SAL Spaceandpeople Plc

23 September 2024

SpaceandPeople plc

("SpaceandPeople" or the "Group")

Interim results for the six months ended 30 June 2024

SpaceandPeople (AIM:SAL), the retail, promotional and brand experience specialist which facilitates and manages the sale of promotional and retail merchandising space in shopping centres and other high footfall venues, announces its interim results for the six months ended 30 June 2024.

Contact details:

Chief Executive's Interim Operating Statement 

I am delighted to report that the Group performed very well in the first half of 2024, with all divisions, both in the UK and Germany, continuing to show strong growth, with our new products and services producing encouraging year on year increases, reinforcing the unique selling points of the SpaceandPeople platform and service.

Overall, revenue grew by 35% compared with H1 2023, with the UK Brand Experiential business performing particularly well, where despite a slow start to the year, the revenue achieved in the second quarter was at record levels for our business. We also delivered strong revenue growth in Germany, driven by a further expansion in the number of kiosks in operation.

This growth in revenue helped to deliver a 41% increase in gross profit, a 50% reduction in the loss before taxation.

UK Trading

Kiosks

The UK Kiosk division reported increased revenue, driven mainly by the continued roll out of Rock Up and Pop Up ("RUPU") kiosks. These kiosks have been particularly well received by retail landlords and we have been successful in launching them in a number of the country's most prestigious venues. It is very encouraging that given the considerable investment in design, manufacturing and installation to meet the quality requirements of landlords, these kiosks are trading well and form a key part of our retail strategy moving forward.

RUPU is a unique service offered by SpaceandPeople and is aimed at nascent, online or expanding retail chains who want to trial physical retail in any enclosed shopping centre in the UK. The service, which offers a fully bespoke designed kiosk, merchandising, marketing and, if required, staffing has been welcomed by a wide variety of retailers from Kate Spade, who utilised the kiosk in Westfield London and St Pancras, to new retailers such as Just Bee (now in 5 shopping centres UK wide) and Ishvari (an ex John Lewis scarves and accessories concessionaire) who, having traded on a RUPU kiosk, have now invested in their own mid mall kiosk.

Our Mobile Promotions Kiosks units also form part of the revenue for this sector and, whilst this business continues to perform to budget, it should be noted that we do not see the customer acquisition sector as a significant driver for the business moving forward.

Promotions

As stated previously, the main driver of growth in the UK promotions division was brand experience activations. This revenue stream enjoyed an unprecedented end to 2023, however, this was followed by a relative lull in bookings in the first quarter of 2024. This seems to have become a trend in the industry and we are mindful of this when setting our budgets and expectations. However, following this quieter period, business rebounded very quickly in Q2 and in June we recorded our best ever brand experience sales, with a multitude of activations across both indoor and outdoor venues including brand activations for Samsung, Chanel, Tesla and many others.

Business continues to look positive for this division although our sight of the pipeline beyond the next 2 to 3 months is always difficult to predict and therefore forecasting for the critical end of year period can be challenging.

We continue to invest in innovation to secure and grow our market and in Q1 2024 we launched CORE (the Campaign Optimiser for Retail and Experiential). This web-based platform has been developed in conjunction with leading brand agencies and in association with industry representatives from the Institute of Promotional Marketing (IPM).

By using CORE, campaign managers, agencies, and brands can gain access to comprehensive insights gleaned from live experiential, sampling and pop up retail activations, including footfall analysis, sample distribution metrics, sign-up rates, and category preferences. Agencies are invited to submit data on an on-going basis via CORE ensuring that the data is always current.

Our retail division continues to play an important role in the business and we have seen some interesting new concepts taking mall space during the year including new offers from challenger optician brands and fragrance retailers. We are also seeing growth in outdoor activity from retailers looking to place service offers in retail parks and from leisure operators seeking large outdoor spaces to place ticketed activities such as circuses.

German and other European Business

The German business continues to perform well under the new contract with ECE and had a good start to the year, operating from an average 115 kiosks across Germany during H1 2024 (H1 2023: 95 units). We took the decision to add to the team in 2024 to enable us to book brand experiences into German venues in addition to our pop up retail offer so costs are slightly higher than anticipated as revenues will take some time to build.

It is our intention to continue to take steps to expand the business beyond the German borders and we have now successfully booked retailers into shopping centres in Austria, France and Luxemburg.

Outlook

Since the half year end, we received the fantastic news that we have retained the contract with Network Rail for a further 5 year period and we have added Southeastern train stations too. Network Rail is an important account for SpaceandPeople and supports our dominance in the brand experience market. This win, combined with the innovative approach that we are taking to developing new physical retail business, our new insights platform and our outreach into European venues beyond Germany means that the company is in good shape to continue to develop and grow. This summer has seen a real increase in interest in experiential campaigns and we therefore hope for a strong Q4 in this sector.

I am, as ever, incredibly grateful to the hard working teams in the UK and Germany, that have delivered these sales. Our results would not be possible without the support of the teams in finance, venue management, operations, compliance and marketing, working closely with our committed and talented sales executives and managers.

Nancy Cullen

Consolidated Group Statement of Comprehensive Income

For the six months ended 30 June 2024

Consolidated Group Statement of Financial Position

As at 30 June 2024

Consolidated Group Statement of Cash Flows

For the six months ended 30 June 2024

Consolidated Group Statement of Changes in Equity

For the six months ended 30 June 2024

Notes to the financial statements

For the six months ended 30 June 2024

1.               General information

SpaceandPeople plc is a limited liability company incorporated and domiciled in Scotland (registered number SC212277) which is quoted on AIM (ticker: SAL).

This condensed consolidated interim financial information has been reviewed, but not audited, by the auditors, and their independent review is set out earlier in this report. It does not constitute statutory accounts as defined by Section 434 of the Companies Act 2006. The financial information for the 12 months to 31 December 2023 has been extracted from the statutory accounts for that period. These published accounts were reported on by the auditors without qualification or an emphasis of matter reference and did not include a statement under section 498 of the Companies Act 2006 and have been delivered to the Registrar of Companies.

This condensed consolidated interim financial information was approved by the board on 20 September 2024.  

2.               Basis of preparation

This condensed consolidated interim financial information for the six months ended 30 June 2024 has been prepared in accordance with IAS 34 'Interim financial reporting'. The condensed consolidated interim financial information should be read in conjunction with the financial statements of the Group for the period ending 31 December 2023 which were prepared on a going concern basis under the historical cost convention in accordance with International Financial Reporting Standards (IFRS) as adopted by the UK, and those parts of the Companies Act 2006 applicable to companies reporting under IFRS.

3.               Accounting policies

The accounting policies adopted in the preparation of the condensed consolidated interim financial information are consistent with those applied in the financial statements of the Group for the year ended 31 December 2023.

Going Concern

The Directors are required to prepare the statutory financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business. In satisfaction of this responsibility the Directors have considered the Group's ability to meet its liabilities as they fall due.

The Group meets its day-to-day cash requirements through working capital management and the use of existing bank overdrafts and loans. Management information tools including budgets and cash flow forecasts are used to monitor and manage current and future liquidity.

The current and future financial position of the Group, including its cash flows and liquidity, continue to be reviewed by the Directors. They take a prudent view of the Group's business in light of current inflationary and other macroeconomic factors impacting on the business, its customers and suppliers. They have also considered the Group's ability to withstand the loss of key contracts and any mitigating actions that would be available to them.

The Group has term loans in place that mature in 2025 and 2027 along with overdraft facilities available until 2025. Financial covenants are in place that reflect the current and budgeted trading position and the Directors are confident of renewing the overdraft facilities in the normal course of business.

The Group continues to manage its cash flows prudently and the Directors are confident that the current resources and available funding facilities will provide sufficient headroom to meet the forecast cash requirements whilst remaining within its financial covenants.

As such, the Directors consider that it is appropriate to prepare the financial statements on the going concern basis.

4.               Segmental reporting

The Group splits its business into two main areas, being promotions and retail. The retail business is further sub-divided into both UK and German territories. The Group maintains its head office in Glasgow and has a subsidiary office in Hamburg, Germany. The Group has determined that these, along with head office functions, are the principal operating segments as the performance of these segments is monitored separately and reviewed by the Board.

The following tables present revenues and loss/profitability regarding the Group's two core business segments - Promotional Sales and Retail, split by geographic area, after licence fees and management charges made between Group companies.

Note: * Revenue restated in accordance with the revised revenue recognition policy explained in note 3 of the financial statements of the Group for the year ended 31 December 2023.

5.               Goodwill

6.                Property, plant and equipment

The right of use lease liabilities are secured against the right of use assets.

7.                Cash & cash equivalents

8.                   Borrowings

At the reporting date the Group had the following borrowings:

As at 30 June 2024, SpaceandPeople plc had £1.0 million (2023: £1.3 million) of CBILS term loans, £0.2 million of which expire in April 2025 and £0.8 million expire in January 2027. SpaceandPeople plc also had £0.75 million of overdraft facilities of which £nil was used as at 30 June 2024 (2023: £nil). The bank facilities are secured by floating charge over the Group's assets and are subject to interest between 3.25% to 3.8% plus base. The Group's CBILS term loans are subject to annual and quarterly rolling covenant tests based on EBITDA performance and the right to defer settlement of the balances disclosed as greater than one year subject to compliance with these covenants.

9.                   Called up share capital

10.                Earnings per share

Earnings per share (EPS) has been calculated using the loss / profit after taxation attributable to owners of the company for the period and the weighted average number of shares in issue.

There are share options outstanding as at the end of each period which, if exercised, would increase the number of shares in issue. However, in the periods to June '24 and June '23, there is an anti-dilutive effect and as such the effects of anti-dilutive potential ordinary shares are ignored in calculating diluted EPS.

Nancy Cullen, Gregor Dunlay and Andrew Keiller will present the interim results to retail investors via Investor Meet Company (IMC) on Monday, 23 September 2024, at 2:15pm.

The meeting is open to all existing and potential shareholders. Questions can be submitted before the event through the IMC dashboard or at any time during the presentation.

Investors can sign up to Investor Meet Company for free, follow SpaceandPeople and gain access to the meeting via: https://www.investormeetcompany.com/spaceandpeople-plc/register-investor

Investor feedback

Please take a moment to share your feedback on SpaceandPeople and your thoughts on this announcement here: https://www.investormeetcompany.com/feedback/9d0e228e-fdd8-4ae0-9439-038a3cb81e2c