Final Results

RNS Number : 6736F

SpaceandPeople PLC

18 January 2010

 



Embargoed for 7 am 18 January 2010 

SpaceandPeople plc

18 January 2010 

SpaceandPeople plc ("SpaceandPeople" or the "Company")

Preliminary announcement of results for the year ended 31 October 2009

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 Asia, announces its preliminary results for the year ended 31 October 2009.

HIGHLIGHTS

• Total billings up 7.3% to £13.35m (2008 - £12.44m).

• Now represent 310 venues with a footfall of over 40mn customers per week.

• Revenues up 5.6% to £2.69m (2008 - £2.55m).

• UK operating costs down 2.3%.

• Operating profit before licence fees up by 7.6% to £493.3k (2008 - £458.4k).

• Profit before tax down 18.4% to £506.2k (2008 - £602.5k) as a result of one off profits last year.

• Strong balance sheet with £1.34m of cash at year end.

• Recommending maintaining dividend at 2.00p per share.

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

SpaceandPeople

Matthew Bending	Group Chief Executive	Tel: [phone]
Nancy Cullen	Group Chief Operating Officer
Richard Chadwick	Non-Executive Finance Director

Seymour Pierce

John Cowie

Tel: [phone]

The financial information has been extracted from the Company's audited financial statements for the year ended 31 October 2009. The Report of the Directors and Financial Statements for the year ended 31 October 2009 will be available on the Company's website and will be posted to shareholders shortly.

Chairman's Statement

For the year ended 31 October 2009

Dear shareholder

Your management is to be commended for delivering another excellent set of results, generating a 5.6% increase in revenues to £2.69m on the back of a 7.3% uplift in billings to £13.35m in some of the most difficult trading conditions in memory and in the face of widespread cuts in advertising and media spending. They have identified new areas of growth for the business generating an increase in operating profit before one-off licence fee income over last year of 7.6% to £493.2k (2008: £458.4k).  This is testament to the commitment of the executive directors and a motivated sales team.

SpaceandPeople now represent 310 venues in the UK and Germany, up from 282 last year, and the combined footfall has now increased to over 40 million customers per week, which is a powerful offer to advertisers.  Shopping centre owners continue to seek to maximise revenue from alternative sources, playing to SpaceandPeople's strengths, and advertisers looking to maximise the returns from their advertising and marketing budgets truly recognise the value of SpaceandPeople's service.

The German business has had a good year and is operating out of an increasing number of venues using an expanded telesales team. This, together with more flexibility about the type and timing of promotions in the ECE malls, should lead to increased revenue in future years.

Last year, the company made one-off sales of licences to two new territories totalling £107,000. As a result, the profit before tax for 2008 included income from which we did not benefit this year. The reduction in interest rates also reduced interest earned on cash balances. As a result, profit before tax fell by 18.4% to £506.2k (2008: £620.5k), however both turnover and ongoing profits have grown this year.

The balance sheet remains strong with £352.1k of pre-tax cash flow from operating activities and £1.34m of cash at the year end. We continue to have no debt on the balance sheet. 

The new year has started well and the order books are strong. During the year, the Company is seeking to consolidate its position in the UK market and to expand the overseas business, particularly in Germany.

Dividend

The business is well positioned for the future. The Board is confident about the prospects for improved revenues and profitability in the current year, and so is proposing to maintain the dividend at 2.00p per share, payable on 26 March 2010 to all shareholders on the share register as at 29 January 2010.

David Henderson-Williams

Chairman

15 January, 2010

SpaceandPeople plc

Group Chief Executive Officer's Review

For the year ended 31 October 2009

Despite the global recession impacting operations in both the UK and Germany, SpaceandPeople has performed well, increasing revenues by 5.6% to £2.69m and operating profits (prior to the licence fees) by 7.6% to £493.3k. Profit before tax, however, is down 18.4% to £506.2k due to lower interest rates and the lack of one off profits from the sale of licences.  

UK

The backdrop of the national economy posed us great difficulty in forecasting and identifying areas of growth to exploit but our diverse income streams have delivered a strong result with an increase in gross billings of 10.7%. There was a significant refocus of the sales teams bringing in more management support in Glasgow; this has enabled a much greater emphasis on sales staff productivity and a reduction in costs (for the year down 2.3%). This, plus the growth in sales, contributed to the 7.6% increase in UK operating profit before licence fees.

Many shopping centre owners are proactively looking to us to increase their income streams, and this has enabled us to achieve growth in our venue relationships. Over the year we grew the number of venues represented in the UK from 227 to 239. Significant wins included Whitgift in Croydon, High Wycombe and St. Enoch Centre in Glasgow. Of particular note is our ability to generate money from outdoor spaces, which has yielded significant income gains for property owners over the last 12 months.

The UK business has started very strongly in the first two months of this financial year and we are confident of increased sales and profitability for the next 10 months.

Germany

Germany was hit extremely hard in the first 6 months of the year as most of its business was mainstream experiential road shows, and these types of promotions were significantly affected by the recession. At the half year we were concerned about profitability from the German operation, but increased productivity and an improved economy for the last six months resulting in some significant contract wins, has delivered an increase in revenues of 30.2% to £631.8k.

Operating profits improved marginally to £3.6k and we have introduced a similar telesales management structure to the UK, which is already proving beneficial. Relationships with ECE Projektmanagement G.m.b.H. & Co. KG, for whom we now manage 71 venues (up from 55 last year), remain excellent. Germany has started strongly in the first two months of the current financial and we expect it to make a significant contribution to the overall results this year.

India

SpaceandPeople (India) Ltd, in which we retain a 47.1% share, has progressed well in the past 12 months and is only three months behind forecast for income against their original business plan; they currently represent 31 malls in India of which 8 are exclusive. To satisfy business users in other parts of India we have opened a sales office in Delhi with three staff, and sales agents have been appointed in Hyderabad and Kolkata, in addition to the head office in Mumbai.

Whilst it made a small operating loss of £84.9k in 2009, the growth of the Indian economy will sustain the business. The board of SpaceandPeople (India) Ltd will provide a detailed update to shareholders later this quarter.

Hong Kong 

SpaceandPeople (Hong Kong) Ltd, where we have a 35.3% share, has had a more difficult year and has struggled to attract key experiential marketers. There has been a change in Managing Director and reorganisation of operations, resulting in a big decrease in monthly overheads. The current team has revised the business plan and offer, and are starting to gain traction in the market. The board of SpaceandPeople (Hong Kong) Ltd will provide a detailed update to shareholders later this quarter.

Prospects

The strength of SpaceandPeople is its diversity with no one venue or advertiser representing more than 10% of the business in the UK. This allows other sales departments to take up the slack another may experience at any point. When this is spread out across other countries, we have a robust, expanding and exciting business. 

We now represent 310 venues in the UK and Germany (up from 282 last year), with a combined footfall of over 40 million people per week. Interest in Germany from large scale experiential marketers and retail sales is looking very positive and the UK has started the current financial year with record sales over the first two months as advertisers recognise the value of high footfall venues. We are well placed to continue this growth and will also be looking to expand the business significantly over the next year. 

Matthew Bending

Group Chief Executive Officer

15 January, 2010

SpaceandPeople PLC Income Statement For the year ended 31 October 2009
		Year to		Year to
		31 October 2009		31 October 2008
		£		£
REVENUE		2,689,769		2,547,833
Administrative expenses		2,196,500		2,089,474
		493,269		458,359
Other operating income		-		107,000
OPERATING PROFIT		493,269		565,359
Finance income		12,881		55,152
PROFIT BEFORE TAXATION		506,150		620,511
Taxation		(142,204)		(154,435)
PROFIT FOR THE PERIOD AFTER TAXATION		363,946		466,076
EARNINGS PER SHARE
Basic		3.12p		4.01p
Diluted		3.08p		3.96p
DIVIDENDS PER SHARE
Paid		2.00p		1.85p
Proposed		2.00p		2.00p

CONTINUING OPERATIONS

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

SpaceandPeople PLC Balance Sheet 31 October 2009
		31 October 2009		31 October 2008
		£		£
ASSETS
Non-current assets:
Intangible assets		168,149		228,131
Property, plant and equipment		52,378		90,630
Fixed asset investment		117,383		95,027
		337,910		413,788
Current assets:
Trade and other receivables		1,417,709		1,104,570
Cash and cash equivalents		1,341,491		1,543,320
		2,759,200		2,647,890
Total Assets		3,097,110		3,061,678
LIABILITIES
Current liabilities
Trade and other payables		1,172,335		1,261,053
Current tax payable		131,967		164,435
Total Liabilities		1,304,302		1,425,488
Net assets		1,792,808		1,636,190
EQUITY
Called up share capital		116,566		116,566
Share premium		265,890		265,890
Special reserve		232,809		232,809
Retained earnings		1,177,543		1,020,925
Shareholders equity		1,792,808		1,636,190

These financial statements were approved by the Board of Directors on 15 January, 2010.

Signed on behalf of the Board of Directors

MJ Bending - Director

SpaceandPeople PLC Cashflow Statement For the year ended 31 October 2009
		Year to		Year to
		31 October 2009		31 October 2008
		£		£
Cash flows from operating activities
Cash generated from operations		352,138		642,658
Taxation		(174,672)		(140,000)
Net cash inflow from operating activities		177,466		502,658
Cash flows from investing activities
Interest received		12,881		55,152
Purchase of intangible assets		(11,201)		(52,557)
Purchase of property, plant and equipment		(6,737)		(61,962)
Investment in associates		(22,356)		(95,027)
Net cash outflow from investing activities		(27,413)		(154,394)
Cash flows from financing activities
Proceeds from issue of shares		-		254,206
Cash (paid)/received on behalf of associate		(118,750)		118,750
Dividends paid		(233,132)		(215,647)
Net cash flow from financing activities		(351,882)		157,309
Increase/(decrease) in cash and cash equivalents		(201,829)		505,573
Cash at beginning of year		1,543,320		1,037,747
Cash at end of year		1,341,491		1,543,320
Reconciliation of operating profit to net cash inflow from operating activities
Operating profit		493,269		565,359
Amortisation of intangible assets		71,183		70,411
Depreciation of property, plant and equipment		44,989		44,478
Effect of foreign exchange rate changes		25,804		19,008
(Increase)/decrease in trade and other receivables		(313,139)		(272,299)
Increase/(decrease) in trade and other payables		30,032		215,701
Cash flows from operating activities		352,138		642,658

SpaceandPeople PLC Statement of Changes in Equity For the year to 31 October 2009
	Share Capital	Share Premium	Special Reserve	Retained Earnings	Total Equity
	£	£	£	£	£
Year to 31 October 2009
At 1 November 2008	116,566	265,890	232,809	1,020,925	1,636,190
Shares issued	-	-	-	-	-
Foreign currency translation	-	-	-	25,804	25,804
Profit for the year	-	-	-	363,946	363,946
Dividends paid	-	-	-	(233,132)	(233,132)
At 31 October 2009	116,566	265,890	232,809	1,177,543	1,792,808
Year to 31 October 2008
At 1 November 2007	114,636	13,614	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	116,566	265,890	232,809	1,020,925	1,636,190

 

END

 

 

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