TIDMARE
RNS Number : 5491C
Arena Events Group PLC
11 February 2020
11 February 2020
Arena Events Group plc
("the Company" or "the Group")
Unaudited Interim Results for the six-months ended 31 December
2019
Arena Events Group plc (AIM: ARE) announces its unaudited
Interim Results for the six-months ended 31 December 2019. As
announced on 10 April 2019, to better reflect the seasonality of
the business, the Group changed its year end to 31 March. As a
result, the next set of audited results will be for the
fifteen-month period to 31 March 2020.
Financial Highlights
Six months
-- Revenue increased by 16% to GBP92.7m (6m Dec 18: GBP80.1m)
-- Gross profit increased to GBP30.2m (6m Dec 18: GBP25.1m)
-- Adjusted EBITDA* increased by 56% to GBP13.4m (6m Dec 18: GBP8.6m)
-- Operating profit of GBP5.3m (6m Dec 18: loss of GBP0.3m)
Twelve months
-- Revenue increased by 21% to GBP162.7m (12m Dec 18: GBP135.0m)
-- Adjusted EBITDA* increased by 37% to GBP16.6m (12m Dec 18: GBP12.1m)
-- Operating profit of GBP4.5m (12m Dec 18: GBPnil)
IFRS 16
-- The full impact of IFRS16 has been reflected in these
results, resulting in an increase of GBP2.1m EBITDA in the
six-months ended 31 December 2019 (GBP4.1m 12m Dec 19) and
additional depreciation of GBP2.0m in the six-months (GBP3.9m 12m
Dec 19). IFRS 16 is excluded from all 2018 comparative results.
Six-month operational highlights
-- In the UK - the delivery of structures, seating and furniture
at major events including the Open Golf at Royal Portrush, the BMW
PGA Championship at Wentworth and the Wimbledon Tennis
Championships; the installation of over twenty ice rinks around the
UK including new venues such as Cathedral Gardens Manchester and
the Royal Museums Greenwich; and the successful delivery of the
players' training facilities and hospitality venue for the 2019
Nitto ATP Finals.
-- In the US - major activations included the Chicago Marathon,
the Experimental Aircraft Aviation (EAA) AirVenture show and a
major software vendor conference; in addition, a major cost
reduction exercise was undertaken in September to re-shape the
business.
-- In the Middle East & Asia - completed two very
significant contracts in Saudi Arabia, including a temporary 15,000
seat stadium and 3,000 guest VIP hospitality structure for the
Joshua-Ruiz boxing match; delivered a number of temporary
hospitality structures for the 2019 Rugby World Cup in Japan and
the Abu Dhabi F1 Grand Prix; and provided temporary exhibition
space for ADIPEC, the world's largest oil and gas show.
Post period highlights
-- Secured a multi-year contract with the owners of the London
Stadium, to develop, install and maintain new seating systems in
the north and south of the stadium.
-- Signed a multi-million pound contract to deliver a number of
pavilions and kiosks for Expo 2020 Dubai.
* Adjusted EBITDA is defined as earnings before interest, tax,
depreciation, intangible amortisation, exceptional items share
option costs and acquisition costs.
Greg Lawless, CEO, commented:
"For the Group as a whole, trading for the six-months to
December has been solid. In the Middle East & Asia, the
successful delivery of several large, high-profile projects in
Saudi Arabia and at the Rugby World Cup in Japan have more than
offset weakness in the Hong Kong and Dubai markets. Whilst these
large projects required additional investment in equipment and
working capital, impacting overall debt levels, it has positioned
the business well to support planned future growth in the region.
During the period we also reset the cost base in the US and in the
UK, to ensure that we continue to deliver an acceptable return on
our asset base, whilst ensuring we deliver to the Arena standard in
all regions. The London events market remains soft, but it is
pleasing to note that major Tier 1 events continue to grow with
robust attendance levels in all regions.
As previously announced, the Group is changing its year end to
March and expects the seasonally quiet calendar Q1 period in 2020
to be broadly in line with that of the prior year with cost savings
offsetting any market weakness. Looking further forward, despite
some concerns about the general trading environment in a number of
markets, the Group still expects to see revenue growth in the year
ended March 2021 with the return of the US Open, the Ryder Cup, the
Dubai Expo 2020 and further projects in Saudi Arabia.
Audited results and the dividend declaration for the
fifteen-month period ending March 2020 will be released in early
July 2020."
Enquiries:
Arena Events Group plc
Greg Lawless, CEO (contact via Alma)
Steve Trowbridge, CFO
Cenkos Securities (Nomad & Broker)
Max Hartley (Corporate Finance) 0207 397 8900
Julian Morse (Sales)
Alma PR (Financial PR)
John Coles, Josh Royston, Helena Bogle 0203 405 0205
About Arena Events Group plc
Arena Events Group plc (www.arenagroup.com) is a provider of
temporary physical structures, seating, ice rinks furniture and
interiors. The Group has operations across the UK, the US, the
Middle East, and Asia and current clients include Wimbledon Tennis
Championships, The Open, the PGA European Tour and Ryder Cup.
The Group services major sporting, outdoor and leisure events,
providing a managed solution from concept and design through to the
construction and integration of the final structure and interior.
Contracts range in size and complexity from simple equipment rental
for a local outdoor event, to an integrated solution of multiple
structures and interiors for a major international sporting
event.
Arena Events Group plc
Chief Executive's Review
Introduction
The Group delivered a solid performance in a challenging
six-months ended December 2019. Revenue growth of 16% delivered
Adjusted EBITDA of GBP13.4m, as headwinds from weaker markets in
Hong Kong and Dubai, were broadly offset by growth in Saudi Arabia.
Meanwhile both the UK and US markets were less buoyant than in
previous years and we have taken measures to offset this.
Overall the Group reported a gross margin percentage of 32.6% in
the six-months compared to 31.3% in the same period in 2018, with
regional mix playing a large role in this outturn. Cost pressures
continue in both the US and UK from "tighter" labour markets
leading to an increase in staff costs, particularly among hourly
paid colleagues. To counter this, steps were taken part way through
the period to reset the cost base in all regions to ensure that
profit margins could be maintained, without compromising the Arena
Standard. As reported at the first six-months results, the London
event market has been softer than prior years due to the general
level of economic nervousness and political uncertainty. This trend
has continued and as a result we have seen a reduction in revenues
and profit in our Well Dressed Tables division versus last
year.
This year we have seen an even greater concentration of activity
into the final calendar quarter. This put significant pressure on a
number of the business units, particularly in the Middle East, but
I am pleased how all teams have yet again delivered exceptionally
well. One example of this was the design and installation of the
temporary 15,000 seat Diriyah Arena and 3,500 square metre
temporary hospitality structure in Saudi Arabia for the Joshua v
Ruiz II boxing "Clash on the Dunes". This project was delivered at
short notice by resources from across the Group and was a fantastic
demonstration of cross-Division cooperation. This was the single
largest temporary seating structure that the company has built
since the London 2012 Olympics and was highly praised by the
promoter.
Operational Highlights
UK & Europe Division
During the six-months to December 2019, the UK Division
delivered solutions to a range of summer and autumn events,
including the Wimbledon Championships, The Open at Royal Portrush,
the Women's Open, the Newmarket Races, the Major League Baseball
London Series and the Goodwood Revival, followed by the Nitto ATP
Finals in early November. From late October onwards attention also
turned to winter activities, with the group delivering over 20 ice
rink venues across the country, of which nine were on a fully
managed basis. The UK Seating division also benefitted from
supplying some UK-based equipment to the Middle East & Asia
managed projects as well as the delivery of seats to Japan for the
upcoming Tokyo 2020 Olympics.
All acquisitions made in 2018 have been fully integrated into
the Division, with ongoing work to optimise the operating model and
geographic footprint, whilst reducing overheads. All this is under
the leadership of Chris Morris who joined the business as CEO UK
& Europe in March.
US Division
The six-months ended December 2019 were weaker in revenue terms
for the US Division than in previous years. This was primarily due
to less disaster relief work than the prior year (2018: GBP2.4m
revenue) and the shift in venue of the Fortnite World Cup (to a
permanent stadium). The Division's attention is now, and has been
for some months, on detailed planning for the three major golf
events in 2020 (US Open, the PGA Championship and the Ryder Cup).
Nevertheless, major projects delivered during the period included
the Chicago Marathon, the Experimental Aircraft Aviation (EAA)
AirVenture show, a major software vendor conference and the
construction of a temporary venue in New York for the launch of a
new TV series. The outlook for the region remains robust, boosted
by recent contract wins to deliver the US Senior Golf Open through
to 2024 and renewed the USGA contract for a further five years.
The Stuart Event Rentals business acquired at the end of 2018,
continued to make progress, driving reported revenue growth in the
region. Whilst still trading under the Stuart banner, the business
has delivered a number of events in conjunction with the Arena
Americas Division and will work closely to support the 2020
pipeline on the West Coast.
During the six-month period a wide-ranging cost transformation
programme was executed in Arena Americas to streamline the overall
structure and improve efficiency across the national tenting
business unit. This review will help reduce the reliance on
"late-notice/one-off" projects in order to deliver a sustained
level of profitability moving forward.
Middle East & Asia Division
Activity in the Middle East during the six months ended December
2019, was heavily dominated by the 'mega' projects in Saudi Arabia
delivered in the final calendar quarter of the year. This comprised
six temporary high-end restaurants for the Riyadh Festival, and a
temporary 15,000 seat stadium and a 3,000 guest VIP hospitality
structure built primarily for the Joshua-Ruiz boxing match but also
used for the Diriyah Tennis and the Saudia Diriyah E-Prix. Both
these projects required additional capital expenditure, which has
expanded the regional inventory base and will be used to support
new project wins which are due to be delivered in 2020 as well as
the establishment of a full-scale permanent base in Saudi Arabia
later this year.
Elsewhere in the Middle East, the Group delivered its regular
events including temporary exhibition space for ADIPEC, the world's
largest oil and gas show, the Abu Dhabi Formula 1 Grand Prix and
the Dubai Beach Soccer. However, this was against a backdrop of a
generally soft Dubai market, especially in the area of events and
exhibitions. While this freed up resources to help deliver the
projects in Saudi Arabia, we still have further work to do to fully
integrate TGP into the Arena business. This business unit was
rebranded Arena Exhibitions & Event Services at the end of the
year.
Across Asia the picture was also mixed with tough trading in
Malaysia and Hong Kong, due to broader economic and political
issues. In Korea the CJ Cup was the key project, while in Japan the
Group delivered a number of temporary hospitality structures for
the 2019 Rugby World Cup and dispatched seating to Tokyo for three
venues at the 2020 Olympics.
Current trading and outlook
The Group is now in the traditionally quiet, loss-making quarter
of the year. In the UK, the key focus is on finalising operational
and property changes ahead of the Easter start to the season. In
the US, planning continues for the large golf projects later in the
year, including the fabrication and purchase of equipment needed to
deliver them. Whilst in the Middle East, activity on normal
seasonal work has progressed and additional assignments in Saudi
Arabia are underway offsetting a weak Asian market. We expect this
to lead to a broadly flat year on year result in the first calendar
quarter, which completes the reporting period for the
fifteen-months ending 31 March 2020.
Looking further forward, despite some concerns about the general
trading environment in a number of markets including the UK and
Hong Kong, the Group expects to see further revenue growth in the
year to March 2021 as a result of several major events already
secured. These include the return of the US Open, the Ryder Cup,
the Dubai Expo 2020 and further work for the Tokyo Olympics.
Further progress year on year is also expected in Saudi Arabia on
the back of the significant events delivered in 2019.
Alongside the revenue opportunities, improvements in operational
efficiency in every region continues to be a major priority as we
seek to deliver continuous improvements across the global
platform.
Greg Lawless
Chief Executive Officer
10 February 2020
Financial Review
Revenue and gross margin
The Group delivered GBP92.7m of revenue in the six-months ended
December 2019 (6m Dec 18: GBP80.1m), representing a total increase
of 16% compared to the prior period in 2018. Excluding the impact
of the annualisation of acquisitions made in H2 2018, revenue
growth was GBP1.9m. This organic growth was driven largely by the
Middle East & Asia, where new projects were won in Saudi Arabia
and Japan. By contrast the UK was slightly down, while the US saw a
larger decline due to fewer "late notice/one-off" projects, such as
disaster relief assignments.
The purchase of Stuart Event Rentals in the US and TGP in Dubai
accounted for all of the acquisition-led growth in the six-months
ended December 2019, contributing GBP2.8m and GBP9.6m respectively.
Revenue from Ironmonger, based in Hong Kong, fell year on year due
to several event cancellations, attributable to the local political
uncertainty.
Gross margins across the Group increased from 31.3% to 32.6% due
in part to mix, as the Middle East & Asia delivered the most
revenue growth at an average 32.2% margin. The UK reported improved
gross margins at 26.9% (6m Dec 2018: 20.3%) as the overtrading
issues in 2018 were not repeated and the Seating division provided
equipment to support the large Middle East & Asia managed
projects. The US saw gross margins fall slightly to 39.7% (6m Dec
2018: 40.9%) due to fewer late notice/one off projects, which
typically deliver higher margins.
Administrative expenses
Administrative expenses were GBP25.0m in the six-months ended
December 2019, compared to GBP25.4m in the same period in 2018.
Despite inflationary pressures, particularly in salary costs, this
GBP0.4m reduction was mainly due to carefully targeted plans to
reset the cost base across all regions by reassessing headcount
levels and consolidating the property portfolio.
Adjusted EBITDA
Adjusted EBITDA is defined as earnings before interest, tax,
depreciation, amortisation, exceptional items and acquisition
costs. The Group's Adjusted EBITDA increased to GBP13.4m in the
six-months ended December 2019, compared to GBP8.6m in the same
period last year.
IFRS 16
These results include the adoption of IFRS 16 (Leases) as
described in more detail in note 6 of these results. The main
impact of the adoption of IFRS 16 is the change in accounting
treatment for operating leases, to remove the rental payments from
Adjusted EBITDA, but then to account for additional depreciation on
the new Right of Use asset and additional interest charges. Without
the impact of IFRS 16 on the six-months ended December 2019,
reported Adjusted EBITDA would have been GBP2.1m lower and the
depreciation charge would have been GBP2.0m less. IFRS 16 is
excluded from all 2018 comparative results.
Operating profit and loss after tax
The Group generated an operating profit of GBP5.3m for the
six-months ended December 2019 compared to a loss of GBP0.3m in the
same period in 2018. Excluding the effects of IFRS 16, this outturn
reflects the higher underlying Adjusted EBITDA described above,
offset by GBP1.1m of additional depreciation year on year due to
the increased asset base following the acquisitions made in 2018
and equipment investment in 2019. Exceptional costs were GBP1.9m in
the six-month period, lower than the GBP5.1m charge in the same
period in 2018. In 2019 these reflected restructuring activities
in: the US Arena operation; the UK Structures and Well-Dressed
Tables business units; the Arena Exhibitions & Events Services
division in Dubai; and, operations in a number of Asian markets.
There were no acquisition costs in the period and intangible
amortisation was broadly consistent with prior periods.
Interest expense of GBP0.9m in the six-months ended December
2019 relates to the interest costs of the Group's bank debt and
finance leases, with higher average drawings partly driving the
year on year increase in cost. Other finance costs include the
amortisation of debt arrangement fees paid in previous periods and
the imputed interest on the deferred consideration balance which is
shown at its discounted value on the balance sheet, with notional
interest accruing at a rate of 10% per annum. In addition, with the
implementation of IFRS 16 (see note 6) there is an additional
finance interest charge of GBP0.3m relating to the new Right of Use
asset.
After a tax charge of GBP15k (6m Dec 2018: GBP0.3m), the Group's
profit after tax for the period was GBP4.1m (6m Dec 2018: loss of
GBP1.7m).
Earnings per share
Basic earnings per share (EPS) for the six-months ended December
2019 was 2.7p per share. The figure for the comparative period in
2018 was a loss of 1.5p per share.
Dividends
At the results for the six-months ended June 2019, the Board
declared an interim dividend of 0.25 pence per share (2018: 0.5
pence). This was paid on 1 November 2019. Consideration of the
level of final dividend will be announced at the results for the
fifteen-month period to 31 March 2020.
Cash flow
The Group generated operating cash flow of GBP6.2m in the
six-months ended December 2019 compared to GBP4.4m in the same
period in 2018. Increased operating profit in the 2019 period was
in part offset by a higher working capital balance, as the timing
of several large projects resulted in some customer receipts
remaining outstanding at the end of the year.
Capital expenditure
Net capital expenditure (additions less proceeds from disposals)
in the six-months ended December 2019 was GBP6.1m, compared to
GBP5.3m in the same period in 2018. This level of spend reflects
continued investment in rental equipment, mainly growth-related in
the Middle East, to support key projects in new markets such as
Saudi Arabia. The net capital expenditure in the twelve-months
ended December 2019 of GBP11.5m, is only slightly higher year on
year (12m Dec 2018: GBP10.8m), despite the increased size of the
Group following the acquisitions made in 2018 and the contract wins
to be delivered during 2020.
Balance sheet
At end of December 2019, goodwill and other intangibles stood at
GBP55.7m. No reassessment has been made of the carrying values of
any intangible assets during the six-month period. Property, plant
and equipment at December 2019 of GBP51.5m was GBP4.2m higher than
at December 2018.
Cash at December 2019 was GBP8.1m, giving a net debt position of
GBP31.5m and a twelve-month Adjusted EBITDA to net debt ratio of
1.9x (2.5x pre IFRS 16). At the end of December 2019, the Group's
drawn senior debt facility remained at GBP35m, in line with the
June position, supported by overdraft and guarantee facilities in
the US and Middle East. An additional GBP2m short-term financing
facility with Lombard Odier Investment Management (LOIM) was agreed
and announced in November, of which GBP2m was drawn at the period
end.
During the six-month period the Group paid GBP1.9m of dividends,
being the 2018 final dividend of GBP1.5m and the interim dividend
of GBP0.4m in respect of the first six-month period. In addition,
GBP0.6m of deferred consideration payments were made in respect of
acquisitions made in 2018.
Post balance sheet events
There are no material post balance sheet events.
Exchange rates
The reported figures use an average US$ rate of $1.26 for the
period (2018: $1.30) and a period end rate of $1.29 (2018
$1.33).
Condensed Consolidated Income Statement
For the six-months ended 31 December 2019
6 months 6 months 12 months
ended 31 ended 31 ended 31
December December December
2019 2018 2019
(unaudited) (unaudited) (unaudited)
GBPm GBPm GBPm
------------ ------------ ------------
Revenue 92.7 80.1 162.7
Cost of sales (62.5) (55.0) (112.7)
-------------------------------- ------------ ------------ ------------
Gross profit 30.2 25.1 50.0
Administrative expenses (25.0) (25.4) (45.5)
-------------------------------- ------------ ------------ ------------
Operating profit/(loss) 5.3 (0.3) 4.5
Analysed as:
Adjusted EBITDA 13.4 8.6 16.6
Depreciation (5.7) (2.6) (11.0)
Exceptional costs (1.9) (5.1) (0.3)
Acquisition costs (0.0) (0.6) (0.1)
Share option costs (0.1) (0.2) (0.1)
Intangible amortisation (0.3) (0.4) (0.7)
-------------------------------- ------------ ------------ ------------
Interest expense (0.9) (0.6) (1.5)
Other finance costs (0.3) (0.5) (1.1)
-------------------------------- ------------ ------------ ------------
Profit/(loss) before taxation 4.1 (1.4) 1.8
Tax on profit/(loss) on
ordinary activities (0.0) (0.3) (0.1)
Profit/(loss) after taxation 4.1 (1.7) 1.7
-------------------------------- ------------ ------------ ------------
Adjusted EBITDA reflects earnings before interest, taxation,
depreciation, exceptional items, acquisition costs, share option
costs and intangible amortisation
Loss per share
For the six-months ended 31 December 2019
6 months 6 months 12 months
ended 31 ended 31 ended 31
December December December
2019 2018 2019
(unaudited) (unaudited) (unaudited)
------------ ------------ ------------
Basic profit/(loss)
per share - pence 2.7 (1.5) 1.1
Diluted profit/(loss)
per share - pence 2.7 (1.5) 1.1
Statement of comprehensive income
For the six-months ended 31 December 2019
6 months 6 months 12 months
ended 31 ended 31 ended 31
December December December
2019 2018 2019
(unaudited) (unaudited) (unaudited)
GBPm GBPm GBPm
------------ ------------ ------------
Profit/(loss) for the
period 4.1 (1.7) 1.7
Items that may be reclassified
subsequently to profit
or loss:
Exchange differences on
translation of foreign
subsidiaries (0.6) 0.2 (0.5)
------------ ------------ ------------
Other comprehensive income
for the period net of
tax (0.6) 0.2 (0.5)
Total comprehensive profit/(loss)
for the period 3.5 (1.5) 1.2
------------ ------------ ------------
Total comprehensive profit/(loss)
attributable:
Owners of the company 3.5 (1.5) 1.2
3.5 (1.5) 1.2
------------ ------------ ------------
Condensed Consolidated Balance Sheet
As at 31 December 2019
31 December 31 December
Notes 2019 2018
(Unaudited)
GBPm GBPm
--------------------------------------- ------ ------------ ------------
Non-current assets
Goodwill and other intangibles 55.7 57.9
Property, plant and equipment 51.5 47.3
Right of use asset 20.6 -
Trade and other receivables
due after one year 0.9 0.5
--------------------------------------- ------ ------------ ------------
128.6 105.7
Current assets
Inventories and WIP 6.2 5.9
Trade and other receivables 43.1 27.7
Cash and cash equivalents 8.1 7.5
--------------------------------------- ------ ------------ ------------
57.5 41.1
Current liabilities
Trade and other payables (14.3) (14.9)
Current tax liabilities (0.0) (0.2)
Net obligations under finance
leases (0.2) (0.7)
Net obligations under right
of use (2.9) -
Borrowings (5.2) -
Other creditors (5.0) (3.6)
Accruals and deferred revenue (27.7) (17.4)
Deferred consideration 4 (1.2) (2.3)
--------------------------------------- ------ ------------ ------------
(56.6) (39.1)
Net current assets 0.8 2.0
Total assets less current liabilities 129.4 107.7
Non-current liabilities
Borrowings (34.4) (26.7)
Net obligations under finance
leases (0.0) (0.1)
Net obligations under right
of use (18.2) -
Other creditors (2.2) (3.4)
Deferred consideration 4 (1.2) (4.0)
Deferred tax liabilities (1.7) (1.5)
(57.7) (35.7)
------------
Net assets 71.7 72.0
--------------------------------------- ------ ------------ ------------
Condensed Consolidated Group Cash Flow Statement
6 months 6 months 12 months
ended 31 ended 31 ended 31
December December December
2019 2018 2019
(unaudited) (unaudited) (unaudited)
GBPm GBPm GBPm
--------------------------------------- ------------ ------------ ------------
Cash flow from operating activities
Operating profit/(loss) for the
period 5.3 (0.3) 4.5
Adjustments for the period:
Depreciation of property, plant
and equipment 5.8 2.6 11.0
Amortisation of intangibles 0.3 0.4 0.7
Gain on disposal of property,
plant and equipment (0.2) (0.0) (0.3)
Share option costs 0.1 0.2 0.1
Increase in provisions - 3.4 -
(Increase)/decrease in inventories 3.6 2.2 (0.9)
(Increase)/decrease in trade and
other receivables (9.5) 2.6 (15.8)
Increase/(decrease) in trade and
other payables 0.7 (6.6) 5.4
--------------------------------------- ------------ ------------ ------------
Cash generated by operations 6.2 4.4 4.7
--------------------------------------- ------------ ------------ ------------
Interest paid (0.7) (0.5) (1.3)
Other finance charges (0.0) (0.5) (0.1)
Corporation tax (0.1) (0.2) (0.1)
--------------------------------------- ------------ ------------ ------------
Net cash inflow from operating
activities 5.4 3.2 3.2
--------------------------------------- ------------ ------------ ------------
Cash flow from investing activities
Investment in business combination, - (15.9) -
net of cash acquired
Deferred consideration paid (0.6) (0.1) (2.2)
Proceeds on disposal of property,
plant and equipment 0.2 0.4 0.4
Purchases of property, plant and
equipment (6.3) (5.7) (11.9)
Net cash used in investing activities (6.7) (21.3) (13.7)
Cash flow from financing activities
Increase in borrowings 5.1 1.7 13.0
Principal repayments under finance
lease (0.2) (0.3) (0.6)
Proceeds on issue of shares net
of costs 0.0 19.5 0.3
Payment of loan note interest - (0.0) -
Dividend paid (1.9) (1.8) (1.9)
------------ ------------
Net cash generated from financing
activities 2.9 19.0 10.8
--------------------------------------- ------------ ------------ ------------
Net increase in cash and cash
equivalents 1.6 0.9 0.3
Cash and cash equivalents at the
beginning of the period 6.2 6.5 7.5
Effect of foreign exchange rate
changes 0.3 0.1 0.3
--------------------------------------- ------------ ------------ ------------
Cash and cash equivalents at the
end of the period 8.1 7.5 8.1
--------------------------------------- ------------ ------------ ------------
Notes to the Interim Report
1. General information
Arena Events Group plc (the "Company" or "the Group") is a
public company limited by shares incorporated in the United Kingdom
under the Companies Act 2006 (registration number 10799086) and is
registered in England & Wales. The registered address is 4 Deer
Park Road, London, SW19 3GY.
Copies of this Interim Report may be obtained from the
registered address or on the Corporate (Investor Relations) section
of the Company's website at www.arenagroup.com.
Statement of compliance and basis of preparation
The condensed consolidated financial information presented in
this Interim Report has been prepared in accordance with applicable
IFRS including standards and interpretations issued by the
International Accounting Standards Board as adopted by the EU and
in accordance with Article 4 of the IAS Regulation. The financial
information has been prepared using the historical cost convention
and on a going concern basis.
The Annual Financial Report for the year ended 31 December 2018
was audited and has been filed with the Registrar of Companies. The
Independent Auditors' Report on the Annual Report and Accounts for
the year ended 31 December 2018 was not qualified and did not
contain statements under s498(2) or (3) of the Companies Act
2006.
The financial information for the six-months ended 31 December
2019 and 30 June 2019 is unaudited and has not been reviewed by the
Company's auditors. Likewise the comparative information for the
six-months ended 31 December 2018 is also deemed unaudited as it
has been extracted from the year ended 31 December 2018 results by
deducting the unaudited financial information for the six-months
ended 30 June 2018. The Group has previously announced a change in
its year end from December to March and will be publishing the next
audited results for the fifteen-month period ended 31 March 2020 in
July 2020.
The Interim financial statements are presented in sterling and
all values are rounded to the nearest hundred thousand pounds
(GBP0.1m) except where otherwise indicated.
Changes in accounting policies
The financial information presented in this Interim Report
includes the adoption of IFRS 16 Leases.
IFRS 16 Leases
IFRS 16 came into effect for the Group's financial year
commencing 1 January 2019 and requires lessees to recognise all
leases on balance sheet with the exception of short-term leases and
leases of low value assets.
The Group has opted to apply the transition approach which does
not require the restatement of comparative information. 2018
figures have therefore not been restated and the impact of applying
IFRS 16 is reflected from 1 January 2019. On 1 January 2019 the
Group recognised right of use assets and corresponding lease
liabilities. As a result of the adoption of IFRS 16 the Group no
longer records a rental expense within its operating costs but
instead records a depreciation charge in respect of the right of
use assets within operating costs and an interest charge on the
lease liabilities within its finance costs.
Detail on the impact of the implementation of IFRS 16 on the
interim results ended 31 December 2019 is show in note 6.
2. Segmental analysis
6 months ended 31 December 2019
(unaudited)
UK&E ME&A US Total
GBPm GBPm GBPm GBPm
Revenue
Rental 26.7 38.4 23.8 88.8
Capital sales 2.3 0.1 1.4 3.8
-------- -------- -------- --------
Total revenue 29.0 38.5 25.2 92.7
Gross profit
Rental 7.3 12.4 8.9 28.6
Capital sales 0.5 0.1 1.1 1.6
-------- -------- -------- --------
Total gross profit 7.8 12.4 10.0 30.2
Administration expenses (4.6) (5.7) (6.5) (16.8)
-------- -------- -------- --------
Segment result 3.2 6.8 3.5 13.5
Central administrative expenses (0.0)
--------
Adjusted EBITDA 13.4
Reconciliation of segment
result to profit before tax:
Depreciation & amortisation (6.1)
Exceptional costs (1.9)
Acquisition costs (0.0)
Share option costs (0.1)
Net finance expense (1.2)
--------
Profit before tax 4.1
6 months ended 31 December 2018
(unaudited)
UK&E ME&A US Total
GBPm GBPm GBPm GBPm
Revenue
Rental 29.4 17.0 28.7 75.1
Capital sales 1.6 1.8 1.6 5.0
-------- -------- -------- --------
Total revenue 31.0 18.7 30.3 80.1
Gross profit
Rental 5.8 6.2 11.1 23.1
Capital sales 0.5 0.2 1.3 2.0
-------- -------- -------- --------
Total gross profit 6.3 6.4 12.4 25.1
Administration expenses (5.6) (4.1) (6.5) (16.2)
-------- -------- -------- --------
Segment result 0.7 2.3 5.9 8.8
Central administrative expenses (0.2)
--------
Adjusted EBITDA 8.6
Reconciliation of segment
result to loss before tax:
Depreciation & amortisation (3.0)
Exceptional costs (5.1)
Acquisition costs (0.6)
Share option costs (0.2)
Net finance expense (1.0)
--------
Loss before tax (1.4)
12 months ended 31 December 2019
(unaudited)
UK&E ME&A US Total
GBPm GBPm GBPm GBPm
Revenue
Rental 49.9 53.4 52.8 156.1
Capital sales 3.3 0.5 2.7 6.6
--------- -------- -------- --------
Total revenue 53.2 54.0 55.5 162.7
Gross profit
Rental 13.8 16.9 16.3 47.0
Capital sales 0.8 0.2 2.0 3.0
--------- -------- -------- --------
Total gross profit 14.6 17.2 18.3 50.0
Administration expenses (9.3) (10.2) (12.9) (32.4)
--------- -------- -------- --------
Segment result 5.3 6.9 5.4 17.6
Central administrative expenses (1.0)
--------
Adjusted EBITDA 16.6
Reconciliation of segment
result to profit before tax:
Depreciation & amortisation (11.7)
Exceptional costs (0.3)
Acquisition costs (0.1)
Share option costs (0.1)
Net finance expense (2.7)
--------
Profit before tax 1.8
12 months ended 31 December 2018
(audited)
UK&E ME&A US Total
GBPm GBPm GBPm GBPm
Revenue
Rental 52.2 26.4 49.4 128.0
Capital sales 2.0 2.1 2.9 7.0
--------- -------- -------- --------
Total revenue 54.2 28.5 52.3 135.0
Gross profit
Rental 12.6 9.9 16.1 38.6
Capital sales 0.6 0.4 2.2 3.2
--------- -------- -------- --------
Total gross profit 13.2 10.3 18.3 41.8
Administration expenses (10.5) (7.0) (11.1) (28.6)
--------- -------- -------- --------
Segment result 2.7 3.3 7.2 13.2
Central administrative expenses (1.1)
--------
Adjusted EBITDA 12.1
Reconciliation of segment
result to loss before tax:
Depreciation & amortisation (5.7)
Exceptional costs (5.4)
Acquisition costs (0.8)
Share option costs (0.2)
Net finance expense (1.6)
--------
Loss before tax (1.6)
3. Earnings and Profit/(Loss) per share
6 months 6 months 12 months
ended ended ended
31 December 31 December 31 December
(Unaudited) 2019 2018 2019
------- ---------------- ------ ---------------- ------- ----------------
Weighted Weighted Weighted
Profit average number Loss average number Profit average number
GBPm of shares GBPm of shares GBPm of shares
4.1 152,074,121 (1.7) 115,950,490 1.7 152,474,121
Basic profit/(loss)
per share - pence 2.7 (1.5) 1.1
Diluted average Diluted average Diluted average
Profit number of Loss number of Profit number of
GBPm shares GBPm shares GBPm shares
4.1 152,383,395 (1.7) 115,950,490 1.7 153,731,606
Diluted profit/(loss)
per share - pence 2.7 (1.5) 1.1
4. Deferred consideration
Future deferred consideration falls due as follows: GBP1.2m in
the next twelve-months, GBP1.0m in 2021 and GBP0.3m in 2022.
Deferred consideration payments due in relation to Arena Stuart
Rentals and TGP Holdings are linked to future profitability.
Management has made an estimate of the deferred consideration due
based on expected future profitability of these entities. There are
no employment related obligations attached to future deferred
consideration.
5. Dividends
An interim dividend of 0.25p per share was paid on 1 November
2019 to shareholders on the register on 4 October 2019. The
declaration of any final dividend will accompany the results for
the fifteen-month period to 31 March 2020, scheduled for release in
July 2020.
6. IFRS 16
The application of IFRS 16 from 1 January had the following
impact on the income statement and balance sheet.
Income Statement 6 months ended 31 December 2019 (unaudited)
UK&E ME&A US Total
GBPm GBPm GBPm GBPm
Adjusted EBITDA 0.8 0.5 0.8 2.1
Depreciation (0.7) (0.4) (0.9) (2.0)
----------- ----------- ----------- ------------
Operating profit/(loss) 0.1 0.1 (0.1) 0.1
Interest (0.1) 0.0 (0.2) (0.3)
----------- ----------- ----------- ------------
Profit/(loss)
before tax 0.0 0.1 (0.3) (0.2)
12 months ended 31 December 2019 (unaudited)
UK&E ME&A US Total
GBPm GBPm GBPm GBPm
Adjusted EBITDA 1.4 1.0 1.7 4.1
Depreciation (1.2) (0.9) (1.8) (3.9)
----------- ----------- ----------- ------------
Operating profit/(loss) 0.2 0.1 (0.1) 0.2
Interest (0.3) (0.1) (0.4) (0.8)
----------- ----------- ----------- ------------
Loss before tax (0.1) (0.0) (0.5) (0.6)
Balance Sheet 31 December 2019 (unaudited)
GBPm
Right of use
assets 20.6
Current lease
liabilities (2.9)
Non-current lease
liabilities (18.2)
------------
Net assets (0.6)
7. Post balance sheet events
There are no material post balance sheet events.
Ends.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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