TIDMR4E
RNS Number : 1907Z
Reach4Entertainment Enterprises PLC
25 May 2016
25 May 2016
reach4entertainment enterprises plc ("r4e", the "Company"' or
the "Group")
Final results for the year ended 31 December 2015
r4e, the transatlantic media and entertainment company, today
announces its results for the year ended 31 December 2015.
Highlights
2015 2014 Change
Revenue GBP85.9m GBP83.3m 3.1%
Gross Profit GBP20.2m GBP20.1m 0.1%
Adjusted EBITDA GBP1.8m GBP2.6m -31%
Profit/(Loss) before
tax (including exceptional
items) GBP4.5m GBP(5.1)m 234%
-- Sound trading performance combined with the successful re-structuring of the business.
-- Adjusted EBITDA of GBP1.84 million, in-line with market
expectations but, as expected, below the exceptional performance of
2014.
-- The Company successfully completed an equity placing to raise
GBP4.0 million to support restructuring
-- Secured a three-year asset based debt facility of GBP9.5
million ('New Facility') with PNC Business Credit ('PNC') being
made up of a GBP1 million term loan and a revolving credit facility
of up to GBP8.5 million based on qualifying accounts
receivable.
-- GBP9.6 million repayment of its existing GBP14.8 million loan
facility with Allied Irish Bank ('AIB') plus grant of 25 million
warrants to AIB. Balance of loan written off.
-- Significant reduction in the level of debt means borrowing
costs will reduce by approximately 50%.
-- Strengthened balance sheet now puts the Company in a stable
position from which to maintain its status as a market leader in
both London and New York.
-- Looking ahead, the Company remains focused on supporting its
first class teams across the business in continuing to deliver
modern, market leading promotional strategies for theatre, live
acts and film.
Commenting on the results, David Stoller, Executive Chairman,
said, "Firstly, I would like to thank all of the r4e staff, the
shareholders and our lenders for their continued support during
this transformational period for the business. Now that the
restructuring of our debt is complete, I am confident that the
Company has a solid platform from which to progress in the coming
years. The focus is now very much on creating long term value for
our existing and new shareholders by continuing to maintain our
status as a market leader in both London and New York, as well as
identifying and executing strategic opportunities to enhance the
business."
31 December 2015 Full Report and Accounts
The Company will shortly post its report and accounts for the
year ended 31 December 2015 to shareholders, along with notice of
the annual general meeting to be held at 10.30am on 29 June 2016,
and both documents will soon be available on its website,
www.r4e.com. The annual general meeting will be held at the offices
of the Company at Wellington House, 125 Strand, London, WC2R
0AP.
Enquiries:
reach4entertainment
David Stoller, Executive Chairman +44 (0) 20 7968 1655
Novella Communications - Financial PR
Tim Robertson +44 (0) 207 6303843
Ben Heath +44 (0) 207 6303848
Allenby Capital Ltd - AIM Nominated Adviser and Broker
Jeremy Porter/ James Reeve +44 (0) 20 3328 5656
EXECUTIVE CHAIRMAN'S STATEMENT
2015 sees a return to normal market conditions
The Group is delighted to announce that, although results did
not replicate the exceptional performance of 2014, the twelve month
period saw an improvement on key performance indicators such as
revenue and profit before tax. The strength of performance in the
twelve month period was the result of a combination of delivery
from its client base, both new and existing clients, together with
the on-going restructuring of the agency and its cost base.
The theatre and live entertainment market continued to be stable
throughout 2015. In the twelve month period, the Group promoted
over 100 shows in both London and internationally, further
demonstrating our position as the leader in theatre and film
promotion. The Group continues to develop its services, with
further expansion in digital and the creation of a boutique social
media brand, as well as being consistent with growth in its touring
offering.
Trading in-line with market expectations
The Group delivered further improvement in revenue growth in the
twelve months to 31 December 2015.
Group revenue increased by 3.1 per cent to GBP85.9 million
(2014: GBP83.3 million), with trading more weighted towards the
second half of the period.
Underlying profitability for r4e (Adjusted EBITDA*) reduced by
31 per cent to GBP1.8 million (2014: GBP2.6 million), due to
exceptional income from SpotCo in 2014 not reoccurring in 2015 plus
additional staff costs required to service the higher volume of
turnover. The gross profit margin remained unchanged from 2014 at
24%.
Profit before tax increased to GBP4.5 million (2014: loss of
GBP5.1 million) as a result of the exceptional gain made from the
AIB debt write-off and deferred consideration waiver.
Earnings per share from total operations for the year is 4.01p
(2014: loss of 8.03p). The significant increase in EPS was in part
due to the impact of goodwill impairment in 2014, and the initial
benefits from debt restructuring which will continue into 2016.
On 04 December 2015, the Company raised GBP4.0 million, before
expenses, placing 400,000,000 new Ordinary Shares with new and
existing shareholders at a price of 1 penny per share. The Company
also entered into a new facility with PNC for a three year secured
asset based debt facility of GBP9.5 million being made up of a GBP1
million term loan and a revolving credit facility of up to GBP8.5
million based on qualifying accounts receivable. This enabled the
Company to repay its existing loan facility agreement of GBP14.5
million with AIB (after GBP0.6 million of scheduled capital
repayments made during the year), through a cash settlement of GBP9
million, with the remaining GBP5.2 million written-off and taken as
an exceptional gain to the income statement.
* Adjusted EBITDA is EBITDA before exceptional items and
impairment of goodwill
Market leader in London and New York
The Group continues to be a market-leader in London and New York
theatre and live entertainment marketing businesses through its
wholly-owned subsidiaries. In London, the Group operates through
Dewynters Ltd ('Dewynters'), and the London based signage and
fascia business, Newman Displays Ltd ('Newmans'). Operations in New
York consist of SpotCo and Dewynters Advertising Inc ('DAI'), with
the latter becoming dormant after the Dewynters merchandising
division was transferred during the period.
While 2014 was an exceptional year for SpotCo due to a number of
one off events, 2015 represented a return to normal market
conditions for the business. In London, reduction in headcount and
finance costs enabled Dewynters to deliver improved profitability
despite a decrease in revenues on the previous year. Overall the
trading performance was in-line with our expectations.
London
Dewynters showed strong performance in 2015, following the
challenging and unexpected market conditions experienced in 2014.
The business remained focused on reducing its employee count and
keeping expenditure under control and, as a result, saw an EBITDA
increase of 85% in the period, up to GBP0.85 million (2014: GBP0.46
million). Revenues are down 0.4% on the prior year, however, the
company has maintained its gross profit at 27.8%.
The business is a world-leading specialist live entertainment
branding, design and marketing agency with over 30 years of
experience. The management team expects this status to continue
into 2016.
For over 25 years, Newmans has pushed creative boundaries to
deliver tailored outdoor signage, displays and installations that
deliver eye-catching, inspiring results. The business revenues were
GBP3.5 million (2014: GBP3.6 million) in the period and EBITDA was
GBP0.16 million (2014: GBP0.22 million). The Group anticipates that
new films will increasingly adopt the digital signage technology,
with Newmans clearly focussed on developing its presence in this
market. In addition, Newmans has upgraded some key equipment that
the management team is confident will substantially enhance the
business.
New York
SpotCo still enjoys a market leading position, although EBITDA
for 2015 was not comparable to the previous year due to some
one-off events in 2014. Revenues for the period increased by 5% on
the previous year to GBP54.6 million (2014: GBP51.8 million). The
company continues to be a leader in New York's theatre and live
entertainment industry and its achievements were in evidence when
the shows it represents won 16 Tony awards of the total 24 awarded
in the 2014/15 season.
The company's financial condition was enhanced in 2015 with the
waiver of an outstanding deferred consideration balance of $1
million that resulted from the acquisition of SpotCo in 2008.
As mentioned above, during the twelve months the merchandise
division of Dewynters was transferred to Playbill UK Ltd, meaning
that DAI would cease to collect royalties from merchandise sales in
the USA. As at the end of 2015 DAI was no longer trading.
The platform for 2016 has been established
2015 marks a significant milestone for the Group. Cleared of the
prohibitive debt facility from AIB, the business now has the
ability to organically grow as well as invest and expand where the
opportunities present themselves, particularly in exploring new
geographies and pursing data-based marketing and other digital
initiatives. The management team is confident that the Group will
be able to pursue these growth opportunities while maintaining and
building upon its position as a theatre and entertainment market
leader in the London and New York.
David Stoller
Executive Chairman
REVIEW OF PERFORMANCE BY COMPANY
Year ended 31 December 2015
London New York Group
Dewynters Newmans Total SpotCo DAI Total Head Office Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 27,496 3,512 31,008 54,610 231 54,841 - 85,849
Adjusted
EBITDA* 846 161 1,007 1,218 10 1,228 (392) 1,843
Exceptional
admin
items (138) (6) (144) - - - 5,020 4,876
Operating
(loss)/profit (432) 130 (302) 863 10 873 4,621 5,192
Year ended 31 December 2014
London New York Group
Dewynters Newmans Total SpotCo DAI Total Head Office Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 27,600 3,570 31,170 51,827 285 52,112 - 83,282
Adjusted
EBITDA* 458 223 681 2,286 16 2,302 (336) 2,647
Exceptional
admin
items (112) 132 21 - - - - 21
Operating
profit/(loss) (6,194) 322 (5,872) 1,897 16 1,913 (342) (4,301)
*Adjusted EBITDA is before exceptional items and impairment of
goodwill.
CONSOLIDATED INCOME STATEMENT FOR THE YEARED 31 DECEMBER
2015
2015 2014
Note GBP'000 GBP'000
Continuing operations
Revenue 1 85,849 83,282
Cost of sales 5 (65,684) (63,170)
GROSS PROFIT 20,165 20,112
Administrative expenses 5 (14,973) (24,413)
--------------------------------------------- ---- -------- ------------
EBITDA before exceptional items 1,843 2,647
Exceptional administrative expenses 2 (1,149) (243)
Exceptional administrative income 2 6,025 264
Impairment of goodwill 8 (965) (6,430)
Depreciation (370) (344)
Amortisation of intangible assets 8 (192) (195)
OPERATING PROFIT/(LOSS) 5,192 (4,301)
Finance income 3 61 60
Finance costs 4 (714) (879)
-------- ------------
PROFIT/(LOSS) BEFORE TAXATION 4,539 (5,120)
Taxation 6 (273) (873)
PROFIT/(LOSS) FOR THE YEAR 4,266 (5,993)
The profit/(loss) is attributable to the
equity holders of the parent
Basic and diluted earnings/(loss) per share
7 4.01 (8.03)
======== ============
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEARED 31
DECEMBER 2015
2015 2014
GBP'000 GBP'000
PROFIT/(LOSS) FOR THE YEAR 4,266 (5,993)
-------- --------
Other comprehensive income:
Items that will not be reclassified to
profit and loss:
Currency translation differences 147 245
Other comprehensive income for the year,
net of tax 147 245
TOTAL COMPREHENSIVE INCOME/(LOSS) FOR THE
YEAR ATTRIBUTABLE TO THE OWNERS OF THE
PARENT 4,413 (5,748)
Items in the statement above are disclosed net of tax. The
income tax relating to each component of other comprehensive income
is disclosed in note 6.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER
2015
2015 2014
Note GBP'000 GBP'000
NON-CURRENT ASSETS
Goodwill and intangible assets 8 9,985 10,859
Property, plant and equipment 2,359 2,448
Deferred tax asset 145 88
12,489 13,395
CURRENT ASSETS
Inventories 152 401
Trade and other receivables 12,906 12,240
Other current assets 498 473
Cash and cash equivalents 1,160 2,446
14,716 15,560
TOTAL ASSETS 27,205 28,955
============== ==============
CURRENT LIABILITIES
Trade and other payables (14,709) (15,840)
Borrowings 9 (6,002) (1,896)
(20,711) (17,736)
NET CURRENT LIABILITIES (5,995) (2,176)
NON-CURRENT LIABILITIES
Deferred taxation (1,470) (1,349)
Other payables 10 (1,478) (1,460)
Borrowings 9 (739) (14,155)
(3,687) (16,964)
-------------- --------------
TOTAL LIABILITIES (24,398) (34,700)
NET ASSETS/(LIABILITIES) 2,807 (5,745)
EQUITY
Called up share capital 2,374 1,872
Share premium 15,329 13,501
Deferred shares 1,498 -
Capital redemption reserve 15 15
Warrant reserve 311 -
Retained earnings (16,570) (20,836)
Own shares held (259) (259)
Foreign exchange reserve 109 (38)
TOTAL EQUITY/(DEFICIT) ATTRIBUTABLE TO
EQUITY HOLDERS OF THE PARENT 2,807 (5,745)
============== ==============
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY AS AT 31 DECEMBER
2015
Capital Own Foreign Total
Share Share Deferred Redemption Warrant Retained Shares Exchange Equity
capital premium shares reserve reserve earnings held reserve GBP'000
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
ATTRIBUTABLE TO
EQUITY HOLDERS
OF
THE PARENT
At 31 December
2013 1,872 13,501 - 15 - (14,843) (259) (283) 3
(Loss) for the
year - - - - - (5,993) - - (5,993)
Other
comprehensive
income, net of
tax:
Currency
translation
differences - - - - - - - 245 245
-------- -------- --------- ----------- --------- --------- --------- --------- ---------
Total
comprehensive
income for the
year - - - - - (5,993) - 245 (5,748)
At 31 December
2014 1,872 13,501 - 15 - (20,836) (259) (38) (5,745)
Profit for the
year - - - - - 4,266 - - 4,266
Other
comprehensive
income, net of
tax:
Currency
translation
differences - - - - - - - 147 147
Total
comprehensive
income for the
year 1,872 13,501 15 (16,570) (259) 109 (1,332)
Transactions
with owners in
their
capacity as
owners: shares
issued 2,000 1,828 - - - - - - 3,828
Share
re-organisation (1,498) - 1,498 - - - - - -
Issue of
warrants - - - - 311 - - - 311
At 31 December
2015 2,374 15,329 1,498 15 311 (16,570) (259) 109 2,807
======== ======== ========= =========== ========= ========= ========= ========= =========
CONSOLIDATED STATEMENT OF CASH FLOWS AS AT 31 DECEMBER 2015
2015 2014
Note GBP'000 GBP'000
Cash generated from operating activities 12 (642) 2,494
Income taxes paid (213) (723)
Net cash (used in)/generated from operating
activities (855) 1,771
Investing activities
Purchases of property, plant and equipment (193) (194)
Proceeds from disposal of property,
plant and equipment - 3
Payment of deferred consideration 9 (661) (615)
Dividends received from associated
undertaking 3 60 60
Net cash used in investing activities (794) (746)
Financing activities
Net proceeds from the issue of share
capital 3,828 -
Proceeds from new borrowings 6,690 -
Repayments of borrowings (9,630) -
Interest paid (604) (502)
Net cash generated from/(used in) financing
activities 284 (502)
Net (decrease)/increase in cash and
cash equivalents (1,365) 523
Cash and cash equivalents at the beginning
of the year 2,446 1,876
Effect of foreign exchange rate changes 79 47
Cash and cash equivalents at the end
of the year 1,160 2,446
BASIS OF PRESENTATION
The above unaudited financial information in this announcement
does not constitute statutory accounts as defined in section 434 of
the Companies Act 2006. The above figures for the year ended 31
December 2015 are an abridged version of the Company's accounts
which have been reported on by the Company's auditor but have not
been dispatched to the shareholders or filed with the Registrar of
Companies. These accounts received an audit report which was
unqualified and did not include a statement under section 498(2) or
section 498(3) of the Companies Act 2006. The audit report included
a reference to matters to which the auditors drew attention by way
of emphasis without qualifying their report in relation to going
concern, as follows:
Emphasis of matter
In forming our opinion on the financial statements, which is not
modified, we have considered the adequacy of the disclosure set out
below concerning the group's ability to continue as a going
concern. There are monthly financial covenants attached to the
group's term and asset backed borrowings with PNC and the group's
forecasts show an expected breach of these covenants in the latter
half of 2016. The Directors believe that the breach is temporary
and as a result of seasonality in the business and subsequent
months are expected to meet covenants with headroom.
These conditions, along with the other matters explained in the
disclosure below, indicate the existence of a material uncertainty
which may cast significant doubt about the group's ability to
continue as a going concern. The financial statements do not
include the adjustments that would result if the group was unable
to continue as a going concern.
GOING CONCERN
As at 31 December 2015 the Group had net assets of GBP2.81
million (31 December 2014: net liabilities GBP5.75 million) and
made an operating profit in the year then ended of GBP5.19 million
(year ended 31 December 2014: loss of GBP4.30 million).
During 2015 the Group has made a considerable change to its debt
levels and overall financial position:
-- Deferred consideration owing in relation to the SpotCo
acquisition at 31 December 2014 was USD $2 million (GBP1.26 million
GBP). During 2015, USD $1 million of this was repaid as scheduled
(GBP0.66 million GBP) leaving USD $1.0 million (GBP0.65 million)
outstanding which the Company had the option to pay by the issue of
new ordinary shares in the Company. In November 2015 it was agreed
with the vendor that the $1 million USD would be waived (GBP0.72
million including interest). As at 31 December 2015 there is no
deferred consideration debt outstanding.
-- Bank debt with AIB as at 31 December 2014 was GBP14.785
million. The Group agreed a re-financing with AIB which took place
in December 2015 leaving no debt outstanding with AIB as at 31
December 2015.
As part of the re-financing of AIB, two sources of funds were
obtained:
i. The Company issued 400,000,000 ordinary shares of 1p each
raising GBP4,000,000 (before share issue costs)
ii. The Group obtained a new three year secured asset based debt
facility of GBP9.5 million with PNC Business Credit Services Ltd
being made up of a GBP1 million term loan and a revolving credit
facility of up to GBP8.5 million based on qualifying accounts
receivable. As at 31 December 2015 the debt owed to PNC totalled
GBP6.68 million, a reduction of GBP8.11 million from the AIB debt
outstanding at 31 December 2014.
The term loan held with PNC is a 3 year facility against which
monthly capital repayments commenced from March 2016. The debt will
be fully paid down by October 2018. The asset based lending
facility is a revolving credit line based upon qualifying accounts
receivable. This means current debt is constantly being paid down
and new debt being drawn. The facility will therefore fluctuate but
will be no more than GBP8.5 million at any point. A new set of
financial covenants were agreed with PNC in relation to this debt.
The financial covenants are measured monthly and all were met at 31
December 2015 and also at each subsequent month end until the
latest measurement date prior to these accounts being 30 April
2016. Later in 2016, the Group is forecasting a possible breach in
the fixed charge cover covenant due to updated forecasts showing
seasonal fluctuations in EBITDA. The previous covenants with AIB
were determined on a 12 month rolling basis in which seasonality
was not a risk. The fixed charge covenant with PNC is determined on
a 3 month rolling basis and is therefore sensitive to seasonality
shifts. Given that the current forecast for the full year 2016
EBITDA is in line with expectations, PNC has informed the Company
that they recognise the seasonality factor and the likelihood that
the company will still meet its debt obligations even if a monthly
covenant is breached. That said, they cannot provide a waiver of a
potential future breach as of the date of these accounts.
Given the significant reduction in the debt levels of the group,
plus the improvement to the balance sheet position, the Directors
believe that the going concern basis is appropriate and the Group
has adequate resources to continuing trading for the foreseeable
future. Regarding the aforementioned PNC covenants, the Directors
are confident that although breaches are possible in later 2016,
these would only be temporary as a result of seasonal fluctuations
and not due to performance of the Group as a whole - subsequent
months are forecast to meet covenants with headroom - and therefore
believe it highly unlikely that PNC would decide to terminate the
facility.
SIGNIFICANT ACCOUNTING POLICIES
GOODWILL
Goodwill is reviewed for impairment at least annually and any
impairment will be recognised in the income statement and is not
subsequently reversed. As such it is stated at cost less provision
for impairment in value. On disposal of a subsidiary, the
attributable amount of goodwill is included in the determination of
the profit or loss on disposal.
IMPAIRMENT OF ASSETS (INTANGIBLE AND PROPERTY, PLANT AND
EQUIPMENT)
Goodwill is not subject to amortisation but is tested annually
or whenever there is an indication that the asset may be impaired.
For the purpose of impairment testing, assets are grouped at the
lowest levels for which they have separately identifiable cash
flows, known as cash generating units. If the recoverable amount of
the cash-generating unit is less than the carrying amount of the
unit, the impairment loss is allocated first to reduce the carrying
amount of any goodwill allocated to the unit and then to the other
assets of the unit pro-rata on the basis of the carrying amount of
each asset in the unit. Impairment losses recognised for goodwill
are not reversed in a subsequent period.
Recoverable amount is the higher of fair value less costs to
sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset for
which the estimates of future cash flows have not been
adjusted.
At each balance sheet date, the Group reviews the carrying
amounts of its property, plant and equipment and intangible assets
with finite useful lives to determine whether there is any
indication that those assets have suffered an impairment loss. If
any such indication exists, the recoverable amount of the asset is
estimated in order to determine the extent, if any, of the
impairment loss. Where it is not possible to estimate the
recoverable amount of an individual asset, the Group estimates the
recoverable amount of the cash-generating unit to which the asset
belongs. If the recoverable amount of an asset or cash-generating
unit is estimated to be less than its carrying amount, the carrying
amount of the asset or cash-generating unit is reduced to its
recoverable amount. An impairment loss is recognised immediately in
the income statement. Where an impairment loss subsequently
reverses the carrying amount of the asset or cash-generating unit
is increased to the revised estimate of its recoverable amount, not
to exceed the carrying amount that would have been determined had
no impairment loss been recognised for the asset or cash-generating
unit in prior years. A reversal of an impairment loss is recognised
immediately in the income statement.
EXCEPTIONAL ITEMS
Exceptional items represent income or expenses, which based on
their materiality, frequency or non-operating nature, have been
separately disclosed to facilitate the assessment of the Group's
underlying operating profitability.
CAPITAL RISK MANAGEMENT
The Group's objectives when managing capital are to safeguard
the Group's ability to continue as a going concern in order to
provide returns for shareholders and benefits for other
stakeholders and to maintain an optimal capital structure to reduce
the cost of capital. In order to adjust the capital structure, the
Group may issue new shares or sell assets to reduce debt.
As part of the Capital Risk Management process the Group
acknowledges the need to monitor, and meet in full, covenants held
over the revolving asset based facility with PNC. More details on
the bank debt are in the borrowings note 9. The covenants were met
in full as at 31 December 2015 and also at each subsequent month
end until the latest measurement date prior to these accounts being
30 April 2016.
NOTES
1. BUSINESS AND GEOGRAPHICAL SEGMENTS
Business segments
For management purposes, the Group is currently organised into
three operating segments - New York operations, London operations
and Head Office. These divisions are the basis on which the Group
reports its segment information.
Principal continuing activities are as follows:
New York (NY) - marketing, design, advertising, promotions,
digital media services, publishing and merchandising.
London - marketing, design, advertising, promotions, digital
media services, publishing and merchandising, signage and fascia
displays.
Head Office - finance and administration services for the
Group.
Segment information for continuing operations of the Group for
the year ended 31 December 2014 is presented below.
NY London
operations operations Head Office Group
Revenue GBP'000 GBP'000 GBP'000 GBP'000
Sale of goods 231 1,749 - 1,980
Provision of services 54,610 29,259 - 83,869
Revenue (all external
customers) 54,841 31,008 - 85,849
Adjusted EBITDA* 1,228 1,007 (392) 1,843
Exceptional administrative
expense - (299) (850) (1,149)
)
Exceptional administrative
income - 155 5,870 6,025
Impairment of Goodwill - (965) - (965)
Depreciation (224) (139) (7) (370)
Amortisation (131) (61) - (192)
Operating profit/(loss) 873 (302) 4,621 5,192
Finance income 1 60 - 61
Finance costs (32) (28) (654) (714)
Profit/(loss) before
tax 842 (270) 3,967 4,539
Tax (charge)/credit (250) (393) 370 (273)
Profit/(loss) after
tax 592 (663) 4,337 4,226
============ ============ ============ =========
Management fees charged at an arm's-length basis between
reportable segments are reflected in the figures above on the basis
that this is a true reflection of the operating costs of each
segment.
*Adjusted EBITDA is before exceptional items.
Head
NY London Office
operations operations operations Group
GBP'000 GBP'000 GBP'000 GBP'000
Capital additions:
Property, plant and equipment 104 88 1 193
============ ============ ============ =========
Balance sheet:
Segment assets
Non-current assets 7,408 5,056 25 12,489
Current assets 8,842 5,450 424 14,716
------------ ------------ ------------ ---------
16,250 10,506 449 27,205
Total segment assets
============ ============ ============ =========
Liabilities
Total segment liabilities (15,177) (7,376) (1,845) (24,398)
Segment information for continuing operations of the Group for
the year ended 31 December 2014 is presented below:
NY London
operations operations Head Office Group
Revenue GBP'000 GBP'000 GBP'000 GBP'000
Sale of goods 285 2,196 - 2,481
Provision of services 51,827 28,974 - 80,801
Revenue (all external
customers) 52,112 31,170 - 83,282
Adjusted EBITDA* 2,302 681 (336) 2,647
Exceptional administrative
expense - (243) - (243)
Exceptional administrative
income - 264 - 264
Impairment of Goodwill - (6,430) - (6,430)
Depreciation (194) (144) (6) (344)
Amortisation (195) - - (195)
Operating profit/(loss) 1,913 (5,872) (342) (4,301)
Finance income - 60 - 60
Finance costs - (1) (878) (879)
Profit/(loss) before
tax 1,913 (5,813) (1,220) (5,120)
============ ============ ============ =========
Tax credit/(charge) (716) (753) 596 (873)
Profit/(loss) after
tax 1,197 (6,566) (624) (5,993)
============ ============ ============ =========
Management fees charged at an arm's-length basis between
reportable segments are reflected in the figures above on the basis
that this is a true reflection of the operating costs of each
segment.
*Adjusted EBITDA is before exceptional items.
Head
NY London Office
operations operations operations Group
GBP'000 GBP'000 GBP'000 GBP'000
Capital additions:
Property, plant and equipment 146 36 12 194
============ ============ ============ =========
Balance sheet:
Segment assets
Non-current assets 7,285 6,076 34 13,395
Current assets 9,229 6,295 36 15,560
------------ ------------ ------------ ---------
Total segment assets 16,514 12,371 70 28,955
============ ============ ============ =========
Liabilities
Total segment liabilities (11,658) (5,617) (17,425) (34,700)
2. EXCEPTIONAL ADMINISTRATIVE ITEMS
2015 2014
GBP'000 GBP'000
Office move costs (14) (46)
Employee contract termination related
costs (13) (197)
Costs relating to debt restructure (539) -
Costs of merchandise division sale (272) -
Issue of warrants to AIB (311) -
Exceptional administrative expenses (1,149) (243)
Landlord and Tenants Act reimbursement - 264
Income from transfer of merchandise 155 -
division
Gain on deferred consideration write 715 -
off (note 9)
Gain on debt write off (note 9) 5,155 -
Exceptional administrative income 6,025 264
Office move and Landlord reimbursement
In the prior year 2014 the Newmans premises and Dewynters
warehouse, which are on the same site in London, were given notice
by the Landlord to vacate by December 2014 in order that the land
could be developed. The surrender of the leases resulted in
compensation from the Landlord of GBP0.26 million as the tenancy
was within the scope of the Landlords and Tenants Act 1954.
Subsequent to the commencement of the search process for new
premises, the current Landlord agreed to a new lease on the
premises due to the planned development being put on hold.
Exceptional expenses of GBP0.01 million relate to the search for
new premises plus negotiation for the new leases with the current
landlord (2014: GBP0.05 million).
Employee contract termination costs
Exceptional expenses of GBP0.01 million (2014: GBP0.2 million)
relates to Dewynters employee contract termination costs in prior
year which are considered exceptional due to the level of
redundancy required as a result of company performance.
Deferred consideration on the acquisition of SpotCo
Deferred consideration payments were made as scheduled during
2015 leaving a further remaining balance at the end of October 2015
of USD $1.0 million (GBP0.65 million) which the Company had the
option to pay by the issue of new ordinary shares in the Company.
It was agreed during the year that the vendor would waive the final
liability of $1 million which resulted in exceptional income of
GBP0.72 million including interest (2014: Nil). The vendor
continues in his role at SpotCo. In addition the final interest due
to unwind on the discounted liability was also written off
resulting in a gain of GBP0.07 million (2014: Nil).
Gain on debt write off
The debt restructure which took place in December 2015 paid AIB
Group GBP9 million of the debt outstanding at that date of GBP14.16
million. The remaining balance of GBP5.16 million was written off
resulting in an exceptional gain to the Income Statement. The
process of negotiating the debt restructure included service from
legal professionals, consultants, brokers, advisors etc. Fees in
relation to the restructure totalled GBP0.53 million.
Issue of warrants to AIB
As part of the refinancing deal with AIB, the Company granted
24,994,462 Warrants to AIB Joint Ventures, a subsidiary of AIB.
These have been valued at the date of issue, see note 11.
3. FINANCE INCOME
2015 2014
GBP'000 GBP'000
Bank interest received 1 -
Dividend income from associated undertaking 60 60
61 60
Dividend income received in the year ended 31 December 2015 of
GBP60,492 (2014: GBP59,824) is from the associate undertaking
Theatrenow Limited, in which Dewynters has a 29.91% shareholding.
The payments are final distributions of capital and the associate
is to be wound up in 2016.
4. FINANCE COSTS
2015 2014
GBP'000 GBP'000
Finance lease interest 1 -
Interest on AIB bank loans 482 563
Interest on new debt 15 -
Fees on new debt 37 -
Amortisation of arrangement fees for
bank loan 66 87
Unwinding of discounting on deferred
consideration (note 9) 91 154
Foreign exchange loss on trade 3 -
Foreign exchange loss on deferred
consideration (note 9) 19 75
714 879
5. EXPENSES BY NATURE AND AUDITOR'S REMUNERATION
2015 2014
GBP'000 GBP'000
Media, marketing and promotional services 65,029 62,503
Staff costs 12,854 12,325
Depreciation, amortisation and impairment 1,526 6,969
Exceptional administrative income
(note 2) (4,876) (21)
General office expenses 2,996 2,612
Operating lease payments:
Land and buildings 1,378 1,324
Plant and machinery 142 247
Professional costs 1,004 1,042
Travelling 534 423
Other 70 159
Total cost of sales and administrative
expenses 80,657 87,583
1.
6. TAXATION
2015 2014
GBP'000 GBP'000
Current tax:
Overseas tax on profits/(losses) of
the year 251 716
Total current tax charge 251 716
Deferred tax:
Origination and reversal of timing differences 82 147
Deferred tax rate change 17 -
Deferred tax - adjustment in respect
of previous periods (77) 10
Total deferred tax 22 157
Tax charge on loss of ordinary activities 273 873
Factors affecting the tax charge for the year:
2015 2014
GBP'000 GBP'000
The tax assessed for the year differs
from the effective average rate of
corporation tax in the UK of 20.25%
(2014: 21.5%). The differences are
explained below:
Profit/(loss) on ordinary activities
before tax 4,539 (5,120)
Profit/(loss) on ordinary activities
multiplied by effective average rate
of corporation tax in the UK of 20.25%
(2014: 21.5%) 919 (1,101)
Effects of:
Fixed asset differences 13 -
Expenses not deductible for tax purposes 342 1,413
Income not subject to tax (1,182) (14)
Other tax adjustments, reliefs and (144) -
transfers
Depreciation on non-qualifying assets - 5
Difference in tax rates on overseas
earnings 185 364
UK losses not utilised - 192
Timing differences not recognised in 131 -
the computation
Change in corporation tax rates 123 2
Adjustments to brought forward values (13) -
Adjustment in respect of previous periods (59) 12
Deferred tax not recognised (42) -
Total tax charge for the year 273 873
A deferred tax asset of approximately GBP0.96 million (2014:
GBP0.87 million) has not been recognised due to uncertainty over
future profitability. At 31 December 2015, the Group had losses
carried forward of GBP5.3 million (2014: GBP4.3 million), available
for offset against future profits.
Taxation is calculated at the rates prevailing in the respective
jurisdictions. The standard tax rates in each jurisdiction are 40%
in the United States (2014: 40%) and 20% in the United Kingdom
(2014: 21%).
7. EARNINGS/(LOSS) PER SHARE
The calculations of earnings per share are based on the
following profits/(loss) and number of shares:
Profits/(Loss) attributable to equity holders of the company
2015 2014
GBP'000 GBP'000
For basic and diluted profit per share
Profit/(Loss) for financial year 4,266 (5,993)
Number Number
Number of shares
Weighted average number of ordinary shares for the purposes of basic and diluted
earnings
per share 106,416,614 74,635,792
============= ============
Earnings/(Loss) per share (pence)
after tax
Total operations after tax 4.01 (8.03)
8. GOODWILL AND INTANGIBLE ASSETS
Brands Customer relationships Purchased goodwill Total
GBP'000 GBP'000 GBP'000 GBP'000
Cost
1 January 2014 4,052 4,115 13,393 21,560
Foreign exchange differences 111 - 278 389
Write down - (1,508) - (1,508)
-------- ---------------------- ------------------ --------
31 December 2014 4,163 2,607 13,671 20,441
Foreign exchange differences 98 - 244 342
31 December 2015
-------- ---------------------- ------------------ --------
4,261 2,607 13,915 20,783
Amortisation
1 January 2014 904 3,317 181 4,402
Charged in the year 131 61 - 192
Write down - (1,508) - (1,508)
Impairment charge - - 6,430 6,430
Foreign exchange differences 63 - - 63
31 December 2014 1,098 1,870 6,611 9,579
Charged in the year 131 61 192
Impairment charge - - 965 965
Foreign exchange differences 62 - - 62
31 December 2015 1,291 1,931 7,576 10,798
-------- ---------------------- ------------------ --------
Net book value
31 December 2015 2,970 676 6,339 9,985
31 December 2014 3,062 737 7,060 10,859
31 December 2013 3,148 798 13,212 17,158
Goodwill relates to the anticipated profitability and future
operating synergies arising on the acquisition of subsidiaries.
Write down of customer relationships in prior year relates to
SpotCo intangible assets with zero net book value where the
relationship with the client no longer existed.
All amortisation and impairment charges have been recognised as
administrative expenses in the income statement.
Impairment tests for goodwill
Goodwill is allocated to the Group's cash generating units
(CGUs) identified according to the operations as grouped upon
acquisition. An operating level summary of the goodwill allocation
is presented below:
2015 2014
GBP'000 GBP'000
------------------------------------------- ---------- ----------
Dewynters Group (Dewynters, Newmans, DAI) 1,351 2,316
SpotCo 4,988 4,744
Total Goodwill 6,339 7,060
An impairment charge of GBP0.97 million was incurred in the year
on the Dewynters Group (inclusive of Dewynters, Newman and DAI)
(2014: GBP6.43 million).
The merchandise division of Dewynters was transferred during the
year and as a result the royalties from merchandise sales in the
USA will no longer be collected by DAI. This means DAI is no longer
trading and remains dormant with the exception of minor costs of
corporation and tax accounts in the USA. The Company has allocated
to DAI a portion of the goodwill in the Dewynters Group, which
arose on its acquisition in 2006, based on its proportion of the
EBITDA of the Dewynters Group at the time of the acquisition. This
resulted in an impairment of GBP0.97 million recognised in the 2015
accounts. As at 31 December 2015 the recoverable amount of the
Dewynters Group is GBP5.66 million. No class of asset other than
goodwill was deemed impaired.
The recoverable amount of CGUs has been determined based on
value-in-use calculations which cover a period of 5 years plus a
terminal value. These calculations use pre-tax cash flow
projections based on financial budgets for the year ended 31
December 2016 as approved by management and cash flows beyond the
one-year period are extrapolated using straight line growth rates
stated below. Prudent assumptions have been used in the
value-in-use calculations as detailed below.
The key assumptions used for the value-in-use calculations in
2015 are as follows:
Dewynters
Group SpotCo
------------------------------------------ --------- ------
Revenue (fall)/growth- 1 year (3.4)% 3.6%
Revenue growth per annum - years 2-5 1.5% 1.5%
Cost growth - employee costs from year
1 0.8% 10.2%
Cost growth per annum - employee costs
from years 2-3 2% 2.0%
Cost growth per annum - employee costs
years 4-5 1% 1.5%
Cost growth - overhead costs from year
1 1% 1.5%
Cost growth - overhead costs from years
2-5 1% 1.5%
Discount rate 12% 12%
Capitalisation rate 17.5% 17.5%
Management have determined budgeted gross margin, revenue growth
and costs based on past performance and expectations of the market
development for each CGU. The discount rates are pre-tax and
reflect management's assessment of the risks relating to each CGU.
In line with the conservative approach adopted in valuing the CGUs,
the discount rate applied in the value-in-use calculations has been
adjusted to reflect long term rates.
Initial growth rates in year 1 are taken from the CGU's 2016
operational budgets, and so in some cases
can show a difference to the straight line growth rates applied
to subsequent years. Growth after year 1 has been determined on the
basis of general industry market growth and so the rate reduces and
remains consistent. The growth rates used are considered by
management to be in line with general trends in which each CGU
operates and deemed by management to be a reasonable expectation
for the media CGU.
The following table reflects the level of movements required in
revenue or costs which could result in a potential impairment per
the value in use calculation. A further percentage (fall)/increase,
of the magnitude indicated in the table below, in any one of the
key assumptions set out above would result in a removal of the
headroom in the value-in-use calculations in 2015:
Dewynters
Group SpotCo
----------------------------------------- --------- -------
Revenue (fall)- 1 year (10.1)% (27.0)%
Revenue (fall) - remainder (0.5)% (1.3)%
Cost growth - employee costs from year
1 1.5% 5.0%
Cost growth per annum - employee costs
from years 2-3 0.8% 1.5%
Cost growth - overhead costs from year
1 5.0% 21.0%
Cost growth - overhead costs from year
2-5 0.9% 3.0%
Discount rate increase 4.0% 9.0%
Capitalisation rate increase 6.5% 23.5%
Brands and customer relationships are all derived from
acquisitions; there are no internally generated intangible assets.
The brand allocated to the Dewynters CGU totalling GBP2.26 million
(2014: GBP2.26 million) is determined to have an indefinite life.
It is subject to an annual impairment review using the same
assumptions as for goodwill. The brand value allocated to SpotCo
CGU totalling GBP0.70 million (2014: GBP0.80 million) is being
amortised over 15 years and has 8 years remaining.
Intangible customer relationships are attributable to Dewynters
only. The useful economic life for customer relationships within
Dewynters is 20 years of which 12 are remaining as at 31 December
2015. It has a carrying value of GBP0.67 million and GBP0.06
million was charged to amortisation in the year. Where there are
any indications of impairment within these businesses the Group
carries out impairment reviews on brands and customer relationships
using the same assumptions as for goodwill.
9. BORROWINGS
2015 2014
GBP'000 GBP'000
Current:
Deferred consideration - 1,266
Term debt 314 630
Asset based lending facility 5,665 -
Finance leases 23 -
6,002 1,896
Non-current:
Term debt 697 14,155
Finance leases 42 -
--------- ---------
739 14,155
Analysis of borrowings:
On demand or within one year
Deferred consideration - 1,266
Term debt 314 630
Asset based lending facility 5,665 -
Finance leases 23 -
6,002 1,896
In the second to fifth years inclusive
Term debt 697 14,155
Finance leases 42 -
739 14,155
Amounts due for settlement 6,741 16,051
Less amounts due within one year (6,002) (1,896)
Amounts due for settlement after one year 739 14,155
Analysis of borrowings by currency:
Sterling USD Total
GBP'000 GBP'000 GBP'000
31 December 2015
Asset based lending facility 731 4,934 5,665
Term debt 350 661 1,011
Finance leases 65 - 65
1,146 5,595 6,741
Sterling USD Total
GBP'000 GBP'000 GBP'000
31 December 2014
Bank loans 14,785 - 14,785
Deferred consideration - 1,266 1,266
14,785 1,266 16,051
Debt restructure
In December 2015, the Company successfully concluded discussion
on restructuring the debt which arose on the previous acquisitions
of SpotCo and the Dewynters Group of companies. At the end of prior
year 31 December 2014, the Company had borrowings with AIB Group
(UK) plc amounting to GBP14.8 million. During 2015 GBP0.63 million
of this debt was repaid in accordance with the debt facility
agreement. On 04 December 2015 the remaining debt was restructured
as follows:
-- The Company raised GBP4 million (before expenses) through the
placing of 400 million new ordinary shares
-- The 3 trading companies of the r4e group, SpotCo, Dewynters
and Newmans, entered into a new facility with PNC. The new facility
is a three year secured asset based debt facility of GBP8.5 million
plus a GBP1 million term loan. Both the facility and the term loan
are shared across the 3 companies
-- The proceeds of the equity placing plus new debt with PNC
repaid GBP9 million of the debt facility with AIB
-- The remaining GBP5.16 million of debt with AIB was written off. See note 2
-- The Company has granted 24,994,462 warrants to AIB. See note 11
Term debt
The new term debt with PNC totalled GBP1 million when drawn down
on 04 December 2015 (GBP1.02 million at 31 December 2015 due to
foreign exchange) and was split between SpotCo and Dewynters based
on expected future cash flows of the Companies. The debt has
interest payable at 4% over Barclays Bank plc. base rate
(Dewynters) and the rate published by the central bank or monetary
authority of the relevant territory (SpotCo). Repayments are in
equal monthly instalments and begin in March 2016. The debt will be
fully repaid by October 2018.
Asset based lending
All 3 trading companies, SpotCo, Dewynters and Newmans, hold
asset based lending facilities with PNC. Borrowing is determined by
qualifying accounts receivable. The nature of the facility means
that the balance will fluctuate from month to month and as the debt
is paid down, new debt will arise to finance working capital,
therefore the facility has been reflected as a current liability as
it will be constantly revolving. Another effect of the facility is
that cash balances across the group will be lower as cash drawdown
incurs a higher rate of interest therefore cash will only be drawn
down as required rather than being held on hand.
The facility with PNC has interest payable at 2.25% over
Barclays Bank plc. base rate for amounts borrowed. Borrowings not
utilised have interest payable at 0.5%. On top of a fixed and
floating charge over its assets, the Group has given PNC an
unlimited guarantee in respect of these borrowings. The Group has a
set of financial covenants with PNC in relation to the loan which
are measured monthly and were met in full as at 31 December 2015
and also at each subsequent month end until the latest measurement
date prior to these accounts being 30 April 2016. Forecasts for
2016 currently reflect a possible breach in the fixed charge cover
financial covenant due to updated forecasts showing seasonal
fluctuations in EBITDA, however, given that the current forecast
for the full year 2016 EBITDA is in line with expectations and
subsequent months are forecast to meet covenants with headroom, the
Directors are confident the Group remains a going concern - see
Significant Basis of Preparation above for further details.
Deferred Consideration
The remaining payments scheduled to the vendor for 2015 were
made leaving a balance of $1 million USD at October 2015 which
could be converted to equity. An agreement was signed with the
vendor agreeing to waive the $1 million conversion. He retains his
role at Spotco.
Movements on deferred consideration during the year are as
follows:
2015 2014
GBP'000 GBP'000
Opening balance 1,266 1,652
Unwinding of discounting on deferred consideration (note 4) 91 154
Payments of deferred consideration - cash (661) (615)
Foreign exchange differences (note 4) 19 75
Write off of remaining $1 million (649) -
Release of interest previously discounted (66) -
Closing balance - 1,266
========= =========
10. OTHER NON CURRENT PAYABLES
Landlord reimbursement accrual
Amounts in non-current other payables of GBP0.63 million (2014:
GBP0.66 million) relate to the re-imbursement of leasehold
improvement costs from SpotCo's landlord at the new New York
office. As with many US leases SpotCo, as tenant, had to undertake
a programme of complete refurbishment of the property. Some of the
expenses, related to the provision of basic utilities and services,
were then refunded by the landlord. GBP0.84 million ($1.25 million
USD) was received in cash from the Landlord in 2013. In line with
SIC Interpretation 15 this reimbursement has been recognised as a
liability and is being unwound to the income statement over the
period of the lease, reducing rental costs. GBP0.06 million was
unwound during the year (2014: GBP0.06 million). Amounts in current
liabilities relating to the reimbursement total GBP0.06 million
(2014: GBP0.06 million).
2015 2014
GBP'000 GBP'000
Within one year 61 55
--------- ---------
Between two and five years 244 220
More than five years 384 435
628 655
========= =========
Rent holiday accrual
Other amounts in non-current other payables of GBP0.85 million
(31 December 2014: GBP0.81 million) relate to an accrual for rental
payments built up during a period of 'rent holiday' as provided for
in the new leases for Dewynters and SpotCo's Offices. In line with
SIC Interpretation 15 the accrual will be released to the income
statement over the term of the lease thus reducing rent costs.
2015 2014
GBP'000 GBP'000
Within one year 144 38
--------- ---------
Between two and five years 577 523
More than five years 273 282
--------- ---------
850 805
Total non-current payables 1,478 1,460
========= =========
11. WARRANT RESERVE
The warrant reserve comprises the equity component of warrants
issued by the Company. On 04 December 2015 the Company granted
24,994,462 Warrants to AIB Joint Ventures, a subsidiary of AIB. The
Warrants are exercisable for five years at an exercise price of 1
penny per Warrant, only when the closing mid-market price of a New
Ordinary Share reaches 5 pence or more on any Trading Day during
that five year period, subject to the right to exercise earlier
upon the occurrence of certain specified Acceleration Events (as
defined in the Warrant Agreement). The warrants have been accounted
for at fair value through the profit and loss account. Fair value
has been calculated via a binomial tree modelling of a knock in
option. The model assumes there are no dividends in the option
period and other inputs are as follows:
Year ended Year ended
2015 2014
---------------------------------- ---------- ----------
Share price at 31 December 2015 -
Risk free rate 1.346% -
Barrier price GBP0.05 -
Strike price GBP0.01 -
Volatility 100% -
Spot price GBP0.016 -
Days to Expiry 1,798 -
Over the past three years, the share price volatility has been
98%, rising to 133% over the 12 months to the 31 December 2015
balance sheet date. Subsequent to the refinancing, the Board
considers that future share price volatility will be materially
less than the historic values which were unquestionably influenced
by the financial restructuring. Notwithstanding, it was considered
prudent to assume a 100% volatility for purposes of valuing the
warrants. Using an 80% or a 120% volatility results in a +/- 15%
change in the warrant price.
The fair value of the warrants at the date of grant totalled
GBP311k (2014: GBPNil). This amount has been charged in full to the
profit and loss account during the year.
12. CASH GENERATED FROM OPERATIONS
2015 2014
GBP'000 GBP'000
Reconciliation of net cash flows from
operating activities
Profit/(Loss) before taxation 4,539 (5,120)
Adjustments:
Finance costs 714 879
Finance income (61) (60)
Depreciation 369 344
Amortisation of intangibles 192 195
Impairment of goodwill 965 6,430
Exceptional debt write offs (6,018) -
Operating cash flows before movements
in working capital 700 2,668
Decrease/(increase) in inventories 249 (120)
(Increase) in trade and other receivables (666) (1,897)
(Decrease)/Increase in trade and other
payables (925) 1,843
Cash (used in)/generated from operating
activities (642) 2,494
13. RELATED PARTY DISCLOSURES
During the year ended 31 December 2015, transactions with Key
Management Personnel are in relation to Directors of the Group and
are presented in Directors Remuneration tables on page 18 and note
6 to the audited financial statements.
Dividend income received in the year ended 31 December 2015 of
GBP0.06 million (2014: GBP0.06 million) is from the associate
undertaking Theatrenow Limited, in which Dewynters has a 29.91%
shareholding.
14. TRANSACTIONS WITH DIRECTORS
At 31 December 2015, David Stoller owed the Group GBP35,982
(2014: the Group owed Mr. Stoller GBP1,026 repaid in 2015). This
relates to PAYE payments, whereby following a PAYE assessment it
was determined that Mr Stoller's compensation for work in the UK
for the Company should be subject to PAYE (as opposed to being
taxed only in the US) and therefore the Company was required to
immediately pay outstanding PAYE. The Company will seek to recover
this amount from Mr Stoller as soon as possible and once the
related overpayment of employment tax in the US becomes available.
Subsequent to 31 December 2015, Mr Stoller has made repayments of
GBP8,000. The loan is non-interest bearing and no terms and
conditions are attached. Full repayment is due by 31 December
2016.
During the year ended December 2015, the Group procured
consultancy services totalling GBP0.188 million (2014: Nil) from
Glen House Capital Strategies Ltd., a company owned by Richard
Ingham, a non-executive director of the Board during the period, in
recognition of consultancy services provided since 2013. GBP0.12
million was outstanding at 31 December 2015 (2014: Nil).
During the year ended December 2015, the Group procured
consultancy services totalling GBP0.03 million (2014: Nil) from
Springtime Consultants Ltd., a company owned by Marcus Yeoman, a
non-executive director of the Board during the period. GBP0.02
million was outstanding at 31 December 2015 (2014: Nil).
15. SUBSEQUENT EVENTS
On 11 February 2016 Richard Ingham resigned his position as
non-executive member of the Board of Directors to take effect after
three months. As a result Mr. Ingham stepped down as a director on
11(th) May 2016.
On 12 February 2016, 1 million shares were issued in payment of
services relating to advice received on the December 2015 fund
raise. The shares were issued at 0.01 pence each.
On 4 March 2016 the Company announced that it had adopted a new
employee share incentive scheme, the reach4entertainment
enterprises plc 2016 Long Term Incentive Plan. The plan can grant
up to 20 per cent. of the issued share capital at an exercise price
of 1p per share. On 4 March 2016, 84,475,000 options in new
ordinary shares in the Company, representing approximately 17.75
per cent. of the issued ordinary share capital of the Company on
that date, were granted to employees and senior management,
including to the Executive Chairman and Acting CEO. Of the total
Options granted, 23,750,000 were granted to David Stoller, the
Executive Chairman and Acting CEO of the Company, which represent
approximately 4.99 per cent. of the issued ordinary share capital
of the Company at that date.
On 4 March 2016 it was announced that James Charrington had been
appointed as CEO of Dewynters. In 2014, Mr Charrington had set up
Jampot Consulting Limited ("Jampot") an Arts Marketing Consultancy,
working with, amongst others, the National Theatre and Sonia
Friedman on ticketing and marketing strategies. On 21 March 2016,
the Company acquired 100% of Jampot for consideration totalling
GBP55,000 by the issue of 3,666,666 ordinary shares in r4e at 1.5p
per share. The Board of r4e believes the IP in digital marketing
that Jampot can bring will be beneficial to the Group and add to
its service offering. Jampot has a year end of 31 October,
therefore for the period from 1 November 2015 to the date of
acquisition being 21 March 2016, Jampot had revenue of GBP16,214,
profit before tax of GBP5,563 and net assets of GBP87.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR AKQDKOBKDNPB
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May 25, 2016 02:00 ET (06:00 GMT)
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