TIDMEMAN
RNS Number : 7162G
Everyman Media Group PLC
19 March 2020
19 March 2020
Everyman Media Group PLC
("Everyman", "Company" or the "Group")
Audited results for the 52 weeks ended 2 January 2020
Everyman Media Group PLC (AIM: EMAN) announces its audited final
results for the year ended 2 January 2020.
Financial Highlights
-- Revenue for the year up 25.1% to GBP65.0 million (2018: GBP51.9 million);
-- Admissions up 17% on previous financial period to 3.3 million (2018: 2.8 million);
-- Average ticket price increased to GBP11.37 (2018: GBP11.26)
and Spend Per Head increased 13% to GBP7.13 (2018: GBP6.30) driven
by menu development and operational improvements;
-- Pre IFRS 16 EBITDA* grew 31.3% to GBP12.0 million (2018:
GBP9.2 million), exceeding revenue growth as the Group continues to
benefit from its growing estate. This equates to a post-IFRS 16
EBITDA of GBP15.6 million;
-- Operating profit increased 67.1% to GBP4.8 million (2018: GBP2.9 million);
-- A further seven new Everyman venues opened in the last 12
months, growing the estate to 33 sites and 110 screens as at 18
March 2020;
-- Box office market share rose to 3.1% (2018: 2.5%) and
Everyman remains the fifth largest cinema business in the UK by
gross box office revenue.
Outlook
Since our financial year end the outlook for the UK and Global
economy has become increasingly uncertain due to the spread of the
COVID-19 virus. Following guidance provided by the UK government on
16 March 2020, the Board of Everyman took the decision to close its
venues to guests from 17 March 2020 until further notice. The
health of our staff and our customers is the Board's highest
priority.
We therefore expect to see a significant pause in business and
are taking all appropriate measures to reduce the financial impact
of this on the Group . Whilst the exact longer term impact of the
situation is difficult to predict the Board believes that
shareholders should take comfort from the following:
-- The Group has in excess of GBP14m headroom in its loan facility currently
-- Action has been taken to postpone all non-committed capital
expenditure, which will affect our planned rollout but maintains
the strong financial position of the group
-- Actions to reduce operating expenses have been taken and
further actions are in place to reduce expenses to a minimum during
this period of closure
We will see a significant interruption in business and new
openings, but will remain well placed to deliver again in 2021.
Cinema has been a part of the social experience for over 80 years
and we are confident we will be well placed to deliver again for
our customers, continuing to provide them with a great night out,
once we have overcome the Coronavirus crisis.
*Adjusted for pre-opening costs, acquisition expenses,
depreciation, amortisation and share based payments. IFRS 16 has
been applied. Pre IFRS 16 EBITDA would have been GBP12.0m, an
increase of 30.4%.
Crispin Lilly, Chief Executive Officer of Everyman Media Group
PLC said:
"We are facing an unprecedented global situation, and are now
concentrating all our resources on tackling the challenge at hand.
We will be focussed on preparing the business to be in the best
possible position in the future. Everyman has proven itself to be a
strong business with good growth fundamentals, which the Board is
confident will stand the Company in a good position once the
current market challenges have been overcome."
The information communicated in this announcement contains inside
information for the purposes of Article 7 of the Market Abuse
Regulation (EU) No. 596/2014.
For further information, please contact:
Everyman Media Group PLC Tel: +44 (0)20 3145
Crispin Lilly 0500
Canaccord Genuity Limited - Nominated Adviser Tel: +44 (0)20 7523
and Broker 8000
Bobbie Hilliam
Richard Andrews
Georgina McCooke
Alma PR (Financial PR Advisor) Tel: + 44 (0) 20
Rebecca Sanders-Hewett 3405 0205
Susie Hudson
Harriet Jackson
Chairman's statement
Facing the challenges ahead
At the time of writing we are all facing unprecedented
uncertainty, both personally and commercially. Whilst at Everyman
we are confident in our position, results and the fundamentals of
our business, we along with everyone else, are subject to the
ongoing risk of COVID-19 and all the challenges it presents.
In line with the latest Government advice, and with the health
of our customers in mind, we made the decision earlier this week to
close our cinemas for a period of time. This is one of the various
scenarios we have been planning for, with all its implications. Our
ambition is to ensure the business is in the best possible position
for the future and we are taking whatever steps we can in the short
term, to best prepare for the long term.
Outlined below is a review of activity in 2019.
Overview
Reflecting on 2019, the Everyman experience continued to be
embraced and enjoyed by our customers across our ever-growing
variety of locations throughout the UK. Whether our venues are
located as part of urban communities in larger cities, or smaller,
more rural towns, the business model continued to deliver in the
period. With seven new openings in the year, 2019 marked another
year of strong growth as the business performed in line with the
Board's expectations across all key areas.
We now operate 33 venues with 110 screens, as at 18 March 2020,
up from 26 venues and 84 screens at the beginning of 2019. We
continue to be proud of the positive impact that our venues can
have on high streets and communities, breathing new life into
public spaces either through regeneration, or new developments.
Our financial performance was again strong, in line with
expectations, delivering revenue for the period up 25%, and
pre-IFRS 16 EBITDA up 31.3% to GBP12.0m. Pleasingly, EBITDA grew
ahead of revenue, demonstrating the benefits of our roll-out
strategy.
Review of the business
By the end of 2019, Everyman had grown market share by box
office to 3.1% up from 2.6%. We remained the fifth largest UK
cinema business for the second year in a row, as defined by gross
box office revenue (source: ComScore) and continue to be seen as a
trusted and highly regarded national brand.
This is set against a background of the UK cinema industry which
delivered close to the modern-day record last year of 177.0
million, with 176.1 million admissions in 2019 (source: UK Cinema
Association). This continues to demonstrate the power of cinema,
with people's appetite for entertainment continuing to be an
important trend.
Openings
We opened new sites during the year in Horsham (3 screens, April
2019), Newcastle (4 screens, May 2019), London Broadgate (3
screens, October 2019), Clitheroe (4 screens, October 2019),
Manchester (3 screens, November 2019), Wokingham (3 screens,
December 2019) and Cardiff (5 screens, December 2019). The opening
of five sites in the last quarter of 2019 was especially pleasing
as it demonstrates our ability to manage numerous openings
successfully in a short time period.
In addition to the refurbishment of our Walton On Thames venue,
we invested GBP1.0 million into building a new third screen at
Gerrards Cross along with an expanded bar and new kitchen now
capable of serving our full Spielburger menu.
Staff
In the period, Elizabeth Lake joined us as Chief Financial
Officer on 16 September 2019.
We would like to recognise the hard work that all our team put
into the business throughout 2019, and thank them for their support
and understanding during the challenging time we now find ourselves
in.
Future of the Group
As outlined above, we face significant challenges in the short
to medium term, as a result of dealing with the COVID-19 pandemic.
We believe in, and are confident about, the fundamentals of our
business and are working hard to ensure the business is positioned
to continue to deliver once we emerge from this crisis.
Paul Wise
Executive Chairman
18 March 2020
Chief Executive's Statement
We find ourselves in an unparalleled environment, where what was
business as usual last month, is now a distant past. We are focused
on tackling the challenge at hand and ensuring the business is in
the best possible position for the future.
Development of the Group's business in 2019
2019 was a strong year for the Group, as we delivered in line
with our proven growth plan, and the 25% growth in revenue
delivered in the period reflects the effect of an increase in the
number of venues and admissions, an increase in box office pricing
and an improved spend per head on food and beverage. The growth of
all our KPIs reflects the work the team has put in throughout the
period enhancing the Everyman experience.
Progress against strategy
KPIs
The Group uses the following key performance indicators, in
addition to total revenues, to monitor the progress of the Group's
activities:
Year ended Year ended
2 January 3 January
2020 2019
(52 weeks) (53 weeks)
Admissions +17% 3,271,166 2,795,359
Box office average ticket
price +1% GBP11.37 GBP11.26
Food and beverage spend
per head +13% GBP7.13 GBP6.30
The average ticket price grew by 1%, diluted by the
disproportionate increase in admissions being generated by the
Group at new venues outside London. Like for like, the Group
continued to realise annual increases in ticket prices in line with
inflation.
In contrast, the food and beverage spend per head continued to
grow off the back of enhanced menu development, further roll out of
Spielburger and operational improvements. Actual price increases
were in line with inflation. The average spends in our new venues
remained disproportionately strong as we continued to improve the
design and operational support that we put into new openings.
Enhancing the Everyman Experience
Over the period we saw an increased focus on digital engagement,
membership and advanced our understanding of our existing
customers, which helped to increase frequency whilst the ongoing
development of our food and beverage offering increased dwell time
and associated spends. The continued development of all categories,
further Spielburger roll out to venues, and a focus on improving
operational speed were particularly successful in driving the
F&B revenues in 2019.
Further investment in partnerships and sponsorship saw Everyman
working with Green & Blacks and American Airlines.
Investment in the underlying business also continued in the
period, with additional new training programmes for our teams,
including the successful roll out of online training models across
venues and head office, and continuing improvement to our IT
infrastructure.
In addition, a full refurbishment of our Walton and Gerrards
Cross venues took place during the year, including the addition of
a third screen at the latter.
These investments were financed from current resources including
the new extended bank facility and retained earnings.
Expansion of our geographic footprint
In the period, we continued to focus both on the growth of our
footprint, adding seven new Everyman venues across 2019, as well as
increasing our customer base, frequency and ancillary spends from
our existing venues.
The Group currently has venues in the following locations:
Number of Number of
Screens Seats
Location
Altrincham 4 247
Birmingham 3 328
Bristol 3 439
Cardiff* 5 253
Chelmsford 5 379
Clitheroe* 4 255
Esher 4 336
Gerrards Cross** 3 257
Glasgow 3 201
Harrogate 5 410
Horsham* 3 239
Leeds 5 611
Liverpool 4 288
London, Baker Street 2 118
London, Barnet 5 429
London, Belsize Park 1 129
London, Broadgate* 3 264
London, Canary Wharf 3 266
London, Crystal Palace 4 313
London, Hampstead 2 194
London, Islington 1 125
London, Kings Cross 4 276
London, Maida Vale 2 149
London, Muswell Hill 5 478
Manchester* 3 247
Newcastle* 4 215
Oxted 3 212
Reigate 2 170
Stratford-Upon-Avon 4 384
Walton-On-Thames 2 158
Winchester 2 236
Wokingham* 3 289
York 4 329
110 9,224
--------------------- --------------------
* New venues in 2019, ** extended by one screen in 2019.
Building the Everyman brand
In the period, we continued to materially invest in marketing
within the business, including investment in digital technology. We
launched our new App in October 2019 which has been well received
and achieved 50,000 downloads in the first three months, which is
above market performance. The app allows our customers to make
bookings faster and easier, and increases brand engagement through
features such as 'Everyman Playlists' where Everyman's own curated
playlists are available. We have also invested in social media,
resulting in strong engagement across key social channels.
Typically, we avoid more traditional advertising, preferring to
focus on delivering in-venue events and experiences that surprise
and exceed our customers' expectations. This in turn builds loyalty
and goodwill whilst fostering tremendous word of mouth,
increasingly shared on social media. Such events in 2019 included
the world premiere of Busby in our new Manchester venue, several
exclusive Q&A screenings, and the 5th annual Everyman Music
& Film Festival and an outdoor cinema season at The Grove
Hotel, Hertfordshire.
UK cinema m arket performance in 2019
The UK cinema industry delivered close to the modern-day record
last year of 177.0 million, with 176.1 million admissions in 2019
(source: UK Cinema Association). Gross box office for the UK was
flat at GBP1.26bn (source: UK Cinema Association) reflecting the
continued growth in family and subscription audiences.
Our share of UK & Ireland box office revenue in 2019 rose
from 2.5% in 2018 to 3.1% (source: ComScore).
Outlook
Currently the Group's focus is on addressing the short to medium
term challenges we face associated with the global COVID-19
pandemic. This does not change the Board's confidence in Everyman
and its proposition over the long term.
Crispin Lilly
CEO
18 March 2020
Chief Financial Officer's Statement
Results
Revenue for the year was up 25.2% on last year to GBP64,955,000
(2018: GBP51,880,000).
The Group's adjusted operating profit (before depreciation,
amortisation, pre-opening expenses, acquisition costs and
share-based payments) was up 70.4% to GBP15,590,000 (2018:
GBP9,150,000). On a like for like accounting basis pre-IFRS 16
growth was 31.2% at GBP12,010,000. This is an adjusted IFRS measure
which has been further explained in note 2 and on the face of the
statement of profit and loss and other comprehensive income. The
Group generated an operating profit for the year of GBP4,807,000
(pre-IFRS 16 equivalent GBP3,868,000, 2018: GBP2,876,000) and
generated a profit after tax for the year of GBP1,800,000 (pre-IFRS
16 equivalent GBP3,191,000, 2018: GBP2,037,000).
The increase in net liabilities is due to the Group's adoption
of IFRS 16. The Directors take a prudent approach to the Group's
leverage ratio and regularly review its balance sheet with this in
mind. The Board does not recommend the payment of a dividend at
this stage of the Group's development (2018: GBPnil).
Cash flows
Net cash generated from operating activities was GBP15,924,000
(2018: GBP7,640,000). Net cash outflows for the year, before
financing, were GBP8,207,000 (2018: GBP15,485,000 million). This is
largely represented by capital expenditure on the expansion of the
business through build and fit-out costs of new sites and
refurbishment of existing sites during the year.
Cash held at the end of the year was GBP4,271,000 (2018:
GBP3,517,000).
On 16 January 2019 the Group agreed a new 5 year loan facility
of GBP30.0 million with Barclays Bank PLC and Santander UK PLC.
This replaced the GBP20.0 million loan facility signed in March
2017 with Barclays Bank PLC. At the year end the Group had drawn
down GBP14.0 million (2018: GBP7.0 million) of the available funds.
Charges have been put in place over the net assets of the Group as
collateral against the loan balance.
Pre-opening costs
Pre-opening costs, which have been expensed within
administrative expenses, were GBP1,044,000 (2018: GBP1,099,000).
Included within depreciation and financial expense is GBP0.3m also
relating to pre-opening operating lease expenditure in the prior
year. These costs include expenses which are necessarily incurred
in the period prior to a new venue being opened but which are
specific to the opening of that venue.
Elizabeth Lake
CFO
18 March 2020
Strategic Report
The Directors present their strategic report for the Group for
the year ended 2 January 2020 (comparative period: 53 weeks 3
January 2019). Comprising the Chief Executive's statement and the
Chief Financial Officer's statement.
Principal activity
The Group is a leading independent cinema group in the UK. The
principal activity of the Company is that of a holding company.
Review of the business
The Group made a profit after tax of GBP1,771,000 (2018:
GBP2,037,000). The profit in 2019 is after charging GBP2,115,000
interest on lease liabilities and depreciation of right of use
assets in excess of operating lease equivalents under IFRS 16
(2018: GBPnil).
Further details are shown in the Chairman's statement and
consolidated statement of profit and loss and other comprehensive
income, together with the related notes to the financial
statements.
Principal risks and uncertainties
Risks relating to the Group's business
The Board considers risk assessment to be important in achieving
its strategic objectives. There is a process of evaluation of
performance targets through regular reviews by senior management to
forecasts. Project milestones and timelines are reviewed regularly.
A risk register is in place which the Board reviews and updates on
an ad-hoc basis during meetings.
The identified risks remain largely unchanged from our last
annual report:
1 Admissions - The Group's revenues are dependent on admissions.
Nearly all revenues (box office, food & beverage, screen
advertising) are linked to this. As a result, the Group's financial
position is largely reliant on the continued popularity and the
overall quantity and quality of the films (and other content) which
it shows. The Board believes that the Group's strategy of focusing
on customer experience, the venue environment and hospitality
mitigates this risk somewhat as customers are more willing to try
smaller, more diverse films that may not get the same exposure
either in above-the-line advertising spend or through wider
platform releases by the industry.
2 Film licensing - The Group's ability to license films on
acceptable terms is also largely dependent on its relationships
with film distributors and remains a core risk to the costs of the
business. This risk is managed through healthy partnership-based
relations with distributors of all sizes as well as careful weekly
negotiation on specific titles.
3 Alternative media channels - The proliferation of alternative
media channels, including streaming, has introduced new competitive
forces for the film-going audience. To date this has proven to be a
more virtuous relationship, both increasing the investment in film
production and further fuelling an overall interest in film with
customers of all ages. It remains an ever-present caution however,
that we must continue to deliver an exceptional experience in order
to deliver real added value for our customers who choose to see a
film at our venues.
4 Piracy - Film piracy, aided by technological advances,
continues to be a real threat to the cinema industry generally. Any
theft within our venues may result in distributors withholding
content to the business. Everyman's typically smaller, more
intimate auditoria, with much higher occupancy levels than the
industry average, make our venues less appealing to film thieves.
In addition, higher levels of staffing further mitigate this
risk.
5 Seasonality - Release schedules affect the Group's box office
revenues as they fluctuate throughout the course of any given year
and are largely dependent on the timing of release of films, over
which the Group has no control. As a result, the Group's revenues
may vary significantly from month to month and within any given
financial year. The Board mitigates this risk by reviewing changes
in the release schedule and through the development and promotion
of special events at certain times of the year.
6 Extreme weather - The Group's business may suffer as a result
of periods of abnormal, severe or unseasonal weather conditions.
Cinema admissions are affected by periods such as exceptionally hot
weather or heavy snowfall. This is mitigated somewhat by becoming a
national player, ensuring that localised extreme weather has a
decreasing impact on the overall business.
7 Extraordinary events and consumer environment - Specific large
events can temporarily reduce cinema admissions, for example royal
weddings, elections or large sporting events. In addition, a
reduction in consumer spending because of broader economic factors
could impact the Group's revenues. Film release schedules tend to
work around large, known events such as a World Cup or the
Olympics, so that admissions are typically lower at these times
anyway. Historically, cinema has been incredibly resilient to
recession with it remaining an affordable treat during such times
for most consumers. However, the Group constantly monitors long
term trends as well as the broader leisure market.
8 Food & Beverage - Retail sales of food & beverage form
an important part of the revenues of the Group. Our cinemas sell
freshly prepared food and drink which also presents food hygiene
risks. Stringent operational procedures exist to ensure compliance
with all necessary regulations and the Group retains the services
of an external health, safety and food hygiene audit company to
check standards regularly.
9 Advertising revenue - The Group earns revenue from advertising
which may fluctuate due to broader macro-economic factors. Revenue
earned from advertising is influenced by the level of admissions
and the size of the Group's portfolio of properties and as such,
may decrease in line with any reduction of admissions. The Group
over-indexes on this revenue stream due to its reputation for
partnership-driven sponsorship activity and this, combined with the
growth of other revenue streams, helps mitigate any decline in
traditional advertising revenues.
10 Property - The Group's operating costs include rent and
energy costs. These costs may be volatile due to increased market
fluctuations in the price of property rental, business rates, gas
and electricity. The Board mitigates this risk by regularly
assessing alternative energy suppliers, rating and rental costs
when open market rent reviews are due on each property. In addition
the Group will be able to benefit from new rate reliefs at a number
of venues.
11 Competition - Where the Group has an existing cinema, it may
be subject to competition from the introduction of a new and/or
upgraded cinema operated by other chains. The Board continuously
monitors competing operators and significant capital budget is set
aside for refurbishments. We believe the Everyman offer represents
great value to our customers and is more resilient to competition
than more traditional cinema offers.
12 Key suppliers - The Group is reliant on certain key contracts
and arrangements with partners and suppliers, mainly in the UK. The
loss of some of these arrangements may cause temporary disruption
to the operations and financial performance of the Group. The Board
mitigates this risk by maintaining relationships with a number of
alternative suppliers as well as appropriate reviews of these
contracts.
13 Reputation - The strong positive reputation of the Everyman
brand is a key benefit, helping to ensure the successful future
performance and growth which also serves to mitigate many of the
risks identified above. The Group consistently focuses on customer
experience and monitors feedback from many different sources. A
culture of partnership and respect for customers and our suppliers
is fostered within the business at all levels.
14 Brexit - Risks linked to Brexit include consumer confidence,
foreign exchange rate risk, a lack of availability of certain food
items and staff. Whilst the full business implications of Brexit
remain uncertain, and will do for some time, the Board believes the
Group is well positioned to react to the potential challenges and
opportunities ahead. The Group has no exchange rate exposure and is
only directly impacted by the fall in sterling due to cost pressure
on a small number of imported food and beverage purchases. These
are, for the most part, offset by increased buying power due to our
rapid expansion. The cinema industry is historically resilient to
recessionary pressures however, the Board is continuing to monitor
the situation closely. The Group has secured financing to allow it
to fully fund its next phase of expansion.
15 Public Health - Risks linked to an infectious pandemic which
could close public places i.e. cinemas, cause significant
absenteeism from work and disruption to supply chains. The Board
mitigate this risk by closely monitoring the latest information and
advice from the Government. All staff are trained in Health &
Safety and how to minimise the spread of disease.
Financial risks
The Group does not have a direct exposure to foreign currency
movements and does not contract any hedging arrangements in respect
of currency positions.
The Group takes out suitable insurance against property and
operational risks where considered material to the anticipated
revenue of the Group.
Companies Act s172 Statement
This section serves as our s172 statement and should be read in
conjunction with the whole Strategic Report. s172 of the Companies
Act 2006 requires Directors to take into consideration the
interests of stakeholders in their decision making. The Directors
continue to have regard to the interests of the Company's employees
and other stakeholders including the impact of its activities on
the community, the environment and the Company's reputation when
making decisions. Acting in good faith and fairly between members
the Directors consider what is most likely to promote the success
of the Company for its members long term.
Within the Corporate Governance Report on pages 8 to 11 we
describe how the Board operates and the culture of the business
including employee engagement.
Our principle stakeholders are engaged with on a regular basis.
With regards to our shareholders this includes face to face
meetings at least twice a year, and we engage in constant dialogue
with our workforce and our suppliers.
Directors' report
The Directors present their annual report and the audited
financial statements for the Group for the 52 weeks ended 2 January
2020 (comparative period: 53 weeks to 3 January 2019).
Results and dividends
The results of the Group are included in the strategic report.
Further details are shown in the consolidated statement of profit
and loss and other comprehensive income and the related notes to
the financial statements. The Group generated a profit after tax
for the year of GBP1,770,000 (pre-IFRS 16 equivalent GBP3,191,000,
2018: GBP2,037,000). As mentioned in the Chairman's statement, the
Directors do not recommend the payment of a dividend (2018:
GBPnil).
Principal activity
The Group is a leading independent cinema group in the UK.
Further information is contained in the strategic report. The
principal activity of the Company is that of a holding company. The
subsidiaries of the Group are set out in the related notes to the
financial statements.
Financial risk management: objectives and policies
The financial and other risks to which the Group is exposed,
together with the Group's objectives and policies in respect of
these risks, are set out in the strategic report.
Capital structure
2,528,666 new shares were issued in 2019. The number of Ordinary
shares in issue at 2 January 2020 was 73,517,969 (2018:
70,989,303). The Group has also issued options over the share
capital of the Company to members of the Board and to certain
employees which amounted to 4,277,864 Ordinary shares (2018:
5,575,344 Ordinary shares) which, if exercised, would comprise 5.8%
(2018: 7.9%) of the current issued share capital of the Company
(see also Directors' interests below and the related notes). Of
these, nil (2018: 1,392,864) are represented by 'A' Ordinary shares
issued by Everyman Media Holdings Limited which were converted into
Ordinary shares of the Company during the year. The shares of the
Company are quoted on the London AIM market.
Going concern
Uncertainty due to the recent COVID-19 outbreak has been
considered as part of the Group's adoption of the going concern
basis. Trading over recent days has been impacted by COVID-19 and
the delay of major movie releases. Following guidance provided by
the UK government, the Board of Everyman has taken the decision to
close its venues to guests until further notice. The health of our
staff and our customers is the boards highest priority.
All appropriate measures have been put in place to reduce the
impact on the Group, including cost reduction and the postponement
of new sites, refurbishments and other capital expenditure
projects. Whilst the Group has significant headroom in its loan
facility there is a risk of breaching the Group's financial
covenants. The Board is in discussions with its lenders and is in
the process of re-negotiating its loan covenants to maintain
liquidity through this period of uncertainty. The Board is hopeful
of lenders continued support in this period of uncertainty which is
underpinned by the Government announcement to provide guaranteed
loans to business.
The Board's latest forecasts are based on a scenario where the
business is closed for a period of three months with reduced
admissions for the following two months at 50% and 65% of normal
trade respectively. The Board has factored in a delay in all
non-committed capital expenditure, reduction in variable costs
including staffing and moving to monthly rent payments. In addition
the Government has recently announced a twelve month business rates
holiday for the hospitality sector. Under this scenario there is a
risk of breaching the Group's financial covenants as stated
above.
The Group also has a very supportive shareholder base who are
committed to the long term success of the Group, and currently
there is GBP14m headroom in the loan facility at the date of these
financial statements. Subject to the waiver or agreement of new
loan covenants which match the expected trading position of the
business, the Group is able to operate within the level of its
current facility for at least 12 months from the approval date of
the financial statements.
The events arising as a result of the COVID-19 outbreak has
meant that there is a material uncertainty. Based on these
indications the directors believe that it remains appropriate to
prepare the financial statements on a going concern basis.
Statement of Directors' responsibilities in respect of the
annual report and financial statements
The Directors are responsible for preparing the annual report
and the Group and parent Company financial statements in accordance
with applicable laws and regulations.
Company law requires the Directors to prepare Group and parent
Company financial statements for each financial year. As required
by the AIM rules of the London Stock Exchange they are required to
prepare the Group financial statements in accordance with
International Financial Reporting Standards (IFRS) as adopted by
the EU and applicable law and have elected to prepare the parent
Company financial statements in accordance with UK accounting
standards and applicable law (UK Generally Accepted Accounting
Practice), including FRS101 Reduced Disclosure Framework.
Under company law, the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and parent Company and of
their profit or loss for that period. In preparing each of the
Group and Parent company financial statements, the Directors are
required to:
- Select suitable accounting policies and then apply them
consistently.
- Make judgements and estimates that are reasonable, relevant,
reliable and prudent.
- For the Group financial statements, state whether they have
been prepared in accordance with IFRS as adopted by the EU.
- For the parent Company financial statements, state whether
applicable UK accounting standards have been followed, subject to
any material departures disclosed and explained in the financial
statements.
- Assess the Group and parent Company's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern.
- Use the going concern basis of accounting unless they either
intend to liquidate the Group or the parent Company or to cease
operations or have no realistic alternative but to do so.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the parent
Company's transactions and disclose with reasonable accuracy at any
time the financial position of the parent Company and enable them
to ensure that its financial statements comply with the Companies
Act 2006. They are responsible for such internal control as they
determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to
fraud or error, and have general responsibility for taking such
steps as are reasonably open to them to safeguard the assets of the
Group and to prevent and detect fraud and other irregularities.
Under applicable law and regulations, the Directors are also
responsible for preparing a strategic report and a Directors'
report that complies with that law and those regulations. The
Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's
website. Legislation in the UK governing the preparation and
dissemination of financial statements may differ from legislation
in other jurisdictions.
Independent auditor's report to the members of Everyman Media
Group PLC
1 Our opinion is unmodified
We have audited the financial statements of Everyman Media Group
PLC ("the Company") for the year ended 2 January 2020 which
comprise the consolidated statement of profit and loss and other
comprehensive income, the consolidated balance sheet, the
consolidated statement of changes in equity, the consolidated cash
flow statement, the company balance sheet, the company statement of
changes in equity and the related notes, including the accounting
policies in note 2.
In our opinion:
-- the financial statements give a true and fair view of the
state of the Group's and of the parent
Company's affairs as at 2 January 2020 and of the Group's profit for the year then ended;
-- the group financial statements have been properly prepared in
accordance with International Financial Reporting Standards as
adopted by the European Union;
-- the parent Company financial statements have been properly
prepared in accordance with UK accounting standards, including FRS
101 Reduced Disclosure Framework and
-- the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) ("ISAs (UK)") and applicable law. Our
responsibilities are described below. We have fulfilled our ethical
responsibilities under, and are independent of the Group in
accordance with, UK ethical requirements including the FRC Ethical
Standard as applied to listed entities . We believe that the audit
evidence we have obtained is a sufficient and appropriate basis for
our opinion.
2 Material uncertainty related to going concern
We draw attention to note 2 to the financial statements which
indicates that the group has profit for the year of GBP1.7 million
(2018: GBP2.0 million) and net current liabilities of GBP7.9
million (2018: GBP4.7 million). Due to the recent COVID-19 outbreak
trading over recent days has been impacted. Following guidance
provided by the UK government, the group has taken the decision to
close its venues until further notice. These events and conditions,
along with the other matters explained in note 2, constitute a
material uncertainty that may cast significant doubt on the group's
and the parent company's ability to continue as a going
concern.
Our opinion is not modified in respect of this matter.
The risk
Disclosure quality
There is little judgement involved in the directors' conclusion
that risks and circumstances described in note 2 to the financial
statements represent a material uncertainty over the ability of the
group and company to continue as a going concern for a period of at
least a year from the date of approval of the financial
statements.
However, clear and full disclosure of the facts and the
directors' rationale for the use of the going concern basis of
preparation, including that there is a related material
uncertainty, is a key financial statement disclosure and so was the
focus of our audit in this area. Auditing standards require that to
be reported as a key audit matter.
Our response
-- Our procedures included:
-- Assessing transparency :
-- Assessing the completeness and accuracy of the matters
covered in the going concern disclosure by evaluating management's
cashflow projections for the next 12 months and the underlying
assumptions.
3 Other Key audit matters: our assessment of risks of material
misstatement
Key audit matters are those matters that, in our professional
judgment, were of most significance in the audit of the financial
statements and include the most significant assessed risks of
material misstatement (whether or not due to fraud) identified by
us, including those which had the greatest effect on: the overall
audit strategy; the allocation of resources in the audit; and
directing the efforts of the engagement team. These matters were
addressed in the context of our audit of the financial statements
as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. Going concern is a
significant key audit matter and is described in section 2 of our
report. In arriving at our audit opinion above, the other key audit
matters, in decreasing order of audit significance, were as follow
(unchanged from 2018):
Recoverability of property, plant and equipment, Right-of-use
assets and goodwill (Risk vs 2018 )
Group: goodwill - GBP9.0 million (2018: GBP9.0 million), plant,
property and equipment - GBP83.5 million (2018: GBP66.2 million),
Right- of- use assets - GBP58.4 million (2018: GBPnil).
Refer to page 8 and 9 the in Audit Committee Report, page 28 in
accounting policy Note 2, and page 38 and 39 of financial
disclosures.
The risk
Forecast-based valuation
Plant, property and equipment, Right-of-use assets and the
carrying value of goodwill in the Group, are significant and at
risk of potential impairment due to the Group operating in a
competitive industry where box office revenues along with beverage
revenues are dependent on admissions. The estimated recoverable
amount of these balances is subjective due to the inherent
uncertainty involved in forecasting and discounting the related
future cash flows.
The effect of these matters is that, as part of our risk
assessment, we determined that the recoverable amount of property,
plant and equipment, right-of-use assets and the recoverable amount
of goodwill has a high degree of estimation uncertainty, with a
potential range of reasonable outcomes greater than our materiality
for the financial statements as a whole.
Our response
-- Our procedures included:
-- Our sector experience:
-- We challenged the cash flow forecasts, and the assumptions
behind them, based on our knowledge of the business and market for
all cinema sites with goodwill, and those others where there was an
indicator of impairment such as potential loss-making sites,
identified by inspecting the group's records of performance by
site.
-- Historical comparisons:
-- We compared the EBITDA of each site against budget and prior
year results for any changes that could have a potential impairment
impact.
-- We assessed the historical accuracy of the forecasts used in
the Group's impairment model by considering actual prior year
performance to budget.
-- Benchmarking assumptions:
-- We compared the Group's assumptions to externally derived
data in relation to key inputs such as projected growth and the
discount rate using Discount Rate tool provided by valuations
specialists.
-- Sensitivity analysis:
-- For all cinemas with goodwill, and those with impairment
indicators over plant, property and equipment, we calculated the
degree to which the key inputs and assumptions would need to
fluctuate before an impairment was triggered and considered the
likelihood of this occurring.
-- Assessing transparency
-- We assessed whether the Group's disclosures about the
sensitivity of the outcome of the impairment assessment to changes
in key assumptions reflected the risks inherent in the valuation of
property, plant, and equipment and goodwill.
-- We have assessed the Group's compliance with the requirements of IFRS 16: Leases including Identification of leases and the completeness of the leases schedule, accuracy of information recorded; and discount rate.
Recoverability of parent company investment in subsidiary (Risk
vs 2018 )
Parent: GBP32.0 million (2018: GBP30.3 million)
Low risk, high value
The carrying amount of the parent company's investments in
subsidiaries represents 33.2% (2018: 40%) of the company's total
assets. Their recoverability is not at a high risk of significant
misstatement or subject to significant judgement. However, due to
their materiality in the context of the parent company financial
statements, this is considered to be the area that had the greatest
effect on our overall parent company audit.
Our response
-- Our procedures included:
-- Comparing valuations
-- We compared the carrying amount of the parent company's
investment in its trading subsidiary with the expected value of the
business based on the Group's year end market capitalisation.
4 Our application of materiality and an overview of the scope of
our audit
Materiality for the group financial statements as a whole was
set at GBP580,000 (2018: GBP450,000), determined with reference to
a benchmark of group revenue, of which it represents 0.9% (2018:
0.9%). We consider revenue to be an appropriate benchmark as the
group continues to expand through capital expenditure, and
therefore is a more stable measure than profit or loss before
tax.
Materiality for the parent company financial statements as a
whole was set at GBP520,000 (2018: GBP400,000), determined with
reference to a benchmark of Company total assets, of which it
represents 0.5% (2018: 0.5%).
We agreed to report to the Audit Committee any corrected or
uncorrected identified misstatements exceeding GBP30,000 (2018:
GBP22,600), in addition to other identified misstatements that
warranted reporting on qualitative grounds.
The Group audit team subjected all (2018: all) of the Group's
three reporting components to full scope audits for group purposes
and performed the audit of the parent company. The Group team
approved the component materiality's, which ranged from GBP85,000
to GBP505,000 (2018: GBP50,000 to GBP440,000), having regard to the
mix of size and risk profile of the Group across the
components.
5 We have nothing to report on the other information in the
Annual Report
The directors are responsible for the other information
presented in the Annual Report together with the financial
statements. Our opinion on the financial statements does not cover
the other information and, accordingly, we do not express an audit
opinion or, except as explicitly stated below, any form of
assurance conclusion thereon.
Our responsibility is to read the other information and, in
doing so, consider whether, based on our financial statements audit
work, the information therein is materially misstated or
inconsistent with the financial statements or our audit knowledge.
Based solely on that work we have not identified material
misstatements in the other information.
Strategic report and directors' report
Based solely on our work on the other information:
-- we have not identified material misstatements in the
strategic report and the directors' report;
-- in our opinion the information given in those reports for the
financial year is consistent with the financial statements; and
-- in our opinion those reports have been prepared in accordance with the Companies Act 2006.
6 We have nothing to report on the other matters on which we are
required to report by exception
Under the Companies Act 2006, we are required to report to you
if, in our opinion:
-- adequate accounting records have not been kept by the parent
Company, or returns adequate for our audit have not been received
from branches not visited by us; or
-- the parent Company financial statements are not in agreement
with the accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
We have nothing to report in these respects.
7 Respective responsibilities
Directors' responsibilities
As explained more fully in their statement set out on page 12,
the directors are responsible for: the preparation of the financial
statements including being satisfied that they give a true and fair
view; such internal control as they determine is necessary to
enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error; assessing the
Group and parent Company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern; and
using the going concern basis of accounting unless they either
intend to liquidate the Group or the parent Company or to cease
operations, or have no realistic alternative but to do so.
Auditor's responsibilities
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue our
opinion in an auditor's report. Reasonable assurance is a high
level of assurance, but does not guarantee that an audit conducted
in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in aggregate,
they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial
statements.
A fuller description of our responsibilities is provided on the
FRC's website at www.frc.org.uk/auditorsresponsibilities .
8 The purpose of our audit work and to whom we owe our
responsibilities
This report is made solely to the Company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
Company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the Company and the Company's members, as a body,
for our audit work, for this report, or for the opinions we have
formed.
Kelly Dunn (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
Botanic House
100 Hills Road
Cambridge
CB2 1AR
19 March 2020
Consolidated statement of profit and loss and other
comprehensive income for the year ended 2 January 2020
Year ended Year ended
2 January 3 January
2020 2019
Note GBP000 GBP000
Revenue 5 64,955 51,880
Cost of sales (24,937) (20,248)
------------------------- ------------------------
Gross profit 40,018 31,632
Other operating income - 3
Administrative expenses (35,213) (28,759)
------------------------- ------------------------
Operating profit 4,805 2,876
------------------------- ------------------------
Financial income 11 1 -
Financial expenses 1 2 (2,510) (160)
------------------------- ------------------------
Net financing expense (2,509) (160)
------------------------- ------------------------
Profit before tax 6 2,296 2,716
Tax expense 1 3 (526) (679)
------------------------- ------------------------
Profit for the year 1,770 2,037
Other comprehensive income for the
year 1 -
------------------------- ------------------------
Total comprehensive income for the
year 1,771 2,037
------------------------- ------------------------
Basic earnings per share (pence) 14 2.45 2.89
------------------------- ------------------------
Diluted earnings per share (pence) 14 2.42 2.78
------------------------- ------------------------
All amounts relate to continuing
activities.
Non-GAAP measure: adjusted profit
from operations
Adjusted profit from operations 15,588 9,150
Before:
Depreciation and amortisation* 15/17 (8,763) (4,563)
Disposal of property, plant and
equipment (52) -
Acquisition expenses (25) (9)
Pre-opening expenses (1,044) (1,099)
Share-based payment expense 31 (688) (500)
Option-based social security (211) (103)
------------------------- ------------------------
Operating profit 4,805 2,876
------------------------- ------------------------
Equivalent operating lease expense
included within administrative expenses
pre IFRS 16 (3,580)
------------------------- ------------------------
Adjusted profit from operations
comparable with prior year 12,008 9,150
------------------------- ------------------------
*included within depreciation and financial expenses is GBP298k
relating to pre-opening expenditure. This was accounted for as
pre-opening operating expenditure in the year.
Consolidated balance sheet at 2 January 2020
Registered
in England
& Wales
08684079
2 January 3 January
2020 2019
Note GBP000 GBP000
Assets
Non-current assets
Property, plant and equipment 15 83,499 66,150
1
Right-of-use assets 6 58,415 -
Intangible assets 17 10,694 10,655
Trade and other receivables 21 173 173
152,781 76,978
------------------- ---------------------------
Current assets
Inventories 19 507 406
Trade and other receivables 21 4,463 3,790
Cash and cash equivalents 20 4,271 3,517
------------------- ---------------------------
9,241 7,713
------------------- ---------------------------
Total assets 162,022 84,691
------------------- ---------------------------
Liabilities
Current liabilities
Other interest-bearing loans and
borrowings 24 122 56
Trade and other payables 22 14,408 12,398
Lease liabilities 25 2,386 -
Corporation tax liabilities 23 186 -
17,102 12,454
------------------- ---------------------------
Non-current liabilities
Other interest-bearing loans and
borrowings 24 14,000 7,000
Other payables 22 - 7,796
Lease liabilities 25 74,005 -
Provisions for other liabilities 28 - 1,794
Deferred tax liabilities 29 1,362 1,210
------------------- ---------------------------
89,367 17,800
------------------- ---------------------------
Total liabilities 106,469 30,254
------------------- ---------------------------
Net assets 55,553 54,437
------------------- ---------------------------
Equity attributable to owners of
the Company
Share capital 30 7,352 7,099
Share premium 30 41,920 39,066
Merger reserve 30 11,152 11,152
Forex reserve 1 -
Retained earnings (4,872) (2,880)
------------------- ---------------------------
Total equity 55,553 54,437
------------------- ---------------------------
These financial statements were approved by the Board of
Directors on 18 March 2020 and signed on its behalf by:
Crispin Lilly
CEO
Consolidated statement of changes in equity for the year ended 2
January 2020
Share Share Merger Forex Retained Total
capital premium reserve reserve earnings Equity
Note GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 29 December 2017 7,003 38,354 11,152 - (5,170) 51,339
--------- --------- --------- --------- ---------- --------
Profit for the year - - - - 2,037 2,037
--------- --------- --------- --------- ---------- --------
Total comprehensive income - - - - 2,037 2,037
--------- --------- --------- --------- ---------- --------
Shares issued in the period 30 96 712 - - - 808
Share issue expenses 30 - - - - - -
Share-based payments 31 - - - - 500 500
Deferred tax on share-based
payments 29 - - - - (247) (247)
--------- --------- --------- --------- ---------- --------
Total transactions with
owners of parent 96 712 - - 253 1,061
--------- --------- --------- --------- ---------- --------
Balance at 3 January 2019 7,099 39,066 11,152 - (2,880) 54,437
--------- --------- --------- --------- ---------- --------
Balance at 4 January 2019 7,099 39,066 11,152 - (2,880) 54,437
--------- --------- --------- --------- ---------- --------
Profit for the year 1,770 1,770
Retranslation of foreign
currency denominated subsidiaries - - - 1 - 1
--------- --------- --------- --------- ---------- --------
Total comprehensive income - - - 1 1,770 1,771
--------- --------- --------- --------- ---------- --------
Shares issued in the period 30 253 2,854 - - - 3,107
Acquisition without change
in control 30 - - - - (1,510) (1,510)
IFRS 16 accumulated restatement 25 - - - - (3,129) (3,129)
Deferred tax on IFRS 16
accumulated restatement 29 - - - - 535 535
Share-based payments 31 - - - - 688 688
Deferred tax on share-based
payments 23/29 - - - - (346) (346)
--------- --------- --------- --------- ---------- --------
Total transactions with
owners of the parent 253 2,854 - - (3,762) (655)
--------- --------- --------- --------- ---------- --------
Balance at 2 January 2020 7,352 41,920 11,152 1 (4,872) 55,553
--------- --------- --------- --------- ---------- --------
Consolidated cash flow statement for the year ended 2 January
2020
2 January 3 January
2020 2019
Note GBP000 GBP000
Cash flows from operating activities
Profit for the year 1,770 2,037
Adjustments for:
Financial income 11 (1) -
Financial expenses 12 2,510 160
Income tax expense 13 526 679
-------------------------- -------------------------
Operating profit 4,805 2,876
Changes in working capital
Depreciation and amortisation 15,17 8,764 4,563
Loss on disposal of property, plant and
equipment 15 52 17
Transfer of property, plant and equipment
to profit and loss 15 5 41
Capitalised finance expenses 68 25
Loan arrangement fees (58) -
Bad debts (79) 141
Acquisition and incorporation expenses 25 4
Lease incentives amortised - 214
Market rent provisions 28 - (88)
Equity-settled share-based payments 31 688 500
-------------------------- -------------------------
14,270 8,293
Increase in inventories (101) (98)
Increase in trade and other receivables (1,333) (2,887)
Increase in trade and other payables 3,089 2,332
-------------------------- -------------------------
Cash generated from operating activities 15,924 7,640
-------------------------- -------------------------
Cash flows from investing activities
Acquisition and incorporation expenses 34 (25) (4)
Acquisition of property, plant and equipment 15 (23,154) (22,235)
Proceeds from sale of property, plant
and equipment - 9
Acquisition of intangible assets 17 (953) (895)
Interest received 11 1 -
-------------------------- -------------------------
Net cash used in investing activities (24,131) (23,125)
-------------------------- -------------------------
Cash flows from financing activities
Proceeds from the issuance of Ordinary
shares 1,450 808
Proceeds from bank borrowings 24 13,000 9,000
Repayment of bank borrowings 26 (6,000) (9,000)
Lease incentives net of reductions in
lease liabilities 850 -
Interest paid (339) (172)
-------------------------- -------------------------
Net cash generated from financing activities 8,961 636
-------------------------- -------------------------
Net increase/(decrease) in cash and cash
equivalents 754 (14,849)
-------------------------- -------------------------
Cash and cash equivalents at the beginning
of the year 3,517 18,366
-------------------------- -------------------------
Cash and cash equivalents at the end
of the year 4,271 3,517
-------------------------- -------------------------
The Group had GBP16,000,000 of undrawn funds available (2018:
GBP13,000,000) of the loan facility at the year end.
Company balance sheet as at 2 January 2020
Registered
in England
& Wales
08684079
2 January 3 January
2020 2019
Note GBP000 GBP000
Assets
Non-current assets
Trade and other receivables 21 55,278 44,536
Property, plant and equipment 15 219 348
Right-of-use assets 16 8,756 -
Investments 18 31,994 30,337
Deferred tax assets 48 -
Intangible assets 17 - 547
-------------------
Total assets 96,295 75,768
------------------- ----------------------
Liabilities
Current liabilities
Lease liabilities 25/26 467 -
Loans and borrowings 24 122 56
Corporation tax liabilities 23 60 -
------------------- ----------------------
649 56
------------------- ----------------------
Non-current liabilities
Interest-bearing borrowings 24 14,000 7,000
Lease liabilities 25/26 9,453 -
Provisions for other liabilities 28 - 1,289
Deferred tax liabilities 29 - 41
-------------------
23,453 8,330
------------------- ----------------------
Total liabilities 24,102 8,386
------------------- ----------------------
Net assets 72,193 67,382
------------------- ----------------------
Equity
Equity attributable to owners of
the Company
Ordinary shares 30 7,352 7,099
Share premium 30 41,920 39,066
Merger reserve 30 20,336 20,336
Retained earnings 2,585 881
----------------------
Total equity 72,193 67,382
------------------- ----------------------
These financial statements were approved by the Board of
Directors on 18 March 2020 and signed on its behalf by:
Crispin Lilly
CEO
Company statement of changes in equity for the year ended 2
January 2020
Share Share Merger Retained Total
capital premium reserve earnings equity
Note GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 28
December
2017 7,003 38,354 20,336 490 66,183
Loss for the year - - - (109) (109)
Shares issued in the
period 30 96 712 - - 808
Share-based payments 31 - - - 500 500
---------------- ---------------- ---------------- ---------------- --------------
Balance at 3 January
2019 7,099 39,066 20,336 881 67,382
---------------- ---------------- ---------------- ---------------- --------------
Balance at 4 January
2019 7,099 39,066 20,336 881 67,382
Profit for the year - - - 1,470 1,470
Shares issued in the
period 30 253 2,854 - - 3,107
Share-based payment
expense 31 - - - 688 688
IFRS 16 accumulated
restatement 25/26 - - - (548) (548)
Deferred tax on IFRS
16 accumulated
restatement 29 - - - 94 94
Balance at 2 January
2020 7,352 41,920 20,336 2,585 72,193
---------------- ---------------- ---------------- ---------------- --------------
Notes to the financial statements
1 General information
Everyman Media Group PLC and its subsidiaries (together, the
Group) are engaged in the ownership and management of cinemas in
the United Kingdom. Everyman Media Group PLC (the Company) is a
public company limited by shares registered, domiciled and
incorporated in England and Wales, in the United Kingdom
(registered number 08684079). The address of its registered office
is Studio 4, 2 Downshire Hill, London NW3 1NR. All trade takes
place in the United Kingdom.
2 Basis of preparation and accounting policies
The Group financial statements have been prepared and approved
by the Directors in accordance with International Financial
Reporting Standards as adopted by the EU. The Company has elected
to prepare its parent Company financial statements in accordance
with FRS101.
The financial statements are prepared on the historical cost
basis except that the following assets and liabilities are stated
at their fair value: financial liabilities (including derivatives)
measured at fair value, and liabilities for cash-settled
share-based payments. Non-current assets are stated at the lower of
previous carrying amount and fair value less costs to sell.
The accounting policies set out below have, unless otherwise
stated, been applied consistently to all periods presented in these
Group financial statements. The Group prepares its financial
statements on a 52/53 week basis. The year end date is determined
by the 52nd Thursday in the year. A 53rd week is reported where the
year end date is no longer aligned with 7 days either side of 31st
December. The year ended 2 January 2020 is a 52 week period in
comparison to the previous 53 week period ended 3 January 2019.
Company basis of preparation
The Company financial statements were prepared in accordance
with Financial Reporting Standard 101 Reduced Disclosure Framework
(FRS101). The amendments to FRS101 (2014/15 cycle) issued in July
2015 have been applied.
In preparing these financial statements, the Company applies the
recognition, measurement and disclosure requirements of
International Financial Reporting Standards as adopted by the EU
but makes amendments where necessary in order to comply with the
Companies Act 2006 and has set out below where advantage of the
FRS101 disclosure exemptions has been taken.
Under s408 of the Companies Act 2006 the Company is exempt from
the requirement to present its own profit and loss account.
In these financial statements, the Company has applied the
exemptions available under FRS101 in respect of the following
disclosures:
- A cash flow statement and related notes.
- Disclosures in respect of transactions with wholly-owned
subsidiaries.
- Disclosures in respect of capital management.
- Disclosures in respect of the compensation of key management
personnel.
- New but not yet effective IFRS.
As the consolidated financial statements include the equivalent
disclosures, the Company has also taken the exemptions under FRS101
available in respect of the following disclosures:
- IFRS2 Share Based Payments in respect of Group-settled share
based payments.
- Certain disclosures required by IAS36 Impairment Of Assets in
respect of the impairment of goodwill and indefinite-life
intangible assets.
- Certain disclosures required by IFRS3 Business Combinations in
respect of business combinations undertaken by the Company in the
current and prior periods including the comparative period
reconciliation for goodwill.
- Certain disclosures required by IFRS13 Fair Value
Measurement.
- Certain disclosures required by IFRS7 Financial
Instruments.
Going concern
Uncertainty due to the recent COVID-19 outbreak has been
considered as part of the Group's adoption of the going concern
basis. Trading over recent days has been impacted by COVID-19 and
the delay of major movie releases. Following guidance provided by
the UK government, the Board of Everyman has taken the decision to
close its venues to guests until further notice. The health of our
staff and our customers is the boards highest priority.
All appropriate measures have been put in place to reduce the
impact on the Group, including cost reduction and the postponement
of new sites, refurbishments and other capital expenditure
projects. Whilst the Group has significant headroom in its loan
facility there is a risk of breaching the Group's financial
covenants. The Board is in discussions with its lenders and is in
the process of re-negotiating its loan covenants to maintain
liquidity through this period of uncertainty. The Board is hopeful
of lenders continued support in this period of uncertainty which is
underpinned by the Government announcement to provide guaranteed
loans to business.
The Board's latest forecasts are based on a scenario where the
business is closed for a period of three months with reduced
admissions for the following two months at 50% and 65% of normal
trade respectively. The Board has factored in a delay in all
non-committed capital expenditure, reduction in variable costs
including staffing and moving to monthly rent payments. In addition
the Government has recently announced a twelve month business rates
holiday for the hospitality sector. Under this scenario there is a
risk of breaching the Group's financial covenants as stated
above.
The Board has also considered the severe but plausible downside
scenario of complete closure and delayed re-opening. This continues
to be under review given current market conditions associated with
COVID-19. The business, subject to the renegotiation of its loan
covenants, has the ability to remain trading for a period of at
least 12 months from the date of signing of these financial
statements.
The Group also has a very supportive shareholder base who are
committed to the long term success of the Group, and currently
there is GBP14m headroom in the loan facility at the date of these
financial statements. Subject to the waiver or agreement of new
loan covenants which match the expected trading position of the
business, the Group is able to operate within the level of its
current facility for at least 12 months from the approval date of
the financial statements.
The events arising as a result of the COVID-19 outbreak has
meant that there is a material uncertainty. Based on these
indications the directors believe that it remains appropriate to
prepare the financial statements on a going concern basis. However,
these circumstances represent a material uncertainty that may cast
significant doubt on the Group and Company's ability to continue as
a going concern and, therefore, to continue realising their assets
and discharging their liabilities in the normal course of business.
The financial statements do not include any adjustments that would
result from the basis of preparation being inappropriate.
Use of non-GAAP profit and loss measures
The Group believes that along with operating profit, the
'adjusted profit from operations' provides additional guidance to
the statutory measures of the performance of the business during
the financial year.
Adjusted profit from operations is calculated by adding back
depreciation, amortisation, pre-opening expenses and certain
non-recurring or non-cash items. Adjusted profit is an internal
measure used by management as they believe it better reflects the
underlying performance of the Group beyond generally accepted
accounting principles. A pre IFRS16 adjusted profit from operations
is also reported to show EBITDA as would have been reported if
operating leases were reported on a straight line basis as
rent.
Basis of consolidation
Where the Group has power, either directly or indirectly so as
to have the ability to affect the amount of the investor returns
and has exposure or rights to variable returns from its involvement
with the investee, it is classified as a subsidiary. The balance
sheet at 2 January 2020 incorporates the results of all
subsidiaries of the Group for all years and periods, as set out in
the basis of preparation.
Intra-group balances and transactions, and any unrealised income
and expenses arising from intra-group transactions, are eliminated.
Unrealised losses are eliminated in the same way as unrealised
gains, but only to the extent that there is no evidence of
impairment.
The consolidated financial statements include the results of the
Company and all its subsidiary undertakings made up to the same
accounting date.
Merger reserve
On 29 October 2013 the Company became the new holding company
for the Group. This was put into effect through a share-for-share
exchange of 1 Ordinary share of 10 pence in Everyman Media Group
PLC for 1 Ordinary share of 10 pence in Everyman Media Holdings
Limited (previously, Everyman Media Group Limited), the previous
holding company for the Group. The value of 1 share in the Company
was equivalent to the value of 1 share in Everyman Media Holdings
Limited.
The accounting treatment for group reorganisations is presented
under the scope of IFRS3. The introduction of the new holding
company was accounted for as a capital reorganisation using the
principles of reverse acquisition accounting under IFRS3.
Therefore, the consolidated financial statements are presented as
if Everyman Media Group PLC has always been the holding company for
the Group. The Company was incorporated on 10 September 2013.
The use of merger accounting principles has resulted in a
balance in Group capital and reserves which has been classified as
a merger reserve and included in the Group's shareholders'
funds.
The Company recognised the value of its investment in Everyman
Media Holdings Limited at fair value based on the initial share
placing price on admission to AIM. As permitted by s612 of the
Companies Act 2006, the amount attributable to share premium was
transferred to the merger reserve. The investment in the Company is
recorded at fair value.
Revenue recognition
Revenue for the Group is measured at the fair value of the
consideration received or receivable. The Group recognises revenue
for services provided when the amount of revenue can be reliably
measured and it is probable that future economic benefits will flow
to the entity.
The Group's revenues from film and entertainment activities are
recognised on completion of the showing of the relevant film. The
Group's revenues for food and beverages are recognised at the point
of sale as this is the time the performance obligations have been
met. The Group's other revenues, which include commissions, are
recognised when all performance obligations have been
satisfied.
All advanced booking fees, gift cards and similar income which
are received in advance of the related performance are classified
as deferred revenue and shown as a liability until completion of
the performance.
All contractual-based revenue from memberships is initially
classified as deferred revenue. Revenue from memberships that
provide a certain number of tickets per year is recognised over the
year as utilised. Revenue from memberships, sponsorships and
advertising revenues that provide unlimited access is recognised
equally over the year.
Goodwill
Goodwill is stated at cost less any accumulated impairment
losses. Goodwill is allocated to cash-generating units and is not
amortised but is tested annually for impairment. Goodwill
represents the excess of the costs of a business combination over
the total acquisition date fair values of the identifiable assets,
liabilities and contingent liabilities acquired. Goodwill is
capitalised as an intangible asset. Costs incurred in a business
combination are expensed as incurred with the exception that for
business combinations completed prior to 1 January 2010, cost
comprised the fair value of assets given, liabilities assumed and
equity instruments issued, plus any direct costs of
acquisition.
The recoverable amount of an asset or cash-generating unit (CGU)
is the greater of its value-in-use and its fair value less costs to
sell. In assessing value-in-use, the estimated future cash flows
are discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money
and the risks specific to the asset. For the purpose of impairment
testing, assets that cannot be tested individually are grouped
together into the smallest group of assets that generates cash
inflows from continuing use that are largely independent of the
cash inflows of other assets or groups of assets (the CGU). The
goodwill acquired in a business combination, for the purpose of
impairment testing, is allocated to CGUs. Subject to an operating
segment ceiling test, for the purposes of goodwill impairment
testing, CGUs to which goodwill has been allocated are aggregated
so that the level at which impairment is tested reflects the lowest
level at which goodwill is monitored for internal reporting
purposes. Goodwill acquired in a business combination is allocated
to groups of CGUs that are expected to benefit from the synergies
of the combination.
An impairment loss is recognised if the carrying amount of an
asset or its CGU exceeds its estimated recoverable amount.
Impairment losses are recognised in the profit and loss. Impairment
losses recognised in respect of CGUs are allocated first to reduce
the carrying amount of any goodwill allocated to the units, and
then to reduce the carrying amounts of the other assets in the
unit/group of units on a pro-rata basis.
Business combinations
Acquisitions that are deemed to be the transfer of a 'business'
per IFRS3 requirements, are valued at fair value through the use of
an external valuation specialist. As such, any identifiable
tangible and intangible assets and liabilities are valued prior to
acquisition and any excess consideration is treated as goodwill and
reviewed for impairment annually.
Intangible assets
Interests in property-based leases acquired in a business
combination are recognised at fair value at the acquisition date.
Amortisation is calculated on a straight-line basis to allocate the
cost of property-based leases across the term of the relevant
leasehold interest.
Amortisation on software in development does not commence until
it is complete and available for use.
Software assets acquired by the Group are stated at cost less
accumulated amortisation and impairment losses. Amortisation is
provided on all software assets so as to write off their carrying
value over the expected useful economic lives. The estimated useful
lives are as follows:
Leasehold interest - straight line on cost over the remaining
life of the lease
Software assets - 3 to 5 years
Property, plant and equipment
Items of property, plant and equipment are recognised at cost
less accumulated depreciation and accumulated impairment losses. As
well as the purchase price, cost includes directly attributable
costs.
Depreciation on assets under construction does not commence
until they are complete and available for use. These assets
represent fit-outs. Depreciation is provided on all other leasehold
improvements and all other items of property, plant and equipment
so as to write off their carrying value over the expected useful
economic lives. The estimated useful lives are as follows:
Freehold properties - 50 years
Leasehold improvements - straight line on cost over the remaining life of the lease
Plant and machinery - 5 years
Fixtures and fittings - 8 years
Depreciation methods, useful lives and residual values are
reviewed at each balance sheet date. Land is not depreciated.
Impairment (excluding inventories)
A financial asset not carried at fair value through the profit
and loss is assessed at each reporting date to determine whether
there is objective evidence that it is impaired. A financial asset
is impaired if objective evidence indicates that a loss event has
occurred after the initial recognition of the asset and that the
loss event had a negative effect on the estimated future cash flows
of that asset that can be estimated reliably.
An impairment loss in respect of a financial asset measured at
amortised cost is calculated as the difference between its carrying
amount and the present value of the estimated future cash flows
discounted at the asset's original effective interest rate.
Interest on the impaired asset continues to be recognised through
the unwinding of the discount. When a subsequent event causes the
amount of impairment loss to decrease, the decrease in impairment
loss is reversed through the profit and loss.
Inventories
Inventories are valued at the lower of cost and net realisable
value. The cost incurred in bringing each product to its present
location and condition is accounted for as follows:
Food and beverages - purchase cost on a first-in, first-out basis
Projection stock - purchase cost on a first-in, first-out basis
Net realisable value is the estimated selling price in the
ordinary course of business.
Provisions
A provision is recognised in the balance sheet when the Group
has a present legal or constructive obligation as a result of a
past event, that can be reliably measured and it is probable that
an outflow of economic benefits will be required to settle the
obligation. Market rent provisions are determined by discounting
the expected future cash flows at a pre-tax rate that reflects
risks specific to the liability.
Financial instruments
Recognition and initial measurement
Trade receivables are initially recognised when originated. All
other financial assets and liabilities are initially recognised
when the Group becomes party to the contractual provisions of the
instrument.
Financial assets (unless a trade receivable without a
significant financing component) or financial liabilities are
initially measured at fair value plus, for items not at fair value
through the profit and loss, transaction costs that are directly
attributable to their acquisition or issue. Trade receivables
without a significant financing component are initially measured at
the transaction price.
Classification and subsequent measurement
Financial assets classification
On initial recognition, financial assets are classified as
measured at either amortised cost, fair value through other
comprehensive income for debt investments or equity investments, or
fair value through profit and loss. Financial assets are not
reclassified subsequent to their initial recognition unless the
Group changes its business model for managing financial assets, in
which case all affected financial assets are reclassified on the
first day of the first reporting period following the change in the
business model.
Financial assets are measured at amortised cost if they meet
both of the following conditions:
- They are held within a business model whose objective is to
hold assets to collect contractual cash flows
- The contractual terms give rise, on specified dates, to cash
flows that are solely payments of principal and interest on the
principal amount outstanding.
Debt investments are measured at fair value through other
comprehensive income if they meet both of the following
conditions:
- They are held within a business model whose objective is
achieved by both collecting contractual cash flows and selling
financial assets
- The contractual terms give rise, on specified dates, to cash
flows that are solely payments of principal and interest on the
principal amount outstanding.
Investments in subsidiaries are carried at cost less
impairment.
Cash and cash equivalents classification
Cash and cash equivalents comprise cash balances and call
deposits. Bank overdrafts that are repayable on demand and form an
integral part of the Group's cash management are included as a
component of cash and cash equivalents for the purpose only of the
cash flow statement.
Financial assets subsequent measurement, gains and losses
Financial assets classified at fair value through profit and
loss, other than derivatives designated as hedging instruments, are
subsequently measured at fair value. Net gains and losses,
including any interest or dividend income, are recognised in the
profit and loss.
Financial assets classified at amortised cost are subsequently
measured at amortised cost using the effective interest method. The
amortised cost is reduced by impairment losses. Interest income,
foreign exchange gains and losses and impairment are recognised in
the profit and loss. Any gain or loss on derecognition is
recognised in the profit and loss.
Debt investments classified at fair value through other
comprehensive income are subsequently measured at fair value.
Interest income calculated using the effective interest method,
foreign exchange gains and losses and impairment are recognised in
the profit and loss. Other net gains and losses are recognised in
other comprehensive income. On derecognition, gains and losses
accumulated in other comprehensive income are reclassified to the
profit and loss.
Equity investments classified at fair value through other
comprehensive income are subsequently measured at fair value.
Dividends are recognised as income in the profit and loss unless
the dividend clearly represents a recovery of part of the cost of
the investment. Other net gains and losses are recognised in other
comprehensive income and are never reclassified to the profit and
loss.
Financial liabilities and equity
Financial instruments issued by the Group are treated as equity
only to the extent that they meet the following conditions:
- They include no contractual obligations upon the Group to
deliver cash or other financial assets or to exchange financial
assets or financial liabilities with another party under conditions
that are potentially unfavourable to the Group
- Where the instruments may be settled in the Group's own equity
instruments, they are either a non-derivative that include no
obligation to deliver a variable number of the Group's own equity
instruments or they are a derivative that will be settled by the
Group exchanging a fixed amount of cash or other financial assets
for a fixed number of its own equity instruments.
To the extent that this definition is not met, the proceeds of
issue are classified as a financial liability. Where the instrument
so classified takes the legal form of the Group's own shares, the
amounts presented in these financial statements for called up share
capital and share premium account exclude amounts in relation to
those shares.
Financial liabilities are classified as measured at amortised
cost or fair value through profit and loss. Financial liabilities
are classified as fair value through profit and loss if they are
classified as held for trading, they are a derivative or they are
designated as such on initial recognition. Financial liabilities
classified at fair value through profit and loss are measured at
fair value and net gains and losses, including any interest
expense, are recognised in the profit and loss. Other financial
liabilities are subsequently measured at amortised cost using the
effective interest method. Interest expense and foreign exchange
gains and losses are recognised in the profit and loss. Any gain or
loss on derecognition is also recognised in the profit and
loss.
Impairment
The Group recognises loss allowances for expected credit losses
on financial assets measured at amortised cost, debt investments
measured at fair value through other comprehensive income and
contract assets (as defined in IFRS15).
The Group measures loss allowances at an amount equal to
lifetime expected credit losses, except for other debt securities
and bank balances for which credit risk (i.e. the risk of default
occurring over the expected life of the financial instrument) has
not increased significantly since initial recognition which are
measured as 12 month expected credit losses.
Loss allowances for trade receivables and contract assets are
always measured at an amount equal to lifetime expected credit
losses.
When determining whether the credit risk of a financial asset
has increased significantly since initial recognition and when
estimating expected credit losses, the Group considers reasonable
and supportable information that is relevant and available without
undue cost or effort. This includes both quantitative and
qualitative information and analysis, based on the Group's
historical experience and informed credit assessment and including
forward-looking information.
The Group assumes that the credit risk on a financial asset has
increased significantly if it is more than 60 days past due. The
Group considers a financial asset to be in default when the
financial asset is more than 120 days past due.
Lifetime expected credit losses are those that result from all
possible default events over the expected life of a financial
instrument.
12 month expected credit losses are the portion that result from
default events that are possible within the 12 months after the
reporting date (or a shorter period if the expected life of the
instrument is less than 12 months). The maximum period considered
when estimating expected credit losses is the maximum contractual
period over which the Group is exposed to credit risk.
Measurement of expected credit losses
Expected credit losses are a probability-weighted estimate of
credit losses. Credit losses are measured as the present value of
all cash shortfalls (i.e. the difference between the cash flows due
to the entity in accordance with the contract and the cash flows
that the company expects to receive). Expected credit losses are
discounted at the effective interest rate of the financial
asset.
Credit-impaired financial assets
At each reporting date, the Group assesses whether financial
assets carried at amortised cost and debt securities classified at
fair value through other comprehensive income are credit-impaired.
A financial asset is credit-impaired when one or more events that
have a detrimental impact on the estimated future cash flows of the
financial asset have occurred.
Written-off financial assets
The gross carrying amount of a financial asset is written-off
(either partially or in full) to the extent that there is no
realistic prospect of recovery.
Taxation
Tax on the profit and loss for the year comprises current and
deferred tax. Tax is recognised in the profit and loss except to
the extent that it relates to items recognised directly in equity,
in which case it is recognised in equity. Current tax is the
expected tax payable or receivable on the taxable income or loss
for the year, using tax rates enacted or substantively enacted at
the balance sheet date, and any adjustment to tax payable in
respect of previous years.
Deferred tax assets and liabilities are recognised where the
carrying amount of an asset or liability in the consolidated
balance sheet differs from its tax base, except for differences
arising on:
- The initial recognition of goodwill.
- The initial recognition of an asset or liability in a
transaction which is not a business combination and at the time of
the transaction affects neither accounting or taxable profit.
- Investments in subsidiaries and jointly controlled entities
where the Group is able to control the timing of the reversal of
the difference and it is probable that the difference will not
reverse in the foreseeable future.
Recognition of deferred tax assets is restricted to those
instances where it is probable that taxable profit will be
available against which the difference can be utilised.
The amount of the asset or liability is determined using tax
rates that have been enacted or substantively enacted by the
reporting date and are expected to apply when the deferred tax
liabilities or assets are settled or recovered. Deferred tax
balances are not discounted.
Deferred tax assets and liabilities are offset when the Group
has a legally enforceable right to offset current tax assets and
liabilities and the deferred tax assets and liabilities relate to
taxes levied by the same tax authority on either:
- The same taxable group company; or
- Different company entities which intend either to settle
current tax assets and liabilities on a net basis or to realise the
assets and settle the liabilities simultaneously, in each future
period in which significant amounts of deferred tax assets and
liabilities are expected to be settled or recovered.
Operating segments
The Board, the chief operating decision maker, considers that
the Group's primary activity constitutes one reporting segment, as
defined under IFRS8.
The total profit measures are operating profit and profit for
the year, both disclosed on the face of the consolidated profit and
loss. No differences exist between the basis of preparation of the
performance measures used by management and the figures used in the
Group financial information.
All of the revenues generated relate to cinema tickets, sale of
food and beverages and ancillary income, an analysis of which
appears in the notes below. All revenues are wholly generated
within the UK. Accordingly there are no additional disclosures
provided to the financial information.
Pre-opening expenses
Property rentals and other related overhead expenses incurred
prior to a new site opening are expensed to the profit and loss in
the year that they are incurred. Similarly, the costs of training
new staff during the pre-opening phase are expensed as incurred.
These expenses are included within administrative expenses,
right-of-use depreciation and financing expenses.
Employee benefits
Defined contribution plans
A defined contribution plan is a post-employment benefit plan
under which the company pays fixed contributions into a separate
entity and will have no legal or constructive obligation to pay
further amounts. Obligations for contributions to defined
contribution pension plans are recognised as an expense in the
profit and loss in the periods during which services are rendered
by employees.
Share-based payments
Certain employees (including Directors and senior executives) of
the Group receive remuneration in the form of share-based payment
transactions, whereby employees render services as consideration
for equity instruments (equity-settled transactions). The cost of
share-based payments is recharged by the Company to subsidiary
undertakings in proportion to the services recognised.
The cost of equity-settled transactions with employees is
measured by reference to the fair value at the date on which they
are granted. The fair value is determined by using an appropriate
pricing model.
The cost of equity-settled transactions is recognised, together
with a corresponding increase in equity, over the period in which
the performance and/or service conditions are fulfilled, ending on
the date on which the relevant employees become fully entitled to
the award (the vesting date). The cumulative expense recognised for
equity-settled transactions at each reporting date until the
vesting date reflects the extent to which the vesting period has
expired and the Group's best estimate of the number of equity
instruments that will ultimately vest. The profit or loss charge or
credit for a period represents the movement in cumulative expense
recognised as at the beginning and end of that period.
No expense is recognised for awards that do not ultimately vest,
except for awards where vesting is conditional upon a market
condition, which are treated as vesting irrespective of whether or
not the market condition is satisfied, provided that all other
performance and/or service conditions are satisfied. The dilutive
effect of outstanding options is reflected as additional share
dilution in the computation of earnings per share.
Research and development
Expenditure on development activities is capitalised if the
product or process is technically and commercially feasible and the
Group intends to and has the technical ability and sufficient
resources to complete development, future economic benefits are
probable and if the Group can measure reliably the expenditure
attributable to the intangible asset during its development.
Development activities involve a plan or design for the production
of new or substantially improved products or processes. The
expenditure capitalised includes the cost of materials and direct
labour. Capitalised development expenditure is stated at cost less
accumulated amortisation and less accumulated impairment
losses.
3 Changes in significant accounting policies
IFRS 16: Leases (effective 1 January 2019)
The Group has applied IFRS 16 using the modified retrospective
approach and therefore the comparative information has not been
restated and continues to be reported under IAS17 and IFRIC4.
At inception of a contract, the Group assesses whether a
contract is, or contains, a lease. A contract is, or contains, a
lease if the contract conveys the right to control the use of an
identified asset for a period of time in exchange for
consideration. To assess whether a contract conveys the right to
control the use an identified asset, the Group assesses
whether:
- the contract involves the use of an identified asset (this may
be specified explicitly or implicitly, and should be physically
distinct or represent substantially all of the capacity of a
physically distinct asset). If the supplier has a substantive
substitution right, then the asset is not identified;
- the Group has the right to obtain substantially all of the
economic benefits from use of the asset throughout the period of
use; and
- the Group has the right to direct the use of the asset. The
Group has this right when it has the decision-making rights that
are most relevant to changing how and for what purpose the asset is
used.
This policy is applied to contracts entered into, or changed, on
or after 1 January 2019. At inception or on reassessment of a
contract that contains a lease component, the Group allocates the
consideration in the contract to each lease component on the basis
of their relative stand-alone prices. However, for the leases of
land and buildings in which it is a lessee, the Company has elected
not to separate non-lease components and account for the lease and
non-lease components as a single lease component.
Previously, the Group recognised operating leases on a
straight-line basis over the term of the lease and recognised
assets and liabilities only to the extent that there was a timing
difference between actual lease payments and the expense
recognised.
In addition, the Group will no longer recognise provisions for
operating leases that it assesses to be onerous. Instead, the
Company will include the payments due under the lease in its lease
liability.
Leases in which the Group is a lessee
The Company recognises a right-of-use asset and a lease
liability at the lease commencement date. The right-of-use asset is
initially measured at cost, which comprises the initial amount of
the lease liability adjusted for any lease payments made at or
before the commencement date, plus any initial direct costs
incurred and an estimate of costs to dismantle and remove the
underlying asset or to restore the underlying asset or the site on
which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the
straight-line method from the commencement date to the end of the
lease term. The right-of-use asset is periodically reduced by
impairment losses, if any, and adjusted for certain remeasurements
of the lease liability.
The lease liability is initially measured at the present value
of the lease payments at the commencement date, discounted using
the interest rate implicit in the lease or, if that rate cannot be
readily determined, the Group's incremental borrowing rate.
Lease payments included in the measurement of the lease
liability comprise the following:
- fixed payments
- variable lease payments that depend on an index or a rate,
initially measured using the index or rate as at the commencement
date
- amounts expected to be payable under a residual value
guarantee
The lease liability is measured at amortised cost using the
effective interest method. It is remeasured when there is a change
in future lease payments arising from a change in an index or rate,
if there is a change in the Group's estimate of the amount expected
to be payable under a residual value guarantee, or if the Group
changes its assessment of whether it will exercise a purchase,
extension or termination option.
When the lease liability is remeasured, a corresponding
adjustment is made to the carrying amount of the right-of-use
asset, or is recorded in profit or loss if the carrying amount of
the right-of-use asset has been reduced to zero.
The Group presents right-of-use assets that do not meet the
definition of investment property, in property, plant and
equipment. Lease liabilities are presented in loans and borrowings
in the balance sheet.
In the comparative period under IAS17, as a lessee the Group
classified leases that transferred substantially all of the risks
and rewards of ownership as finance leases. When this was the case,
the leased assets were measured initially at an amount equal to the
lower of their fair value and the present value of the minimum
lease payments. Minimum lease payments were the payments over the
lease term that the lessee was required to make, excluding any
contingent rent.
Assets held under other leases were classified as operating
leases and were not recognised in the Group's balance sheet.
Payments made under operating leases were recognised in the profit
and loss on a straight-line basis over the term of the lease.
Short-term leases and leases of low-value assets
The Group has elected not to recognise right-of-use assets and
lease liabilities for short-term leases that have a lease term of
12 months or less and leases of low-value assets. The Group
recognises these lease payments as an expense on a straight-line
basis over the lease term.
4 Critical accounting estimates
In the application of the Group's accounting policies, the
Directors are required to make judgements, estimates and
assumptions about the carrying amounts of assets and liabilities
that are not readily apparent from other sources. The estimates and
associated assumptions are based on historical experience and other
facts that are considered to be relevant. Actual results may differ
from these estimates.
These estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised, if the revision
affects only that period, or in the period of the revision and
future periods if the revision affects both current and future
periods. In the current year, there are no estimates or assumptions
that have a significant risk of causing a material adjustment to
the carrying amounts of assets and liabilities.
Impairment of intangible assets
Determining whether intangible assets are impaired requires an
estimate of the fair value of the cash-generating units less costs
to sell. The determination of a fair value and of suitable selling
costs require a level of estimation. In situations where this is
lower than the book value of the net assets of the cash generating
unit, a value-in-use calculation will need to be performed. The
value-in-use calculation requires the entity to estimate the future
cash flows expected to arise from the cash-generating unit and a
suitable discount rate in order to calculate present value. Details
of the impairment accounting policies are set out in the above
notes.
Impairment of tangible assets
Determining whether tangible assets are impaired requires an
assessment at each reporting date to determine whether there is
objective evidence that it is impaired. A tangible asset is
impaired if objective evidence indicates that a loss event has
occurred after the initial recognition of the asset which has a
negative impact on the estimated future cash flows of that asset.
In situations where there are impairment indicators, an impairment
loss will be recognised as the difference between its carrying
amount and the present value of the estimated future cash flows
discounted at the asset's original effective interest rate. The
value-in-use calculation requires the entity to estimate the future
cash flows expected to arise from the cash-generating unit and a
suitable discount rate in order to calculate present value.
5 Revenue
Year ended Year ended
2 January 3 January
2020 2019
GBP000 GBP000
Film and entertainment 37,195 31,465
Food and beverages 23,310 17,622
Other income 4,450 2,793
------------------- -------------------
64,955 51,880
------------------- -------------------
All trade takes place in the United Kingdom. Other income
includes items such as advertising and sponsorship.
The following provides information about opening and closing
receivables, contract assets and liabilities from contracts with
customers. There was no impact on the opening balance sheet when
the Company first applied IFRS15 on 29 December 2017.
Contract balances 2 January 3 January
2020 2019
GBP000 GBP000
Trade and other receivables 1,428 963
Deferred income 3,813 2,935
--------------------- --------------------
Deferred income relates to advanced consideration received from
customers in respect of memberships, gift cards and advanced
screenings. All deferred balances at the beginning of the year
(GBP2,935,000) were recognised in the profit and loss during the
year. All deferred income at the end of the year (GBP3,788,000) is
due to be recognised within 12 months.
6 Profit before taxation
Profit before taxation is stated after charging:
Year ended Year ended
2 January 3 January
2020 2019
GBP000 GBP000
Depreciation of tangible assets 5,748 4,236
Depreciation of right-of-use
assets 2,650 -
Amortisation of intangible assets 366 328
Loss on disposal of property,
plant and equipment 52 17
Operating lease (income)/expense (98) 3,301
Share-based payments 688 500
Acquisition and incorporation
expenses 25 9
----------------------- ---------------------
7 Staff numbers
The average number of employees (including Directors) during the
year, analysed by category, was as follows:
2 January 3 January
2020 2019
Number Number
Management 178 136
Operations 787 641
965 777
-------------------- --------------------
Management staff represent all full-time employees in the
Group.
8 Employee costs including Directors
Year ended Year ended
2 January 3 January
2020 2019
GBP000 GBP000
Wages and salaries 14,126 11,414
Social security
costs 1,071 870
Pension costs 207 126
Share-based payments 688 500
Other staff benefits 9 6
16,101 12,916
---------------------- ----------------------
There were pension liabilities as at 2 January 2020 of GBP49,000
(3 January 2019: GBP30,000).
9 Directors' remuneration
The remuneration of the Directors, who are the key management
personnel of the Group, is set out below in aggregate for each of
the categories specified in IAS24 Related Party Disclosures:
Year ended Year ended
2 January 3 January
2020 2019
GBP000 GBP000
Salaries/fees 548 480
Bonuses 90 70
Other benefits 9 6
Pension contributions 18 29
---------------------- ----------------------
665 585
Share-based payments 223 193
888 778
---------------------- ----------------------
Share-based payment credits in relation to option lapses for
Directors during the year were GBP35,000 (2018: GBPnil).
Information regarding the highest paid Director is as
follows:
Salaries/fees 194 172
Bonuses 40 55
Other benefits 4 2
Pension contributions 11 17
---------------------- -----------------------
249 246
Share-based payments 237 97
486 343
---------------------- -----------------------
Directors remuneration for each Director is disclosed in the
Directors' report. The costs relating to the Directors remuneration
are wholly incurred by Everyman Media Limited for the wider Group.
The amount attributable to services provided to the Company was
GBP178,000 (2018: GBP186,000). 3 Directors exercised options over
shares in the Company during the year (2018: 2).
10 Auditor's remuneration
Year ended Year ended
2 January 3 January
2020 2019
Fees payable to the Company's auditor
for: GBP000 GBP000
Audit of the Company's financial statements 12 12
Audit of the subsidiary undertakings
of the Company 77 73
Taxation and compliance services to
the Group 57 58
146 143
--------------------- ---------------------
The Group's policy on the use of the external auditor for
non-audit services is to ensure that any work undertaken does not
impair the auditor's independence. We have considered the auditor's
independence and we continue to believe that KPMG LLP is
independent within the meaning of all UK regulatory and
professional requirements and the objectivity of the audit
engagement partner and audit staff are not impaired.
11 Financial income
Year ended Year ended
2 January 3 January
2020 2019
GBP'000 GBP'000
Interest receivable 1 -
----------- -----------
12 Financial expenses
Year ended Year ended
2 January 3 January
2020 2019
GBP000 GBP000
Interest on bank loans and overdrafts 405 185
Less: Interest capitalised within assets
under construction (68) (25)
Bank loan arrangement fees 58 -
Interest on lease liabilities 2,115 -
Interest expense recognised in the
profit and loss 2,510 160
--------------------- -----------------------
13 Taxation
Year ended Year ended
2 January 3 January
2020 2019
GBP000 GBP000
Tax expense
Current tax 428 -
--------------------- -----------------------
Deferred tax expense
Origination and reversal of temporary
differences (19) 277
Deferred tax not previously recognised 111 402
Total tax charge 526 679
--------------------- -----------------------
The reasons for the difference between the actual tax charge for
the period and the standard rate of corporation tax in the United
Kingdom applied to the profit for the year are as follows:
Reconciliation of effective tax rate Year ended Year ended
2 January 3 January
2020 2019
GBP000 GBP000
Profit before tax 2,296 2,716
--------------------------- ----------------------
Tax at the UK corporation tax rate of 19.00% 436 516
Permanent differences (expenses not deductible
for tax purposes) 49 18
Previously unrecognised corporation tax 6 -
Deferred tax not previously recognised 111 384
Other short term timing differences (potentially
exercisable share options) 32 (239)
Effect of change in expected future statutory
rates on deferred tax (108) -
--------------------------- ----------------------
Total tax expense 526 679
--------------------------- ----------------------
A reduction in the UK corporation tax rate from 21% to 20%
(effective from 1 April 2015) was substantively enacted on 2 July
2013. Further reductions to 19% (effective from 1 April 2017) and
to 18% (effective 1 April 2020) were substantively enacted on 26
October 2015 and an additional reduction to 17% (effective 1 April
2020) was substantively enacted on 6 September 2016. This will
reduce the Group's future current tax charge accordingly. The
deferred tax at 2 January 2020 has been calculated based on these
rates.
14 Earnings per share
Year ended Year ended
2 January 3 December
2020 2019
GBP000 GBP000
Profit used in calculating basic and
diluted earnings per share 1,770 2,037
-------------------- --------------------
Number of shares (000's)
Weighted average number of shares for
the purpose of basic earnings per share 72,245 70,391
-------------------- --------------------
Number of shares (000's)
Weighted average number of shares for
the purpose of diluted earnings per share 73,179 73,366
-------------------- --------------------
Basic earnings per share (pence) 2.45 2.89
-------------------- --------------------
Diluted earnings per share (pence) 2.42 2.78
-------------------- --------------------
Weighted average number of shares for
the purpose of basic earnings per share 2 January 3 January
2020 2019
Weighted Weighted
average average
no. 000's no. 000's
Issued at beginning of the year 70,989 70,027
Share options exercised 623 364
Shares issued as consideration for
acquisition with no change of control 633 -
-------------------- ----------------------
Weighted average number of shares at
end of the year 72,245 70,391
-------------------- ----------------------
Weighted average number of shares for
the purpose of diluted earnings per
share
Basic weighted average number of shares 72,245 70,391
Effect of share options in issue 934 2,975
------------------ -------------------
Weighted average number of shares at
end of the year 73,179 73,366
------------------ -------------------
Basic earnings per share values are calculated by dividing net
profit/(loss) for the year attributable to Ordinary equity holders
of the parent by the weighted average number of Ordinary shares
outstanding during the year.
The Company has 4,278,000 potentially issuable Ordinary shares
(2018: 6,744,000) all of which relate to the potential dilution
from share options issued to the Directors and certain employees
and contractors, under the Group's incentive arrangements.
The Company made a post-tax loss for the year of GBP1,470,000
(2018: GBP109,000).
15 Property, plant and equipment
(Group)
Plant Fixtures
Land & Leasehold & & Assets under
Buildings improvements machinery fittings construction Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Cost
At 29
December
2017 - 42,962 8,183 7,451 797 59,393
Acquired in
the
year 6,339 9,101 2,705 1,178 2,912 22,235
Disposals - (120) (167) (826) - (1,113)
Transfer to
profit
and loss - - - - (41) (41)
Transfer to
intangibles - - (118) - - (118)
Transfer on
completion - 265 - - (265) -
----------------------- ---------------------- ----------------------- ---------------------- ----------------------- --------------------
At 3 January
2019 6,339 52,208 10,603 7,803 3,403 80,356
Acquired in
the
year 190 15,329 4,130 1,694 1,811 23,154
Disposals - (150) (261) (592) - (1,003)
Transfer to
profit
and loss - - - - (5) (5)
Transfer on
completion - 2,138 174 457 (2,769) -
At 2 January
2020 6,529 69,525 14,646 9,362 2,440 102,502
----------------------- ---------------------- ----------------------- ---------------------- ----------------------- --------------------
Depreciation
At 29
December
2017 - 4,766 3,135 3,253 - 11,154
Charge for
the
year - 2,112 1,506 618 - 4,236
On disposals - (118) (163) (806) - (1,087)
----------------------- ---------------------- ----------------------- ---------------------- ----------------------- --------------------
At 3 January
2019 - 6,760 4,383 3,063 - 14,206
Charge for
the
year 109 2,615 2,197 827 - 5,748
On disposals - (99) (260) (592) - (951)
At 2 January
2020 109 9,276 6,320 3,298 - 19,003
----------------------- ---------------------- ----------------------- ---------------------- ----------------------- --------------------
Net book
value
At 2 January
2020 6,420 60,249 8,326 6,064 2,440 83,499
----------------------- ---------------------- ----------------------- ---------------------- ----------------------- --------------------
At 3 January
2019 6,339 45,448 6,220 4,740 3,403 66,150
----------------------- ---------------------- ----------------------- ---------------------- ----------------------- --------------------
At 28
December
2017 - 38,196 5,048 4,198 797 48,239
----------------------- ---------------------- ----------------------- ---------------------- ----------------------- --------------------
The Group held no assets under finance leases at the balance
sheet date (2018: GBPnil).
For impairment considerations of tangible fixed assets this was
considered using the value in use basis disclosed in Note 17.
Property, plant and equipment
(Company only)
Fixtures
Plant & &
machinery fittings Total
GBP000 GBP000 GBP000
Cost
At 29 December
2017 485 255 740
Acquired in the
year - - -
At 3 January 2019 485 255 740
Acquired in the
year - - -
At 2 January 2020 485 255 740
---------------------- ----------------------- -----------------------
Depreciation
At 29 December
2017 198 65 263
Charge for the
year 97 32 129
---------------------- ----------------------- -----------------------
At 3 January 2019 295 97 392
Charge for the
year 97 32 129
At 2 January 2020 392 129 521
---------------------- ----------------------- -----------------------
Net book value
At 2 January 2020 93 126 219
---------------------- ----------------------- -----------------------
At 3 January 2019 190 158 348
---------------------- ----------------------- -----------------------
At 29 December
2017 287 190 477
---------------------- ----------------------- -----------------------
16 Right-of-use assets
(Group)
Land & Buildings Motor Vehicles
GBP'000 GBP'000 Total
GBP'000
Cost
Recognition on adoption of IFRS 16 57,756 - 57,756
Transfer of existing lease-related
assets (8,621) - (8,621)
Additions/reassessments 11,880 50 11,930
----------------- --------------- ----------
At 2 January 2020 61,015 50 61,065
----------------- --------------- ----------
Amortisation and impairment
Charge for the year 2,639 11 2,650
----------------- --------------- ----------
At 2 January 2020 2,639 11 2,650
----------------- --------------- ----------
Net book value
At 2 January 2020 58,376 39 58,415
----------------- --------------- ----------
16 Right-of-use assets
(Company only)
Land
&
Buildings
GBP'000
Cost
Recognition on adoption of IFRS 16 9,711
Transfer of existing lease-related
assets (741)
Additions/reassessments 301
-----------
At 2 January 2020 9,271
-----------
Amortisation and impairment
Charge for the year 515
-----------
At 2 January 2020 515
-----------
Net book value
At 2 January 2020 8,756
-----------
17 Intangible assets
(Group)
Goodwill Leasehold Software Software Total
GBP'000 interests Assets in Development GBP'000
GBP'000 GBP'000 GBP'000
Cost
At 29 December 2017 8,951 674 619 - 10,244
Acquired in the year - - 632 263 895
Transfer from tangibles - - 118 - 118
--------- ----------- --------- ---------------- ---------
At 3 January 2019 8,951 674 1,369 263 11,257
Acquired in the year - - 938 15 953
Disposals - (674) (63) - (737)
Transfer on completion - - 263 (263) -
--------- ----------- --------- ---------------- ---------
At 2 January 2020 8,951 - 2,507 15 11,473
--------- ----------- --------- ---------------- ---------
Amortisation and impairment
At 29 December 2017 - 90 88 - 178
Transfer from tangibles - - 97 - 97
Charge for the year - 36 291 - 327
--------- ----------- --------- ---------------- ---------
At 3 January 2019 - 126 476 - 602
Charge for the year - - 366 - 366
On disposals - (126) (63) - (189)
--------- ----------- --------- ---------------- ---------
At 2 January 2020 - - 779 - 779
--------- ----------- --------- ---------------- ---------
Net book value
At 2 January 2020 8,951 - 1,728 15 10,694
--------- ----------- --------- ---------------- ---------
At 3 January 2019 8,951 548 893 263 10,655
--------- ----------- --------- ---------------- ---------
At 29 December 2017 8,951 584 531 - 10,066
--------- ----------- --------- ---------------- ---------
17 Intangible assets (continued)
(Company only)
Leasehold
Interests Total
GBP000 GBP000
Cost
At 29 December 2017 674 674
Acquired in the year - -
At 3 January 2019 674 674
Acquired in the year - -
Disposals (674) (674)
At 2 January 2020 - -
----------------------- -----------------------
Amortisation and impairment
At 29 December 2017 90 90
Charge for the year 36 36
At 3 January 2019 126 126
Charge for the year - -
On disposals (126) (126)
----------------------- -----------------------
At 2 January 2020 - -
----------------------- -----------------------
Net book value
At 2 January 2020 - -
----------------------- -----------------------
At 3 January 2019 547 547
----------------------- -----------------------
At 28 December 2017 584 584
----------------------- -----------------------
Value-in-use calculations are performed annually and at each
reporting date for each cash-generating unit (CGU) which represents
each site acquired. Value-in-use was calculated as the net present
value of the projected risk-adjusted post-tax cash flows plus a
terminal value of the CGU. A pre-tax discount rate was applied to
calculate the net present value of pre-tax cash flows. The discount
rate was calculated using a market participant weighted average
cost of capital. A single rate has been used for all sites as
management believe the risks to be the same for all sites. Whilst
there is some sensitivity to the inputs, the methodology is not
significantly impacted by reasonable fluctuations in inputs such as
increasing the WACC used to 10%. Goodwill and indefinite life
intangible assets considered significant in comparison to the
Group's total carrying amount of such assets have been allocated to
CGUs or groups of CGUs as follows:
2 January 3 January
2020 2019
GBP000 GBP000
Baker Street 103 103
Barnet 1,309 1,309
Belsize Park 67 67
Esher 2,804 2,804
Gerrards Cross 1,309 1,309
Islington 86 86
Muswell Hill 1,215 1,215
Oxted 102 102
Reigate 113 113
Walton-On-Thames 94 94
Winchester 217 217
York 1,532 1,532
8,951 8,951
--------------------- ---------------------
The recoverable amount of each CGU has been calculated with
reference to its value-in-use. The key assumptions of this
calculation are shown below:
2 January 3 January
2020 2019
Sales and cost growth (over
a 5 year period) 3% 0%
Discount rate 8.83% 9.51%
Terminal value 10 x EBITDA 8 x EBITDA
Number of years projected 5 years 5 years
There have been no impairments indicated in the year to 2
January 2020 (2018: GBPnil). The projected sales growth was based
on the Group's latest forecasts at the time of review and is in
line with the average growth rate for the industry within the UK.
The key assumptions in the cash flow pertain to revenue growth.
Management have determined that growth based on industry average
growth rates and actuals achieved historically are the best
indication of growth going forward. The Group has adjusted its
discount rate to 8.83%. The Directors are confident that the Group
is largely immune from the effects of Brexit and the impact on the
wider economic environment. Additionally, the Group believes that
there has been no significant impact on the structure of the Group
that should result in a significant impact on the discount rate.
Management has performed sensitivity testing on all inputs to the
model and noted no material sensitivities in the model.
18 Investments
(Company only)
Total
GBP000
At 29 December 2017 and 3 January
2019 30,337
Acquisition of Group companies 1,657
------------------
At 2 January 2020 31,994
------------------
The subsidiaries of the Company are as follows (all of which are
included on consolidation):
Country Proportion
Principal of Class of of
Name activity incorporation share held shares held
Everyman Media Holdings Cinema management and
Limited ownership UK Ordinary 100%
Series
1, 2 and
3 100%
Cinema management and
Everyman Media Limited* ownership UK Ordinary 100%
CISAC Limted* Dormant UK Ordinary 100%
Cinema management and
Foxdon Limited* ownership ROI Ordinary 100%
ECPee Limited** Property management UK Ordinary 100%
Bloom Martin Limited** Dormant UK Ordinary 100%
Bloom Theatres Limited*** Dormant UK Ordinary 100%
Mainline Pictures Limited*** Dormant UK Ordinary 100%
* Shareholding is held by Everyman Media Holdings Ltd
** Shareholding is held by Everyman Media Ltd
*** Shareholding is held by Bloom Martin Ltd
The A Ordinary shares have no rights to a dividend. Everyman
Media Group PLC directly holds all the Ordinary shares (GBP27,015)
and A Ordinary shares (GBP6,557) of Everyman Media Holdings
Limited. During the year the Company acquired the remaining A
Ordinary shares in Everyman Media Holdings Limited for GBP1.7
million having previously been held by Adam Kaye and Paul Wise.
Consideration was paid in a share-for-share exchange of
newly-issued shares in the Company. The change in the interest in
Everyman Media Holdings Limited has not resulted in a change of
control and has been accounted for as an equity transaction.
Everyman Media Limited has 285,000 Ordinary shares of GBP1.00
each in issue, all of which are held by Everyman Media Holdings
Limited and therefore indirectly held by Everyman Media Group PLC.
All other subsidiaries are also indirectly-held investments.
Everyman Media Holdings Limited acquired 100 Ordinary shares, being
the entire issued share capital of Foxdon Limited (a limited
company established and resident in the Republic of Ireland and
dormant at the date of acquisition) for EUR100 on 24 June 2019.
With respect to the class and proportion of shares held in existing
subsidiaries, the amounts remain the same for the year ended 2
January 2020 and the year ended 3 January 2019. Bloom Martin
Limited, Bloom Theatres Limited and Mainline Pictures Limited are
all dormant companies and exempt from the requirement for an audit
for the year.
The class and proportion of shares held in all other
subsidiaries remain the same for the year ended 2 January 2020 and
the year ended 3 January 2019.
The registered office address of all investments incorporated in
the UK is Studio 4, 2 Downshire Hill, London NW3 1NR. Foxdon
Limited's registered office is 33 Sir John Rogerson's Quay, Dublin
2, D02 XK09. All companies listed above are included in the
consolidated financial statements. All consolidated companies have
the same financial year and apply the same accounting policies.
19 Inventories
2 January 3 January
2020 2019
GBP000 GBP000
Food and beverages 443 338
Projection 64 68
------------------------ ---------------------
507 406
------------------------ ---------------------
Included within inventories is GBPnil (2018: GBPnil) expected to
be recovered in more than 12 months. Finished goods recognised as
cost of sales in the year amounted to GBP5,607,000 (2018:
GBP4,297,000). The write-down of inventories to net realisable
value amounted to GBPnil (2018: GBPnil).
20 Cash and cash equivalents
2 January 3 January
2020 2019
GBP000 GBP000
Per balance sheet 4,271 3,517
---------------------- -----------------
Per cash flow statement 4,271 3,517
---------------------- -----------------
21 Trade and other receivables
(Group)
2 January 3 January
2020 2019
GBP000 GBP000
Included in current assets 4,463 3,790
Included in non-current
assets 173 173
------------------------- --------------------
4,626 3,963
------------------------- --------------------
Trade and other receivables 1,428 963
Social security and other
taxation 13 -
Other debtors 1,527 1,363
Prepayments and accrued
income 1,668 1,637
------------------------- --------------------
4,636 3,963
------------------------- --------------------
There were no receivables that were considered to be impaired
other than existing provisions. There is no significant difference
between the fair value of the other receivables and the values
stated above. Other debtors include deposits paid in respect of
long-term leases and contributions from landlords towards
fit-outs.
Trade and other receivables
(Company only)
2 January 3 January
2020 2019
GBP000 GBP000
Included in non-current assets 55,278 44,536
--------------------- ------------------
Amounts due from company undertakings 55,278 44,536
--------------------- ------------------
All amounts other than those from Company undertakings are due
for payment within one year. Interest is charged on inter-company
loans at the same rate as that charged to the Group by its lenders,
currently 3.3%. The loans are repayable on 15 January 2022.
22 Trade and other payables
2 January 3 January
2020 2019
GBP000 GBP000
Included in current liabilities 14,408 12,398
Included in non-current liabilities - 7,796
-------------------------- --------------------
14,408 20,194
-------------------------- --------------------
Trade creditors 4,495 2,660
Social security and other taxation 1,464 733
Other creditors 56 2
Accrued expenses 4,580 5,739
Lease incentives - 8,125
Deferred income 3,813 2,935
-------------------------- --------------------
14,408 20,194
-------------------------- --------------------
23 Corporation tax liabilities
2 January 3 January
2020 2019
GBP'000 GBP'000
Included in current liabilities 186 -
---------- ----------
Corporation tax gross movements
Opening balance - -
Recognised in profit and loss
Current tax 428 -
Adjustments in respect of prior periods 6 -
---------- ----------
Charge to profit and loss 434 -
Recognised in equity
Movement on share option intrinsic value (248) -
Closing balance 186 -
---------- ----------
24 Other interest-bearing loans and borrowings
2 January 3 January
2020 2019
GBP000 GBP000
Bank borrowings
Current 122 56
Non-current 14,000 7,000
------------------------- ---------------------
14,122 7,056
------------------------- ---------------------
The Company agreed a GBP30 million loan facility with Barclays
Bank PLC and Santander UK PLC on 16 January 2019. Interest is
charged at LIBOR on the drawn-down balance on a 365/ACT D-basis
(the nominal interest rate ranging between 1.65% and 2.65%). The
capital sum is repayable in full on or before 15 January 2024.
Commitment fees are charged quarterly on any balances not drawn at
35% of the applicable rate of drawn funds. The face value is deemed
to be the carrying value. The Group had drawn down GBP14 million of
the GBP30 million debt facility as at 2 January 2020 (2018: GBP7
million).
25 Leases
(Group)
On transition to IFRS16, the Group recognised GBP57.8 million
right-of-use assets and GBP60.9 million lease liabilities,
recognising the difference in retained earnings. When measuring
lease liabilities, the Group discounted lease payments using its
incremental borrowing rate at 1 January 2019. The weighted average
rate applied is 3.2%.
IFRS 16 impact on financial statements from change in accounting
policy
Land & Motor
Buildings Vehicles Total
GBP000 GBP000 GBP000
At 4 January 2019
Obligations under operating leases as
disclosed in prior year 71,159 - 71,159
----------- ---------- ---------
Lease liabilities
Recognition on adoption of IFRS 16 discounted
using incremental borrowing rate 60,886 - 60,886
Existing lease-related provisions 615 - 615
Additions/reassessments 16,556 50 16,606
Interest 2,113 1 2,114
Lease payments (3,810) (20) (3,830)
----------- ---------- ---------
At 2 January 2020 76,360 31 76,391
----------- ---------- ---------
There were no differences between the operating lease
commitments at the date of initial application discounted at the
incremental borrowing rate and the lease liability recognised on
adoption of IFRS16. The Group used the following practical
expedients when applying IFRS16 to leases previously classified as
operating leases under IAS17:
- Adjusted the right-of-use assets by the amount of IAS37
onerous contract provision immediately before the date of initial
application, as an alternative to an impairment review.
- Excluded initial direct costs from measuring the right-of-use
asset at the date of initial application.
- Used hindsight when determining the lease term if the contract
contains options to extend or terminate the lease.
As a lessee
2 January 3 January
2020 GBP'000 2019
GBP'000
Lease liabilities
Current 2,386 -
Non-current 74,005 -
-------------- ----------
76,391 -
-------------- ----------
Maturity analysis of lease payments
2 January 3 January
2020 GBP'000 2019
GBP'000
Contractual future cash outflows
Land and buildings
Less than one year 4,787 -
Between one and five years 20,487 -
Over five years 82,197 -
-------------- ----------
107,471 -
-------------- ----------
Motor Vehicles
Less than one year 14 -
Between one and five years 18 -
-------------- ----------
32 -
-------------- ----------
All lease payments for land and buildings are fixed payments
(including any scheduled increases). Remaining lease liabilities
are reassessed following annual rent reviews based on an external
index (such as the RPI). The weighted average lease length of land
and buildings is 17 years.
Recognised in profit and loss
3 January
2 January 2019
2020 GBP'000 GBP'000
Interest on lease liabilities 2,114 -
Expenses relating to short-term and low-value
leases 32 -
-------------- ----------
Lease expenses 2,146 -
-------------- ----------
As a lessor
Lease income from lease contracts in which the Group acts as a
lessor is as below.
3 January
2 January 2019
2020 GBP'000 GBP'000
Operating leases
Lease income net of expenses 645 519
The Group leases out some leasehold property as operating leases
because they do not transfer substantially all of the risks and
rewards incidental to the ownership of the assets.
Maturity analysis of lease receipts
3 January
2 January 2019
2020 GBP'000 GBP'000
Contractual future cash inflows
Land and buildings
Less than one year 100 100
Between one and five years 400 400
Over five years 650 750
-------------- ----------
1,050 1,150
-------------- ----------
Leases
(Company only)
On transition to IFRS16, the Company recognised GBP9.7 million
right-of-use assets and GBP9.9 million lease liabilities,
recognising the difference in retained earnings. When measuring
lease liabilities, the Company discounted lease payments using its
incremental borrowing rate at 1 January 2019. The weighted average
rate applied is 3.2%.
IFRS 16 impact on financial statements from change Land &
in accounting policy buildings
GBP'000
At 4 January 2019
Obligations under operating leases as disclosed in
prior year 11,859
-----------
Lease liabilities
Recognition on adoption of IFRS 16 discounted using
incremental borrowing rate 10,260
Existing lease related (assets)/provisions (189)
Additions/reassessments 301
Interest 318
Lease payments (770)
-----------
At 2 January 2020 9,920
-----------
As a lessee
3 January
2 January 2019
2020 GBP'000 GBP'000
Contractual future cash inflows
Land and buildings
Less than one year 778 771
Between one and five years 3,113 3,113
Over five years 8,959 9,738
-------------- ----------
12,850 13,621
-------------- ----------
All lease payments for land and buildings are fixed payments
(including any scheduled increases). Remaining lease liabilities
are reassessed following annual rent reviews based on an external
index (such as the RPI). The weighted average lease length of land
and buildings is 18 years.
Recognised in profit and loss
3 January
2 January 2019
2020 GBP'000 GBP'000
Interest on lease liabilities 318 -
26 Financial assets and financial liabilities
Changes in liabilities from financing activities
2 January 3 January
2020 2019
GBP000 GBP000
Opening balance 7,056 7,043
Changes from financing cash
flows:
Proceeds from borrowings 13,000 9,000
Repayment of borrowings (6,339) (9,172)
Interest on borrowings 405 185
------------------------- ------------------------
14,122 7,056
----------------------------- ------------------------- ------------------------
In respect of interest-earning financial assets and
interest-bearing financial liabilities, the following indicates
their effective interest rates at the end of the year and the
periods in which they mature:
Effective Maturing Maturing Maturing
between 1 between
interest within to 2 to
rate 1 year 2 years 5 years
% GBP000 GBP000 GBP000
At 3 January 2019
Bank borrowings 3.3% 56 - 7,000
Bank current and deposit
balances 0.01% 3,517 - -
---------- ------------------------ ------------------------- -----------------------
At 2 January 2020
Bank borrowings 2.9% 122 - 14,000
Bank current and deposit
balances 0.01% 4,271 - -
---------- ------------------------ ------------------------- -----------------------
The following table demonstrates the sensitivity to a reasonably
possible change in interest rates, with all other variables held
constant, of the Group's profit and loss before tax through the
impact on floating rate borrowings and bank deposits and cash
flows:
Change in 2 January 3 January
rate 2020 2019
% GBP000 GBP000
Bank borrowings 14,122 7,056
------------------------- ---------------------
-1.0% 141 71
-0.5% 71 35
0.5% (71) (35)
1.0% (141) (71)
1.5% (212) (106)
------------------------- ---------------------
Bank current and deposit
balances 4,271 3,517
------------------------- ---------------------
-1.0% (43) (35)
-0.5% (21) (18)
0.5% 21 18
1.0% 43 35
1.5% 64 53
------------------------- ---------------------
27 Financial instruments
Investments, financial assets and financial liabilities, cash
and cash equivalents and other interest-bearing loans and
borrowings are measured at amortised cost and the Directors believe
their present value is a reasonable approximation to their fair
value.
2 January 3 January
2020 2019
GBP000 GBP000
Financial liabilities measured at
amortised cost
Bank borrowings 14,122 7,056
----------------------- -------------------
Financial instruments not measured at fair value
Fair value is calculated based on the present value of future
principal and interest cash flows, discounted at the market rate of
interest at the balance sheet date.
Non-derivative financial liabilities 2 January 3 January
2020 2019
GBP000 GBP000
Unsecured bank facility
Carrying amount 14,122 7,056
-------------------------- --------------------
Contractual cash flows:
Less than one year 535 275
Between one and two years 519 284
Between three and five years 15,038 852
Over five years - 7,284
-------------------------- --------------------
16,092 8,696
-------------------------------------- -------------------------- --------------------
Charges have been put in place over the net assets of the Group
as collateral against the loan balance.
Risk management
(Group)
The Board has overall responsibility for the determination of
the Group's risk management objectives and policies. The overall
objective of the Board is to set policies that seek to reduce risk
as far as possible without unduly affecting the Group's
competitiveness and flexibility. The Group has not issued or used
any financial instruments of a speculative nature and the Group
does not contract derivative financial instruments such as forward
currency contracts, interest rate swaps or similar instruments.
The Group is exposed to the following financial risks:
- Credit risk
- Liquidity risk
- Interest rate risk
To the extent financial instruments are not carried at fair
value in the consolidated Balance Sheet, net book value
approximates to fair value at 2 January 2020 and 3 January
2019.
Trade and other receivables are measured at amortised cost. Book
values and expected cash flows are reviewed by the Board and any
impairment charged to the consolidated statement of profit and loss
and other comprehensive income in the relevant period. Cash and
cash equivalents are held in sterling and placed on deposit in UK
banks. Trade and other payables are measured at book value and held
at amortised cost. There have been no impairment losses recognised
on these assets.
Accounting classification
The following table shows the carrying amounts and fair values
of financial assets and financial liabilities. It does not include
the fair value information for financial assets and financial
liabilities not measured at fair value if the carrying amount is a
reasonable approximation of fair value.
2 January 3 January
Carrying amount 2020 2019
GBP000 GBP000
Financial assets not measured at
fair value
Trade and other receivables 4,636 3,963
Cash and cash equivalents 4,271 3,517
----------------------- -------------------
8,907 7,480
----------------------- -------------------
Financial liabilities not measured
at fair value
Unsecured bank loans 14,122 7,056
Trade and other payables 14,408 20,194
----------------------- -------------------
28,530 27,250
----------------------- -------------------
Credit risk
Credit risk is the risk of financial loss to the Group if a
customer or counterparty to a financial instrument fails to meet
its contractual obligations and arises principally from the Group's
receivables from customers and investment securities.
The Company is exposed to credit risk in respect of its
receivables from its subsidiary companies. The recoverability of
these balances is dependent upon the performance of these
subsidiaries in future periods. The performance of the Company's
subsidiaries is closely monitored by the Company's Board of
Directors.
At 2 January 2020 the Group has trade receivables of
GBP1,380,000 (2019: GBP963,000). The Group is exposed to credit
risk in respect of these balances such that, if one or more of the
customers encounters financial difficulties, this could materially
and adversely affect the Group's financial results. The Group
attempts to mitigate credit risk by assessing the credit rating of
new customers prior to entering into contracts and by entering into
contracts with customers with agreed credit terms. At 2 January
2020 the Directors have provided for GBPnil against doubtful debts
(2018: GBP122,230). The maximum exposure to credit risk at the
balance sheet date by class of financial instrument was:
2 January 3 January
2020 2019
GBP000 GBP000
Ageing of receivables
<30 days 1,092 672
31-60 days 276 39
61-120 days - 11
>120 days 12 241
------------------------- -----------------------
1,380 963
------------------------- -----------------------
In determining the recoverability of trade receivables the Group
considers any change in the credit quality of the trade receivable
from the date credit was initially granted up to the reporting
date. Credit risk is limited due to the customer base being diverse
and unrelated. There has not been any impairment other than
existing provisions in respect of trade receivables during the year
(2018: GBPnil). There were no material expected credit losses in
the year.
Liquidity risk
Liquidity risk arises from the Group's management of working
capital. It is the risk that the Group will encounter difficulty in
meeting its financial obligations as they fall due. The Group's
policy is to ensure that it will always have sufficient cash to
allow it to meet its liabilities when they become due. To achieve
this aim, it seeks to maintain cash balances to meet its expected
cash requirements as determined by regular cash flow forecasts
prepared by management.
Exposure to liquidity risk
The following are the remaining contractual maturities of
financial liabilities at the reporting date. The amounts shown are
gross, not discounted and include contractual interest payments and
exclude the impact of netting agreements.
Contractual cash flows
------------------------------------------------------
Less Between Over
2 January 2020 Carrying than one Between three five
and two and five
amount one year years years years Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Non-derivative
financial liabilities
Unsecured bank
facility 14,122 535 519 15,038 7,284 16,092
Trade creditors 4,481 4,481 - - - 4,481
Leases 76,391 4,801 5,074 15,431 82,198 107,504
Social security
and other taxation 1,464 1,464 - - - 1,464
Other creditors 56 56 - - - 56
Accrued expenses 4,577 4,577 - - - 4,577
--------- --------- -------- -------------- ------- --------
101,091 15,914 5,593 30,469 82,198 134,174
--------- --------- -------- -------------- ------- --------
Contractual cash flows
--------------------------------------------------------------
Over
3 January 2019 Carrying Less than Between one Between three five
and five
amount one year and two years years years Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Non-derivative
financial liabilities
Unsecured bank
facility 7,056 275 284 852 7,284 8,696
Trade creditors 2,660 2,660 - - - 2,660
Social security
and other taxation 733 733 - - - 733
Other creditors 2 2 - - - 2
Accrued expenses 5,737 5,737 - - - 5,737
--------- ---------- -------------- -------------- ------- -------
16,188 9,407 284 852 7,284 17,828
--------- ---------- -------------- -------------- ------- -------
Interest rate risk
Interest rate risk arose from the Group's holding of
interest-bearing loans linked to LIBOR. The Group is also exposed
to interest rate risk in respect of its cash balances held pending
investment in the growth of the Group's operations. The effect of
interest rate changes in the Group's interest-bearing assets and
liabilities are set out in note 26.
Capital management
The Group's capital is made up of share capital, share premium,
merger reserve and retained earnings totalling GBP55,552,000 (2018:
GBP54,437,000).
The Group's objectives when maintaining capital are:
- To safeguard the entity's ability to continue as a going
concern so that it can continue to provide returns for shareholders
and benefits for other stakeholders.
- To provide an adequate return to shareholders by pricing
products and services commensurately with the level of risk.
The capital structure of the Group consists of shareholders
equity as set out in the consolidated statement of changes in
equity. All funding required to set-up new cinema sites and for
working capital purposes are financed from existing cash resources
where possible. Management will also consider future fundraising or
bank finance where appropriate.
28 Provisions
(Group)
2 January 3 January
2020 2019
GBP000 GBP000
Market rent provisions
Opening balance 1,794 1,883
Additional provisions arising
on acquisition (1,794) -
Utilised against rent during
the period - (89)
------------------------------- ---------------------
Closing balance - 1,794
------------------------------- ---------------------
Provisions 2 January 3 January
(Company only) 2020 2019
GBP000 GBP000
Market rent provisions
Opening balance 1,290 1,360
On derecognition (1,290) -
------------------------------- ---------------------
Utilised against rent during
the period - (70)
------------------------------- ---------------------
Closing balance - 1,290
------------------------------- ---------------------
Market rent provisions relate to the fair value of liabilities
on leases acquired in 2015 and 2017. The market rent provisions are
being amortised over the term of the individual leases.
29 Deferred tax
(Group)
2 January 3 January
2020 2019
GBP000 GBP000
Included in non-current liabilities 1,362 1,210
-------------------------- ----------------------
Deferred tax gross movements
Opening balance 1,210 284
-------------------------- ----------------------
Recognised in the profit and loss
Arising on loss carried forward 17 (438)
Other provisions released (39) (7)
Net book value in excess of tax written
down value (82) 1,188
Movement on share option intrinsic value (26) (64)
Amortisation of IFRS accumulated restatement 31 -
Movement on share option intrinsic value 191 -
-------------------------- ----------------------
Charge to profit and loss 92 679
-------------------------- ----------------------
Recognised in equity
Movement on share option intrinsic value 594 247
Recognition of temporary differences
on IFRS 16 accumulated restatement (535) -
Amortisation of IFRS 16 accumulated restatement 59 -
-------------------------- ----------------------
92 247
-------------------------- ----------------------
Differences in foreign exchange 1 -
Closing balance 1,362 1,210
-------------------------- ----------------------
The deferred tax liability comprises:
Temporary differences on property, plant
and equipment 2,190 2,270
Temporary differences on IFRS 16 accumulated
restatement (502) -
Temporary differences on leases acquired 87 105
Share-option scheme intrinsic value (223) (790)
Available losses (578) (596)
Unrealisable deferred tax assets 190 -
Other temporary and deductible differences 198 221
-------------------------- ----------------------
1,362 1,210
-------------------------- ----------------------
Deferred tax is calculated in full on temporary differences
under the liability method using the tax rates that have been
substantively enacted for future periods, being 17%. The deferred
tax liability has arisen due to the timing difference on property,
plant and equipment, the deferral of capital gains tax arising from
the sale of a property and other temporary and deductible
differences. The Group has recognised unutilised tax allowances in
relation to losses of GBP578,000 as well as unutilised tax
allowances in relation to the accumulated IFRS16 restatement of
GBP502,000 at expected tax rates in future periods.
In accordance with IAS12 Income taxes, the expense of GBP594,000
(2018: GBP247,000) has been recognised outside of profit and loss
to the extent that the deferred tax asset has arisen on expected
allowable deductions for tax purposes at future tax rates in excess
of the fair value of the share option charge that will be
recognised in the profit and loss. In this instance, the expected
gain on the exercise of share options is anticipated to exceed the
full share option charge recognised in the profit and loss at
initial fair value. A further GBP535,000 has been recognised as a
credit in equity due to the IFRS16 accumulated restatement expense
not being charged to profit and loss.
Deferred tax
(Company only)
2 January 3 January
2020 2019
GBP000 GBP000
Included in non-current (assets)/liabilities (48) 41
-------------------------- -------------------------
Deferred tax gross movements
Opening balance 41 43
Recognised in the profit and loss
Movement in loss carried forward 16 5
Amortisation of IFRS 16 accumulated restatement 5 -
Amortisation of acquisition-related deferred
tax (16) (7)
-------------------------- -------------------------
Credit to profit and loss 5 (2)
Recognised in equity
Recognition of temporary differences
on IFRS 16 accumulated restatement (94) -
Closing balance (48) 41
-------------------------- -------------------------
2 January 3 January
2020 2019
GBP000 GBP000
The deferred tax liability/(asset) comprises:
Temporary differences on property, plant
and equipment (46) (48)
Temporary differences on IFRS 16 accumulated
restatement (89) -
Temporary differences on leases acquired 87 105
Available losses - (16)
-------------------------- -------------------------
(48) 41
-------------------------- -------------------------
The Company has a deferred tax liability due to the timing
difference on property, plant and equipment. The Company has
recognised unutilised tax allowances of GBPnil (2018: GBP16,000) at
expected tax rates in future periods.
30 Share capital and reserves
2 January 3 January
Nominal 2020 2019
value GBP000 GBP000
Authorised, issued and fully paid
Ordinary shares GBP0.10
At the start of the year 7,099 7,003
Issued in the year 253 96
------------------------- -------------------
At the end of the year 7,352 7,099
------------------------- -------------------
Number of shares 2 January 3 January
Nominal 2020 2019
value Number Number
Authorised, issued and fully paid
Ordinary shares GBP0.10
At the start of the year 70,989,303 70,027,103
Issued in the year 2,528,666 962,200
------------------------- -------------------
At the end of the year 73,517,969 70,989,303
------------------------- -------------------
The holders of Ordinary shares are entitled to one vote per
share. During the year the Company issued 2,528,666 Ordinary shares
at prices ranging from 83p to 85p from the exercise of share
options including 820,548 as consideration for the acquisition of A
shares in Everyman Media Holdings Limited.
During the year, the Group acquired the remaining A Ordinary
shares in Everyman Media Holdings Limited for GBP1.7 million.
Consideration was paid in a share-for-share exchange of newly
issued shares in Everyman Media Group PLC. The change in the
interest in Everyman Media Holdings Limited has not resulted in a
change of control and has been accounted for as an equity
transaction.
Merger reserve
In accordance with s612 of the Companies Act, the premium on
Ordinary shares issued in relation to acquisitions is recorded as a
merger reserve.
Share premium
Share premium is stated net of share issue costs.
Dividends
No dividends were declared or paid during the period (2018:
GBPnil).
31 Share-based payment arrangements
The Group operates three equity-settled share based remuneration
schemes for employees. The schemes combine a long term incentive
scheme, an EMI scheme and an unapproved scheme for certain senior
management, executive Directors and certain contractors.
The terms and conditions of the grants are as follows:
Instruments
Contractual
Method of outstanding Vesting life
Persons entitled Grant date settlement 000's Conditions* of options
Management employees,
Directors and contractors 29.10.2013 Equity-settled 118 1 10 years
Management employees,
Directors and contractors 29.10.2013 Equity-settled 170 2 10 years
Management employees,
Directors and contractors 29.10.2013 Equity-settled - 4 10 years
Management employees,
Directors and contractors 29.10.2013 Equity-settled - 3 10 years
Directors 04.11.2013 Equity-settled 50 2 10 years
Directors 20.04.2015 Equity-settled - 7 10 years
Directors 20.04.2015 Equity-settled - 8 10 years
Management employees,
Directors and contractors 29.10.2015 Equity-settled 218 9 10 years
Management employees 15.12.2016 Equity-settled 220 10 10 years
Management employees 10.01.2017 Equity-settled 75 10 10 years
Directors 13.03.2017 Equity-settled 250 10 10 years
Management employees
and contractors 11.10.2017 Equity-settled 445 10 10 years
Management employees 09.11.2017 Equity-settled 10 10 10 years
Management employees
and Directors 23.11.2017 Equity-settled 107 11 10 years
Management employees
and Directors 23.04.2018 Equity-settled 38 12 10 years
Management employees
and contractors 02.10.2018 Equity-settled 413 10 10 years
Management employees 03.10.2018 Equity-settled 18 13 10 years
Management employees 05.11.2018 Equity-settled 1 13 10 years
Directors 13.03.2019 Equity-settled 500 10 10 years
Management employees
and Directors 28.05.2019 Equity-settled 269 14 10 years
Management employees
and Directors 24.09.2019 Equity-settled 1,378 10 10 years
*1 EMI options. These vest in equal tranches on the first,
second and third anniversaries of the date of grant.
*2 Unapproved options. These vest in equal tranches on the
first, second and third anniversaries of the date of grant.
*3 EMI options. These vest in equal tranches on the first,
second and third anniversaries of the date of grant. Each tranche
is exercisable if the Company's share price exceeds GBP1.20,
GBP1.40 and GBP1.70 respectively for 15 consecutive trading
days.
*4 Series 1, 2 and 3 A Ordinary shares in Everyman Media
Holdings Ltd. Holders of these shares have a right to require
Everyman Media Group PLC to purchase the shares at a price
essentially equivalent to the market value of an Everyman Media
Group PLC Ordinary share less 83p provided that the share price has
been, for 15 consecutive trading days after 8 May 2014, GBP1.20 or
more for Series 1 shares, GBP1.40 or more for Series 2 shares and
GBP1.70 or more for Series 3 shares. The A Ordinary shares will
convert into essentially worthless deferred shares to the extent
that these targets are not met by 7 November 2023. As such, the
Directors consider these shares to be largely equivalent to an EMI
option. The rights described above were accounted for as
share-based payments.
*5 EMI options. These vest in two tranches: 181,455 on the first
anniversary of the date of grant and 105,901 on the second
anniversary of the date of grant. The tranches may be exercised if
the Company share price is above GBP1.20 and GBP1.40 respectively
for 15 consecutive trading days.
*6 Unapproved options. These vest in two tranches: 75,554 on the
second anniversary of the date of grant and 181,455 on the third
anniversary of the date of grant. The tranches may be exercised if
the Company share price is above GBP1.40 and GBP1.70 respectively
for 15 consecutive trading days.
*7 EMI options. These vest in two tranches: 169,358 on the first
anniversary of the date of grant and 105,367 on the second
anniversary of the date of grant. The tranches may be exercised if
the Company share price is above GBP1.20 and GBP1.40 respectively
for 15 consecutive trading days.
*8 Unapproved options. These vest in two tranches: 63,991 on the
second anniversary of the date of grant and 169,358 on the third
anniversary of the date of grant. The tranches may be exercised if
the Company share price is above GBP1.40 and GBP1.70 respectively
for 15 consecutive trading days.
*9 Unapproved options. These vest in equal tranches on the
first, second and third anniversaries of the date of grant. Each
tranche is exercisable if the Company share price exceeds GBP1.30,
GBP1.50 and GBP1.80 respectively for 15 consecutive trading
days.
*10 Unapproved options. These vest on the third anniversary of
the date of grant.
*11 Unapproved options as part of the long-term incentive plan.
These vest on the fifth anniversary of the date of grant. Half of
the options are exercisable if the share price exceeds GBP2.10 for
2 consecutive trading days within 60 days following the
announcement of the preliminary results for 2017. The other half of
the options are exercisable if the Adjusted Profit measure for 2017
exceeds GBP6.4m, GBP6.5m and GBP6.6m respectively.
*12 Unapproved options as part of the long-term incentive plan.
These vest 4 years and 7 months from the date of grant. 45% of the
options are exercisable if the share price exceeds GBP2.95 for 2
consecutive trading days within 60 days following the announcement
of the preliminary results for 2018. The other 55% of the options
are exercisable if the Adjusted Profit measure for 2018 exceeds
GBP8.8m and incrementally to GBP9.5m.
*13 Unapproved options as part of the long-term incentive plan.
These vest 4 years and 2 months from the date of grant. 45% of the
options are exercisable if the share price exceeds GBP2.95 for 2
consecutive trading days within 60 days following the announcement
of the preliminary results for 2018. The other 55% of the options
are exercisable if the Adjusted Profit measure for 2018 exceeds
GBP8.8m and incrementally to GBP9.5m.
*14 Unapproved options as part of the long-term incentive plan.
These vest 3 years and 6 months from the date of grant. 45% of the
options are exercisable if the share price exceeds GBP2.25 for 2
consecutive trading days within 60 days following the announcement
of the preliminary results for 2019. The other 55% of the options
are exercisable if the Adjusted Profit measure for 2019 exceeds
GBP12.1m and incrementally to GBP12.5m.
Equity-settled share-based payments are measured at fair value
(excluding the effect of non-market-based vesting conditions) as
determined through use of the Black-Scholes technique, at the date
of grant. The fair value determined at the grant date of the
equity-settled share-based payments is expensed on a straight-line
basis over the vesting period, based on the Group and Company's
estimate of shares that will eventually vest and adjusted for the
effect of non-market-based vesting conditions.
The inputs into the Black-Scholes model for the share option
plans for the share options issued in the year are as follows:
Option scheme conditions for
options issued in the year: 2 January 2 January 3 January 3 January
2020 2020 2019 2019
Performance No performance Performance No performance
criteria criteria criteria criteria
Weighted average share price
at grant date (pence) 190.00 183.21 233.96 235.00
Weighted average option exercise
prices (pence) 10.00 183.21 10.00 235.00
Expected volatility 60.82% 65.89% 56.49% 58.72%
Expected option life 5 years 4 years 4 years 5 years
Weighted average contractual
life of outstanding share options 10 years 10 years 10 years 10 years
Risk-free interest rate 0.81% 0.64% 1.5% 1.54%
Expected dividend yield 0.0% 0.0% 0.0% 0.0%
Fair value of options granted
in the year (pence) 2.78 0.94 281.98 1.01
Weighted average
exercise
price per share in
the year ended
2 January 3 January 2 January 3 January
2020 2019 2020 2019
Pence Pence Number Number
Options at the beginning
of the year 102.2 91.3 5,575,344 5,861,152
Options issued in the
year 159.9 164.6 2,186,820 731,392
Options exercised in the
year 84.0 83.9 (3,100,982) (962,200)
Option forfeited in the
year 79.7 95.5 (383,322) (55,000)
------------------- -----------------
Options at the end of
the year 146.9 102.2 4,277,861 5,575,344
------------------- -----------------
No options lapsed beyond their contractual life in the year
(2018: nil).
Share-based payments charged to the profit
and loss 2 January 3 January
2020 2019
GBP000 GBP000
Administrative costs 688 500
----------------------- --------------------
The charge for the Company was GBPnil (2018: GBPnil) after
recharging subsidiary undertakings with a charge of GBP688,000
(2018: GBP500,000). The relevant charge is included within
administrative costs.
There are 775,147 options exercisable at 2 January 2020 in
respect of the current arrangements (2018: 3,656,129). 3,100,982
options were exercised in the year (2018: 962,200).
Volatility for options issued was determined by reference to
movements in the share price over 5 years prior to the grant date.
The market value conditions, where applicable, are reflected in the
forfeited options following 60 days of the announcement of the
annual results since the performance conditions are met/not met
prior to the vesting period and as such no estimate of potential
achievement of market values is required.
32 Commitments
There were capital commitments for tangible assets at 2 January
2020 of GBP2,951,000 (2018: GBP5,899,000).
33 Events after the balance sheet date
There has been a significant event after the balance sheet date
associated with the COVID-19 outbreak. See Chairman's report and
Basis of Preparation of accounts note.
34 Acquisitions
Acquisitions in the period
The Group acquired 100 Ordinary shares, being the entire issued
share capital of Foxdon Limited (a limited company established and
resident in the Republic of Ireland) for EUR100 on 24 June
2019.
35 Related party transactions
In the year to 2 January 2020 the Group engaged services from
entities related to the Directors and key management personnel of
GBP680,000 (2018: GBP603,000) comprising consultancy services of
GBP85,000 (2018: GBP50,000), office rental of GBP97,000 (2018:
GBP56,000) and venue rental for Bristol, Harrogate and
Stratford-Upon-Avon of GBP497,000 (2018: GBP497,000). There were no
other related party transactions. There are no key management
personnel other than the Directors.
The Company charged an amount of GBP688,000 (2018: GBP500,000)
to Everyman Media Limited in respect of share-based payments,
GBP917,000 (2018: GBP823,000) in respect of the rental of four
cinema sites acquired in 2016 and GBP2,071,000 (2018: GBP185,000)
in respect of interest on bank loan funds provided to the
Company.
Everyman Media Holdings Limited, charged an amount of GBP547,000
(2018: GBP419,000) to Everyman Media Limited in respect of the
rental of two cinema sites.
ECPee Limited charged an amount of GBP160,000 (2018: GBP103,000)
to Everyman Media Limited in respect of the rental of its cinema
site during the year.
The Group's commitment to new leases is set out in the above
notes. Within the total of GBP107.5m is an amount of GBP850,000
relating to office rental, GBP5.1m relating to Stratford-Upon-Avon,
GBP2.4m relating to Bristol and GBP5.4m relating to Harrogate. The
landlords of the sites are entities related to the Directors of the
Company.
36 Ultimate controlling party
The Company has a diverse shareholding and is not under the
control of any one person or entity.
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
FR UWRURRRUOAUR
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