 June 2024 - 30 June 2031 125p
24 August 2025 - 24 August
24 August 2022 76,000 2032 102.5p
The movement in the number of options outstanding under the
scheme over the period is as follows:
12 months 12 months
to to
31 December 31 December
2022 2021
Number of options outstanding as at
the beginning of the period 1,101,000 1,300,818
Number of options in issue following 110,100 -
share consolidation
Granted 76,000 855,000
Lapsed - (254,818)
Forfeited (2,750) (800,000)
------------ ------------
Number of options outstanding as at
the end of the period 183,350 1,101,000
------------ ------------
Weighted average exercise price 162p 20.3p
The number of options outstanding and the weighted average
exercise price should the share consolidation have applied in 2021
would have been 110,100 and 203p respectively.
The total share-based payment charge for the year, calculated in
accordance with IFRS2 on share-based payments, was GBP5k (2021:
GBP5k).
25. Own shares held
The Group has shares held by the Spaceandpeople plc Employee
Benefit Trust for the purpose of issuing shares under the company's
share option scheme.
Number of GBP'000
shares
Opening balance 1 January 2021 and closing - -
balance 31 December 2021
Acquisition of shares by Employee Benefit
Trust 49,405 50
---------- --------
Closing balance 31 December 2022 49,405 50
---------- --------
Contact details:
SpaceandPeople Plc 0845 241 8215
Nancy Cullen, Gregor Dunlay
Zeus (Nominated Adviser and Broker) 0203 829 5000
David Foreman, Jamie Peel, Ed Beddows
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END
FR PPUPGAUPWPPM
(END) Dow Jones Newswires
May 30, 2023 02:00 ET (06:00 GMT)
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