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Immotion Group PLC (IMMO)

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Wednesday 26 September, 2018

Immotion Group PLC

Interim Results

RNS Number : 9272B
Immotion Group PLC
26 September 2018
 

For Immediate Release

26 September 2018

Immotion Group PLC ("Immotion Group"; the "Company" or the "Group")

Interim Results

Immotion Group PLC (AIM: IMMO.L), the provider of 'Out of Home' virtual reality ("VR") experiences, is pleased to announce its Interim Results for the six months to 30 June 2018.

 

Highlights

 

·   Listed on AIM in July 2018 (post period end), raising a total of £5.75m (before expenses) via an oversubscribed placing

·      H1 total revenue £1.1*m (including £137,000 VR revenue)

·      VR revenue expected to grow very significantly in H2 following post-listing activity

·     Opened two owned and operated ImmotionVR experience centres in the UK which has increased to seven post period-end - the first in Bristol traded well throughout H1 2018

·     First VR experiences launched with concession partners at LEGOLAND® Discovery Centre, Boston, USA and Resorts World, Birmingham, UK with further Concession partner experiences now open as at the date of this report

·    Developed new and exclusive VR content, as well as Immotion Group's proprietary operating system (CMS) to facilitate "Create - Publish - Distribute" model

·     New exclusive distribution agreements with Leke VR for UK and USA

·    Strong pipeline of concession and retail opportunities

 

*Includes revenue from discontinued activities

 

Sir Robin Miller, Non-Executive Chairman of Immotion Group, said:

"The Board and I were delighted by the support shown from investors for our IPO. We have an ambition to become a leading global player in the Out of Home' VR experience market.  By combining the creation of exciting content with high-quality motion platforms, Immotion Group delivers immersive, fun and educational VR experiences.  Our first ImmotionVR experience centres and Concessions are trading well and we are very pleased by the positive response we have received from consumers. This has given the executive team the confidence to pursue a rapid roll out in the second half of the year."

 

Enquiries:

Immotion Group

Martin Higginson

Tel: +44 (0) 161 235 8505

WH Ireland Limited

(Nomad and Joint Broker)

Adrian Hadden

Jessica Cave

Tel: +44 (0) 207 220 1666

Shard Capital Partners LLP

(Joint Broker)

Damon Heath

Erik Woolgar

Tel: +44 (0) 20 7186 9900

 

 

 

Redleaf Communications

(Financial PR)

Elisabeth Cowell

Robin Tozer

 

Tel: +44 (0) 20 3757 6880

[email protected]

About Immotion Group

 

Immotion Group, co-founded by Martin Higginson and David Marks in 2017, generates revenues through the delivery to consumers of high quality "state of the art" VR experiences, combined with cutting-edge motion platforms at affordable price points through a range of channels:

 

●    Concession partners - currently installed at a range of outlets including Merlin Entertainments' LEGOLAND® Discovery Centres in Boston, USA and Manchester, UK and Genting Resorts World in Birmingham - this channel provides an opportunity for its partners to earn ancillary revenues, as well as providing an exciting additional attraction to their facilities

 

●    Owned and franchised VR experience centres, trading as ImmotionVR, located in high footfall retail and leisure malls

 

●    Sales - sale of VR Motion Platforms to leisure and entertainment operators to provide the operator with the opportunity to drive substantial ancillary revenues

 

Chief Executive's Statement

 

The period under review culminated in our shares being successfully admitted to trading on AIM, in July 2018 (post period end), raising £5.75 million (before expenses) by way of a significantly oversubscribed placing of new shares. The IPO has provided us with the funds required to rapidly scale our business in the coming months.

 

The 'Out of Home' VR experience market is forecast to grow eight-fold to $8 billion by 2022*, and Immotion Group has placed itself at the centre of what has been described as the "rising tide" of interest in VR.

 

Immotion Group is focused on becoming a leading participant in the 'Out of Home' VR experience market and we believe that the VR experiences we have developed will allow us to achieve this. Working closely with our Chinese motion platform manufacturer, Beijing LEKE VR Technology Co., Ltd ("Leke VR"), we have taken the basic VR motion platforms that they develop and have enhanced them with software and hardware upgrades, including our proprietary Content Management System, to deliver a truly differentiated offering. This combined solution gives Immotion Group the ability to offer partners a compelling ancillary revenue opportunity through exciting VR experiences.

 

We have exclusive distribution rights for Leke VR's motion platforms in the UK, Europe and the USA and Immotion Group has identified three routes to market:

 

·     Concession partners, enabling Immotion Group and its partners to earn revenues, as well as providing an exciting additional attraction to its partner's facilities;

·    Owned and franchised VR experience centres, trading as ImmotionVR, located in high footfall shopping and leisure destinations; and

·    Sales of VR Motion Platforms to leisure and entertainment operators, providing the opportunity for the operator to drive substantial ancillary revenues.

 

Our recently updated agreement with Leke VR, announced in September 2018, underpins our belief that there is strong demand for premium content. We have agreed to supply content to Leke VR's installed base of machines (currently 1m "plays" per month) which will help them to differentiate themselves in the non-USA and European markets. Leke VR currently supplies VR Motion Platforms to China, Japan, Korea, Taiwan, New Zealand, Saudi, and Croatia and has ambitious plans to open more VR parks throughout Asia and to grow its distribution network significantly. We are currently working on a number of joint initiatives for attractions and VR motion platforms which will be designed by our UK teams in collaboration with Leke VR. These plans provide Immotion Group with the opportunity to build significant additional revenue from its content.

 

Our strategy to develop VR experiences was enabled through the acquisition of both Studio Liddell, our CGI studio in Manchester, and C2K, the Los Angeles based, live-action studio. These acquisitions were completed just before we entered the current period (in December 2017) and both companies immediately set to work producing or publishing a range of VR experiences specifically for motion platforms. These include the space action ride, 'Delta Zero' as well as a number of proprietary experiences, including a mixed live action and CGI underwater experience, 'Legend of Lusca'. Variations of old favourites, such as our VR Snow Rollercoaster; along with "seasonal" VR experiences for both Halloween and Christmas are also coming soon.

 

The interim results reflect the Company's legacy operations. In the UK, we have been finishing a small number of prestigious larger commercial projects, but have not sought to win new commercial business in 2018. We will continue with selected commercial client business in the USA until VR activities grow in that market. However, we intend to exit our Japanese branch. Our first owned and operated ImmotionVR experience centre in Bristol, UK, which opened in mid-December 2017, traded throughout the period. This experience centre, together with Resorts World Birmingham which opened at the end of March 2018, and our first LEGOLAND® Discovery Centre Concession installation, which opened in May 2018, provided us with our inaugural VR revenues of £137,000.  Our ImmotionVR experience centre in the Arndale Centre, Manchester, UK opened just one month ahead of listing on 19 June 2018, so contributed to these H1 figures for only 12 days. 

 

With several locations contributing for the whole of H2 2018, along with new sites (both ImmotionVR and Concessions) and machine sales, we expect very substantial growth in our VR revenues in H2 2018.

 

Outlook

 

Our decision to invest heavily in both a proprietary Content Management System and in VR experience origination during the period has started to deliver rewards. The differentiated offering that we have created is now allowing us to win significant long-term revenue generating relationships. Indeed, having shown our VR experiences to a range of potential partners, we are now progressing a number of these to contract status.  These are predominantly with UK based leisure players but we are also in final stage negotiations with a Spanish distributor which we hope to announce imminently.

 

We are pleased with our progress to date and are now looking to accelerate the growth of our installed base.  We believe we can scale the business rapidly using both our owned, franchised and Concession models. 

 

Our future pipeline is looking strong, and we are making significant headway in terms of our discussions with landlords and leisure operators alike. Regarding Concession partners, the revenue share model we have adopted allows us to expedite the decision-making process and benefits our company by providing us with immediate exposure to revenue. Plus, the relatively low price point of our experiences means that consumer uptake of our Concession partners' installations is strong, providing them with substantial ancillary revenues immediately, therefore positioning us a valuable partner of choice.

 

We are accelerating our efforts in the USA, and to that end, we have hired a sales director, a retail operations manager and rented a warehouse.  We will shortly open two ImmotionVR experience centres in Los Angeles, which will give us a showcase as we begin to approach potential Concession partners.

 

All this gives me confidence that the year ahead will be characterised by growth and expansion. Comprised of experienced media and leisure entrepreneurs and award-winning content creators, I believe that our management team are well placed to overcome the challenges and exploit the opportunities which we will face as we seek to carve out a leading position in this exciting and rapidly evolving space.

 

The solid progress made so far in the 'out of home' VR marketplace has given the Board confidence in both our strategy and business model, and we believe that Immotion Group is well positioned to take advantage of the "rising tide" of interest in VR.

 

We would like to take this opportunity to welcome and thank the investors who participated in our IPO, and also thank our advisers for their support.

 

Martin Higginson

CEO

24 September 2018

 

 

Footnotes

*Location-Based Virtual Reality Market Report: Q1 2018 Update, Greenlight Insights

 

INTERIM CONSOLIDATED INCOME STATEMENT

for the six months ended 30 June 2018

 

 

Unaudited

Unaudited

 

Notes

Six months to

Period to

 

 

30 June 18

31 December 17

 

 

£'000

£'000

Continuing Operations

 

 

 

Revenue

 

547

-

 

 

 

 

Cost of sales

 

 (502) 

-

 

 

_______

______

Gross profit

 

45

-

 

 

 

 

Administrative expenses

 

(1,496) 

(175)

 

 

_______

______

Operating loss

 

(1,451) 

(175)

 

 

 

 

"Adjusted operating loss" being operating loss before exceptional charges, depreciation and amortisation

 

 

(1,162) 

 

 

 

(114)

 

 

Amortisation

 

(40) 

-

Depreciation

 

(135) 

-

Acquisition & listing costs

 

(114) 

(61)

 

 

______

______

Operating loss

 

(1,451) 

(175)

 

 

 

 

Finance costs

 

(27) 

-

 

 

______

______

Loss before taxation

 

(1,478) 

(175)

 

 

 

 

Tax credit

 

84

-

 

 

______

_____

Loss for the period from continuing operations

 

(1,394) 

 

(175)

Loss from discontinued operations

10

(196) 

-

 

 

 

 

TOTAL EXPENSE FOR THE

 

(1,590) 

(175)

PERIOD

 

========

========

 

 

 

 

Loss on translation of subsidiary

 

(13) 

________

  -

________

OTHER COMPREHENSIVE EXPENSE FOR THE PERIOD

 

(13) 

-

 

 

 

 

TOTAL COMPREHENSIVE EXPENSE FOR THE PERIOD

 

(1,603) 

(175)

 

 

========

========

Earnings per share

4

 

 

 

 

£

£

Basic EPS from continuing operations

 

(0.14) 

(0.15)

Basic EPS from discontinued operations

 

(0.02) 

-

 

 

______

______

Basic EPS from loss for the period

 

(0.16) 

(0.15)

 

 

 

 

Diluted EPS from continuing operations

 

(0.13) 

(0.15)

Diluted EPS from discontinued operations

 

(0.02) 

-

 

 

______

______

Diluted EPS from loss for the period

 

(0.15) 

(0.15)

 

 

______

______

           

INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the six months ended 30 June 2018 (unaudited)

 

 

 

Share

 

 

 

 

 

Share Capital

 

Premium reserve

Retained earnings

Foreign exchange reserve

Other reserves

 

Total

 

 

£'000

£'000

£'000

£'000

£'000

£'000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total comprehensive expense for the period

-

-

(175)

-

-

(175) 

 

 

 

 

 

 

 

Issue of new shares

         -

3,704

-

-

-

3,704

 

_____

_____

_____

_____

_____

_____

Balance at 31 December 2017

     -

3,704

(175)

-

-

3,529

 

 

 

 

 

 

 

Total comprehensive expense for the period

-

-

(1,590)

-

-

(1,590)

 

 

 

 

 

 

 

Currency translation expense

-

-

-

(13)

-

(13)

 

 

 

 

 

 

 

Issue of new shares

-

571

-

-

-

571

 

 

 

 

 

 

 

Bonus issue

52

(52) 

-

-

-

-

 

 

 

 

 

 

 

Issue costs deducted from equity

-

(68) 

-

-

-

(68) 

 

 

 

 

 

 

 

Equity element of convertible loan

-

-

-

-

126

126  

 

_____

_____

_____

_____

_____

_____

Balance at 30 June 2018

52

4,155

(1,765)

(13)

126

2,555

 

_____

_____

_____

_____

_____

_____

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

as at 30 June 2018

 

 

 

Unaudited

Unaudited

 

Notes

30 June 18

31 December 17

 

 

£'000

£'000

ASSETS

 

 

 

NON-CURRENT ASSETS

 

 

 

Property, plant and equipment

 

749

  493

Goodwill

6

2,438

2,438

Intangible assets

6

610

458

 

 

______

_______

TOTAL NON-CURRENT ASSETS

 

3,797

3,389

 

 

______

_______

 

 

 

 

CURRENT ASSETS

 

 

 

Trade and other receivables

 

987

865

Deferred tax asset

 

9

85

Cash and cash equivalents

 

109

755

 

 

______

_______

TOTAL CURRENT ASSETS

 

1,105

1,705

 

 

______

_______

TOTAL ASSETS

 

4,902

5,094

 

 

______

_______

LIABILITIES

 

 

 

CURRENT LIABILITIES

 

 

 

Trade and other payables

 

(1,321) 

(1,146) 

Bank overdraft and loans

 

(726) 

(357) 

Corporation tax payable

 

-

-

Deferred income

 

(135) 

(62) 

 

 

_______

________

TOTAL CURRENT LIABILITIES

 

(2,182) 

(1,565) 

 

 

_______

________

TOTAL CURRENT NET ASSETS

 

2,720

3,529

 

 

 

 

NON-CURRENT LIABILITIES

 

 

 

Bank loans

 

(165) 

-

 

 

_______

_______

TOTAL NON-CURRENT LIABILITIES

 

(165) 

-

 

 

 

 

 

 

_______

________

TOTAL NET ASSETS

 

2,555

3,529

 

 

_______

________

 

 

 

 

CAPITAL AND RESERVES

ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT

 

 

 

Issued Share capital

7

52

-

Share premium account

7

4,155

3,704

Other reserves

 

126

-

Foreign exchange reserve

 

(13) 

-

Retained earnings

 

(1,765) 

(175) 

 

 

_______

_______

 

 

2,555

_______

 

3,529

_______

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONSOLIDATED CASH FLOW STATEMENT

for the six months ended 30 June 2018

 

 

Unaudited

Unaudited

 

Six months to

Period to

 

30 June 18

31 December 17

 

£'000

£'000

OPERATING ACTIVITIES

 

 

Loss from ordinary activities

(1,603) 

(175) 

 

 

 

Adjustments for:

 

 

Depreciation

135

-

Amortisation

200

-

Finance costs

27

-

Foreign exchange on retranslation of fixed assets

8

-

Taxation payable

84

-

 

_____

_____

Operating loss before changes in working capital and provisions

(1,149) 

(175) 

 

 

 

Decrease/(increase) in trade and other receivables

(122) 

(12) 

Decrease in trade and other payables

248

163

Decrease in loans

172

-

 

_____

_____

Cash generated by operations

298

151

 

_____

_____

Cash flows from operating activities

(851) 

(24) 

 

_____

_____

INVESTING ACTIVITIES

 

 

Purchase of property, plant and equipment

(407) 

-

Purchase of intangible assets

(352) 

-

Cash with subsidiaries over which control has been obtained

-

188

 

_____

_____

Cash consumed by investing activities

(759) 

188

 

_____

_____

FINANCING ACTIVITIES

 

 

Issue of ordinary shares

503

591

Issue of convertible loan

488

-

Finance costs

(27) 

-

 

Cash generated by financing activities

_____

964

_____

           591

 

 

 

(DECREASE)/INCREASE IN CASH AND CASH

EQUIVALENTS

(646) 

---------------

755

---------------

 

 

 

Cash and cash equivalents brought forward

755

-

 

_____

_____

CASH AND CASH EQUIVALENTS CARRIED FORWARD

109

755

 

_____

_____

Represented by:

 

 

Cash at bank and in hand

109

755

 

========

========

NOTES TO THE INTERIM REPORT

for the six months ended 30 June 2018

 

1.   Corporate information

 

The interim consolidated financial statements of the group for the period ended 30 June 2018 were authorised for issue in accordance with a resolution of the directors on 25 September 2018. Immotion Group Plc ("the company") is a Public Limited Company listed on AIM, incorporated in England and Wales. The interim consolidated financial statements do not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006.

 

2.   Statement of Accounting policies

 

2.1 Basis of Preparation

The entities consolidated in the half year financial statements of the company for the six months to 30 June 2018 comprise the company and its subsidiaries (together referred to as "the group").

 

The interim consolidated financial statements do not include all the information and disclosures required in the annual financial statements.

 

The directors are satisfied that, at the time of approving the consolidated interim financial statements, it is appropriate to adopt a going concern basis of accounting and in accordance with the recognition and measurement principles of International Financial Reporting Standards adopted for use in the European Union ("IFRS").

 

2.2 Accounting Policies

 

The principal accounting policies adopted in the preparation of the financial statements are set out below.  The policies have been consistently applied to all the years presented, unless otherwise stated.

 

The interim results announcement has been prepared in accordance with International Financial Reporting Standards ("IFRS"), International Accounting Standards and Interpretations issued by the International Accounting Standards Board as adopted by the European Union ("IFRSs") and with those parts of the Companies Act 2006 applicable to companies preparing their accounts under IFRSs.  The consolidated financial statements have been prepared under the historical cost convention.

 

The preparation of these consolidated half year financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates in preparing these consolidated half year financial statements.

 

The proceeds received on issue of the Group's convertible loan are allocated into their liability and equity components and presented separately in the Balance Sheet. The amount initially attributed to the debt component equals the discounted cash flows using a market rate of interest that would be payable on a similar debt instrument that did not include an option to convert. The difference between the net proceeds of the convertible loan and the amount allocated to the debt component is credited direct to equity and is not subsequently remeasured. On conversion, the debt and equity elements are credited to share capital and share premium as appropriate.

 

Standards and amendments and interpretations to published standards not yet effective

 

Certain new standards, amendments and interpretations to existing standards have been published that are mandatory for the group's accounting periods beginning on or after 1 July 2018 or later periods and which the group has decided not to adopt early are:

 

IFRS 16 Leases (effective for accounting periods beginning on or after 1 January 2019)

 

Amendments to IFRS 3 Business Combinations (effective for accounting periods beginning on or after 1 January 2019)

 

Amendments to IAS 2 Income Taxes (effective for accounting periods beginning on or after 1 January 2019)

 

Amendments to IAS 23 Borrowing Costs (effective for accounting periods beginning on or after 1 January 2019)

 

The impact that the implementation of the above standards will have on the financial statements is currently being assessed.

 

3.   Segment Information

 

The Group's primary reporting format for segment information is business segments which reflect the management reporting structure in the Group.

 

6 months to 30 June 2018

 

 

 

VR experiences

Client Services

Head Office

Total continuing operations

6 months to 30 June 2018

Discontinued operations

6 months to 30 June 2018

Total

6 months to 30 June 2018

 

 

            £'000

          £'000

          £'000

         £'000

  £'000

       £'000

 

Revenue

137

410

-

547

527

1,074

 

Cost of sales

(324)

(178) 

-

(502) 

(325)

(827)

 

Admin expenses*

-

(143) 

  (1,064) 

(1,207) 

(170)

(1,377)

 

 

----------------

----------------

----------------

---------------

---------------

--------------------

 

Operating profit/(loss)

(187)

89

(1,064) 

(1,162)

32

(1,130)

 

 

 

 

 

 

 

 

 

Amortisation

(38)

-

(2) 

(40)

(160)

(200)

 

Depreciation

(72)

-

(63) 

(135)

-

(135)

 

Acquisition and listing costs

-

-

(114) 

(114)

(68)

(182)

 

Finance costs

-

-

(27) 

(27)

-

(27)

 

Tax

-

-

84

84

-

84

 

 

----------------

----------------

----------------

-------------

---------------

--------------------

 

Loss for the period

(297)

89

(1,186) 

(1,394)

(196)

(1,590)

 

 

----------------

----------------

----------------

------------

---------------

--------------------

 

 

 

 

 

 

 

 

 

For the period to 31 December 2017, all costs were head office costs.

 

*Admin expenses exclude depreciation, amortisation and acquisition and listing costs.

 

 

 

 

 

 

External revenue by location of customer

Total asset by location of assets

Net tangible capital expenditure by location of assets

 

30-Jun-18

Continuing

30-Jun-18

Discontinuing

31-Dec-17

30-Jun-18

31-Dec-17

30-Jun-18

31-Dec-17

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

United Kingdom

134

279

-

4,394

4,604

564

-

United States of America

279

-

-

508

490

195

-

Japan

-

248

-

-

-

-

-

United Arab Emirates

134

-

-

-

-

-

-

 

_____

_____

_____

_____

_____

_____

_____

Total

547

527

-

4,902

5,094

759

-

 

_____

_____

_____

_____

_____

_____

                                   

 

 

 4.   Earnings per share

 


The calculation of the group basic and diluted loss per ordinary share is based on the following data:

 

 

 

Unaudited

Unaudited

 

 

Six months to

Period to

 

 

30 June 18

31 December 17

 

 

£'000

£'000

 

The earnings per share is based on the following:

 

 

 

 

 

 

 

Continuing earnings post tax loss attributable to shareholders

(1,394)

(175) 

 

 

 

 

 

Discontinued earnings post tax loss attributable to shareholders

(196)

-

 

 

 

 

 

 

==========

==========

 

Basic Weighted average number of shares

10,053,557

1,185,198

 

Diluted Weighted average number of shares

10,291,495

1,185,198

 

 

==========

==========

 

 

 

 

 

 

£

£

 

Basic earnings per share

(0.16)

(0.15)

 

Diluted earnings per share

(0.15)

(0.15)

 

 

==========

==========

 

Continuing earnings per share

(0.14)

(0.15)

 

Continuing diluted earnings per share

(0.13)

(0.15)

 

 

==========

==========

 

Discontinued earnings per share

(0.02)

-

 

Discontinued diluted earnings per share

(0.02)

-

 

 

==========

==========

 

 

 

 

Earnings per ordinary share has been calculated using the weighted average number of shares in issue during the year. The weighted average number of equity shares in issue was 10,053,557.


 

 

5a.   Business Combinations

 

On 12 December 2017 the Group acquired 100% of the ordinary shares in Studio Liddell Limited (renamed as Immotion Studios Limited on 7th June 2018) for a consideration of £1,600,000. This investment is included in the Parent company's balance sheet at its fair value at the date of acquisition.

 

The completion accounts show a breakdown of the assets and liabilities of the acquired company to be as follows:

 

 

 

 

Book value

Fair value adjustment

Fair value to Group

 

 

 

 

£

 

£

 

£   

 

Intangible fixed assets

 

 

-

231,000

231,000

Tangible fixed assets

 

 

238,962

-

238,962

Receivables

 

 

460,292

-

460,292

Cash and cash equivalents

 

 

(7,569)

-

(7,569) 

Payables

 

 

(475,680)

-

(475,680) 

Loans

 

 

(194,002)

-

(194,002) 

Deferred tax

 

 

134,392

(39,270)

95,122

 

 

 

-----------------------

-----------------------

-----------------------

Net assets on acquisition

 

 

156,395

191,730

348,125

 

 

 

 

 

 

Goodwill on acquisition

 

 

1,251,875

 

 

 

 

 

----------------------

Total consideration

 

 

 

 

1,600,000

 

 

 

 

 

==========

 

Discharged by:

 

 

 

 

              £

Shares in Immotion Group Plc

 

 1,600,000

 

 

---------------------

 

 

1,600,000

 

 

==========

 

 

The revenue and loss included in the Consolidated Statement of Comprehensive Income for the 6 months to 30 June 2018 was £281,390 and (£559,917) pre-tax respectively.

 

Acquisition costs of approximately £25,000 were written off as overheads in the period.

 

The Directors have treated the acquisition as occurring on 31 December 2017 on the basis there was no material trade during the period to 31 December 2017.

 

The intangible fixed asset fair value adjustment is in relation to customer lists.

 

 

5b.   Business Combinations

 

On 21 December 2017 the Group acquired 100% of the ordinary shares in C.2K Entertainment, Inc. for a consideration of £603,000. This investment is included in the Parent company's balance sheet at its fair value at the date of acquisition.

 

The completion accounts show a breakdown of the assets and liabilities of the acquired company to be as follows:

 

 

 

 

Book value

Fair value adjustment

Fair value to Group

 

 

 

 

£

 

£

 

£  

Tangible fixed assets

 

 

615

-

615  

Receivables

 

 

307,489

-

307,489 

Cash and cash equivalents

 

 

182,657

-

182,657 

Payables

 

 

(472,455)  

-

(472,455)    

Loans

 

 

(163,038)  

-

(163,038)    

 

 

 

-----------------------

-----------------------

-----------------------

Net assets on acquisition

 

 

(144,732)  

-

(144,732) 

 

 

 

 

 

 

Goodwill on acquisition

 

 

747,732

 

 

 

 

 

----------------------

Total consideration

 

 

 

 

603,000

 

 

 

 

 

==========

 

Discharged by:

 

 

 

 

              £

Shares in Immotion Group Plc

 

603,000

 

 

---------------------

 

 

603,000

 

 

==========

 

The revenue and loss included in the Consolidated Statement of Comprehensive Income for the 6 months to 30 June 2018 was £660,796 and (£328,878) pre-tax respectively.

 

Acquisition costs of approximately £25,000 were written off as overheads in the period.

 

The Directors have treated the acquisition as occurring on 31 December 2017 on the basis there was no material trade during the period to 31 December 2017.

 

 

5c.   Business Combinations

 

On 21 December 2017 the Group acquired 100% of the ordinary shares in VR Acquisition (Holdings) Limited for a consideration of £910,500. This investment is included in the Parent company's balance sheet at its fair value at the date of acquisition.

 

The completion accounts show a breakdown of the assets and liabilities of the acquired company to be as follows:

 

 

 

 

Book value

Fair value adjustment

Fair value to Group

 

 

 

 

£

 

£

 

£

 

Intangible fixed assets

 

 

6,000

221,000

227,000

Tangible fixed assets

 

 

253,585

-

253,585

Receivables

 

 

153,285

-

153,285

Cash and cash equivalents

 

 

12,687

-

12,687

Payables

 

 

(163,670)

-

(163,670)

Loan

 

 

-

-

-

Deferred tax

 

 

28,595

(38,590)

(9,995)

 

 

 

-----------------------

-----------------------

-----------------------

Net assets on acquisition

 

 

290,482

182,410

472,892

 

 

 

 

 

 

Goodwill on acquisition

 

 

437,608

 

 

 

 

 

----------------------

Total consideration

 

 

 

 

910,500

 

 

 

 

 

==========

 

Discharged by:

 

 

 

 

              £

Shares in Immotion Group Plc

 

910,500

 

 

---------------------

 

 

910,500

 

 

==========

 

 

The revenue and loss included in the Consolidated Statement of Comprehensive Income for the 6 months to 30 June 2018 was £131,938 and (£278,367) pre-tax respectively.

 

Acquisition costs of approximately £25,000 were written off as overheads in the period.

 

Immotion Group Plc acquired 50.1% of the issued capital, and control, on the 21st December 2017 with instruction to acquire the remaining shares on this date. Immotion Group Plc acquired the remaining 49.9% of the issued capital on the 8th January 2018 via a Drag Along clause from the Articles of Association of VR Acquisition (Holdings) Limited. The substance of the transaction was that Immotion Group Plc had 100% control as at 21st December 2017. The Directors have treated the acquisition as occurring on 31 December 2017 on the basis there was no material trade during the period to 31 December 2017.

 

The intangible fixed asset fair value adjustment is in relation to a supplier contract.

 

 

 

6.     Intangible Assets

 

 

 

 

 

 

 

 

 

Other Intangible Assets

Goodwill acquired on acquisition

Development costs

 

 

 

 

 

 

 

Total

 

£'000

£'000

£'000

 

£'000

 

 

 

 

 

 

Cost

 

 

 

 

 

At 1 January 2018  

452

2,438

6

 

2,896

 

 

 

 

 

 

Additions

-

-

352

 

352

 

_____

_____

_____

 

_____

At 30 June 2018

452

2,438

358

 

3,248

 

 

 

 

 

 

Amortisation

 

 

 

 

 

At 1 January 2018

-

-

-

 

-

 

 

 

 

 

 

Charge

37

-

2

 

39

Impairment

161

-

-

 

161

 

_____

_____

_____

 

_____

At 30 June 2018

198

-

2

 

200

 

_____

_____

_____

 

_____

 

 

 

 

 

 

Net book value

 

 

 

 

 

 

 

 

 

 

 

30 June 2018

254

2,438

356

 

3,048

 

_____

_____

_____

 

_____

 

 

 

 

 

 

31 December 2017

452

2,438

6

 

2,896

 

_____

_____

_____

 

_____

 

 

 

 

 

 

 

 

 

 

The cost of other intangible assets comprises the estimated net present value of £352k of customer and supplier relationships at the date of acquisition.

 

The other intangible assets are being amortised over a period of 3 years.

 

Amortisation is charged to administrative costs in the Statement of Comprehensive Income. 

 

7.    Share capital

 

Allotted, issued and fully paid

 

 

No.

Value

£

 

 

 

 

 Ordinary shares of 0.5p each

 

10,428,250

52,141

 

 

===========

==========

 

 

Shares issued in the 6 month period to 30 June 2018:

 

Date

Description

No shares

Price/ share

Gross share value

Cash received

 

01.02.18

23.03.18

23.03.18

23.04.18

14.05.18

14.05.18

22.06.18

 

Issue of 1p shares

Issue of 1p shares

Issue of 1p shares

Issue of 1p shares

Issue of 1p shares

Issue of 1p shares

  Bonus issue - 100:1

 

3,908

70 

364

76 

158

634

5,162,500

Pence

100

100

100

157.61

157.61

157.61

-

£

390,800

7,000  

36,400 

11,978 

24,903 

99,925    

51,625 

£

390,800

7,000

36,400  

11,978  

24,903  

99,925  

-

22.06.18

Sub-division - 0.01 to 0.005

5,214,125

-

-

-

 

 

-----------------------

 

---------------------

---------------------

 

 

10,381,835

 

622,631

571,006

 

 

===========

 

==========

=========

As at 30 June 2018

10,428,250

 

4,266,253

1,162,306 

 

 

 

 

 

As at 31 December 2017

46,415

 

3,643,622

591,300

 

 

 

 

 

 

 

 

On 22 June 2018, the 5,214,125 shares of 1p each then in issue were subdivided into 10,428,250 shares of 0.5p each.

Cash received does not include costs incurred relating to share issues. In the 6 month period to 30th June 2018 costs of £67,744 were incurred relating to share issues and these costs were charged against share premium. The net of costs cash received from share issues in the period was £503,262.

 

8.    Related party transactions

 

 

 

M J Higginson is a controlling shareholder of M Capital Investment Properties Limited, and his son, S Higginson, and step-daughter, E Stanyon, are directors of the company. Services to the value of £93,500 were invoiced in the period by M Capital Investment Properties to Immotion Group Plc. At 30 June 2018, Immotion Group Plc owed £24,700 (31 December 2017: £nil) to M Capital Investment Properties Limited.

 

 

9.    Seasonality

 

The Group's activities are not subject to significant seasonal variation.

 

10.  Discontinued operations

 

 

6 months to 30 June 2018

Continuing operations

 

6 months to 30 June 2018

Discontinued operations

 

6 months to 30 June 2018

Total

 

 

 

             £'000

            £'000

            £'000

 

 

 

 

Revenue

547

527

1,074

Cost of sales

(502)  

(325)  

(827)

 

----------------

---------------------

------------------

 

 

 

 

Gross profit

45

202

247 

Sales general & administration expenses

(1,207)  

(170)  

(1,377)

Exceptional items

(114)  

(68)  

(182)

Depreciation

(135)  

-

(135)

Amortisation

(40)  

(160)  

(200)

 

 

 

 

 

----------------

---------------------

------------------

Operating loss

(1,451)  

(196)  

(1,647)

Finance costs

(27)  

-

(27)

 

 

 

 

 

----------------

---------------------

------------------

Loss before tax

(1,478)  

(196)  

(1,674)

 

----------------

---------------------

------------------

Tax

84

-

84

 

----------------

---------------------

------------------

Loss after tax

(1,394)  

(196)  

(1,590)

 

----------------

---------------------

------------------

Other comprehensive expenses

(13)  

-

(13)

 

----------------

---------------------

------------------

Total Comprehensive expense

(1,407)  

(196)  

(1,603)

 

  _______

________

_______

 

 

 

 

 

  

 

 Cashflows from discontinued operations are as follows:

 

          

 

 Continuing

Discontinuing

            Total

 

        £'000

            £'000

            £'000

 

 

 

 

Operating cash flows

(868)  

17

(851)  

Investing cash flows

(759)  

-

(759)  

Financing cash flows

964

-

964

 

----------------

---------------------

------------------

 

 

 

 

 

 

 


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