Trading Statement

RNS Number : 0922F

SpaceandPeople PLC

17 April 2014

 



SpaceandPeople plc

("SpaceandPeople" or "the Company")

Retail, promotional and brand experience specialist SpaceandPeople PLC (AIM: SAL) today issues the following update on trading for the financial year ending 31 December 2014.

In the three months to 31 March 2014, the Company has experienced a cumulative 12% shortfall in revenues compared with management's forecast. It is anticipated that this trend will continue for the remainder of the year within the core UK and German promotions and retail businesses. Revenue for these businesses will be £1.7 million (13%) lower than budget. The main reasons for this are as follows:

·     UK promotions - sales traction in new venues being slower than anticipated;

·     UK retail - increased restrictions on some retail categories available for us to sell;

·     German promotions - delays in obtaining local authority permits to trade in new centres resulting in lost sales opportunities in this year; and

·     German retail - delayed roll-out plan throughout the year and lower than expected occupancy in the first 6 months of the year.

Overall, forecast revenue for the Company for the year end 31 December 2014 has been revised down to £18.2 million from £18.6 million despite the increase in forecast revenue in S&P+ of £1.25 million and in S&P India of £50k. However, the increase in revenue generated by S&P+ is at a lower gross margin percentage than the retail and promotional sales divisions.

As a result, pre-tax profits for the full year are now expected to be £1.4 million lower than previously forecast and will be £1.5 million after one off costs of £150k.

The Company's financial position remains strong with forecast net cash at 31 December 2014 being in excess of £1 million and with long-term borrowing facilities of £2 million in place. The Company's ability to pay the proposed dividend on 25 April 2014 is unaffected as is the required capital expenditure plan going forward.

The Board is confident that growth in revenue in the core business will resume towards the end of 2014 as new business wins gain traction and for 2015 we are forecasting modest revenue growth, along with the reorganisation and cost reduction plan that the Company has already implemented. This will deliver a forecast pre-tax profit for 2015 of £2.0 to £2.5 million.

The Company's AGM is on Thursday 24 April 2014.

For further information, contact:

SpaceandPeople Plc	0141 354 1151
Matthew Bending, Gregor Dunlay
Cantor Fitzgerald Europe	020 7894 7000
David Foreman, Mark Percy (Corporate Finance)
Richard Redmayne, Paul Jewell (Corporate Broking)

About SpaceandPeople plc:

SpaceandPeople facilitates and manages promotional space for marketing campaigns and retailing in shopping centres and other high footfall locations, such as theme parks and railway stations. SpaceandPeople is at the forefront of developing the concept of space as an advertising and promotional medium. It offers consumer brands the opportunity to promote their products through direct engagement with consumers through a mix of experiential marketing events and complementary above the line advertising and multimedia campaigns. SpaceandPeople offers a comprehensive service covering brokerage, consultancy and venue centric media buying. SpaceandPeople is independently funded and its shares are admitted to trading on AIM. The Company acquired Retail Profile, the RMU specialist, in May 2010 and operates in the UK, Germany, India and Russia.

www.spaceandpeople.com

 

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