Half-year Report

RNS Number : 6757G

Time Out Group plc

31 March 2022

 

31 March 2022

Time Out Group plc

("Time Out," the "Company" or the "Group")

Unaudited results for the six months ended 31 December 2021

Time Out Group plc, the global media and hospitality business, today announces its unaudited results for the six months ended 31 December 2021.

Commenting on the results, Chris Ohlund, CEO of Time Out Group plc, said:

"We are encouraged by the progress made in the period, albeit in the face of the emergence of the Omicron variant. Our digital audience grew as our content remained relevant and engaging, footfall began returning to the Markets and global brands advertised with us once again. Whilst the trading environment remains challenging and uncertain, the Group's recovery is gaining momentum and we are cautiously optimistic that now Omicron is receding, this will continue over the coming months as normality returns and the key spring and summer seasons begin.

There are many measures we are undertaking to further drive our growth and profitability. These include expanding the format and publishing channels of our content, a far greater focus on digital advertising solutions and more resource committed to realising the potential of the Time Out Market as we respond to landlords wishing to introduce this leading concept to key properties in cities throughout the world."

Financial Summary

· Gross revenue ⁽¹⁾   increased by 141% to £32.0m (2020⁽⁵⁾: £13.3m) and net revenue by 106% to £24.7m (2020: £12.0m)

· Gross profit ⁽²⁾   increased 102% to £19.7m (2020: £9.8m)

· Gro up adjusted EBITDA loss ⁽³⁾ narrowed significantly to £0.8m (2020⁽⁵⁾: £6.2m loss)

· Group operating loss decreased to £8.5m (2020: £14.9m loss)

· Cash of £8.5m at 31 December 2021 and debt of £20.3m, resulted in adjusted net debt⁽⁴⁾ of £11.8m. Reported net debt was £34.6m   including £22.7m of IFRS 16 lease liabilities

· Refinancing of existing loan facility in progress and the Board remains confident of completion on acceptable terms

Operational Summary

· The Group's global brand audience increased 19% to a monthly average of 76.2m (2020: 64.1m) driven by increased unique visitors (up 14%) and social followers (up 24%)

· Time Out Market: Whilst trading was disrupted in the period , all Markets are now open and trading is recovering with further momentum expected as tourism expands further and people return to the workplace.

· Time Out Media: There was a notable recovery in advertising spend, tempered by the Omicron surge towards the period end, as advertisers responded to consumers' willingness to engage in leisure and travel activities.

Outlook:  

This period represents the beginning of our transition to a post-pandemic world. As more of the global economy unlocks, international tourism recovers and people head out, we are encouraged by the direct benefit to our trading and prospects. We are in advanced discussions with partners regarding new Time Out Market management agreements, and evaluating a growing pipeline of further signings, which offer a recurring earnings stream without the need for further capital expenditure.

(1)  See note 4 for the explanation of gross and net revenue

(2)  Gross margin calculated as gross profit as a percentage of net revenue

(3)  Adjusted EBITDA is stated before interest, taxation, depreciation, amortisation, share based payments, and exceptional items. This is a non-GAAP alternative performance measure that management uses to aid understanding of the underlying business performance.

(4)  Adjusted net cash/(debt) excludes lease-related liabilities under IFRS 16.

(5)  All comparative information relates to the six-month period to 31 December 2020. EBITDA has been restated to include the impact of IFRS 16 Leases.

For further information, please contact:
Time Out Group plc	Tel: [phone]
Chris Ohlund, CEO
Steven Tredget, Investor Relations Director
Liberum (Nominated Adviser and Broker)	Tel: [phone]
Andrew Godber / Clayton Bush / Edward Thomas
FTI Consulting LLP	Tel: [phone]
Edward Bridges / Stephanie Ellis / Fiona Walker

Notes to editors

About Time Out Group

Time Out Group is a global media and hospitality business that curates and creates the best of the world's greatest cities through its two divisions - Time Out Media and Time Out Market. Time Out launched in London in 1968 with a magazine to help people discover the exciting new urban cultures that had started up all over the city. Today, across the Group's digital and physical platforms, Time Out's professional journalists curate the best things to do, see and eat in 333 cities in 59 countries.

Time Out Market is the world's first editorially curated food and cultural market, bringing a city's best chefs, restaurateurs and unique cultural experiences together under one roof. The first Time Out Market opened in Lisbon in 2014, followed in 2019 by Miami, New York, Boston, Chicago and Montreal, and Dubai in 2021. A further pipeline of openings includes Porto, Abu Dhabi, Prague, London and more. Time Out Group PLC, listed on AIM, is headquartered in the United Kingdom.

Chief Executive's Review

Group overview

Financial summary

	Unaudited	Unaudited (4)
	6 months to 31 December 2021	6 months to 31 December 2020	Change
	£m	£m	%
Market	11,867	3,007	295%
Media	12,836	8,957	43%
Group net revenue(1)	24,703	11,964	106%
Gross profit	19,694	9,773	102%
Gross margin % (2)	80%	82%	(2)%
Divisional adjusted operating expenses(3,4)	(19,423)	(15,431)
Divisional adjusted EBITDA (3,4)	271	(5,658)
Market	(619)	(4,847)
Media	890	(811)
Corporate costs	(1,120)	(559)
Group adjusted EBITDA	(849)	(6,218)

(1)  See note 4 for the explanation of net revenue

(2)  Gross margin calculated as gross profit as a percentage of net revenue

(3)  Adjusted measures are stated before interest, taxation, depreciation, amortisation, share based payments, and exceptional items.

(4)  Prior period operating expenses and EBITDA have been restated to include the impact of IFRS 16 Leases.

The first half of the financial  year marked the slow transition to something approaching normality across the world and in our trading environments. As consumers returned to socialising, offices reopened and some travel resumed,  we experienced a gradual increase in revenue in our Markets and noticeable increases in advertising spend in the Media business. This represents a promising start to an anticipated longer recovery period, which will include the regaining some of the momentum lost following the emergence of the  Omicron variant at the end of this period.

The Group's net revenue increased by 106% to £24.7m (2020: £12.0m), albeit from a comparative period severely impacted by Covid-19. Gross margin declined marginally from 82% to 80% as we resumed an element of our UK print products. Adjusted operating expenses continue to benefit from the cost rationalisation completed in previous periods but increased by 26% to £19.4m (2020: £15.4m) in response to the increased trading in the period. These combined to produce a 105% improvement in the adjusted divisional EBITDA to £0.3m (2020: £5.7m EBITDA loss). Corporate costs increased to £1.1m against a comparative that benefitted from temporary Covid-19 related cost savings.

Operating KPIs

	6 months to 31 December 2021	6 months to 31 December 2020	Change	%
Global brand audience - monthly average(1)	76.2m	64.1m	12.1m	19%
Market TTV(2)	£35.6m	£5.7m	£29.9m	525%

(1)  Global brand audience is the estimated monthly average in the period including all owned & operated cities and franchises. It includes print circulation (O&O), unique website visitors, unique social users (as reported by Facebook and Instagram with social followers on other platforms used as a proxy for unique users), social followers (for other social media platforms), opted in members and Market visitors.

(2)  Total transaction value across all Time Out Markets including food, drink and other retail sales

The pandemic has certainly altered how consumers behave, what information they seek and how it is delivered. We have participated in this change and increased our global brand audience by 19% with unique visitors up by 14% and social followers up by 24%, with our content being key to driving these increases as people began searching once again for the best things to do in cities around the world.

Time Out's partnership with Apple News resulted in our World's Coolest Neighbourhoods and Best Cities rankings attracting significant viewing numbers in September and October. The period culminated with two 'Best of' awards: the audience-nominated Love Local awards which featured their most loved venues and our editorially curated Best of the CityAwards which featured the best venues in key Time Out cities. Both awards cemented our authority in the city and reflect our ethos of enabling our audience to make the most of the cities they love.

We also focussed on vertical video, content filmed in portrait mode, designed for mobile consumption. These videos were published via Instagram Reels, giving social videos an increased presence on our Instagram channels and drove significant growth in our TikTok audience. We will continue to invest in this shift to video and mobile formats to match our audience behaviour and preferences. Our loyal and increasing audience in a period of disruption of the leisure industry is testament to the continued relevance and authority of our content.

The increase in Time Out Market TTV is a direct result of Markets re-opening on a more consistent basis as the most severe restrictions ended.

Time Out Market trading overview

	Unaudited	Unaudited(3)
	6 months to 31 December 2021	6 months to 31 December 2020	Change
	£'000	£'000	%
Owned Operations	10,429	2,320	350%
Management Fees	1,438	687	109%
Net Revenue	11,867	3,007	295%
Gross profit	9,882	2,530	291%
Gross Margin %	83%	84%	(1)%
Operating expenses (trading)	(8,210)	(5,706)
Trading EBITDA(1)	1,672	(3,176)
Market central costs	(2,291)	(1,679)
Pre-opening costs	-	8
Adjusted EBITDA	(619)	(4,847)

(1)  Trading EBITDA represents the adjusted EBITDA from owned and operated markets post opening, and the development fees relating to management agreements. It is presented before pre-opening costs of new markets and other central costs of the Market business

(2)  Adjusted measures are stated before interest, taxation, depreciation, amortisation, share based payments, and exceptional items.

(3)  Prior period operating expenses and EBITDA have been restated to include the impact of IFRS 16 Leases.

Time Out Market revenue increased by 295% as the business emerged from the severe restrictions experienced during the comparative period. This reflects a gradual return of customers to our Markets despite the requirement for vaccination record checks and the continued use of masks. International travel is now gathering some momentum and together with a return of office workers, we are optimistic  that this trend will accelerate into the spring and summer. Operating expenses have increased in line with revenue and continues to benefit from cost saving initiatives implemented in the previous periods. Market central costs have increased as we invest in resource to continue to develop and progress the strong pipeline of future markets.

As we emerge from the pandemic, our teams have been focussed on ensuring the Markets doors have reopened with the highest quality line up of concessionaires and activations and events that showcase our connection to the local community all of which is attracting new customers who come back regularly. These included the ever-popular drag bingo nights in Miami, a ticketed Tupac vs. Biggie-themed event in Chicago which featured on local television stations, whilst the DJ van on the patio went viral on Tik Tok with 5.4m views and increased bar sales by 60% after 10pm. The New Year's Eve celebrations across all North American Markets generated revenue close to pre-pandemic levels.

Collectively these actions have resulted in the Markets being well placed to capture the return to city life, as can be seen in the encouraging performance of those Markets in regions which have been quickest to return to 'normality'.

Time Out Market continues to serve up the unique combination of a city's best food, drink and cultural experiences, in a  premium engaging environment, supported by strong consumer-led marketing and a cost-effective structure for restauranteurs. At a time when commercial landlords and real estate developers face the increasing challenge of attracting customers, the Markets transform spaces that become the anchor in prime locations to drive consumer footfall. Our engagement with landlords has continued, albeit with the conclusion of new agreements being delayed due to pandemic-related restrictions, most notably the curbs on travel. As a result, we expect to sign more management agreement sites in the year ahead, growing the Group's recurring earnings stream, without the need for further capital expenditure.

Subject to any further Covid-19 related delays, the current opening schedule for additional new Markets is:

· Porto (owned & operated) - calendar 2023

· Abu Dhabi (management agreement) - calendar 2024

· Prague (management agreement) - calendar 2025

· London Spitalfields (owned & operated) - Listed Building consent application has been submitted and the Group awaits the outcome.

Time Out Media trading overview

	Unaudited	Unaudited(2)
	6 months to 31 December 2021	6 months to 31 December 2020	Change
	£'000	£'000	%
Digital advertising	8,894	5,492	62%
Print	1,673	1,453	15%
Live events	539	-	100%
Local Marketing Solutions	485	609	(20)%
Advertising sales	11,591	7,554	53%
Affiliates & Offers	1,006	1,101	(9)%
Franchises	239	302	(21)%
Net revenue	12,836	8,957	43%
Gross Profit	9,812	7,243	35%
Gross Margin %	76%	81%	(5)%
Operating expenditure	(8,922)	(8,054)
Adjusted EBITDA(1)	890	(811)

(1)  Adjusted measures are stated before interest, taxation, depreciation, amortisation, share based payments, and exceptional items.

(2)  Prior period operating expenses and EBITDA have been restated to include the impact of IFRS 16 Leases.

Time Out Media trading was encouraging in the period with net revenue up 43% to £12.8m, generating and generated positive adjusted EBITDA of £0.9m. Digital revenue continues to grow, supplemented by selective print products in the UK, Spain and Portugal. Live events rebounded as we worked with clients on multi-platform campaigns to engage consumers as they emerged from lockdown restrictions. The affiliates and offers business is beginning to show similar recovery as theatres and entertainment venues re-open consistently and international travel resumes. We are doing much to increase the global audience -  generating compelling short-form video for rapidly growing social media platforms such as TikTok and Instagram Reels; and creating partnerships with leading media and content brands. And as people begin going out again, they are coming back to the Time Out brand, one they trust to create and recommend their experiences in the world's leading cities.

Gross margin reduced by 5% as lower margin print products returned while our digital revenue is not yet at pre-pandemic levels. As we continue to be more selective with our print activities, our focus has shifted to growing our media revenue and profitability through our digital capabilities, driving advertising activity through direct and agency sales and programmatic partners. Mobile-optimised interactive digital content and video are increasingly the preferred medium in which our audience engages with the world around them - and we are investing to ensure we can adapt to our audience. While this investment strategy will incur additional costs later this year, it positions us to grow and evolve our digital offerings.

Our integrated Creative Solutions team continue to bring brands to life - in the UK we crafted a 360^o advertising programme for Green & Black's culminating in a physical drinks and chocolate tasting event to truly engage with our shared audience. In the US, we partnered with NY Lottery to construct the 'One Good Thing To Do Today' campaign, capturing the attention of New Yorkers through custom content, email, social and native promotion. Our strong direct client relationships have led to original and engaging campaigns as with Samsung where we worked with their in-house team to tailor and host over 100 ticketed events, sold through the Time Out platform drawing our audience into activations in the flagship King's Cross store.

Financial Review

Revenue and gross profit

Group gross revenue for the period increased by 141% to £32.0m (2020: £13.3m) as the business recovers from the effect of the Covid-19 pandemic.

Group net revenue and Group gross profit increased by 106% and 102% respectively compared to the 141% increase in gross revenue reflecting the greater relative increase in the gross revenues of Markets versus Media.

 The decrease in Group gross profit as a percentage of net revenue from 82% to 80% is primarily driven by the Media revenue mix in the period where lower margin, print products diluted the gross margin from 81% to 76%. Time Out Market gross margin as a percentage of net revenue declined slightly from 84% to 83%.

Operating expenses

Adjusted Group operating expenses increased by £4.5m to £20.5m (2020: £16.0m restated). In line with IFRS 16 Leases, operating expenses do not include property lease costs, which are replaced by amortisation of right-of-use assets and interest on lease liabilities in each period.

Market adjusted operating expenses increased by £3.1m to £10.5m (2020: £7.4m), comprising trading operating expenditure increase (£2.5m) and investment in the central Market team (£0.4m). Media adjusted operating expenses increased by £0.8m to £8.9m (2020: £8.1m). Corporate costs increased to £1.1m against a comparative that benefitted from temporary Covid-19 related cost savings.

Adjusted EBITDA loss

Group Adjusted EBITDA loss, which is stated before interest, taxation, depreciation, amortisation, share-based payments and exceptional items, improved by 86% to a loss of £0.8m (2020: £6.2m loss restated). This loss is measured including the impact of IFRS 16 Leases. The material decrease was driven by the growth in revenue as the business begins to recover from the impact of the pandemic.

Operating loss

The reported operating loss was £8.5m (2020: £14.9m loss). This includes the IFRS 16 impact of lower property lease costs of £1.6m (2020: £2.2m), which was previously reported in operating expenditure and higher depreciation of £0.9m (2020: £2.0m) on the right-of-use assets recognised.

The net exceptional costs of £1.6m comprises costs related to a discontinued corporate transaction (£0.8m), staff redundancy costs (£0.1m) and contractual exit costs of the former Chief Executive (£0.7m). The prior period exceptional costs of £1.1m all relate to staff redundancy costs.

The depreciation charge of £4.1m (2020: £5.0m) decreased by £0.9m, driven principally by reduced Media office space in the UK and US.

The amortisation of intangible assets of £1.4m (2020: £2.1m) decreased by £0.7m principally due to certain acquired intangible assets now being fully amortised.

Net finance costs

Net finance costs of £2.0m (2020: £1.8m) primarily relates to interest on debt (£1.3m), amortisation of deferred financing costs (£0.1m) and interest cost in respect of lease liabilities (£1.1m), offset by the foreign exchange gain on financial liabilities of £0.5m.

Foreign exchange

The revenue and costs of Group entities reporting in dollars have been consolidated in these financial statements at an average exchange rate of $1.37 (2020: $1.30). The operations reporting in euros have been consolidated at a rate of €1.17 (2019: €1.11).

Cash and debt

	Unaudited	Audited	Unaudited
	31 December 2021 £'000	30 June 2021 £'000	31 December 2020 £'000
Cash and cash equivalents	8,459	19,070	10,394
Borrowings	(20,328)	(23,517)	(22,976)
Adjusted net cash/(debt)	(11,869)	(4,447)	(12,582)
IFRS 16 Lease liabilities	(22,698)	(22,453)	(31,443)
Net cash/ (debt)	(34,567)	(26,900)	(44,025)

Cash and cash equivalents decreased by £10.6m since 30 June 2021 to £8.5m. This was driven primarily by the adjusted EBITDA loss of £0.8m (2020: £6.2m restated), net working capital outflow of £2.0m (2020: £2.7m), a net decrease in borrowings of £3.9m (2020: £1.0m) and the repayment of lease liabilities of £1.6m (2020: £2.1m).

Essential Market capital expenditure of £0.1m was undertaken to ensure the markets remain Covid-safe and £0.5m invested in the initial stages of the development of Time Out Market Porto. Media invested £0.3m (2020: £0.6m) in capitalised software development costs to support the Group's increasingly important digital platforms.  

Borrowings now comprise principally the fully drawn  Incus Capital Finance facility which was £19.2m at period end, which is repayable in full on 30 November 2022. In September 2021, all remaining covenants were waived for the remainder of the facility term.

Cash utilisation continues to be closely monitored. The next significant cash requirement is the settlement of the Incus Capital Finance facility described above. However, the Group is satisfied that this facility can be refinanced within the existing timelines. The Group is therefore confident that it has sufficient funding to cover its operational needs for the foreseeable future. Further information is included below and in note 1.

Going concern

The financial statements have been prepared under the going concern basis of accounting as the Directors have a reasonable expectation that the Group and Company will continue in operational existence and be able to settle their liabilities as they fall due for the foreseeable future, being a period of not less than one year from the date of approval of the financial statements. In making this determination, the Directors have considered the financial position of the Group, projections of its future performance and the financing facilities that are in place.

The Covid-19 pandemic has had a significant adverse impact on the Group's recent trading and as we recover from the effects of the pandemic any projection of future performance continues to be uncertain. The key drivers of uncertainty include the ongoing impact of the global vaccination programme on any further waves of the pandemic, the actions that may be taken by governments to respond (which could restrict our ability to operate our Markets business) and the response of our customers themselves to adverse changes in their economic circumstances (which will impact on revenues in both our Markets and Media businesses). We have taken, and will continue to take, steps to control our discretionary expenditure and therefore the principal driver of our future profitability and cash flows will be the revenue we are able to generate from our two businesses. We have also agreed with our lender, Incus Capital Finance, that the quarterly financial covenants that apply to their loan will be waived for the balance of the facility term. Whilst the facility is due to expire in November 2022, the Directors are confident that the loan will be refinanced on acceptable terms.

The Group has modelled two financial scenarios over the next 12 months that reflect the potential continued impact of the pandemic.

The base case assumes a cautious period of recovery across both Market and Media. Market revenue is assumed to improve but be lower than the pre-pandemic period while restrictions begin to be lifted and international travel resumes. Markets overall are only assumed to reach full capacity during the 2022/23 financial year. Media revenue is assumed to gradually increase over the period, with revenue levels excluding print, recovering to pre-pandemic levels in the 2022/23 financial year. The changing revenue mix in Media is expected to yield higher margins while maintaining the reduced cost base achieved through strategic decisions taken in previous periods. This scenario does not include the impact of further protracted lockdown periods.

The downside case assumes that the Market revenue underperforms the base case by 30% for the rest of this financial year, with revenue returning to 80% of budgeted levels in July 2022 and no corresponding reduction in budgeted costs over this period. In addition, it assumed that only critical capital expenditure is undertaken during this period. There was no change to Media revenue and performance. The Directors consider the modelled reduction in revenue for the Markets division to be unlikely given the recent performance post restrictions being lifted and the Markets reopening. However, with the continued uncertainty of new restrictions this scenario is considered severe but plausible.

Under both scenarios there would be adequate cash available to the Group up until November 2022 when the balance of the Incus Capital Finance facility totalling £22.1 million will need to be repaid and given the Group currently has insufficient funding in place to settle this contractual obligation in full, the Group would need to seek additional funding by raising new equity or by refinancing the debt within the going concern period in order to continue in operational existence.

The Group intends to refinance the debt facility but as the refinancing has yet to be completed, the Directors have concluded that attention should be drawn to the fact that a material uncertainty exists which may cast significant doubt on the Group and Company's ability to continue as a going concern.

The global recovery from the impact of the pandemic is just beginning. However, after consideration of the matters set out above, the Directors are satisfied that there is a reasonable expectation that the Group and Company have adequate funding to cover its operation needs for the foreseeable future and therefore consider it appropriate to prepare the financial statements under the going concern basis.

Outlook

This period represents the beginning of our transition to a post-pandemic world. As more of the global economy unlocks, international tourism recovers and people head out, we are encouraged by the direct benefit to our trading and prospects. We are in advanced discussions with partners regarding new Time Out Market management agreements, and evaluating a growing pipeline of further signings, which offer a recurring earnings stream without the need for further capital expenditure.

Chris Ohlund

Chief Executive

Condensed Consolidated Income statement

6 months ended 31 December 2021

		Unaudited		Unaudited		Audited
	Note	6 months ended 31 December 2021		6 months ended 31 December 2020		18 months ended 30 June 2021
		£'000		£'000		£'000
Gross revenue	1, 4	32,049		13,282		44,897
Cost of sales	4	(12,355)		(3,509)		(14,727)
Gross profit		19,694		9,773		30,170
Administrative expenses		(28,202)		(24,694)		(90,717)
Operating loss		(8,508)		(14,921)		(60,547)
Finance income		501		1,387		35
Finance costs		(2,465)		(3,165)		(10,544)
Loss before income tax	4	(10,472)		(16,699)		(71,056)
Income tax (charge)/credit		(16)		157		507
Loss for the period		(10,488)		(16,542)		(70,549)
Loss for the period attributable to:
Owners of the parent		(10,483)		(14,407)		(66,770)
Non-controlling interests		(5)		(2,135)		(3,779))
		(10,488)		(16,542)		(70,549)
Loss per share:
Basic and diluted loss per share (p)	6	3.1		5.1		27.9

Condensed Consolidated Statement of Other Comprehensive Income

6 months ended 31 December 2021

	Unaudited		Unaudited		Audited
	6 months ended 31 December 2021		6 months ended 31 December 2020		18 months ended 30 June 2021
	£'000		£'000		£'000
Loss for the period	(10,488)		(16,542)		(70,549)
Other comprehensive income:
Items that may be subsequently reclassified to the profit or loss:
Currency translation differences	3,520		(9,082)		(2,458)
Other comprehensive income/(expense) for the period, net of tax	3,520		(9,082)		(2,458)
Total comprehensive expense for the period	(6,968)		(25,624)		(73,007)
Total comprehensive expense for the period attributable to:
Owners of the parent	(6,963)		(22,998)		(69,360)
Non-controlling interests	(5)		(2,626)		(3,647)
	(6,968)		(25,624)		(73,007)

Condensed Consolidated Statement of Financial Position

At 31 December 2021

		Unaudited		Audited
	Note	31 December 2021		30 June 2021
		£'000		£'000
Assets
Non-current assets
Intangible assets - Goodwill		29,404		28,911
Intangible assets - Other		9,274		10,253
Property, plant and equipment		37,287		39,037
Right-of-use assets		16,530		17,031
Other receivables		3,278		3,197
		95,773		98,429
Current assets
Inventories		950		995
Trade and other receivables		12,573		9,932
Cash and cash equivalents	7	8,459		19,070
		21,982		29,997
Total assets		117,775		128,426
Liabilities
Current liabilities
Trade and other payables		(12,519)		(11,286)
Borrowings		(19,390)		(5,395)
Lease liabilities		(1,887)		(985)
		(33,796)		(17,666)
Non-current liabilities
Trade and other payables		(336)		(1,158)
Borrowings		(938)		(18,122)
Lease liabilities		(20,811)		(21,468)
Deferred tax liability		(1,129)		(1,185)
		(23,214)		(41,933)
Total liabilities		(57,010)		(59,599)
Net assets		60,745		68,827
Equity
Called up share capital	9	336		332
Share premium		185,563		185,563
Translation reserve		5,009		3,057
Capital redemption reserve		1,105		1,105
Retained earnings / (losses)		(131,228)		(121,182)
Total parent shareholders' equity		60,785		68,875
Non-controlling interest		(40)		(48)
Total equity		60,745		68,827

Condensed Consolidated Statement of Changes in Equity

At 31 December 2021 (Unaudited)

	Called up share capital	Share premium	Translation reserve	Capital Redemption reserve	Retained earnings/ (losses)	Total parent Shareholders' equity	Non- Controlling interest	Total equity
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 1 July 2021	332	185,563	3,057	1,105	(121,182)	68,875	(48)	68,827
Changes in equity
Loss for the period	-	-	-	-	(10,483)	(10,483)	(5)	(10,488)
Other comprehensive income	-	-	1,952	-	-	1,952	-	1,952
Total comprehensive income	-	-	1,952	-	(10,483)	(8,531)	(5)	(8,536)
Share based payments	-	-	-	-	450	450	-	450
Adjustment arising on change of non-controlling interest					(13)	(13)	13	-
Issue of new shares	4	-	-	-	-	4	-	4
Balance at 31 December 2021	336	185,563	5,009	1,105	(131,228)	60,785	(40)	60,745

Condensed Consolidated Statement of Changes in Equity

At 31 December 2020 (Unaudited)

	Called up Share capital	Share premium	Translation reserve	Capital Redemption reserve	Retained earnings/ (losses)	Total parent Shareholders' equity	Non- Controlling interest	Total equity
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 1 July 2020	283	169,089	9,715	1,105	(62,684)	117,508	(6,945)	110,563
Changes in equity
Loss for the period	-	-	-	-	(14,407)	(14,407)	(2,135)	(16,542)
Other comprehensive income	-	-	(8,591)	-	-	(8,591)	(491)	(9,082
Total comprehensive income	-	-	(8,591)	-	(14,407)	(22,998)	(2,626)	(25,624)
Share-based payments	-	-	-	-	565	565	-	565
Issue of shares	-	-	-	-	-	-	-	-
Balance at 31 December 2020	283	169,089	1,124	1,105	(76,526)	95,075	(9,571)	85,504

Condensed Consolidated Statement of Changes in Equity

At 30 June 2021 (Audited)

	Called up Share capital	Share premium	Translation reserve	Capital Redemption reserve	Retained earnings/ (losses)	Total parent Shareholders' equity	Non- Controlling interest	Total equity
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 1 January 2020	148	123,290	5,647	1,105	(47,420)	82,770	(4,873)	77,897
Changes in equity
Loss for the period	-	-	-	-	(66,770)	(66,770)	(3,779)	(70,549)
Other comprehensive income	-	-	(2,590)	-	-	(2,590)	132	(2,458)
Total comprehensive income	-	-	(2,590)	-	(66,770)	(69,360)	(3,647)	(73,007)
Share-based payments	-	-	-	-	1,480	1,480	-	1,480
Adjustment arising on change of non-controlling interest	-	-	-	-	(8,472)	(8,472)	8,472	-
Issue of shares	184	62,273	-	-	-	62,457	-	62,457
Balance at 30 June 2021	332	185,563	3,057	1,105	(121,182)	68,875	(48)	68,827

Condensed Consolidated Statement of Cash Flows

6 months ended 31 December 2021

		Unaudited		Unaudited		Audited
	Note	6 months ended 31 December 2021		6 months ended 31 December 2020		18 months ended 30 June 2021
		£'000		£'000		£'000
Cash flows from operating activities
Cash used in operations	8	(4,511)		(9,898)		(20,219)
Interest paid		(1,885)		-		(5,430)
Tax paid		-		-		(311)
Net cash used in operating activities		(6,396)		(9,898)		(25,960)
Cash flows from investing activities
Purchase of property, plant and equipment		(531)		599		(3,108)
Purchase of intangible assets		(288)		(627)		(2,145)
Interest received		-		15		35
Net cash used in investing activities		(819)		(13)		(5,218)
Cash flows from financing activities
Repayment of borrowings		(2,084)		-		(22,500)
Advance of borrowings		257		-		3,865
Repayment of lease liabilities		(1,578)		(2,146)		(6,731)
Costs relating to share issues		-		-		(1,835)
Proceeds from share issue		-		-		64,148
Net cash from financing activities		(3,405)		(2,146)		36,947
Increase/(decrease) in cash and cash equivalents		(10,620)		(12,057)		5,769
Cash and cash equivalents at beginning of period		19,070		22,524		13,420
Effect of foreign exchange rate change		9		(73)		(119)
Cash and cash equivalents at end of period		8,459		10,394		19,070

Notes to the condensed consolidated statements

1.  Basis of preparation

The financial information ("condensed consolidated statements") set out in this announcement represents the results of the Group and its subsidiaries for the six months ended 31 December 2021. While the financial information included in these condensed consolidated statements has been prepared in accordance with the recognition and measurement criteria of International Accounting Standards("IAS") in conformity with the requirements of the Companies Act 2006, this announcement does not itself contain sufficient information to comply with lASs and IFRSs. The condensed financial information is unaudited and has not been reviewed by the Group's auditor. The financial information for the 18 months ended 30 June 2021 is derived from the audited financial statements for the 18 months ended 30 June 2021, which have been delivered to the Registrar of Companies. The external auditor report in those financial statements included reference to a material uncertainty in respect of going concern due to the refinancing of the balance of the Incus Capital Finance loan facilities of approximately £22.1m (comprising capital and accrued interest to November 2022) which is due for repayment in full in November 2022. The preliminary results for the 18 months ended 30 June 2021 do not include the adjustments that would result if the Group was unable to continue as a going concern.

The financial information is prepared under the historical cost basis, unless stated otherwise in the accounting policies.

These statements were approved by the Board on 31 March 2022.

Alternative performance measures

The Group uses alternative performance measures to help management and analysts to assess the underlying business before one-off and non-cash items. These include:

· Adjusted EBITDA is calculated as profit or loss before interest, taxation, depreciation, amortisation, share based payments and exceptional items.

· Adjusted net debt excludes the lease liabilities recognised in accordance with IFRS 16 "Leases"

· Net revenue is calculated as gross revenue less the share of concessionaire revenue, further detailed in Note 4.

Going Concern

These condensed financial statements have been prepared under the going concern basis of accounting as the Directors have a reasonable expectation that the Group and Company will continue in operational existence and be able to settle their liabilities as they fall due for the foreseeable future, being a period of not less than one year from the date of approval of these financial statements. In making this determination, the Directors have considered the financial position of the Group, projections of its future performance, and the financing facilities that are in place.

The Covid-19 pandemic has had a significant adverse impact on the Group's recent trading and as we recover from the effects of the pandemic any projection of future performance continues to be uncertain. The key drivers of uncertainty include the ongoing impact of the global vaccination programme on any further waves of the pandemic, the actions that may be taken by governments to respond (which could restrict our ability to operate our Markets business) and the response of our customers themselves to adverse changes in their economic circumstances (which will impact on revenues in both our Markets and Media businesses). We have taken, and will continue to take, steps to control our discretionary expenditure and therefore the principal driver of our future profitability and cash flows will be the revenue we are able to generate from our two businesses. We have also agreed with our lender, Incus Capital Finance, that the quarterly financial covenants that apply to their loan will be waived for the balance of the facility term. Whilst the facility is due to expire in November 2022, the Directors are confident that the loan will be refinanced on acceptable terms.

The Group has modelled two financial scenarios over the next 12 months that reflect the potential continued impact of the pandemic.

The base case assumes a cautious period of recovery across both Market and Media. Market revenue is assumed to improve but be lower than the pre-pandemic period while restrictions begin to be lifted and international travel resumes. Markets overall are only assumed to reach full capacity during the 2022/23 financial year. Media revenue is assumed to gradually increase over the period, with revenue levels excluding print, recovering to pre-pandemic levels in the 2022/23 financial year. The changing revenue mix in Media is expected to yield higher margins while maintaining the reduced cost base achieved through strategic decisions taken in previous periods. This scenario does not include the impact of further protracted lockdown periods.

The downside case assumes that the Market revenue underperforms the base case by 30% for the rest of this financial year, with revenue returning to 80% of budgeted levels in July 2022 and no corresponding reduction in budgeted costs over this period. In addition, it assumed that only critical capital expenditure is undertaken during this period. There was no change to Media revenue and performance. The Directors consider the modelled reduction in revenue for the Markets division to be unlikely given the recent performance post restrictions being lifted and the Markets reopening. However, with the continued uncertainty of new restrictions this scenario is considered severe but plausible.

Under both scenarios there would be adequate cash available to the Group up until November 2022 when the balance of the Incus Capital Finance facility totalling £22.1 million will need to be repaid and given the Group currently has insufficient funding in place to settle this contractual obligation in full, the Group would need to seek additional funding by raising new equity or by refinancing the debt within the going concern period in order to continue in operational existence.

The Group intends to refinance the debt facility but as the refinancing has yet to be completed, the Directors have concluded that attention should be drawn to the fact that a material uncertainty exists which may cast significant doubt on the Group and Company's ability to continue as a going concern.

The global recovery from the impact of the pandemic is just beginning. However, after consideration of the matters set out above, the Directors are satisfied that there is a reasonable expectation that the Group and Company have adequate funding to cover its operation needs for the foreseeable future and therefore consider it appropriate to prepare the financial statements under the going concern basis.

2.  Accounting policies

The same accounting policies and methods of computation are followed in these condensed set of financial statements as applied in the Group's latest annual audited financial statements.

3.  Exchange rates

The significant exchange rates to UK Sterling for the Group are as follows:

	6 months ended 31 December 2021			6 months ended 31 December 2020			18 months ended 30 June 2021
	Closing rate	Average rate		Closing rate	Average rate		Closing rate	Average rate
US dollar	1.35	1.37		1.36	1.30		1.38	1.32
Euro	1.19	1.17		1.11	1.11		1.16	1.14
Australian dollar	1.86	1.86		1.77	1.81		1.84	1.85
Singaporean dollar	1.82	1.85		1.80	1.77		1.86	1.80
Hong Kong dollar	10.53	10.65		10.53	10.06		10.75	10.23
Canadian dollar	1.72	1.72		1.74	1.73		1.71	1.73

4.  Segmental information

In accordance with IFRS 8, the Group's operating segments are based on the figures reviewed by the Board, which represents the chief operating decision maker. The Group comprises two operating segments:

· Time Out Market - this includes Time Out's share of concessionaires' sales, revenues from Time Out operated bars and other revenues include retail, events and sponsorship.

· Time Out Media - this includes the sale of digital and print advertising, local marketing solutions, live events tickets and sponsorship, commissions generated from e-commerce transactions, and fees from our franchise partners.

6 months ended 31 December 2021

(Unaudited)

	Time Out Market	Time Out Media	Corporate costs	Total
	£'000	£'000	£'000	£'000
Gross revenue	19,213	12,836	-	32,049
Concessionaire share	(7,346)	-	-	(7,346)
Net revenue	11,867	12,836	-	24,703
Gross profit	9,882	9,812	-	19,694
Administrative expenses	(14,912)	(10,624)	(2,666)	(28,202)
Operating loss	(5,030)	(812)	(2,666)	(8,508)
Operating loss	(5,030)	(812)	(2,666)	(8,508)
Amortisation of intangible assets	49	1,329	-	1,378
Depreciation of property, plant and equipment	3,209	66	-	3,275
Depreciation of right-of-use assets	908	-	-	908
EBITDA (loss)/ gain	(864)	583	(2,666)	(2,947)
Share based payments	186	241	23	450
Exceptional items	59	66	1,523	1,648
Adjusted EBITDA (loss)/ gain	(619)	890	(1,120)	(849)
Finance income				501
Finance costs				(2,465)
Loss before income tax				(10,472)
Income tax credit				(16)
Loss for the period				(10,488)

Gross revenue represents the total value of all food, beverage and retail sales transactions in relation to the North American markets, the Group's share of sales transactions in relation to the Lisbon market and any management agreement fees. Net revenue is calculated as gross revenue less the concessionaires' share of revenue.

6 months ended 31 December 2020

(Unaudited)

	Time Out Market	Time Out Media	Corporate costs	Total
	£'000	£'000	£'000	£'000
Gross revenue	4,325	8,957	-	13,282
Concessionaire share	(1,318)	-	-	(1,318)
Net revenue	3,007	8,957	-	11,964
Gross profit	2,530	7,243	-	9,773
Administrative expenses	(12,089)	(11,832)	(773)	(24,694)
Operating loss	(9,559)	(4,589)	(773)	(14,921)
Operating loss	(9,559)	(4,589)	(773)	(14,921)
Amortisation of intangible assets	404	1,680	-	2,084
Depreciation of property, plant and equipment	2,804	129	-	2,933
Depreciation of right-of-use assets	1,468	576	-	2,044
EBITDA loss	(4,883)	(2,204)	(773)	(7,860)
Property lease costs	(1,363)	(872)	-	(2,235)
Share based payments	-	565	-	565
Exceptional items	36	828	214	1,078
Adjusted EBITDA loss	(6,210)	(1,683)	(559)	(8,452)
Finance income				1,387
Finance costs				(3,165)
Loss before income tax				(16,699)
Income tax charge				157
Loss for the period				(16,542)

18 months ended 30 June 2021

(Audited)

	Time Out Market	Time Out Media	Corporate costs	Total
	£'000	£'000	£'000	£'000
Gross revenue	19,327	25,570	-	44,897
Concessionaire share	(7,094)	-	-	(7,094)
Net revenue	12,233	25,570	-	37,803
Gross profit	10,272	19,898	-	30,170
Administrative expenses	(32,821)	(55,909)	(1,987)	(90,717)
Operating loss	(22,549)	(36,011)	(1,987)	(60,547)
Operating loss	(22,549)	(36,011)	(1,987)	(60,547)
Amortisation of intangible assets	1,767	4,401	-	6,168
Depreciation of property, plant and equipment	10,038	411	-	10,449
Depreciation of right-of-use assets	3,548	1,404	-	4,952
EBITDA loss	(7,196)	(29,795)	(1,987)	(38,978)
Property lease costs	(6,108)	(1,401)	-	(7,509)
Share based payments	-	1,480	-	1,480
Exceptional items	(1,257)	20,786	365	19,894
Loss on disposal of fixed assets	35	1	-	36
Adjusted EBITDA loss	(14,526)	(8,929)	(1,622)	(25,077)
Finance income				35
Finance costs				(10,544)
Loss before income tax				(71,056)
Income tax charge				507
Loss for the period				(70,549)

Gross revenue is analysed geographically by origin as follows:

	Unaudited		Unaudited		Audited
	6 months ended 31 December 2021		6 months ended 31 December 2020		18 months ended 30 June 2021
	£'000		£'000		£'000
Europe	10,386		7,005		20,097
Americas	18,972		4,890		19,870
Rest of World	2,691		1,387		4,930
	32,049		13,282		44,897

5.  Exceptional items

Exceptional items are analysed as follows:

	Unaudited		Unaudited		Audited
	6 months ended 31 December 2021		6 months ended 31 December 2020		18 months ended 30 June 2021
	£'000		£'000		£'000
Redundancy costs	819		1,078		1,224
Discontinued corporate transaction costs	829		-		-
Time Out Market Waterloo exit costs	-		-		696
Property lease exit costs	-		-		163
Fundraising costs	-		-		96
Write-off of deferred financing costs	-		-		54
Impairment of goodwill	-		-		20,000
Gain on derecognition of right-of-use assets and related lease liabilities	-		-		(2,339)
	1,648		1,078		19,894

6.  Loss per share

Basic loss per share is calculated by dividing the loss attributable to shareholders by the weighted average number of shares during the period.

For diluted loss per share, the weighted average number of shares in issue is adjusted to assume conversion for all dilutive potential shares. All potential ordinary shares including options and deferred shares are antidilutive as they would decrease the loss per share and are therefore not considered. Diluted loss per share is equal to basic loss per share.

	Unaudited		Unaudited		Audited
	6 months ended 31 December 2021		6 months ended 31 December 2020		18 months ended 30 June 2021
	Number		Number		Number
Weighted average number of ordinary shares for the purpose of basic and diluted loss per share	335,582,084		283,201,804		239,394,965
	£'000		£'000		£'000
Losses from continuing operations for the purpose of loss per share	10,483		14,407		66,770
	Pence		Pence		Pence
Basic and diluted loss per share	3.1		5.1		27.9

7.  Cash and debt

	Unaudited		Unaudited		Audited
	31 December 2021		31 December 2020		30 June 2021
Cash and cash equivalents	8,459		10,394		19,070
Borrowings	(20,328)		(22,976)		(23,517)
Adjusted net debt	(11,869)		(12,582)		(4,447)
IFRS 16 Lease liabilities	(22,698)		(31,443)		(22,453)
Net debt	(34,567)		(44,025)		(26,900)

Borrowings comprise principally the Incus Capital Finance loan facility which is fully repayable in November 2022.

8.  Notes to the cash flow statement

Reconciliation of loss before income tax to cash used in operations

	Unaudited		Unaudited		Audited
	6 months ended 31 December 2021		6 months ended 31 December 2020		18 months ended 30 June 2021
	£'000		£'000		£'000
Loss before income tax	(10,472)		(16,699)		(71,056)
Add back:
Net finance costs	1,964		1,778		10,509
Share based payments	450		565		1,480
Depreciation charges	4,183		4,977		15,401
Amortisation charges	1,378		2,084		6,168
Loss on disposal of property, plant and equipment	-		-		36
Impairment of goodwill	-		-		20,000
Time Out Market Waterloo exit costs	-		-		696
Gain on derecognition of right-of-use asset and related lease liability	-		-		(2,339)
Other non-cash movements	-		(43)		54
Increase in inventories	104		311		325
Decrease/(increase) in trade and other receivables	(2,796)		1,340		8,302
(Decrease)/increase in trade and other payables	678		(4,211)		(9,795)
Cash used in operations	(4,511)		(9,898)		(20,219)

9.  Share capital

			Unaudited		Audited
	Nominal value per share		31 December 2021		30 June 2021
			Number		Number
Ordinary shares			335,582,084		331,960,417
Aggregate amounts			335,582,084		331,960,417
			£'000		£'000
Ordinary shares	£0.001		336		332
Aggregate amounts			336		332

10.  Principal risks and uncertainties

The 2021 Annual Report sets out on pages 34 and 35 the principal risks and uncertainties that could impact the business. There are no changes to these risks and uncertainties.

 

END

 

 

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