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Everyman Media Grp (EMAN)

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Wednesday 05 September, 2018

Everyman Media Grp

Interim Results

RNS Number : 7706Z
Everyman Media Group PLC
05 September 2018
 

Everyman Media Group PLC

("Everyman" or the "Group")

 

Interim results (unaudited) for six-month period ended 5 July 2018

 

Highlights:

·      Revenue for the period up 32% to £24.9m (H1 2017: £18.8m)

·      Adjusted EBITDA up 35% to £4.1m (H1 2016: £3.0m)

·      One new venue added in the period, expanding the current estate to 22 venues operating 69 screens

·      Committed to a further 15 new venues, with the Group exchanging contracts on a further 3 sites at Crystal Palace, Cardiff and London Broadgate since the beginning of 2018

·      Trading since the period end has continued in line with the Board's expectations

 

 

For further information, please contact:

 

Everyman Media Group plc
Crispin Lilly

 

Tel: 020 3145 0500

 

Canaccord Genuity Limited (NOMAD and Broker)
Antony Isaacs
Henry Fitzgerald-O'Connor
Richard Andrews

 

 

Tel: 020 7523 8000

 

The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.

 

 Chairman's Statement:

 I am pleased to report on the Group's results for the 27 weeks ended 5 July 2018.

 

2018 has continued the significant growth in the business seen in 2016 and 2017. This expansion, along with underlying revenue growth and improved efficiencies, delivered an overall performance in line with the Board's expectations for the period.

 

The Group now operates 22 venues. A four-screen venue opened in York at the beginning of the period as well as a minor refurbishment of our Maida Vale site.

 

Review of the business 

For the 27 weeks ended 5 July 2018, the Group's box office revenue was up 29.7% on the previous period, reflecting favourably compared to a market movement of 4.5% for the same comparative period. This resulted in the Group's market share increasing to 2.45% for the period (29 June 2017: 1.98%, 28 December 2017: 2.11%) (Source: Comscore).

 

The 22 venues and 69 screens that now successfully operate across an increasingly regional range of towns and cities prove the breadth of appetite for the Everyman experience and continue to build on our reputation as a trusted and highly regarded brand in the cinema and leisure industry.

 

Everyman differentiates by focusing on delivering a high-quality offer through its venues, content, staff and F&B. The Board's long held belief in this model as being the bedrock for significant growth within the UK has been further strengthened in the last six months and our ambitions continue to grow.

 

A further 15 committed venues, and a continually evolving pipeline beyond, is substantially increasing our footprint across the UK.

 

Results

Revenue for the period was up 32.3% on last year to £24,916,000 (29 June 2017: £18,830,000, full year to 28 December 2017: £40,620,000).

 

The Group's adjusted operating profit before depreciation, amortisation, pre-opening expenses, exceptional items and share-based payments was £4,067,000 (29 June 2017: £3,010,000, full year to 28 December 2017: £6,615,000). The Group generated a profit for the period of £768,000 (29 June 2017: £438,000, full year to 28 December 2017: £1,268,000).

 

The effective tax rate is higher than the standard rate of corporation tax for the six-month period ended 5 July 2018 due to the effect of significant continuing capital expenditure incurred by the Group.

 

The share-based payment expense for the period was £221,000 (29 June 2017: £144,000, full year to 28 December 2017: £301,000) reflecting share option incentives provided to the Group's senior management and employees.

 

The Board does not recommend the payment of a dividend at this stage of the Group's development.

 

Key performance indicators

The growth in revenue in the current period reflects the effect of an increase in the number of sites and admissions, an increase in box office pricing and an improved spend per head on food and beverages.

 

The Group uses the following key performance indicators, in addition to total revenues, to monitor the progress of the Group's activities:

 

 

 

Six-month ended

5 July 2018

Six-month ended

29 June 2017

Year ended

28 December 2017

Admissions

+29.3%

1,348,097

1,042,853

2,227,885

Box office average ticket

+0.4%

£11.28

£11.24

£11.28

Food and beverage spend per head

 

+5.3%

£6.14

£5.83

£5.97

 

 The underlying performance of the business continues to be as expected, with a small increase in box office average ticket price of 0.4% (diluted, as expected, by the disproportionate increase in business outside of London) and continued healthy growth in food and beverage spend per head of 5.3% (with menu development and improved operational delivery adding to inflationary increases in pricing).

 

Openings and capital expenditure

During the period, the Group opened a new four-screen venue in York at the end of December 2017.

 

During the period the Group completed on the purchase of the freehold of a site in Crystal Palace for £3,225,000 and exchanged contracts on 2 further sites at Cardiff and London Broadgate. These are in addition to the pre-existing contracts for Newcastle, Liverpool, Glasgow, Altrincham, Lincoln, Cirencester, London's Borough Market, Tunbridge Wells, Horsham, Durham, Wokingham and Edinburgh.

 

The Group continues to invest in its infrastructure and head office to support the growth of new venues, further details of which are set out in note 7 to the financial statements.

 

Cash flows

Net cash used in operating activities was £2,304,000 (29 June 2017: £3,759,000 generated from operating activities, full year to 28 December 2017: £13,825,000 generated from operating activities). Net cash outflows for the year, before financing, were £9,257,000 (29 June 2017: £2,180,000, full year to 28 December 2017: £3,538,000). This is largely represented by capital expenditure on the expansion of the business through build costs and refurbishment of sites.

 

The movement in trade and other payables in the period is largely due to the cash settlement of new venue capital expenditure which was accrued at the year end.

 

Cash held at the end of the period was £3,145,000 (29 June 2017: £1,221,000, 28 December 2017: £18,366,000). The cash held will be invested in the continuing development and expansion of the Group's business.

 

Current trading

Trading since the period end has been in line with expectations, reflecting a solid summer in the cinema market.

 

Paul Wise
Chairman
4 September 2018

 

Consolidated statement of profit and loss and other comprehensive income for the period ended 5 July 2018 (unaudited)

 

 

 

 

 

 

Six-month period

Six-month period

Year ended

 

 

 

 

 

ended 5 July

ended 29 June

28 December

 

 

 

 

 

2018

2017

2017

 

 

 

 

Note

£000

£000

£000

 

 

 

 

 

 

 

 

Revenue

 

 

3

           24,916

           18,830

           40,620

Cost of Sales

 

 

 

            (9,602)

            (7,268)

          (15,937)

 

 

 

 

 

 

 

 

Gross profit

 

 

 

       15,314

           11,562

           24,683

 

 

 

 

 

 

 

 

Other operating income

 

 

                     -

                  45

                  48

Administrative expenses

 

 

          (13,950)

          (10,828)

          (23,107)

 

 

 

 

 

 

 

 

Operating profit

 

 

 

             1,364

                779

             1,624

 

 

 

 

 

 

 

 

Financial income

 

 

 

                     -

                    4

                    4

 

 

 

 

 

 

 

 

Profit before taxation

 

 

             1,364

                783

             1,628

Tax charge on profit for the period

 

4

               (596)

               (345)

               (360)

 

 

 

 

 

 

 

 

Profit for the period

 

 

                768

                438

             1,268

Other comprehensive income for the period

 

 

                  16

                     -

                851

 

 

 

 

 

 

 

 

Total comprehensive income for the period

 

 

                784

                438

             2,119

 

 

 

 

 

 

 

 

Total comprehensive income attributable to equity holders of the Company

                784

                438

             2,119

 

 

 

 

 

 

 

 

Basic earnings per share (pence)

 

5

               1.08

               0.73

               2.04

 

 

 

 

 

 

 

 

Diluted earnings per share (pence)

 

5

               1.03

               0.71

               1.97

 

 

 

 

 

 

 

 

All amounts relate to continuing activities.

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP measure: adjusted profit from operations

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted profit from operations

 

 

             4,067

             3,010

             6,615

Before:

 

 

 

 

 

 

 

Depreciation and amortisation

 

 

            (2,246)

            (1,750)

            (3,688)

Acquisition expenses

 

6

                   (4)

                     -

                 (86)

Pre-opening expenses

 

 

               (232)

               (337)

               (916)

Share-based payment expense

 

 

               (221)

               (144)

               (301)

Operating profit

 

 

 

             1,364

                779

             1,624

 

 

 

Consolidated balance sheet at 5 July 2018 (unaudited)

 

 

 

 

 

5 July

29 June

28 December

 

 

 

 

2018

2017

2017

 

 

 

 

£000

£000

£000

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

Non-current assets

 

 

 

 

Property, plant and equipment

 

       52,910

       39,864

             48,239

Intangible assets

 

 

       10,191

         8,398

             10,066

Trade and other receivables

 

            173

            199

                  173

 

 

 

 

       63,274

       48,461

             58,478

Current assets

 

 

 

 

 

Inventories

 

 

            315

            242

                  308

Trade and other receivables

 

         3,060

         2,274

               1,044

Cash and cash equivalents

 

         3,145

         1,221

             18,366

 

 

 

 

         6,520

         3,737

             19,718

Total assets

 

 

       69,794

       52,198

             78,196

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

Current liabilities

 

 

 

 

 

Other interest-bearing loans and borrowings

              15

                9

                    43

Trade and other payables

 

         8,356

         6,422

             12,479

 

 

 

 

         8,371

         6,431

             12,522

Non-current liabilities

 

 

 

 

Other interest-bearing loans and borrowings

         1,000

         5,000

               7,000

Other payables

 

 

         5,221

         5,343

               5,168

Provisions

 

 

         1,838

         1,395

               1,883

Deferred tax liabilities

 

            863

            607

                  284

 

 

 

 

         8,922

       12,345

             14,335

Total liabilities

 

 

       17,293

       18,776

             26,857

 

 

 

 

 

 

 

Net assets

 

 

       52,501

       33,422

             51,339

 

 

 

 

 

 

 

Equity attributable to owners of the Company

 

 

 

Share capital

 

 

         7,021

         5,989

               7,003

Share premium

 

 

       38,493

       22,773

             38,354

Merger reserve

 

 

       11,152

       11,152

             11,152

Retained earnings

 

 

       (4,165)

       (6,492)

              (5,170)

Total equity

 

 

       52,501

       33,422

             51,339

 

These financial statements were approved by the Board of Directors on 4 September 2018 and signed on its behalf by:

C Lilly
CEO

 

Consolidated statement of changes in equity for the period ended 5 July 2018

 

 

 

Share

Share

Capital

Retained

Total

 

 

 

capital

premium

reserve

earnings

equity

 

 

 

£000

£000

£000

£000

£000

 

 

 

 

 

 

 

 

Balance at 30 December 2016

     5,982

   22,720

   11,152

   (7,590)

   32,264

Profit for the period

 

            -

            -

            -

        438

        438

Other comprehensive income

            -

            -

            -

        516

        516

Total comprehensive income for the period

            -

            -

            -

        954

        954

 

 

 

 

 

 

 

 

Shares issued in the period

            7

          52

            -

            -

          59

Share-based payments

            -

            -

            -

        144

        144

Total transactions with owners of the parent

            7

          52

            -

        144

        203

 

 

 

 

 

 

 

 

Balance at 29 June 2017

     5,989

   22,772

   11,152

   (6,492)

   33,421

 

 

 

 

 

 

 

 

Balance at 30 June 2017

     5,989

   22,772

   11,152

   (6,492)

   33,421

Profit for the period

 

            -

            -

            -

        830

        830

Other comprehensive income

            -

            -

            -

        335

        335

Total comprehensive income for the period

            -

            -

            -

     1,165

     1,165

 

 

 

 

 

 

 

 

Shares issued in the period

     1,014

   16,103

            -

            -

   17,117

Share issue expenses

            -

      (521)

            -

            -

      (521)

Share-based payments

            -

            -

            -

        157

        157

Total transactions with owners of the parent

     1,014

   15,582

            -

        157

   16,753

 

 

 

 

 

 

 

 

Balance at 28 December 2017

     7,003

   38,354

   11,152

   (5,170)

   51,339

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 29 December 2017

     7,003

   38,354

   11,152

   (5,170)

   51,339

Profit for the period

 

            -

            -

            -

        768

        768

Other comprehensive income

            -

            -

            -

          16

          16

Total comprehensive income for the period

            -

            -

            -

        784

        784

 

 

 

 

 

 

 

 

Shares issued in the period

          18

        137

            -

            -

        155

Share-based payments

            -

            -

            -

        221

        221

Total transactions with owners of the parent

          18

        137

            -

        221

        376

 

 

 

 

 

 

 

 

Balance at 5 July 2018

     7,021

   38,491

   11,152

   (4,165)

   52,499

 

 

 

Consolidated cash flow statement for the period ended 5 July 2018 (unaudited)

 

 

 

 

 

5 July

29 June

28 December

 

 

 

 

 

2018

2017

2017

 

 

 

 

Note

£000

£000

£000

 

 

 

 

 

 

 

 

Cash flows from operating activities

 

 

 

 

Profit for the period

 

 

 

              768

              438

           1,268

Adjustments for:

 

 

 

 

 

 

Financial income

 

 

 

                   -

                 (4)

                 (4)

Income tax expense

 

 

4

              596

              345

              360

Operating profit

 

 

 

           1,364

              779

           1,624

 

 

 

 

 

 

 

 

Depreciation and amortisation

 

 

           2,246

           1,750

           3,688

Loss on disposal of property, plant and equipment

 

                   -

                   -

                13

Bad debts

 

 

 

                 (2)

                   -

               (91)

Lease incentives

 

 

 

               (13)

                86

              135

Market rent provisions

 

 

               (45)

               (35)

               (76)

Acquisition expenses

 

 

                  4

                   -

                86

Equity-settled share-based payment expenses

 

              221

              144

              301

 

 

 

 

 

           3,775

           2,724

           5,680

Changes in working capital

 

 

 

 

 

(Increase)/decrease in inventories

 

                 (7)

                  3

               (63)

(Increase)/decrease in trade and other receivables

 

          (2,014)

             (678)

              669

(Decrease)/increase in trade and other payables

 

          (4,058)

           1,710

           7,539

Cash (used in)/generated from operating activities

 

          (2,304)

           3,759

         13,825

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

Acquisition as business combination

6

                 (4)

                   -

          (1,388)

Acquisition of property, plant and equipment

 

          (6,687)

          (5,757)

        (15,588)

Acquisition of intangibles

 

 

             (262)

             (186)

             (391)

Interest received

 

 

 

                   -

                  4

                  4

 

 

 

 

 

 

 

 

Net cash used in investing activities

 

          (6,953)

          (5,939)

        (17,363)

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

Proceeds from the issuance of ordinary shares

 

              157

                60

         17,176

Share issue expenses

 

 

                   -

                   -

             (521)

(Repayment of)/proceeds from bank borrowings

 

          (6,000)

           2,000

           4,000

Interest paid

 

 

 

             (121)

             (225)

             (317)

 

 

 

 

 

 

 

 

Net cash (used in)/generated from financing activities

 

          (5,964)

           1,835

         20,338

 

 

 

 

 

 

 

 

Net (decrease)/increase in cash and cash equivalents

 

        (15,221)

             (345)

         16,800

 

 

 

 

 

 

 

 

Cash and cash equivalents at the beginning of the period

 

         18,366

           1,566

           1,566

 

 

 

 

 

 

 

 

Cash and cash equivalents at the end of the period

 

           3,145

           1,221

         18,366

 

 

 

Notes to the financial statements

 

1.     General information 

Everyman Media Group PLC and its subsidiaries (together, 'the Group') are engaged in the ownership and management of cinemas in the United Kingdom. Everyman Media Group PLC (the Company) is a public company limited by shares domiciled and incorporated in England and Wales (registered number 08684079). The address of its registered office is Studio 4, 2 Downshire Hill, London NW3 1NR.

2.     Basis of preparation and accounting policies

These condensed interim financial statements of the Group for the period ended 5 July 2018 have been prepared using accounting policies consistent with International Financial Reporting Standards (IFRSs) as adopted by the European Union. The same accounting policies, presentation and methods of computation are followed in the condensed set of financial statements as applied in the Group's latest audited financial statements for the year ended 28 December 2017. Amendments made to IFRSs specifically IFRS9 and IFRS15 since 28 December 2017 have not had a material effect on the Group's results or financial position for the period.

The financial statements presented in this report have been prepared in accordance with IFRSs applicable to interim periods. However, as permitted, this interim report has been prepared in accordance with the AIM Rules for Companies and does not seek to comply with IAS34 "Interim Financial Reporting".

These condensed interim financial statements have not been audited, do not include all of the information required for full annual financial statements and should be read in conjunction with the Group's statutory consolidated annual financial statements for the year ended 28 December 2017. The auditor's opinion on these financial statements was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under s498(2) or s498(3) of the Companies Act 2006.

 

Revenue

 

Six-month period

Six-month period

Year ended

 

 

 

ended 5 July

ended 29 June

28 December

 

 

 

2018

2017

2017

 

 

 

£000

£000

£000

 

 

 

 

 

 

Film and entertainment

            15,201

            11,718

            25,124

Food and beverages

              8,277

              6,078

            13,306

Other income

 

              1,438

              1,034

              2,190

 

 

 

            24,916

            18,830

            40,620

 

 

 

Six-month period

Six-month period

Year ended

 

 

 

 

ended 5 July

ended 29 June

28 December

 

 

 

 

2018

2017

2017

 

 

 

 

£000

£000

£000

 

 

 

 

 

 

 

Current tax

 

 

                      -

                      -

                      -

 

 

 

 

                      -

                      -

                      -

Deferred tax expense

 

 

 

 

Origination and reversal of temporary differences

                 201

                 169

                 259

Adjustments in respect of prior years

                 395

                 176

                 101

Total tax charge

 

 

                 596

                 345

                 360

 

The reasons for the difference between the actual tax charge for the period and the standard rate of corporation tax in the United Kingdom applied to the profit for the period are as follows:

 

Reconciliation of effective tax rate

 

Six-month period

Six-month period

Year ended

 

 

 

 

 

ended 5 July

ended 29 June

28 December

 

 

 

 

 

2018

2017

2017

 

 

 

 

 

£000

£000

£000

 

 

 

 

 

 

 

 

Profit before taxation

 

 

              1,364

                 783

              1,628

 

 

 

 

 

 

 

 

Tax at the UK corporation tax rate of 19.00%/19.25%

 

                 259

                 151

                 313

 

 

 

 

 

 

 

 

Permanent differences ((allowable deductions)/expenses not deductible for tax purposes)

                  (11)

                   51

                   13

Adjustments in respect of prior years

 

                 395

                 176

                 101

Other short term timing differences

 

                  (47)

                  (20)

                  (40)

Effect of change in expected future statutory rates on deferred tax

                      -

                  (13)

                  (27)

Total tax expense

 

 

 

                 596

                 345

                 360

                 

 

Reductions in the UK corporation tax rate from 20% to 19% (effective from 1 April 2017) and to 18% (effective 1 April 2020) were substantively enacted on 26 October 2015. Accordingly, the Group's profits for this accounting period are subject to tax at a blended rate of 19% (2017: 19%). An additional reduction to 17% was substantively enacted on 6 October 2016. Deferred tax has been calculated based on these rates.

 

 

Six-month period

Six-month period

Year ended

 

 

 

 

 

ended 5 July

ended 29 June

28 December

 

 

 

 

 

2018

2017

2017

 

 

 

 

 

£000

£000

£000

Profit used in calculating basic and diluted earnings per share

                 768

                 438

              1,268

Number of shares (000's)

 

 

 

 

 

Weighted average number of shares for the purpose of basic earnings per share

            71,413

            59,843

            62,099

Number of shares (000's)

 

 

 

 

 

Weighted average number of shares for the purpose of diluted earnings per share

            74,598

            61,421

            64,528

Basic earnings per share (pence)

 

                1.08

                0.73

                2.04

Diluted earnings per share (pence)

 

                1.03

                0.71

                1.97

 

Basic earnings per share amounts are calculated by dividing net profit/(loss) for the period attributable to Ordinary equity holders of the parent by the weighted average number of Ordinary shares outstanding during the year.

The Company has 5,496,000 potentially issuable shares (2017: 5,818,000) all of which relate to the potential dilution from both the Group's 'A' shares and share options issued to the Directors and certain employees and contractors, under the Group's incentive arrangements.

 

6.     Acquisition of Group companies 

Acquisitions in the period
During the period the Group acquired 100 Ordinary shares in ECPee Ltd for £1 plus professional costs.

 

7.     Related party transactions

The Group intends to enter into a new lease on its head office, where it has been based since June 2012. Full details of the original head office lease are contained within the admission document of the Company, published on 30 October 2013, and available on the Company's website.

Under the terms of the new lease the Group will enter into a 10 year lease with Proper Proper T Ltd, a company 50% controlled by Adam Kaye, who is also one of its directors. The annual rent will be £100,000. As Adam Kaye is a Director of the Company, the new lease is considered a related party transaction under the AIM rules. The Directors of the Company consider the terms of the lease to be on commercial terms and have taken professional advice which supports this view. Furthermore, the Directors of the Company, other than Adam Kaye, having consulted the Company's nominated advisor Canaccord Genuity, consider the terms of the lease to be fair and reasonable insofar as the Company's shareholders are concerned.


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