Final Results

RNS Number : 9069L

SpaceandPeople PLC

20 January 2009

 

SpaceandPeople plc

('SpaceandPeople')

Preliminary announcement of results for the year ended 31 October 2008

SpaceandPeople, the company which facilitates and manages the sale of promotional space in shopping centres and other high footfall locations in the UK, Europe and now Asia, announces its preliminary results for the year ended 31 October 2008.

HIGHLIGHTS

• Strong performance in difficult conditions

• Billings up 12% from £11.13M to £12.44M

• Revenue up 21% from £2,103,627 to £2,547,833

• Germany profitable in first full year

• Profits before tax up 10% from £563,894 to £620,511

• Earnings per share up 12% from 3.59p to 4.01p

• Dividend up 8% from 1.85p per share to 2.00p per share

• Associates launched in Hong Kong and India

• Positive cash flow of over £500k leading to £1.5M of cash at year end

• 2009 started well with sales above last year

For further information please visit www.spaceandpeople.com or contact:

SpaceandPeople 

Matthew Bending, Group Chief Executive              0141 303 8360

Nancy Cullen, Group Chief Operating Officer        0141 303 8360

Richard Chadwick, Finance Director

FinnCap

Matthew Robinson /Edward Frisby                         020 7600 1658

The financial information has been extracted from the Company's audited Financial Statements for the year ended 31 October 2008. The Report of the Directors and Financial Statements for the year ended 31 October 2008 will be available on the Company's website and posted to shareholders shortly.

SpaceandPeople plc

Chairman's Statement

For the year ended 31 October 2008

Dear shareholder

The management is to be commended for producing another strong set of results, with turnover up 21% to £2.5 million and profit before tax up 10% to £620,511. This is all the more creditable given that it was produced in difficult trading conditions, particularly in the retail sector, which witnessed a sharp decline in customer spending due to the recessionary pressures and a number of well publicised corporate failures.  

However, the loss of traditional rental income has prompted shopping centre owners to seek to maximise revenue from other sources, which has played to SpaceandPeople's strengths. Advertisers looking to maximise the returns from their advertising and marketing budgets have recognised the value of SpaceandPeople's service which offers them the opportunity to get in front of some 40m potential customers every week.  

Consequently management has taken advantage of the downturn to lay the foundation for future growth. Some excellent venues have been added and the UK team has been restructured to provide improved efficiency, whilst reducing the overall cost. 

The new website which I announced last year is now fully operational and providing a reliable IT platform for improving the effectiveness of the sales teams and continued overseas expansion.  

The German business which was set up in October 2007 has established itself successfully and, although it only started taking bookings in January, it produced a modest profit for the year. ECE, who manage 97 shopping centres in Europe, rewarded that success by giving us another 18 centres to manage. The prospects for the business are excellent as we increase occupancy rates and expand the range of venues offering the SpaceandPeople service. 

The launching of SpaceandPeople's services in Hong Kong and India through franchises in which we retain 47.5% and 47.1% stakes respectively raised £107,000 in license fees and offers further avenues for growth and a model for further expansion overseas. 

I would like to thank Craig Campbell who left the board in July, having served as a non-executive director since the Company's flotation in 2004.

The board remains confident about the future of SpaceandPeople and the balance sheet is healthy.

Dividend

Recognising the continued progress made by the Company the board is proposing a payment on 25 March 2009 of 2p, an increase of 8.1% on last year, to shareholders on the register as at 30 January 2009.

David Henderson-Williams

Chairman

19 January, 2009

SpaceandPeople plc

Group Chief Executive Officer's Review

For the year ended 31 October 2008

It has been an eventful and successful year for SpaceandPeople. The economic climate has impacted our business but in spite of this, we managed to increase revenue by 21% to £2,547,833 and profits before tax by 10% to £620,511.

UK

In the UK, after a very successful 2006/07, SpaceandPeople staffed up for significant growth in the first quarter of the new financial year. However, November and December 2007 saw the start of the financial crisis which resulted in a downturn in Q1 sales. The opportunity was therefore taken in Q2 to restructure the sales teams and streamline costs which, together with the launch of the new multi-lingual, multi-currency IT platform in the UK, has begun, and will continue to drive the effectiveness and efficiency of the operations. 

We continue to invest in the training and development of the sales department at SpaceandPeople and to focus on new and emerging business sectors. We continue to support our clients with event led sales activity and we have had an increased focus on mall retailing during the year which yielded good growth in activity from this sector.

The number of venues increased from 174 to 227 and we have gained some notable centres with contract wins such as the Pallasades in Birmingham, Eden in High Wycombe and the British Land portfolio of Shopping Parks. We have also started to work with The Mall Group.

During the year we saw our first trans-European (UK, France and Germany) advertising campaign signed up for the National Basketball Association.

Germany

The exclusive contract with ECE Projektmanagement G.m.b.H. & Co. KG was signed at the end of last financial year and the Hamburg office opened in October 2007. SpaceandPeople Deutschland started to take bookings in January 2008 for 55 centres under our management. This operation has had an excellent first year, generating £2.5 million in gross sales and £485,094 in sales commission, resulting in a small profit for the year. As a result of our success, ECE have put a further 18 centres under SpaceandPeople management. 

Hong Kong

The licensing agreement with SpaceandPeople (HK) was signed at the end of the first half, with SpaceandPeople retaining a 47.5% interest in the company. The office was opened in July and Douglas Mulcock has been appointed MD. Douglas previously worked for JC Decaux in Hong Kong, one of the world's leading outdoor advertising companies. He is supported by Nigel Oakins and Kiki Yau as Non Executive Directors; Nigel headed The International Herald Tribune in Asia and Dow Jones Newswire in Hong Kong and Kiki Yau has created and sold recruitment businesses in Hong Kong. Both bring an excellent track record of commercial acumen and regional know-how.

10 venues have signed up on a rolling annual basis and many more have shown interest. The demand from brands and advertising agencies is the best we have experienced during the start up phase of any of our operations, due partially to the high cost of traditional media, and a number of advertising contracts are being negotiated.

India 

A licensing agreement was signed in October and SpaceandPeople (India) launched with Paresh Khivesara as MD. Paresh worked in UK Shopping Centres for several years prior to moving back to India in 2007 to set up SpaceandPeople India. A total of £220,000 has now been raised to fund the Indian operation and SpaceandPeople has retained a 47.1% interest. The office in Mumbai was opened in October and they have started to survey a number of shopping centres with the intention of commencing trading in this spring.

Prospects

At the year end, SpaceandPeople represented 282 venues in total, of which 227 are in the UK and 55 in Germany, representing a combined footfall of over 40 million people per week. The balance sheet remains strong with positive cash flow of over £500,000 during the year and £1.5 million of cash on the balance sheet at the year end.

We continue to see strong demand from advertisers, recognising the value of high footfall venues as an advertising media and, more than ever, switching advertising and marketing budgets from other, less measurable media.

The new financial year has started very well with November and December sales ahead of last year in both the UK and Germany. The Board remains confident of the future prospects for the company.

Matthew Bending

Group Chief Executive Officer

19 January, 2009

SpaceandPeople PLC Income Statement For the year ended 31 October 2008
					Year to				Year to
					31 October 2008				31 October 2007
					£				£
REVENUE					2,547,833				2,103,627
Administrative expenses					2,089,474				1,457,035
Foreign market set up costs					-				152,609
					458,359				493,983
Other operating income					107,000				14,632
OPERATING PROFIT					565,359				508,615
Finance income					55,152				55,279
PROFIT BEFORE TAXATION					620,511				563,894
Taxation					(154,435)				(151,931)
PROFIT FOR THE PERIOD AFTER TAXATION					466,076				411,963
EARNINGS PER SHARE
Basic					4.01p				3.59p
Diluted					3.96p				3.55p
DIVIDENDS PER SHARE
Paid					1.85p				1.50p
Proposed					2.00p				1.85p

CONTINUING OPERATIONS

All items dealt with in arriving at the profit stated above relate to continuing activities.

SpaceandPeople PLC Statement of Changes in Equity For the year to 31 October 2008
		Share Capital	Share Premium	Special Reserve	Retained Earnings	Total Equity
		£	£	£	£	£
Year to 31 October 2008
At 1 November 2007		114,620	13,630	232,809	751,488	1,112,547
Shares issued		1,930	252,276	-	-	254,206
Foreign currency translation		-	-	-	19,008	19,008
Profit for the year		-	-	-	466,076	466,076
Dividends paid		-	-	-	(215,647)	(215,647)
At 31 October 2008		116,550	265,906	232,809	1,020,925	1,636,190
Year to 31 October 2007
At 1 November 2006		114,000	-	232,809	510,525	857,334
Shares issued		620	13,630	-	-	14,250
Profit for the year		-	-	-	411,963	411,963
Dividends paid		-	-	-	(171,000)	(171,000)
At 31 October 2007		114,620	13,630	232,809	751,488	1,112,547

SpaceandPeople PLC Balance Sheet 31 October 2008
		31 October 2008		31 October 2007
		£		£
ASSETS
Non-current assets:
Intangible assets		228,131		245,985
Property, plant and equipment		90,630		73,146
Fixed asset investment		95,027		-
		413,788		319,131
Current assets:
Trade and other receivables		1,104,570		832,271
Cash and cash equivalents		1,543,320		1,037,747
		2,647,890		1,870,018
Total Assets		3,061,678		2,189,149
LIABILITIES
Current liabilities
Trade and other payables		1,261,053		926,602
Current tax payable		164,435		150,000
Total Liabilities		1,425,488		1,076,602
Net assets		1,636,190		1,112,547
EQUITY
Called up share capital		116,550		114,620
Share premium		265,906		13,630
Special reserve		232,809		232,809
Retained earnings		1,020,925		751,488
Shareholders equity		1,636,190		1,112,547

These financial statements were approved by the Board of Directors on 19 January, 2009.

Signed on behalf of the Board of Directors

MJ Bending - Director

SpaceandPeople PLC Cashflow Statement For the year ended 31 October 2008
		Year to		Year to
		31 October 2008		31 October 2007
		£		£
Cash flows from operating activities
Cash generated from operations		642,658		529,259
Taxation		(140,000)		(109,930)
Net cash inflow from operating activities		502,658		419,329
Cash flows from investing activities
Interest received		55,152		55,279
Purchase of  intangible assets		(52,557)		(239,251)
Purchase of  property, plant and equipment		(61,962)		(52,457)
Investment in associate		(95,027)		-
Net cash outflow from investing activities		(154,394)		(236,429)
Cash flows from financing activities
Proceeds from issue of shares		254,206		14,250
Cash received on behalf of associate		118,750		-
Dividends paid		(215,647)		(171,000)
Net cash flow from financing activities		157,309		(156,750)
Increase/(decrease) of cash and cash equivalents		505,573		26,150
Cash at beginning of year		1,037,747		1,011,597
Cash at end of year		1,543,320		1,037,747
Reconciliation of operating profit to net cash inflow from operating activities
Operating profit		565,359		508,615
Amortisation of intangible assets		70,411		19,586
Depreciation of property, plant and equipment		44,478		21,254
Effect of foreign exchange rate changes		19,008		-
(Increase)/decrease in trade and other receivables		(272,299)		(103,532)
Increase/(decrease) in trade and other payables		215,701		83,336
Cash flows from operating activities		642,658		529,259

 

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