Final Results

RNS Number : 4062C

Everyman Media Group PLC

17 March 2014

 



Everyman Media Group plc ("the Group")

Preliminary results for the year ended 31 December 2013

Highlights

·     Revenue for the year up 27% to £11,515,000 (2012: £9,102,000)

·     Admissions up 15% on last year to 771,323 (2012: 668,536)

·     Spend per head up 6% on last year to £13.07 (2012: £12.32)

·     EBITDA of £1,036,000 (2012: £1,055,000)

·     Cash flows from operating activities increased to £2,390,000 (2012: £897,000)

·     Cash held at year end of £8,883,000 (2012: £3,630,000)

·     Three screen cinema and restaurant opened in Leeds in H1 2013

·     Successful admission to AIM, raising £7.0 million

·     Well positioned to continue expansion with three new cinema venues signed and further new venues in the pipeline

Enquiries

Everyman Media Group plc                                                       Tel: [phone]

Andrew Myers, Chief Executive

Cenkos Securities (NOMAD and Broker)                               Tel: [phone]

Bobbie Hilliam/Harry Pardoe

Chairman's Statement

I am pleased to report the Group's results for the year ended 31 December 2013. In November 2013 the Group became a public company, successfully listing on AIM.  A new venue was opened in Leeds which coupled with the refurbishment of existing sites, has helped grow revenue 27% to £11.5m.

The Group's underlying operating profit before pre-opening expenses, exceptional items and share-based payments was £365,000 (2012: £550,000). The Group incurred a loss for the year of £704,000 (2012: profit of £117,000). Overall, the financial performance of the Group after all expenses and taxation is in line with Board's expectations.

Review of the business

We are one of the leading independent cinema groups in the UK in terms of cinema venues, screens and admissions, with a portfolio of ten venues and 20 screens operating under the 'Everyman' brand. Based on market information available, the Group's portfolio of ten venues in the United Kingdom represents approximately 0.46 percent of the total number of screens in the United Kingdom. In 2013, the Group received 0.74 percent of all box office revenues for cinemas in the United Kingdom (Source: Rentrak EDI). The Board believes there is significant growth potential for an independent cinema chain within the UK.

The 'Everyman' brand continues to be positioned at the premium end of the UK cinema market. The Group offering focuses on smaller capacity venues that prioritise customer comfort and service.

In addition to the Group's commitment to expand the estate, the Board is confident that there is scope to increase box office sales, retail spend per customer and other revenue streams from its existing venues through general marketing, advertising and promotion of the 'Everyman' brand.

Results

Revenue for the year was up 27% on last year to £11,515,000 (2012: £9,102,000).

The result for 2013 includes two exceptional charges: IPO expenses of £282,000 relating to the flotation on AIM and an additional share-based payment expense of £250,000 arising from the acceleration on listing of the Group's previous share-option plan.

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

Openings

In April 2013, the Group opened a new three screen site as well as a private screening lounge, outdoor terrace and bar and restaurant in the heart of Leeds city centre.

The Group will be opening new sites at the Mailbox in Birmingham (late 2014), and Canary Wharf in London (mid 2015). There are a number of other sites which are already in the pipeline and at various stages of negotiation. Additionally the Group has acquired additional space adjacent to our existing site in Hampstead which will be used to expand the food offer.

Cash flows

Cash flows from operating activities increased to £2,390,000 (2012: £897,000). Net cash outflow for the year before financing was £1,793,000 (2012: £790,000). This is largely represented by capital expenditure on the expansion of the business through the opening and acquisition of the above sites and inflows from financings.

Chairman's Statement continued

Cash held at the end of the year was £8,883,000 (2012: £3,630,000). The cash held will be invested in the continuing development and expansion of the Group's business in 2014.

Pre-opening costs

Pre-opening costs, which have been expensed within administrative expenses, were £125,000 (2012: £33,000).  These costs include expenses, net of the effect of rent free periods, which are necessarily incurred in the period prior to a new unit being opened, but which are specific to the opening of that unit.

Staff

As ever, our dedicated staff have contributed significantly to the development of the Group throughout the year and I would like to take this opportunity of thanking them again for their hard work and effort.

Current Trading

Since the year end trading has been in line with expectations and there remains a strong pipeline of new opportunities.

Paul Wise

Chairman

14 March 2014

Consolidated statement of comprehensive income

			Year  ended	Year  ended
			31 December	31 December
			2013	2012
			£'000	£000
	Revenue		11,515	9,102
	Cost of sales		(4,699)	(3,861)
	Gross profit		6,816	5,241
	Administrative expenses		(7,102)	(4,936)
	Exceptional items:
	Accelerated share-based payment on listing		(250)	-
	IPO expenses		(282)	-
	Total administrative expenses		(7,634)	(4,936)
	(Loss)/profit from operations		(818)	305
	Adjusted profit from operations (before exceptional items, pre-opening expenses, and share-based payment expense)		365	550
	Exceptional items (as above)		(532)	-
	Pre-opening expenses		(125)	(33)
	Share based payment expense		(526)	(212)
	(Loss)/profit from operations		(818)	305
	Financial income		120	53
	Financial expenses		(83)	(103)
	(Loss)/profit before taxation		(781)	255
	Income tax credit/(expense)		77	(138)
	(Loss)/profit  for the year and total comprehensive income attributable to equity holders of the parent company		(704)	117
	Basic (loss)/earnings per share - pence		(2.42)	0.40
	Diluted (loss)/earnings per share - pence		(2.42)	0.40

All amounts relate to continuing activities.

There were no other recognised gains and losses in the year.

Consolidated statement of financial position
		31 December	31 December	31 December
		2013	2012	2011
		£000	£000	£000
Assets
Non-current assets
Property, plant and equipment		7,988	4,465	2,634
Goodwill		782	782	782
		8,770	5,247	3,416
Current assets
Inventories		98	67	44
Trade and other receivables		510	673	443
Cash and cash equivalents		8,883	3,630	1,152
		9,491	4,370	1,639
Total assets		18,261	9,617	5,055
Current liabilities
Trade and other payables		4,657	3,028	2,155
Loans and borrowings		76	401	522
Current corporation tax liabilities		-	-	-
Total current liabilities		4,733	3,429	2,677
Non-current liabilities
Loans and borrowings		254	-	-
Derivative financial instruments		195	304	342
Deferred tax		172	249	221
		621	553	563
Total liabilities		5,354	3,982	3,240
Net assets		12,907	5,635	1,815
Equity and liabilities
Equity attributable to owners of the Company
Ordinary shares		3,629	2,786	2,786
Share Premium		5,774	-	-
Merger reserve		11,152	10,569	7,078
Retained deficit		(7,648)	(7,720)	(8,049)
Total equity		12,907	5,635	1,815

Consolidated statement of cash flows	31 December 2013	31 December 2013
	£000	£000
Cash flows from operating activities
(Loss)/profit from operations	(818)	305
Depreciation	671	505
Share-based payment	776	212
Corporation tax paid	-	-
	629	1,022
Increase in inventories	(31)	(23)
Decrease/(increase) in trade and other receivables	163	(229)
Increase in trade and other payables	1,629	127
Net cash generated from operating activities	2,390	897
Cash flows from investing activities
Purchase of property, plant and equipment	(4,194)	(1,702)
Interest received	11	15
Net cash generated used in investing activities	(4,183)	(1,687)
Proceeds from the issuance of ordinary shares	7,000	3,500
Share issue expenses	(383)	(9)
Repayment of bank borrowings	(401)	(108)
Receipt of bank loans	330	-
Repayment of finance lease borrowings	-	(12)
Proceeds from issuance of shares in subsidiary undertaking	583	-
Interest paid	(83)	(103)
Net cash generated from financing activities	7,046	3,268
Net increase in cash and cash equivalents	5,253	2,478
Cash and cash equivalents at the beginning of the year	3,630	1,152
Cash and cash equivalents at the end of the year	8,883	3,630

Consolidated statement of changes in equity		Share	Share	Merger	Retained	Total
		capital	premium	reserve	deficit	Equity
		£000	£000	£000	£000	£000
At 1 January 2012 as originally stated		2,786	-	7,078	(7,711)	2,153
Effect of transition to IFRS		-	-	-	(338)	(338)
Balance at 1 January 2012 restated		2,786	-	7,078	(8,049)	1,815
Profit for the year		-	-	-	117	117
Total comprehensive income for the year		-	-	-	117	117
Shares issued by subsidiary undertaking in the period		-	-	3,500	-	3,500
Share issue expenses incurred by subsidiary		-	-	(9)	-	(9)
Share-based payments		-	-	-	212	212
Total contributions by owners of the parent		-	-	3,491	212	3,703
Balance at 31 December 2012		2,786	-	10,569	(7,720)	5,635

Consolidated statement of changes in equity continued	Share	Share	Merger	Retained	Total
	capital	premium	reserve	deficit	Equity
	£000	£000	£000	£000	£000
At 1 January 2013 as originally stated	2,786	-	10,569	(7,477)	5,878
Effect of transition to IFRS	-	-	-	(243)	(243)
Balance at 1 January 2013 restated	2,786	-	10,569	(7,720)	5,635
Loss for the year	-	-	-	(704)	(704)
Total comprehensive income for the year	-	-	-	(704)	(704)
Shares issued in the period	843	6,157	-	-	7,000
Share issue expenses	-	(383)	-	-	(383)
Shares issued by subsidiary undertaking in the period	-	-	583	-	583
Share-based payments	-	-	-	776	776
Total contributions by owners of the parent	843	5,774	583	776	7,976
Balance at 31 December 2013	3,629	5,774	11,152	(7,648)	12,907

The following describes the nature and purpose of each reserve within owners' equity:
Share capital	Amount subscribed for shares at nominal value.
Share premium	Amount subscribed for share capital in excess of nominal value less attributable share-issue expenses.
Merger reserve	Amounts attributable to equity in respect of merged subsidiary undertakings.
Retained deficit	Cumulative loss of the Group attributable to equity shareholders.

Notes

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. The Company is a public company 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. The Company was incorporated on 10 September 2013 for the purpose of becoming the new parent undertaking of the Group.
2	Basis of preparation and accounting policies
	The consolidated financial information, which represents the results of the Company and its subsidiaries,  has been prepared in accordance with International Financial Reporting Standards and IFRC Interpretations issued by the International Accounting Standards Board (together "IFRSs) as adopted by the European Union (EU). This is the first time that IFRSs have been adopted and IFRS 1 First-time Adoption of International financial Reporting Standards has been applied. The Company financial statements have been prepared in accordance with IFRSs from the date of incorporation. The principal accounting policies applied by the Group in the preparation of these consolidated financial statements for the years ended 31 December 2012 and 31 December 2013 are set out below. This is the first year in which IFRSs have been adopted. These policies have been consistently applied to all periods presented. The financial information set out in this announcement does not constitute the Company's statutory accounts for the year ended 31 December 2013 or the year ended 31 December 2012. Statutory accounts for the year ended 31 December 2013 and the year ended 31 December 2012 have been reported on by the Independent Auditors. The Independent Auditors' Report on the Annual Report and Financial Statement for both periods was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006. The statutory accounts for year ended 31 December 2013 will be delivered to the registrar in due course.
	Basis of consolidation Where the Group has power, either directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities, it is classified as a subsidiary.  The statement of financial position at 31 December 2013 incorporates the results of all subsidiaries of the Group for all years and periods, as set out in the basis of preparation. Capital reorganisation and the merger reserve On 29 October 2013 the Company was formed to become the new holding company for the Group. This was put into effect through a share-for-share exchange of one ordinary share of 10 pence in EMG plc for one ordinary share of 10 pence in Everyman Media Holdings Limited (previously Everyman Media Group Limited) ("EMHL"), the previous holding company for the Group.  The value of one share in the Company was equivalent to the value of one share in EMHL.  The accounting treatment for group reorganisations is scoped out of IFRS3. Accordingly, as required under IAS8 Accounting Policies, Changes in Accounting Estimates and Errors the Group has referred to current UK GAAP to assist its judgement in identifying a suitable accounting policy.  The introduction of the new holding company has been accounted for as a capital reorganisation using the merger accounting principles prescribed under current UK GAAP. Therefore the consolidated financial statements EMG plc are presented as if EMG plc has always been the holding company for the Group. The introduction of the new holding company constitutes a Group reconstruction and has been accounted for using merger accounting principles. Therefore the consolidated financial statements are presented as if EMG plc has always been the holding company for the Group and the share capital issued on this date treated as if issued in the earliest year presented. The use of merger accounting principles has resulted in a balance on Group capital and reserves which has been classified as a merger reserve and included in the Group's shareholders' funds. The consolidated financial statements include the results of the Company and all its subsidiary undertakings made up to the same accounting date. The Company has recognised the value of its investment in Everyman Media Holdings Limited at fair-value based upon the initial share placing price on admission to AIM. This is a Level 2 valuation within the fair-value hierarchy. As permitted by S612 of the Companies Act 2006 the amount attributable to share premium has been transferred to the merger reserve. The investment in the Company is recorded at fair-value.
3		Revenue Revenue is wholly attributable to the principal activity of the Group and arises solely in the United Kingdom.

4	(Loss)/profit  before taxation
	(Loss)/profit before taxation is after charging/(crediting):	31 December 2013 Group	31 December 2013 Group
		£000	£000
	Depreciation	671	505
	Operating lease rentals	913	597
	Share-based payment expense	776	212
	Employee costs	2,957	2,260

5	Exceptional items of expenditure	31 December	31 December
		2013 Group	2012 Group
		£	£
	Accelerated share-based payment on listing	250	-
	IPO expenses	282	-
		532	-

On 29 October 2013 the previous share option scheme within the Group, based upon ordinary shares within Everyman Media Holdings Limited was accelerated on listing and a new share-incentive scheme put in place. The options related to the previous scheme were exercised, the vesting periods and the associated share-based payments expense being advanced.

On 7 November 2013 the Company was admitted to the AIM market and an associated placing of shares was made. The total costs were £665,000 of which £383,000 were attributed to share premium.

6	Income tax	31 December	31 December
		2013 Group	2012 Group
		£000	£000
	Current tax (credit)/expense
	Current  tax	-	111
	Deferred tax:
	Origination and reversal of temporary differences	(77)	27
	Total tax (credit)/expense	(77)	138

The reasons for the difference between the actual tax (credit)/charge for the year and the standard rate of corporation tax in the United Kingdom applied to (loss)/profit for the year as follows:

		31 December	31 December
		2013 Group	2012 Group
		£000	£000
	(Loss)/profit before tax	(781)	255
	Applied corporation tax rates:	23.25%	24.50%
	Tax at the UK corporation tax rate of 23.25%/24.5%	(182)	63
	Expenses not deductible for tax purposes	65	75
	Net effect of share options exercised	(65)	-
	Effect of change in tax rates	9	-
	Under provision in prior years	106	-
	Effect of other differences	(10)	-
	Total tax (credit)/expense	(77)	138

7	(Loss)/earnings per share	31 December	31 December
		2013 Group	2012 Group
		£000	£000
	(Loss)/profit used in calculating basic and diluted (loss)/earnings per share	(704)	117
	Number of shares
	Weighted average number of shares for the purpose of basic earnings per share	29,128,127	27,857,290
	Weighted average number of shares for the purpose of diluted earnings per share	29,128,127	27,857,290
	Basic (loss)/earnings per share (pence per share)	(2.42)	0.40
	Diluted (loss)/ earnings per share (pence per share)	(2.42)	0.40

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

Where the Group has incurred a loss in a year or period the diluted earnings per share is the same as the basic earnings per share as the loss has an anti-dilutive effect. The diluted loss per share for 2013 is therefore the same as the basic loss per share for the year and the diluted weighted average number of shares is the same as the basic weighted average number of shares.

The Company has 3,296,441 potentially issuable shares all of which relate to the potential dilution from the Group's 'A' shares and share-options issued to the Directors and certain employees.

 

END

 

 

FR USOWRSSAOAAR