Preliminary Results

RNS Number : 7652I

Everyman Media Group PLC

30 March 2015

 

Everyman Media Group plc

('Everyman' or the 'Company')

Preliminary results for the year ended 31 December 2014

Highlights

·     Revenue for the year up 22% to £14,096,000 (2013: £11,515,000)

·     Admissions up 5% on last year to 808,316  (2013: 771,323)

·     Spend per head up 19% on last year to £15.54 (2013: £13.07)

·     EBITDA of £1,370,000 (2013: £1,036,000)

·     Cash held at year end of £6,363,000 (2013: £8,883,000)

·     Well positioned to continue expansion with a new site at the Mailbox in Birmingham opened in February 2015 and a further site in Canary Wharf in London to open mid-2015.

·     The Group has exchanged contracts on three further sites at Bristol, Harrogate and Cirencester and is in various stages of negotiation on a number of other new opportunities.

Enquiries

Everyman Media Group plc                                                        Tel: [phone]

Crispin Lilly, 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 2014.

Overall, the financial performance of the Group after all expenses and taxation is in line with the 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 eleven venues and 22 screens operating under the 'Everyman' brand as of March 2015.

The Everyman proposition focuses on delivering a high quality, intimate experience within smaller capacity venues that prioritise customer comfort and service. We believe this significantly enhances the cinema-going experience and is consistent with our ambitions to grow a strong leisure brand. The Board believes that there is significant growth for this model within the UK.

In addition to the Group's commitment to expand the estate, the Board is confident that the growth delivered in 2014 in average ticket price and retail spend per customer can be continued going forward as well as there being opportunities to increase other revenue streams from its existing venues through general marketing, advertising and promotion of the 'Everyman' brand.

Further to the appointment of Crispin Lilly as CEO on December 1st 2014, we are also pleased to announce that Jonathan Peters ACA will be joining Everyman as Group Finance Director as of 30th March 2015.

Results

Revenue for the year was up 22% on last year to £14,096,000 (2013: £11,515,000).

The Group's underlying operating profit before pre-opening expenses, exceptional items and share-based payments was £557,000 (2013: £365,000). The Group achieved a profit for the year of £195,000 (2013: loss of £704,000).

The result for 2014 includes total share-based payment expenses of £50,000 (2013: £526,000). The Board does not recommend the payment of a dividend at this stage of the Group's development.

Openings

In May 2014, the Group opened up a restaurant in London under the Spielburger brand. In July 2014, the Group also opened a new screen as part of the Leeds site.

The Group has opened a new site at the Mailbox in Birmingham (February 2015), and will open a further site in Canary Wharf in London (mid 2015). The Group has exchanged contracts on three further sites at Bristol, Harrogate and Cirencester and is in various stages of negotiation on a number of other opportunities

The Group also plans to invest in refurbishing some of its older cinemas during 2015, following the success of a similar project in Walton-On-Thames. 

The Group commissioned a number of marketing projects in 2014 with the purpose of increasing brand awareness with new customers of both existing and planned locations.  These included a pop-up venue at Battersea Power Station and a temporary venue at Selfridges, London.

Cash flows

Cash flows from operating activities were £2,187,000 (2013: £2,390,000). Net cash outflow for the year before financing was £2,389,000 (2013: £1,793,000). This is largely represented by capital expenditure on the expansion of the business through the opening and acquisition of the above sites.

Cash held at the end of the year was £6,363,000 (2013: £8,883,000). The cash held will be invested in the continuing development and expansion of the Group's business in 2015.

Pre-opening costs

Pre-opening costs, which have been expensed within administrative expenses, were £205,000 (2013: £125,000). 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

A key part of the Everyman model and our success is our people, from our teams at venue to our head office support. As always I would like to thank them for their enthusiasm, dedication and passion.

Current Trading

Since the year end trading has been in line with expectations, and the film release schedule for 2015 is encouraging.

Future of the Company

These are exciting times and we are continually looking at ways to enhance our offering and the potential return to shareholders.

Paul Wise

Chairman

27 March 2015

 

Strategic Report

The Directors present their strategic report for the Group for the year ended 31 December 2014.

Principal activities and review of the business

The Group is a leading independent cinema group in the UK. The principal activity of the Company is that of a holding company.

Results

The Group made a profit after taxation of £195,000 (2013: loss of £704,000).

Development of the Group's business

In 2014 the UK cinema market generated £1.14 billion (2013: £1.2billion) of gross box office receipts (Source: Rentrak EDI). The Box Office contribution from the independent, non-multiplex chains (including the Group's venues) increased in the year by 6% delivering 19.9% growth in market contribution (2013: 18.3%), whilst Everyman's contribution increased more than 8% in the same period.

The Directors believe that the cinema market sector continues to be strong and will continue to grow in the years ahead, with takings from niche and/or independent operators being the highest growth segment of the market. The Group believes that customers who are over the age of 25 will remain the fastest growing sector of this market.

Based on market information available to the Directors, the Group's portfolio of 10 permanent sites (19 screens) in the United Kingdom at the end of 2014 represented approximately 0.48% of the total number of screens in the United Kingdom (2013: 10 sites (18 screens), 0.46% of screens). In 2014, the Group delivered 0.51% of all admissions (2013: 0.47%) (Source: CEA/CAA) and 0.90% of all gross box office revenue (2013: 0.74%) in the United Kingdom (Source: Rentrak EDI).

With the opening of Birmingham Mailbox in February 2015, the Group currently has venues in the following locations:

Location	No. of screens	Number of seats	Private Rooms
Birmingham - Mailbox	3	328	-
Leeds - Trinity	4	532	1
London - Baker Street	2	162	-
London - Belsize Park	1	129	-
London - Hampstead	2	209	1
London - Islington	1	125	-
London - Maida Vale	2	150	-
Oxted, Surrey	1	373	-
Reigate, Surrey	2	282	-
Walton-On-Thames, Surrey	2	158	-
Winchester, Hampshire	2	384	-
Total	22	2,832	2

In addition:

·     The Group has been operating a temporary one screen venue as part of a joint venture in Selfridges, London. This venue came into operation in September 2014 and will cease, as planned, in April 2015.

·     The Group opened a small burger restaurant adjacent to their venue in Hampstead in 2014.

The Group has exchanged contracts on new leases for sites in Canary Wharf (opening May 2015), Bristol, Harrogate and Cirencester (all due to open by the end of 2016).

The Everyman Offering

The Everyman brand is positioned at the premium end of the UK cinema market. The Group proposition focuses on smaller capacity, intimate venues, usually in more central, high street locations, and which prioritise customer comfort and service.

The Group seeks to deliver an exceptional experience to each customer every time they watch a film at an Everyman venue. This is done by combining the strengths of our cinema design with a strong, credible food and drink offer, expansive programming and high levels of customer service.

Everyman shows a range of current and classic films alongside event cinema productions. Each venue is fitted with digital projectors, all with high end digital sound systems and many screens with RealD 3D technology.

Growth Strategy

The Directors believe the opportunities for more Everyman venues within the UK are significant. This will be through the delivery of new locations (either as part of new build developments or into spaces within existing buildings) or through the acquisition of existing cinemas.

Continuing expansion will be financed from current resources, retained earnings and, where appropriate, further financing.

The Group has a rolling programme of maintenance and refurbishment throughout its portfolio which the Board believes helps increase box office sales and retail spend per customer. In addition to the rolling maintenance programme the Board has, and will continue to undertake, major refurbishment of existing venues where attractive returns can be achieved.

As the Group continues to expand across the country, the Board believes that there is an increasing opportunity to grow admissions and advertising revenue through development of its marketing assets, its membership programme and through working more proactively with Distributor partners in driving awareness for both the venues and the films shown.

Key Performance Indicators (KPIs)

Revenue for the year was up 22% on last year to £14,096,000 (2013: £11,515,000). The growth in revenue in the current year reflects the effect of an increase in the number of admissions; an increase in box-office yield and an improved spend, by person, 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:

		31 December	31 December
		2014 Group	2013 Group
	Admissions	808,316	771,323
	Box-office-spend per head	£10.44	£9.25
	Food & Beverage spend per head	£5.10	£3.82
	Total spend per head	£15.54	£13.07

For each year shown above 'Admissions' represent the number of seats sold, one per person, at the Group's cinema venues. 'Box-office-spend' per head represents the average ticket price for each seat sold. 'Food and Beverage spend per head' represents the average-spend per person at the Group's cinema venues. These are the key financial and management statistics employed by management.

Competition

There are three major exhibitors in the UK cinema industry, Odeon UCI, Cineworld (including the Picturehouse brand) and Vue - together accounting for 70% of the UK/Ireland box office in 2014 (source: Rentrak). The remainder of the market consists of smaller circuits and independent cinema operators. The Board does not believe the Group competes with the multiplex offer on price, customer proposition or new site locations.

The Everyman offer is focused on the overall experience as opposed to relying exclusively on the film content. The film product will always be integral to this and the Board believes that the Group's customers are interested in seeing a wider range of programming at its venues as a result.

The cinema industry has seen a number of mergers and acquisitions in recent years. The Directors expect corporate activity to continue within the sector.

On behalf of the Board

C Lilly

CEO

27 March 2015

 

Consolidated statement of comprehensive income

				Year  ended	Year  ended
				31 December	31 December
				2014	2013
				£000	£000
	Revenue			14,096	11,515
	Cost of sales			(5,793)	(4,699)
	Gross profit			8,303	6,816
	Administrative expenses			(8,001)	(7,102)
	Exceptional items:
	Accelerated share-based payment on listing			-	(250)
	IPO expenses			-	(282)
	Total administrative expenses			(8,001)	(7,634)
	Profit/(loss) from operations			302	(818)
	Adjusted profit from operations (before exceptional items, pre-opening expenses, and share-based payment expense)			557	365
	Exceptional items (as above)			-	(532)
	Pre-opening expenses			(205)	(125)
	Share based payment expense			(50)	(526)
	Profit/(loss) from operations			302	(818)
	Financial income			42	120
	Financial expenses			(78)	(83)
	Profit/(loss) before taxation			266	(781)
	Income tax (expense)/credit			(71)	77
	Profit/(loss) for the year and total comprehensive income attributable to equity holders of the parent company			195	(704)
	Basic earnings/(loss) per share - pence			0.54	(2.42)
	Diluted earnings/(loss) per share - pence			0.53	(2.42)

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
				2014	2013
				£000	£000
	Assets
	Non-current assets
	Property, plant and equipment			10,819	7,988
	Goodwill			782	782
				11,601	8,770
	Current assets
	Inventories			91	98
	Trade and other receivables			2,020	510
	Cash and cash equivalents			6,363	8,883
				8,474	9,491
	Total assets			20,075	18,261
	Current liabilities
	Trade and other payables			6,045	4,657
	Loans and borrowings			76	76
	Current corporation tax liabilities			52	-
	Total current liabilities			6,173	4,733
	Non-current liabilities
	Loans and borrowings			193	254
	Derivative financial instruments			203	195
	Deferred tax			354	172
				750	621
	Total liabilities			6,923	5,354
	Net assets			13,152	12,907
	Equity
	Equity attributable to owners of the Company
	Ordinary shares			3,629	3,629
	Share premium			5,774	5,774
	Merger reserve			11,152	11,152
	Retained deficit			(7,403)	(7,648)
	Total equity			13,152	12,907

The financial statements were approved by the Board of Directors and authorised for issue on 27 March 2015.

 

Consolidated statement of changes in equity	Share	Share	Merger	Retained	Total
	capital	premium	reserve	deficit	equity
	£000	£000	£000	£000	£000
Balance at 1 January 2014	3,629	5,774	11,152	(7,648)	12,907
Profit for the year	-	-	-	195	195
Total comprehensive income for the year	-	-	-	195	195
Share-based payments	-	-	-	50	50
Total contributions by owners of the parent	-	-	-	50	50
Balance at 31 December 2014	3,629	5,774	11,152	(7,403)	13,152

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.

Consolidated statement of changes in equity continued	Share	Share	Merger	Retained	Total
	capital	premium	reserve	deficit	equity
	£000	£000	£000	£000	£000
Balance at 1 January 2013	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.

Consolidated statement of cash flows	31 December	31 December
	2014	2013
	£000	£000
Cash flows from operating activities
Profit/(loss) from operations	302	(818)
Depreciation	813	671
Share-based payment	50	776
	1,165	629
Decrease/(increase) in inventories	7	(31)
(Increase)/decrease in trade and other receivables	(535)	163
Increase in trade and other payables	1,550	1,629
Net cash generated from operating activities	2,187	2,390
Cash flows from investing activities
Purchase of property, plant and equipment	(3,644)	(4,194)
Deposit on long-leasehold property	(975)	-
Interest received	43	11
Net cash used in investing activities	(4,576)	(4,183)
Cash flows from financing activities
Proceeds from the issuance of ordinary shares	-	7,000
Share issue expenses	-	(383)
Repayment of bank borrowings	(61)	(401)
Receipt of bank loans	-	330
Proceeds from issuance of shares in subsidiary undertaking	-	583
Interest paid	(70)	(83)
Net cash used in financing activities	(131)	7,046
Net (decrease)/increase in cash and cash equivalents	(2,520)	5,253
Cash and cash equivalents at the beginning of the year	8,883	3,630
Cash and cash equivalents at the end of the year	6,363	8,883

All cash transactions relating to the Company were enacted through subsidiary undertakings and no statement of cash flows is presented for the Company.

Company statement of financial position		Registered company number:  08684079
		31 December	31 December
		2014	2013
		£000	£000
Assets
Non-current assets
Investments		23,700	23,643
Current assets
Trade and other receivables		6,567	6,624
Total assets		30,267	30,267
Current liabilities
Trade and other payables		277	288
Total liabilities		277	288
Net assets		29,990	29,979
Equity
Equity attributable to owners of the Company
Ordinary shares		3,629	3,629
Share premium		5,774	5,774
Merger reserve		20,336	20,336
Retained earnings		251	240
Total equity		29,990	29,979

Company statement of changes in equity	Share	Share	Merger	Retained	Total
	capital	premium	reserve	earnings	equity
	£000	£000	£000	£000	£000
At 1 January 2014	3,629	5,774	20,336	240	29,979
Loss for the period	-		-	(39)	(39)
Total comprehensive income for the year	-	-	-	(39)	(39)
Share-based payments	-	-	-	50	50
Total contributions by owners of the parent	-	-	-	50	50
Balance at 31 December 2014	3,629	5,774	20,336	251	29,990

Company statement of changes in equity	Share	Share	Merger	Retained	Total
	capital	premium	Reserve	earnings	Equity
	£000	£000	£000	£000	£000
At 10 September 2013	-	-	-	-	-
Loss for the period	-		-	(285)	(285)
Total comprehensive income for the year	-	-	-	(285)	(285)
Shares issued in the period	3,629	6,157	-	-	9,786
Share issue expenses	-	(383)	-	-	(383)
Investment in Everyman Media Holdings Limited	-	-	20,336	-	20,336
Share-based payments	-	-	-	525	525
Total contributions by owners of the parent	3,629	5,774	20,336	525	30,264
Balance at 31 December 2013	3,629	5,774	20,336	240	29,979

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 merger relief received.
Retained earnings	Cumulative profits of the Company attributable to equity shareholders.

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.
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). The Company financial statements have been prepared in accordance with IFRSs from the date of incorporation. The financial information set out in this announcement does not constitute the Group or Company's statutory accounts for the year ended 31 December 2014 or the year ended 31 December 2013. Statutory accounts for the year ended 31 December 2014 and the year ended 31 December 2013 have been reported on by the Independent Auditors. The Independent Auditors' report on the Annual report and financial statements for both periods 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. The statutory accounts for the year ended 31 December 2014 will be delivered to the registrar in due course. The principal accounting policies applied by the Group in the preparation of these consolidated financial statements for the years ended 31 December 2013 and 31 December 2014 are set out below. These policies have been consistently applied to all periods presented. Companies Act s408 exemption The Company has taken advantage of the exemptions allowed under section 408 of the Companies Act 2006 and has not presented its own statement of comprehensive income in these financial statements. The profit for the year included a loss on ordinary activities after tax of £39,000 in respect of the Company (2013: a loss of £285,000 for the period 10 September 2013 to 31 December 2013). The Company had no other items of comprehensive income in the year.
	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 have the ability to affect the amount of the investor returns, and has exposure or rights to variable returns from its involvement with the investee, it is classified as a subsidiary. The statement of financial position at 31 December 2014 incorporates the results of all subsidiaries of the Group for all years and periods, as set out in the basis of preparation. Basis of preparation and accounting policies continued Merger reserve On 29 October 2013 the Company became 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 Company was incorporated on 10 September 2013. 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. 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. Revenue Recognition Revenue for the Group is measured at the fair value of the consideration received or receivable. The Group recognises revenue for services provided when the amount of revenue can be reliably measured and it is probable that future economic benefits will flow to the entity. The Group's revenues from film and entertainment activities are recognised on completion of the showing of the relevant film. The Group's revenues for 'food and beverages' are recognised at the point-of-sale. The Group's other revenues, which include commissions, are recognised when all performance conditions have been satisfied. All advanced booking fees and similar income which are received in advance of the related performance are classified as deferred revenue and shown as a liability until completion of the performance.
	Retirement Benefits: Defined contribution schemes Contributions to defined contribution schemes are charged to the consolidated statement of comprehensive income in the year to which they relate.
	Goodwill Goodwill represents the excess of the costs of a business combination over the total acquisition date fair values of the identifiable assets, liabilities and contingent liabilities acquired. Goodwill is capitalised as an intangible asset and is tested for impairment annually. For business combinations completed prior to 1 January 2010, cost comprised the fair value of assets given, liabilities assumed and equity instruments issued, plus any direct costs of acquisition. There are no business combinations after this year.
	When the carrying value of goodwill exceeds its recoverable amount, the carrying value of goodwill is written down accordingly in other comprehensive income. The carrying value of goodwill is tested at group level which is the single segment in which the Group operates. An impairment loss recognised for goodwill is not reversed. Any impairment in carrying value is charged to the consolidated statement of comprehensive income.
	Property, plant and equipment Items of property, plant and equipment are initially recognised at cost. As well as the purchase price, cost includes directly attributable costs. Depreciation on assets under construction does not commence until they are complete and available for use. These assets represent 'fit-outs'. Depreciation is provided on all other leasehold improvements and all other items of property, plant and equipment so as to write off their carrying value over the expected useful economic lives. It is provided at the following annual rates: Leasehold improvement               -         Straight line on cost over the remaining life of the lease Plant and machinery                      -          10% to 20% on cost on a straight-line basis Fixtures and fittings                       -          10% to 25% on cost on a straight-line basis
	Inventories
	Inventories are valued at the lower of cost and net realisable value. Cost incurred in bringing each product to its present location and condition is accounted for as follows: Food and beverages - purchase cost on a first-in, first-out basis. Net realisable value is the estimated selling price in the ordinary course of business.
	Cash and cash equivalents
	Cash and cash equivalents comprise cash.
	Financial liabilities All financial liabilities are recognised initially at fair value and subsequently at amortised cost. The Group's interest-rate swap is classified as a financial liability.
	Derivative financial instruments
	Derivative financial instruments within the scope of IAS 39 are classified as financial assets or liabilities at fair-value through profit and loss. Changes to fair value are made through the income statement. All derivative financial instruments are recognised initially at fair value. The subsequent measurement of derivative financial instruments is also at fair-value. Financial assets at fair value through profit and loss are carried in the statement of financial position at fair value with net changes in fair value recognised in finance costs in the income statement.
	Fair Value Hierarchy All financial instruments measured at fair value must be classified into one of the levels below: ·     Level 1: Quoted prices, in active markets ·     Level 2: Level 1 quoted prices are not allowable but fair value is based on observable market data. ·     Level 3: Inputs that are not based on observable market data.
	Share Capital Financial instruments issued by the Group are treated as equity only to the extent that they do not meet the definition of a financial liability. The Group's ordinary shares are classified as equity instruments.
	Leased Assets Where substantially all of the risks and rewards incidental to ownership are not transferred to the Group (an 'operating lease'), the total rentals payable under the lease are charged to the consolidated statement of comprehensive income on a straight line basis over the lease term. The aggregate benefit of lease incentives is recognised as a reduction of the rental expense over the lease term.   Finance leases, which transfer to the Group substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are reflected in profit or loss.
	Deferred taxation Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the consolidated statement of financial position differs from its tax base, except for differences arising on: ·     the initial recognition of goodwill; ·     the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction affects neither accounting or taxable profit; and ·     investments in subsidiaries and jointly controlled entities where the Group is able to control the timing of the reversal of the difference and it is probable that the difference will not reverse in the foreseeable future.
	Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be available against which the difference can be utilised.
	The amount of the asset or liability is determined using tax rates that have been enacted or substantively enacted by the reporting date and are expected to apply when the deferred tax liabilities or assets are settled or recovered. Deferred tax balances are not discounted.
	Deferred tax assets and liabilities are offset when the Group has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority on either: ·     the same taxable group company; or ·     different company entities which intend either to settle current tax assets and liabilities on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax assets and liabilities are expected to be settled or recovered.
	Share-based payments
	Certain employees (including Directors and senior executives) of the Group receive remuneration in the form of share-based payment transactions, whereby employees render services as consideration for equity instruments ('equity-settled transactions'). The cost of equity-settled transactions with employees is measured by reference to the fair value at the date on which they are granted. The fair value is determined by using an appropriate pricing model. The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award ('the vesting date'). The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group's best estimate of the number of equity instruments that will ultimately vest. The profit or loss charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period. No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition, which are treated as vesting irrespective of whether or not the market condition is satisfied, provided that all other performance and/or service conditions are satisfied. The dilutive effect of outstanding options is reflected as additional share dilution in the computation of earnings per share.
	Operating Segments The Board considers that the Group's project activity constitutes one reporting segment, as defined under IFRS 8. Operationally cinemas and restaurants are managed separately. These are reported together as one unit. The total profit measures are operating profit and profit for the year, both disclosed on the face of the consolidated income statement. No differences exist between the basis of preparation of the performance measures used by management and the figures used in the group financial information. All of the revenues generated relate to cinema ticket receipts, sales of foods and beverages and ancillary income. All revenues are wholly generated within the UK. Accordingly there are no additional disclosures provided to the financial information.

Pre-opening expenses

Property rentals and other related overhead expenses incurred prior to a new site opening are expensed to the income statement in the year that they are incurred. Similarly, the costs of training new staff during the pre-opening phase are expensed as incurred. These expenses are included within administrative expenses.

Exceptional items of expense

Exceptional items of expense are administrative costs which are large or unusual in nature and are not expected to recur on a regular basis.

3	Critical accounting estimates and judgements The Group makes certain estimates and assumptions regarding the future. The significant estimates or judgements made by the Group include the value of its leasehold properties and the value of its goodwill and related impairment charges. The value of the Group's leasehold properties may vary with market conditions arising from changes in both the UK economy and specific changes to the local economies where the Group operates. Judgement is required in assessing the effect on the carrying values of related expenditure. No reasonable change in assumptions would result in an impairment of these properties. The value of the Group's goodwill and any related impairment charge requires judgement in respect of the expected future performance of the Group's cinemas. No reasonable change of assumptions would result in an impairment of goodwill. Estimates and judgements are continually evaluated based on historical experience and other factors, including the expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions.
4		Financial instruments - risk management The Board has overall responsibility for the determination of the Group's risk management objectives and policies. The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Group's competitiveness and flexibility. The Group has a liability for an interest-rate swap. The Group has not issued or used any other financial instruments of a speculative nature and the Group no longer contracts new derivative financial instruments such as forward currency contracts, interest rate swaps or similar instruments.
		The Group is exposed to the following financial risks: ·     Credit risk ·     Liquidity risk ·     Market interest rate risk
		To the extent financial instruments are not carried at fair value in the consolidated statement of financial position, book value approximates to fair value at 31 December 2014 and 31 December 2013.
		Trade and other receivables are measured at amortised cost. Book values and expected cash flows are reviewed by the Board and any impairment charged to the consolidated statement of comprehensive income in the relevant period.
		Cash and cash equivalents are held in sterling and placed on deposit in UK banks.
		Trade and other payables are measured at book value and amortised cost.
		Credit risk Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Group is mainly exposed to credit risk from credit sales. At 31 December 2014 the Group has trade receivables of £126,000 (2013: £101,000). The Group is exposed to credit risk in respect of these balances such that, if one or more of the customers encounters financial difficulties, this could materially and adversely affect the Group's financial results. The Group attempts to mitigate credit risk by assessing the credit rating of new customers prior to entering into contracts and by entering into contracts with customers with agreed credit terms. The Directors are unaware of any factors affecting the recoverability of outstanding balances at 31 December 2014 and consequently no further provisions have been made for bad and doubtful debts (2013 £nil).
		Liquidity risk Liquidity risk arises from the Group's management of working capital. It is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due. The Group's policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities when they become due. To achieve this aim, it seeks to maintain cash balances to meet its expected cash requirements as determined by regular cash flow forecasts prepared by management.
		Market interest rate risk
		Market interest rate risk arises from the Group's holding of an interest rate swap instrument contracted to fix the variable rate of interest in respect of the Group's previous interest-bearing borrowings. The Group is also exposed to market interest rate risk in respect of its cash balances held pending investment in the growth of the Group's operations.
		Capital Management The Group's capital is made up of share capital, share premium, merger reserve and retained earnings totalling £13,152,000 (31 December 2013: £12,907,000).
		The Group's objectives when maintaining capital are: ·     To safeguard the entity's ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders; and ·     To provide an adequate return to shareholders by pricing products and services commensurately with the level of risk.
		The capital structure of the Group consists of shareholders equity as set out in the consolidated statement of changes in equity. All funding required to set-up new cinema sites and for working capital purposes are financed from existing cash resources where possible. Management will also consider future fund-raising or bank finance where appropriate.

5	Revenue	31 December	31 December
		2014 Group	2013 Group
		£000	£000
	Film and entertainment	8,818	7,705
	Food and beverages	4,126	3,359
	Other income	1,152	451
		14,096	11,515

6	Profit/(loss) before taxation
	Profit/(loss) before taxation is after charging/(crediting):	31 December 2014 Group	31 December 2013 Group
		£000	£000
	Depreciation	813	671
	Operating lease rentals	1,314	913
	Share-based payment expense	50	776
	Employee costs	3,631	2,957
	Fees payable to the Company's auditor	139	205

7	Employee costs including Directors	31 December	31 December
		2014 Group	2013 Group
		£000	£000
	Wages and salaries	3,363	2,707
	Social Security costs	255	248
	Pension costs	13	2
	Share-based payments	50	776
		3,681	3,733

8	Average number of employees	31 December	31 December
		2014 Group	2013 Group
		Number	Number
	Management	41	34
	Operations	219	202
		260	236

9	Auditors' remuneration	31 December	31 December
		2014 Group	2013 Group
		£000	£000
	Fees payable to the Company's auditor for:
	The audit of the Company's consolidated financial statements	7	10
	The audit of subsidiary undertakings of the Company	25	20
	Taxation compliance services to the Group	22	20
	Services related to the institutional placing offer	-	120
	Other services	85	35
		139	205

Of the total auditors' remuneration for the year, £nil (2013: £27,600) has been charged directly to equity.

10	Exceptional items of expenditure	31 December	31 December
		2014 Group	2013 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.

11	Financial income	31 December	31 December
		2014 Group	2013 Group
		£000	£000
	Interest receivable	42	11
	Fair-value gains on derivative financial instruments	-	109
		42	120

12	Financial expense	31 December	31 December
		2014 Group	2013 Group
		£000	£000
	Interest on bank loans and overdrafts	70	83
	Fair-value losses on derivative financial instruments	8	-
		78	83

13	Income tax	31 December	31 December
		2014 Group	2013 Group
		£000	£000
	Current tax expense/(credit):
	Current tax	(111)	-
	Deferred tax:
	Origination and reversal of temporary differences	182	(77)
	Total tax expense/(credit)	71	(77)

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

		31 December	31 December
		2014 Group	2013 Group
		£000	£000
	Profit/(loss) before tax	266	(781)
	Applied corporation tax rates:	21.50%	23.25%
	Tax at the UK corporation tax rate of 21.5%/23.25%	57	(182)
	Expenses not deductible for tax purposes	26	65
	Net effect of share options exercised	-	(65)
	Effect of change in tax rates	-	9
	Under provision in prior years	-	106
	Effect of other differences	(12)	(10)
	Total tax expense/(credit)	71	(77)

14	Earnings/(loss) per share	31 December	31 December
		2014 Group	2013 Group
		£000	£000
	Profit/(loss) used in calculating basic and diluted earnings/(loss) per  Share	195	(704)
	Number of shares
	Weighted average number of shares for the purpose of basic earnings  per share	36,291,024	29,128,127
	Weighted average number of shares for the purpose of diluted earnings  per share	36,538,391	29,128,127
	Basic earnings/(loss) per share (pence per share)	0.54	(2.42)
	Diluted earnings/(loss) per share (pence per share)	0.53	(2.42)

Basic earnings per share amounts are calculated by dividing net profit/(loss) for the year 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 3,190,088 potentially issuable shares (2013: 3,296,441) all of which relate to the potential dilution from the Group's 'A' shares and share-options issued to the Directors and certain employees.

15	Property, plant and equipment
		Group	Group	Group	Group	Group
		Leasehold improvements	Plant & Machinery	Fixtures & fittings	Assets under construction	Total
		£000	£000	£000	£000	£000
	Cost
	At 1 January 2013	3,859	619	2,511	-	6,989
	Acquired in the year	2,984	604	456	150	4,194
	Disposals	-	(5)	-	-	(5)
	At 31 December 2013	6,843	1,218	2,967	150	11,178
	Acquired in the year	717	395	237	2,295	3,644
	At 31 December 2014	7,560	1,613	3,204	2,445	14,822
	Depreciation
	At 1 January 2013	358	270	1,896	-	2,524
	Charge for the year	282	170	219	-	671
	Disposals	-	(5)	-	-	(5)
	At 31 December 2013	640	435	2,115	-	3,190
	Charge for the year	351	276	186	-	813
	Disposals	-	-	-	-	-
	At 31 December 2014	991	711	2,301	-	4,003
	Net book value
	At 31 December 2014	6,569	902	903	2,445	10,819
	At 31 December 2013	6,203	783	852	150	7,988
	At 31 December 2012	3,501	349	615	-	4,465

Plant & machinery includes assets held under finance leases amounting to £nil (31 December 2013: £nil).

16	Intangible assets
					Group
					Total
	Goodwill				£000
	Cost
	At 1 January 2013, 31 December 2013 and 31 December 2014				4,113
	Impairment
	At 1 January 2013, 31 December 2013 and 31 December 2014				3,331
	Net book value
	At 31 December 2014				782
	At 31 December 2013				782
	At 31 December 2012				782

Value in use was calculated as the net present value of the projected risk-adjusted post tax cash flows plus a terminal value of the cash generating unit. A pre-tax discount rate was applied to calculate the net present value of pre-tax cash flows. Value-in-use calculations are performed annually and at each reporting date.

The key assumptions used in the value-in-use calculations were:

Sales and cost growth (over a 15-year period): 3%.

Discount rate (the Group's weighted average cost of capital): 6.32%.

Terminal growth rate: 3.00%.

Number of years projected: 5.

There have been no impairments indicated in the year to 31 December 2014 (2013: £nil). The projected sales growth was based upon the Group's latest forecasts at the time of review and is in line with the average growth rate for the industry within the United Kingdom. There have been no significant changes made to the key assumptions used above for reviews conducted subsequently.

All of the goodwill has been allocated to certain of the Group's cinema sites in existence at 31 December 2010.

17	Inventories	31 December	31 December
		2014 Group	2013 Group
		£000	£000
	Food and beverages	91	98
	Food and beverages expensed in the year	1,222	955

18	Trade and other receivables	31 December	31 December	31 December	31 December
		2014 Group	2013 Group	2014 Company	2013 Company
		£000	£000	£000	£000
	Trade and other receivables	126	101	-	-
	Amounts due from Group undertakings	-	-	6,567	6,624
	Other debtors	1,441	43	-	-
	Prepayments and accrued income	453	366	-	-
		2,020	510	6,567	6,624

There were no receivables that were past due or considered to be impaired. There is no significant difference between the fair value of the other receivables and the values stated above. Other debtors include a deposits paid in respect of a long-term lease of £975,000 and a short-term lease of £60,000. The remainder of the other debtors balance is categorised as loans and receivables. All amounts shown under trade and other receivables, with the exception of the deposits for new leases, are due for payment within one year.

19	Trade and other payables	31 December	31 December	31 December	31 December
		2014 Group	2013 Group	2014 Company	2013 Company
		£000	£000	£000	£000
	Trade creditors	1,721	563	-	-
	Amounts due to Group undertakings	-	-	277	288
	Social security and other taxes	345	359	-	-
	Accrued expenses	862	1,347	-	-
	Lease incentives	2,395	2,126	-	-
	Deferred income	722	262	-	-
		6,045	4,657	277	288

20	Loans and borrowings	31 December	31 December
		2014 Group	2013 Group
	Bank borrowings	£000	£000
	Current	76	76
	Non-current	193	254
		269	330

Principal terms and the debt repayment schedule of the Group's loan and borrowings as at 31 December 2014 are as follows:

			Nominal	Year of
	Currency		Rate %	Maturity
Bank loans	Sterling		4.5% over Base Rate	2018
In respect of income-earning financial assets and interest-bearing financial liabilities, the following table indicates their effective interest rates at 31 December 2014 and the periods in which they mature or, if earlier, are re-priced. Amounts shown for debt include both capital repayments and related interest calculated at year-end rates. Effective interest rate Maturing within 1 year Maturing between 1 to 2 years Maturing between 2 to 5 years % £000 £000 £000 Bank deposits 1.0% 6,381 - - Bank loans 5.0% (76) (76) (145)

The following table demonstrates the sensitivity to a reasonably possible change in interest rates, with all other variables held constant, of the Group's profit or loss before tax through the impact on floating rate borrowings and bank deposits and cash flows.

			Change in rate		2014 £000		Change in rate		2013 £000
Bank deposits					6,381				8,883
			-0.5%		(32)		-0.5%		(44)
			-1.0%		(64)		-1.0%		(89)
			-1.5%		(96)		-1.5%		(133)
			+0.5%		32		+0.5%		44
			+1.0%		64		+1.0%		89
			+1.5%		96		+1.5%		133

			Change in rate		2014 £000		Change in rate		2013 £000
Bank loans					269				330
			-0.5%		(1)		-0.5%		(2)
			-1.0%		(3)		-1.0%		(3)
			-1.5%		(4)		-1.5%		(5)
			+0.5%		1		+0.5%		2
			+1.0%		3		+1.0%		3
			+1.5%		4		+1.5%		5

21

Related-party transactions

In the year to 31 December 2014 the Group engaged services from entities related to the Directors and key management personnel of £62,774 (2013: £85,574) comprising consultancy services £4,138 (2013: £43,773) and office rental of £56,892 (2013: £44,801). There were no other related-party transactions. The principal trading of the Group is performed through one company. There are no key management personnel other than the Directors.

Three directors, A Myers, A Kaye and P Wise, were issued with 'A' ordinary shares in Everyman Media Holdings Limited (EMHL) as part of the Company's employee incentive plan. A Kaye and P Wise are each committed to pay for uncalled share capital amounting to £73,706 (2013: £73,706) in respect of the 'A' ordinary shares. An amount is included within 'other benefits' attributable to directors for notional interest calculated at a rate of 4% per annum on the amounts of uncalled share capital due to EHML due in respect of these shares. The amounts are attributable to A Myers £2,000, A Kaye £3,000 and P Wise £3,000.

On 1 December 2014 the 'A' ordinary shares in Everyman Media Holdings Limited issued to A Myers were acquired by the Company's parent undertaking for £57,000. An amount of £24,000 in respect of the uncalled capital was released by the company.

The Company charged an amount of £29,000 to Everyman Media Limited, in respect of the share option charge incurred by the Company. The Company was charged an amount of £18,101 by Everyman Media Limited in respect of expenses incurred on behalf of the Company.

 

END

 

 

FR MMGZFNNLGKZM