Trading Update and Notice of Half-Year Results

RNS Number : 4763M

Ten Lifestyle Group PLC

30 April 2018

 

Ten Lifestyle Group plc

("Ten" or the "Company")

Trading Update and Notice of Half-Year Results

Ten Lifestyle Group plc (AIM: TENG), a leading technology-enabled lifestyle and travel platform for the world's wealthy and mass affluent, provides an update on trading ahead of the Company's half-year results for the six months ended 28 February 2018, to be released on Tuesday 15 May 2018.

Since the end of the Company's financial year ended 31 August 2017, Ten has increased its number of sizeable contracts with corporate clients from 15 to 27. This is made up of 21 Medium and 6 Large contracts¹ which includes the recently announced new contract win with HSBC Group. This compares to the year ended 31 August 2017 when Ten had 11 Medium contracts and 4 Large contracts. In addition, Ten anticipates at least two further Medium contracts before the financial year ending 31 August 2018. This momentum continues the strong competitive win rate of recent years and, management believes, reflects the differentiation and appeal of Ten's customer service proposition as well as the Company's new proprietary technology platform. 

However, the Board now expects net revenues for the financial years ending 31 August 2018 and 2019 to be approximately £6 million and £10 million below previous expectations, respectively, for the following reasons:

-      The length of time between a contract tender, win and commencement of net revenue earning activity has been longer than anticipated and in some instances the volume of activity on new wins has taken longer than expected to achieve anticipated levels. This is expected to result in the deferral of net revenues in 2018 and in some instances into 2019;

-      Whilst there can be no certainty of this, two new Large contracts and four new Medium contracts that were expected in FY2018 are now expected in FY2019;

-      One existing contract in the Americas has not grown as anticipated and, whilst that growth is still expected, which would result in it becoming a Large contract, the timing at present is not certain; and,

-      A significant global tender that Ten anticipated winning in H2 FY2018 is now unlikely to be won by Ten. This will have a material impact on 2019 expectations for net revenue and earnings before interest, tax and amortisation ("EBITA"). 

It is currently anticipated that the Company's EBITA losses in FY2018 will be materially less than previous expectations, notwithstanding the anticipated lower net revenues described above. This reflects better operational efficiency across the whole business than had previously been anticipated as well as the timing and efficiency of investment into new verticals. Accordingly, management also expects the cash balance to be higher at the end of FY2018 than previously expected.

In addition to the reduction in net revenues for FY2019, some of the investment into new verticals that was not deployed in FY2018 will now be made in FY2019. Accordingly, profitability in FY2019 will be lower than previous expectations.

Pipeline and Competitive Positioning

The Board believes that the current new business pipeline is stronger and more robust than at the time of the IPO, despite not winning the tender in the Americas. The Board, therefore, remains confident in the Group's strong growth potential which is further underpinned by its strengthening competitive position, its differentiated proposition, as reflected in record member satisfaction ratings, and its market leading technology platform.

Half-Year Results

The Company expects to announce its first half-year results, for the six months ended 28 February 2018, on Tuesday 15 May 2018. The half-year results will show net revenues modestly increased from the prior period last year.

The Company will be hosting an analyst presentation to accompany the half-yearly results on Tuesday 15 May 2018. If you would like to attend, please email [e-mail].

Alex Cheatle, CEO, Ten Lifestyle Group plc, said:

"We are disappointed to announce this reduction in expected net revenues. With the exception of the unsuccessful tender for a large potential contract in the Americas, where we were not prepared to compete on price, most of the reduction is due to deferral of business rather than loss of business or tenders. We believe that Ten's customer and competitive proposition has strengthened over the recent months and we are as convinced as ever about the significant market opportunity and Ten's growth potential within that market as well as our ability to generate value for our shareholders."

(1)  Ten classifies its contracts as Large, Medium and Small: Large contracts are where the annual value of net revenue is expected to be over £2 million. Medium contracts are where the annual net revenues are expected to be between £250,000 and £2 million and a Small contract is where the annual value of net revenue is expected to be below £250,000.

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For further information, please contact:

Ten Lifestyle Group Plc                                                 via Tavistock

Alex Cheatle, Chief Executive Officer

Sean Hegarty, Chief Financial Officer                                    

Jefferies International Limited                                 [phone]

Nominated Advisor       

Simon Hardy

Christopher Binks

Tavistock                                                                             [phone]

Jos Simson

Simon Hudson

Sophie Praill

Notes to Editors

Ten Lifestyle Group Plc, founded in 1998, is a leading, technology-enabled lifestyle and travel platform, providing trusted concierge services to its members around the clock, 365 days a year. The Group currently has a headcount of over 750 staff around the world and is listed on the AIM market of the London Stock Exchange.

Ten assists its members to discover, organise and book travel, dining and live entertainment; seeking to save them both time and money. Through Ten's service proposition, members can achieve superior access, experiences and outcomes, more cost-effectively and conveniently than they could have achieved on their own.

Across the business, Ten manages and provides its personalised service to more than 1.6 million registered private and corporate individuals on behalf of over 40 organisations.

Ten is headquartered in London, with offices in 20 locations globally serving its growing global network of members.

For further information about Ten Lifestyle Group Plc, please go to: https://www.tengroup.com/.

 

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