TIDMEMAN
RNS Number : 8989V
Everyman Media Group PLC
12 April 2023
12 April 2023
Everyman Media Group PLC
("Everyman" the "Company" or the "Group")
Final Results to 29 December 2022
Everyman Media Group plc (AIM: EMAN) today announces its audited
financial results for the year ended 29 December 2022.
Highlights
Strong operational and financial performance
-- Admissions of 3.4m (2021: 2.0m).
-- Revenue of GBP78.8m (2021: GBP49.0m).
-- Adjusted EBITDA of GBP14.5m (2021: GBP8.3m).
-- Paid for Average Ticket Price(1) of GBP11.29 (2021: GBP11.00).
-- Food and Beverage Spend Per Head(2) of GBP9.34 (2021: GBP9.07).
-- Market share maintained at 4.5%.
-- Operating profit of GBP402,000 (2021: GBP2.2m operating loss).
-- GBP3.7m of cash at year end (2021: GBP4.2m) and net debt
of GBP18.5m (2021: GBP8.7m).
Growing momentum in our expansion strategy
-- Two new cinemas opened in April and September 2022 respectively
taking the Group to a total of 130 screens (2021: 119) across
38 venues.
-- Six venues confirmed to open in 2023 with an exciting pipeline
of further opportunities for 2024 and 2025.
Evolving the brand and optimising operations
-- Continued to innovate in Food & Beverage offer with new dishes,
seasonal specials and improved menu architecture.
-- New best-in-class website launched post year end delivering
improved functionality and enhanced targeted advertising
based on customer profiles and web behaviours.
-- Signature partnerships with Jaguar and Green & Black's renewed,
launched a new collaboration with The Times to drive mid-week
admissions and extended our events partnership with Apple
TV+.
Outlook
-- Financial performance in the new financial year has been
in line with expectations.
-- Admissions in 2023 are expected to benefit from an increased
number of wide releases, commitment to the theatrical window
from distributors and new investment from streamers.
-- Successfully navigated inflationary headwinds in FY22.
-- We anticipate continued financial improvement from higher
admissions, strong management of costs and new site openings,
despite the current difficult macroeconomic environment and
its impact on consumer spends.
-- Management is confident of another year of strong operational
and financial progress.
(1) Paid for average ticket price has been adjusted to remove
the benefit of VAT reductions in both 2022 and 2021 in order to
provide a like-for-like comparison. The directors believe that this
metric, which excludes any complimentary tickets, is more
representative of actual customer spend and will be used as a KPI
moving forward.
(2) Food and beverage spend per head has been adjusted to remove
the benefit of VAT reductions in both 2022 and 2021 in order to
provide a like-for-like comparison. The prior year metric has been
adjusted to include Deliveroo income, which had previously been
excluded. This is consistent with the treatment for the current
year.
Alex Scrimgeour, Chief Executive Officer of Everyman Media Group
PLC, said:
"We were encouraged by strong growth in admissions in the year,
marking a return to business as usual. Everyman remains a popular
and affordable choice for consumers, combining great film,
hospitality and atmosphere to provide an exceptional cinema
experience.
We opened two new venues in Edinburgh and Egham in 2022 and are
excited to welcome audiences to new openings in Durham, Salisbury,
Northallerton, Plymouth, Marlow and Bury St Edmunds in the second
half of 2023. As a result of our strong performance in year, we are
actively returning to an agenda of managed organic expansion. The
Company is also assessing acquisition opportunities of existing
cinemas which are suitable to be converted into Everyman
venues.
Supported by an increasingly strong pipeline of new releases,
commitment to the theatrical window from studios and new investment
from streamers in films for theatrical release, we view our
prospects with increasing confidence. Moving through 2023 and
beyond, the Everyman proposition feels as relevant as ever."
For further information, please contact:
Everyman Media Group plc Tel: 020 3145 0500
Alex Scrimgeour, Chief Executive
Will Worsdell, Finance Director
Canaccord Genuity Limited (NOMAD Tel: 020 7523 8000
and Broker)
Bobbie Hilliam
Harry Pardoe
Alma PR (Financial PR Advisor) Tel: 020 3405 0205
David Ison
Joe Pederzolli
About Everyman Media Group PLC:
Everyman is the fourth largest cinema business in the UK by
number of venues, and is a premium, high growth leisure brand.
Everyman operates a growing estate of venues across the UK, with an
emphasis on providing first class cinema and hospitality.
Everyman is redefining cinema. It focuses on venue and
experience as key competitive strengths, with a unique
proposition:
-- Intimate and atmospheric venues, which become a destination in their own right
-- An emphasis on a strong quality food and drink menu prepared in-house
-- A broad range of well-curated programming content, from
mainstream and independent films to theatre and live concert
streams, appealing to a diverse range of audiences
-- Motivated and welcoming teams
For more information visit
http://investors.everymancinema.com
Chairman's statement
I am pleased to report that 2022 was a positive year for the
business, with financial performance ahead of management's initial
expectations. Audiences returned to Everyman in encouraging
numbers, and we delivered solid increases in revenue and adjusted
EBITDA.
With an improving number of year-on-year releases, continued
commitment to the theatrical window from distributors and an
exciting pipeline of new venues, we look ahead with cautious
optimism.
Having served as a Non-Executive Director since 2013, I have
come to know Everyman, its culture and what it stands for and I am
delighted to have taken up the mantle as Chairman in 2023.
Review of the business
The Group's key performance indicators all saw healthy increases
on 2021. Admissions saw significant improvement and we successfully
delivered increases in average ticket price and spend per head.
We were pleased to open two new cinemas in the period, taking us
to a total of 130 screens across 38 venues. A further six venues
are confirmed to open in the coming months and, with landlords
increasingly keen to work with Everyman, an exciting pipeline of
opportunities exists for 2024 and 2025.
During the year, we continued to innovate and optimise our
operations. From a technology perspective, our app has gone from
strength to strength and, post year end, we launched a new website.
Both will play important roles in helping us to grow admissions and
spend per head through taking an increasingly data-driven approach
to marketing.
The teams in our venues and head office continue to be our
greatest asset, again demonstrating an exemplary commitment to
customer satisfaction. Without them, this year's performance would
not have been possible, and I would like to extend my thanks to
them all.
I would also like to express my gratitude to Paul Wise, who
retired as Chairman in 2023, for his immense contribution to
Everyman during his time with the business.
Outlook
We look to the future with increasing confidence, bolstered by a
robust pipeline of upcoming releases and ongoing admissions
momentum. Our focus for 2023 will be to continue to deliver the
high standards of service, atmosphere, food and drink and of course
film that Everyman is known for, and to continue our expansion
plans at a measured pace.
Philip Jacobson
Non-Executive Chairman
12 April 2023
Chief Executive's Statement
Business Model
Everyman brings together great service, atmosphere, food and
drink and of course film to create an exceptional cinema experience
for our customers. In addition, Everyman delivers a more premium
price point and a greater number of revenue-generating activities
than the traditional cinema model.
Emerging from the pandemic, our growth strategy has returned to
the following:
- Expanding our geographical footprint by establishing new
venues in order to reach new customers.
- Continually evolving the quality of experience and breadth of choice we offer at our venues.
- Engaging in effective marketing activity.
As an affordable treat, cinema and Everyman specifically has
historically remained resilient to economic downturn. Not only is
this reflected in Everyman's year-on-year admissions below, but
also by the fact the our customers are spending more with us than
they were in 2021. We remain convinced that appetite for film
remains undiminished, and that the Everyman offer remains more
relevant in a post-pandemic environment.
Financial Overview
The Group delivered solid full year financial results,
demonstrating a return to business as usual. Despite a decreased
number of wide releases due to pandemic-related production delays,
revenue for the period was GBP78.8m, a 61% increase on the prior
year (2021: GBP49.0m).
The Group achieved an operating profit of GBP402,000 (2021:
GBP2.2m operating loss). The improvement is particularly pleasing
given that the prior year operating loss included GBP3.8m of
Covid-related government support a GBP2.5m reversal of
previously-recognised impairment.
As we accelerate our programme of organic expansion, the cash
outflow for the year included GBP18.9m on the acquisition of
Property, Plant & Equipment (2021: GBP7.4m), driven by payments
for venues opened during the year and new venues in Durham,
Northallerton, Salisbury, Plymouth and Marlow, which are currently
under construction and due to be opened in 2023.
The Group was able to finance much of this expansion with
GBP11.8m of cash generated from operating activities (2021:
GBP12.2m) as well as capital contributions of GBP5.0m from
landlords (2021: GBP0.5m), demonstrating the ongoing appetite of
landlords to work with Everyman. A further proportion was financed
through a GBP9.5m draw on the Group's banking facilities (2021:
GBP6.0m). As a result, net banking debt at the balance sheet date
was GBP18.5m (2021: GBP8.4m). The Company retains GBP18m headroom
on its GBP40m debt facilities.
The Directors believe that the Group balance sheet remains well
capitalised, with sufficient working capital to service ongoing
requirements and to support our growth going forward.
The Group's financial performance is given in detail in the
Finance Director's statement below.
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
29 December 30 December
2022 2021
(52 weeks) (52 weeks)
Admissions 3,418,599 2,023,390
Paid for average ticket
price* GBP11.29 GBP11.00
Food and beverage spend
per head** GBP9.34 GBP9.07
Admissions were 69% ahead of last year on a non like-for-like
basis. However, in 2021, the venues were closed from the beginning
of the year to 17(th) May as a result of pandemic-related trading
restrictions.
*Paid for average ticket price has been adjusted to remove the
benefit of VAT reductions in both 2022 and 2021 in order to provide
a like-for-like comparison. The directors believe that this metric,
which excludes any complimentary tickets, is more representative of
actual customer spend and will be used as a KPI moving forward.
**Food and beverage spend per head has been adjusted to remove
the benefit of VAT reductions in both 2022 and 2021 in order to
provide a like-for-like comparison. The prior year metric has been
adjusted to include Deliveroo income, which had previously been
excluded. This is consistent with the treatment for the current
year.
Expansion of our geographical footprint
During 2022 we opened two new venues, in Edinburgh in April and
in Egham in September, and both venues are trading in line with
expectations.
We have a pipeline of six new openings in 2023, with new venues
planned in Durham, Salisbury, Northallerton, Plymouth, Marlow and
Bury St Edmunds. The outlook is promising for 2024 with Cambridge
and Stratford (London) under contract, and - with landlords
increasingly interested in working with Everyman - many further
exciting opportunities to grow the estate. We expect to open a
total of six new venues in both 2024 and 2025.
The Group currently has venues in the following locations:
Number Number
Location of Screens of Seats
Altrincham 4 247
Birmingham 3 328
Bristol 4 476
Cardiff 5 253
Chelmsford 6 411
Clitheroe 4 255
Edinburgh 5 407
Egham 4 275
Esher 4 336
Gerrards Cross 3 257
Glasgow 3 201
Harrogate 5 410
Horsham 3 239
Leeds 5 611
Lincoln 4 291
Liverpool 4 288
London, 13 venues 37 3,136
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
130 10,661
------------ ----------
Market developments
2022 marked the first full year of trade for cinemas since the
pandemic, with total box office revenue across the UK & Ireland
at GBP979m, an increase of 64% against 2021.
Whilst last year the market saw a reduction in blockbusters due
to production delays, the signs of recovery are clear with
audiences coming back to enjoy a broader range of titles. We expect
the number of larger releases to return to near pre-pandemic levels
in 2023.
The diversity of content was bolstered by streamers
demonstrating a further commitment to cinema, moving away from
day-and-date releases, and increasingly seeing the value in
original content for theatrical release. Key examples of this were
Netflix's "Knives Out: A Glass Onion Mystery" and Apple's
"Spirited". We continue to benefit from working cooperatively and
creatively with streaming partners.
With film production increasingly back up to full speed, the
breadth and quality of the slate in 2023 places the market in a
robust position, and the year should continue an upward growth
trajectory.
Technology
In 2022, our website saw 9m users, up from 6.5m in 2021. The
Everyman App ended the year with 116k users, up from 76k in 2021,
representing increases of 54% and 53% respectively.
Post year end we launched a new website with improved user
experience and a more flexible content management system. The
technology that underpins this will improve our customer
segmentation and targeted, personalised marketing. This is a key
step in our digital transformation.
Food & Beverage
During the year we have continued to add exciting new dishes to
our menu, including quarterly burger specials, most recent of which
were the Halloumi Burger and the Korean Chicken Burger. In sharing
plates, our top selling dish is the new Garlic and Parsley
Doughballs. Our vegan range continues to grow, with the addition of
the Vegan Hotdog, and we have also evolved the menu layout to make
it clearer for the customer. Amending the dish placement on the
menus has had a demonstrable impact on sales of hot food.
Innovation in our food and beverage offering is expected to
continue to drive spend per head moving forward.
Partnerships and Events
During the year, we renewed our signature partnerships with
Jaguar and Green & Black's. We added Land Rover Discovery as a
new brand partner, deepening our relationship with the Jaguar
group. In conjunction with Waitrose, we launched a nationwide
membership activation with Green & Black's. In addition, we
launched a collaboration with The Times, offering Times+
subscribers two-for-one tickets on Wednesdays as well as access to
exclusive events, and our partnership with Apple goes from strength
to strength.
Our open-air venues returned to the canal-side at Kings Cross
and the luxurious grounds of The Grove Hotel, introducing the
Everyman brand to thousands of people over the summer period. This
year, we also began a partnership with This Bright Land, a new
festival with a three-year residency at Somerset House.
2022 also saw show-stopping parties and exclusive events with
our partners. Christmas came early for a November preview of the
AppleTV+ film Spirited, we treated Times+ members to a sneak-peek
of Steven Spielberg's The Fabelmans, and the great and good of the
film and music business took to our stages for special events week
after week, with every event exclusive to us.
People
We recognise the commitment our people have shown to Everyman,
our guests and to each other. Our teams' passion is key to
delivering our signature brand of hospitality across all our
venues, both existing and new.
Our unique proposition has meant we have been able to attract
and retain talented people, despite well-publicised challenges in
hospitality sector recruitment. Our new careers website has also
enabled a smoother, brand-focused recruitment process.
During the year we opened two new venues, and our existing teams
supported our newest managers to deliver hospitality the Everyman
way. Our commitment to development saw numerous management roles
filled internally.
Outlook
We are pleased to report solid financial results despite the
reduced number of blockbuster releases in 2022. However, with Top
Gun: Maverick and Avatar: The Way of Water now the 12th and 3rd
highest grossing films of all time respectively, it is clear that
the consumer appetite for film remains undiminished. We remain an
affordable treat for our customers, and with film production back
up at pace and the number of larger releases returning to
pre-pandemic levels, we are confident that customers will return to
our venues in greater numbers.
2022 has been a year of progress for Everyman, as we continued
to focus on evolving the quality of experience and breadth of
choice we offer at our venues. We opened with two new cinemas
opened in Edinburgh and Egham and - to ensure the conservation of
high standards and differentiation - we refurbished our venues in
Hampstead, Canary Wharf, Esher, Bristol and Birmingham.
We look to 2023 with cautious optimism. We continue with our
expansion programme, with new venues due to open in Durham,
Salisbury, Northallerton, Plymouth, Marlow and Bury St Edmunds, and
several further exciting opportunities in the pipeline.
Alex Scrimgeour
CEO
12 April 2023
Strategic Report
The Directors present their strategic report for the Group for
the year ended 29 December 2022 (comparative period: 52 weeks 30
December 2021).
Review of the business
The Group made a loss after tax of GBP3,504,000 (2022:
GBP5,430,000).
The Finance Director's report contains a detailed financial
review. Further details are also shown in the CEO'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
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.
1 Film release schedule - The level of the Group's box office revenues fluctuates throughout
the course of any given year and are largely dependent on the timing of film releases, over
which the Group has no control. The film release schedule remained adversely impacted by the
pandemic in 2022, mainly as a result of production delays during 2020 and 2021. As the impact
of this reduces and the volume of releases increases, the Board remains optimistic about the
film slate going forward. The Group mitigates this risk by widening the sources for new content
to include streaming platforms, TV and theatre, as well as focusing on creating a great overall
experience at venues independent from the films themselves.
2 COVID-19 pandemic - Group revenues are entirely dependent on being open and able to show
films, and to serve food and beverage. Although there were no Covid-related closures in 2022,
the beginning of the period was negatively impacted by the spread of the Omicron variant.
Whilst the situation has improved substantially, the Board remains vigilant to new developments
and further impacts which may arise. In addition, the Group has processes and policies that
can be brought back if needed, and has more flexible employment contracts allowing temporarily
reduced working hours, if required. Everyman works closely with the UK Cinema Association
and the Department for Culture, Media and Sport to ensure that the interests of the business
are represented in all policy discussions.
3 Consumer environment - A reduction in consumer spending because of broader economic factors
could impact the Group's revenues. During 2022, inflation and interest rates have increased
due to the pandemic and geopolitical events. Historically, the cinema industry has been resilient
to difficult macroeconomic conditions, with it remaining an affordable treat during such times
for most consumers. Whilst the Board considers that the impact has been minimal in 2022, the
Group continues to monitor long term trends and the broader leisure market.
4 Alternative media channels - The proliferation of alternative media channels, including streaming,
has introduced new competitive forces for the film-going audience and this has been accelerated
by the pandemic. To date this has proven to be a virtuous relationship, both increasing the
investment in film production and further fuelling an overall interest in film with customers
of all ages. The Board considers that the Everyman business model works well alongside other
film channels. It remains an ever-present caution that to maintain this position 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.
5 Inflation - Given the current economic and geopolitical situation there is a risk to the
cost base from inflation. To mitigate this the Group enters into long term contracts and works
very closely with suppliers to improve efficiencies and limit costs. The Group has a fixed
rate agreement in place with one of the largest energy suppliers until the end of October
2023. Whilst the Board expects energy costs to increase from the current rate, forward prices
for Gas and Electricity continue to fall. The Group is confident that any increases can be
absorbed without material impact to unit economics. In addition, and thanks to its size, the
Group can take advantage of lower price points for higher volumes. Furthermore, payroll costs
are closely monitored and managed to the level of admissions. We remain cautious when passing
on price increases to our customer base.
6 Climate change - The Group's business could suffer because of extreme or unseasonal weather
conditions. Cinema admissions are affected by periods of abnormal, severe, or unseasonal weather
conditions, such as exceptionally hot weather or heavy snowfall. Climate change is also high
on the agenda for investors and increasingly institutional investors are looking closely at
the actions being taken by business to reduce carbon emissions. The Group is working towards
developing a net zero carbon emissions strategy to mitigate this risk.
7 Data and cyber security - The possibility of data breaches and system attacks would have
a material impact on the business through potentially exposing the business to a reduction
in service availability for customers, potentially significant levels of fines, and reputational
damage. To mitigate this risk the IT infrastructure is upgraded to ensure the latest security
patches are in place and that ongoing security processes are regularly updated. This is supported
by regular pen testing and back-ups.
8 Film 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. As we see the numbers returning to cinema coming close to pre-pandemic levels, we
see this risk reducing to a pre-pandemic level.
9 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. Since re-opening we have seen
our market share increase and received positive customer feedback.
Financial risks
The Group has direct exposure to interest rate movements in
relation to interest charges on bank borrowings, with a 1% increase
in rates resulting in an increase in interest charges of GBP0.2m on
current forecast borrowings over the next twelve months. The Board
manages this risk by minimising bank borrowings and reviewing
forecast borrowing positions.
The Group takes out suitable insurance against property and
operational risks where considered material to the anticipated
revenue of the Group.
Finance Director's Statement
Summary
-- Group revenue of GBP78.8m (2021: GBP49.0m)
-- Gross profit of GBP50.5m (2021: GBP30.9m)
-- Non-GAAP adjusted EBITDA of GBP14.5m (2021: GBP8.3m)
-- Operating profit of GBP0.4m (2021: GBP2.2m loss)
-- Net banking debt GBP18.5m (2021: GBP8.4m), with significant headroom in facilities
Revenue and Operating Profit
Admissions for the 52 weeks ending 29 December 2022 totalled
3.4m, an increase of 69.0% on the prior year (2021: 2.0m). In 2021,
venues were closed for the first 19 trading weeks of the year due
to pandemic-related restrictions. 2022 was not impacted by any
government-imposed closures and all venues traded through the year,
aside from any temporary closures for refurbishments.
Whilst the film slate was impacted in 2022 by Covid-related
production delays, it was clear from a number of titles that the
consumer appetite for film remained undiminished. Chief amongst
these were Top Gun: Maverick, released at the end of May, and
Avatar: The Way of Water, released in December, which are now the
12th and 3rd highest-grossing films of all time, respectively. As a
result, and due also to the new venues opened during the year,
admissions were 4.5% ahead of 2019 on a non like-for-like
basis.
Paid-for Average Ticket Price was GBP11.29, a 2.6% increase on
the prior year (2021: GBP11.00), and Food & Beverage Spend per
Head was GBP9.34, a 3.0% increase on the prior year (2021:
GBP9.07). In order to enable like-for-like comparison, both of
these metrics have been adjusted to remove the benefit from the
temporarily reduced rate of VAT during 2021 and the first quarter
of 2022. Given the challenging macroenvironment, the Group has
remained conservative when passing on price increases to
customers.
As a result of the above, revenue for the period was GBP78.8m, a
61% increase on the prior year (2021: GBP49.0m).
Reported Gross Margin was 64.0% (2021: 63.0%). The increase was
driven by a greater proportion of Venue Hire, Advertising and
Membership Income, which carries a higher margin.
Other operating income was GBP0.6m (2021: GBP3.8m). GBP0.2m of
this related to the Omicron Hospitality and Leisure Grant, and
GBP0.4m to other landlord compensation. In the prior year, the
Group received GBP2.8m of support in relation to the Job Retention
Scheme and a GBP1.0m Business Support Grant.
Administrative Expenses for the period were GBP50.7m, a 28.6%
increase on the prior year (2021: GBP39.4m). This is commensurate
with the increased levels of trading activity and admissions. The
Group's people costs are inherently linked to changes in National
Living Wage, which increased by 6.6% in April 2022. Beyond this,
and despite the macroeconomic environment, the Directors believe
that the impact to the cost base from inflation during the year has
been minimal. This is, in part, due to the recruitment of a new
Procurement Director and the resultant re-negotiation of a number
of key contracts.
The Group's Utilities contracts are fixed until the end of
October 2023. The Directors expect costs to rise, but note that
forward prices for Gas and Electricity continue to fall and believe
that increases can be absorbed without material impact to the
Group's unit economics.
The Board carried out a full impairment review at the year end,
based on a judgement of future cash flows by venue and concluded
that, due to positive ongoing trading performance, no indicators of
impairment existed. Within the prior year operating loss was a
GBP2.5m reversal of impairment of right-of-use assets and property,
plant and equipment.
The Directors are pleased to report an operating profit of
GBP0.4m (2021: GBP2.2m operating loss), particularly given both the
greater levels of government support and the gain from the reversal
of impairment in the prior year.
Financial Expenses
Financial expenses were GBP3.9m (2021: GBP3.3m) and relate
mainly to interest charges on the Group's banking facilities and on
lease liabilities under IFRS 16. The increase was as a result of an
increased draw down the Group's Revolving Credit Facility,
increases to underlying interest rates and new leases entered into
during the year.
Non-GAAP adjusted loss from operations
In addition to performance measures directly observable in the
financial statements, the following additional performance measures
are used internally by management to assess performance:
-- Non-GAAP Adjusted EBITDA
-- Admissions
-- Paid-for Average Ticket Price
-- Food & Beverage Spend per Head
Management believes that these measures provide useful
information to evaluate performance of the business as well as
individual venues, to analyse trends in cash-based operating
expenses, and to establish operational goals and allocate
resources.
In prior years, Average Ticket Price has been used as an
additional performance measure. The directors believe that Paid-for
Average Ticket Price, which excludes any complimentary and unpaid
tickets, is more representative of actual customer spend and will
be used as an additional performance measure moving forward.
Non-GAAP adjusted EBITDA was GBP14.5m, compared with GBP8.3m in
2021.
Non-GAAP adjusted EBITDA is defined as earnings before interest,
taxes, depreciation, amortisation, profit or loss on disposal of
Property, Plant & Equipment, impairment, share based payments,
pre-opening expenses and exceptional costs.
The reconciliation between operating loss and non-GAAP adjusted
loss from operations is shown at the end of the consolidated
statement of profit and loss.
Cash Flows
The Directors believe that the Group balance sheet remains well
capitalised, with sufficient working capital to service ongoing
requirements. Net cash generated in operating activities was
GBP11.8m (2021: GBP12.2m) and the net cash outflow for the year was
GBP0.5m (2021: GBP3.9m inflow).
The cash outflow for the year included GBP18.9m on the
acquisition of Property, Plant & Equipment (2021: GBP7.4m).
This was driven by payments for new venues in Edinburgh and Egham,
which opened during the year, and for Borough Yards, which opened
in December 2021. Additionally, payments were made towards new
venues in Durham, Northallerton, Salisbury, Plymouth and Marlow,
which are currently under construction and due to be opened in
2023.
The Group was able to finance much of its expansion during the
year from operating cash flows as well as landlord contributions of
GBP5.0m (2021: GBP0.5m), demonstrating the ongoing appetite of
asset holders to work with Everyman. A further proportion was
financed through a GBP9.5m draw on the Group's banking facilities
(2021: GBP6.0m). As a result, net banking debt at the balance sheet
date was GBP18.5m (2021: GBP8.4m).
Cash held at the end of the year was GBP3.7m (2021:
GBP4.2m).
The Group has banking facilities totalling GBP40m in place at
the year end. GBP25m is in a Revolving Credit Facility (RCF) and
GBP15m is in a Government-backed Coronavirus Large Business
Interruption Loan Scheme ("CLBILS") RCF. At the year end the Group
had drawn down GBP22m (2021: GBP12.5m) of the available funds, and
therefore GBP18m of the facility was undrawn (2021: GBP27.5m).
The Group returned to its original banking covenants, based on
Adjusted Leverage and Fixed Cover Charge, in June 2022. Current
forecasts demonstrate that the Group will remain within these
covenants going forward.
The Revolving Credit Facility matures in April 2024, having been
extended by 3 months in March 2023. The CLBILS, which cannot be
extended, matures in January 2024, as per the previous maturity
date. The Group is working with its banking partners to re-finance
both facilities and expects to complete this process in due
course.
Pre-opening costs
Pre-opening costs, which have been expensed within
administrative expenses, were GBP0.2m (2021: GBP0.1m). 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.
Exceptional costs
The Group incurred exceptional costs of GBP0.2m during the year
(2021: GBPNil), which related to restructuring costs within the
Head Office team.
Annual general meeting
The annual general meeting of the Company will be held at
09:30am on 15 June 2023 at Everyman Cinema Hampstead, 5 Holly Bush
Vale, London NW3 6TX.
Will Worsdell
Finance Director
12 April 2023
Consolidated statement of profit and loss and other
comprehensive income for the year ended 29 December 2022
Year ended Year ended
29 December 30 December
2022 2021
Note GBP000 GBP000
Revenue 6 78,817 49,027
Cost of sales (28,338) (18,129)
------------ ------------
Gross profit 50,479 30,898
Other Operating Income 11 622 3,800
Impairment reversal - 2,504
Administrative expenses (50,699) (39,363)
------------ ------------
Operating profit /(loss) 402 (2,161)
Financial expenses 1 2 (3,906) (3,255)
------------ ------------
Loss before tax 7 (3,504) (5,416)
Tax charge 1 3 - (14)
------------ ------------
Loss for the year (3,504) (5,430)
Other comprehensive income for the
year - 69
------------ ------------
Total comprehensive income for
the year (3,504) (5,361)
------------ ------------
Basic loss per share (pence) 14 (3.84) (5.96)
------------ ------------
Diluted loss per share (pence) 14 (3.84) (5.96)
------------ ------------
All amounts relate to continuing
activities.
Non-GAAP measure: adjusted EBITDA Year ended Year ended
29 December 30 December
2022 2021
GBP000 GBP000
Adjusted EBITDA 14,527 8,281
Before:
Depreciation and amortisation 15/17/18 (11,725) (11,727)
Disposal of Property, Plant & Equipment 15 (434) -
Impairment reversal - 2,504
Pre-opening expenses (195) (147)
Exceptional (234) -
Share-based payment expense 30 (1,537) (1,072)
Operating profit / (loss) 402 (2,161)
------------
Consolidated balance sheet at 29 December 2022
Registered in England and
Wales
Company number: 08684079
29 December 30 December
2022 2021
Note GBP000 GBP000
Assets
Non-current assets
Property, plant and equipment 15 90,067 81,848
Right-of-use assets 17 58,920 58,593
Intangible assets 18 9,312 8,906
Trade and other receivables 21 173 177
------------ ------------
158,472 149,524
Asset held for sale 16 3,219 -
------------ ------------
161,691 149,524
------------ ------------
Current assets
Inventories 19 690 711
Trade and other receivables 21 5,840 5,649
Cash and cash equivalents 20 3,701 4,240
------------ ------------
10,231 10,600
------------ ------------
Total assets 171,922 160, 124
------------ ------------
Liabilities
Current liabilities
Loans and borrowings 23 247 119
Other provisions 27 - 393
Trade and other payables 22 15,571 15,994
Lease liabilities 17 3,014 2,633
18,832 19,139
------------ ------------
Non-current liabilities
Loans and borrowings 23 22,000 12,500
Other provisions 27 1,362 1,118
Lease liabilities 17 83,459 79,147
------------ ------------
106,821 92,765
------------ ------------
Total liabilities 125,653 111,904
------------ ------------
Net assets 46,269 48,220
------------ ------------
Equity attributable to
owners of the Company
Share capital 29 9,118 9,117
Share premium 29 57,112 57,097
Merger reserve 29 11,152 11,152
Other reserve 83 83
Retained earnings (31,196) (29,229)
------------ ------------
Total equity 46,269 48,220
------------ ------------
These financial statements were approved by the Board of
Directors and authorised for issue on 11 April 2023 and signed on
its behalf by:
Will Worsdell
Finance Director
Consolidated statement of changes in equity for the year ended
29 December 2022
Share Share Merger Other Retained Total
capital premium reserve reserve earnings Equity
Note GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 31 December
2020 9,110 57,038 11,152 (6) (24,871) 52,423
Loss for the year - - - - (5,430) (5,430)
Retranslation of foreign
currency - - - 69 - 69
denominated subsidiaries
Total comprehensive
income - - - 69 (5,430) (5,361)
--------- --------- --------- --------- ---------- --------
Shares issued in the
period 29 7 59 - - - 66
Share-based payments 30 - - - - 1,072 1,072
Growth Shares - - - 20 - 20
--------- --------- --------- --------- ---------- --------
Total transactions
with owners of the
parent 7 59 - 20 1,072 1,158
--------- --------- --------- --------- ---------- --------
Balance at 30 December
2021 9,117 57,097 11,152 83 (29,229) 48,220
--------- --------- --------- --------- ---------- --------
Loss for the year - - - - (3,504) (3,504)
Total comprehensive
income - - - - (3,504) (3,504)
--------- --------- --------- --------- ---------- --------
Shares issued in the
period 29 1 15 - - - 16
Share-based payments 30 - - - - 1,537 1,537
--------- --------- --------- --------- ---------- --------
Total transactions
with owners of the
parent 1 15 - - 1,537 1,553
--------- --------- --------- --------- ---------- --------
Balance at 29 December
2022 9,118 57,112 11,152 83 (31,196) 46,269
--------- --------- --------- --------- ---------- --------
Consolidated cash flow statement for the year ended 29 December
2022
29 December 30 December
2022 2021
Note GBP000 GBP000
Cash flows from operating activities
Loss for the year (3,504) (5,430)
Adjustments for:
Financial expenses 12 3,906 3,255
Income tax expense 13 - 14
------------ ------------
Operating profit/(loss) 402 (2,161)
Depreciation and amortisation 15,17,18 11,725 11,727
Impairment reversal - (2,504)
Loss on disposal of property, plant
and equipment 434 488
Rent concessions - (701)
Gain on lease derecognition (99) -
Share-based payment expense 30 1,537 1,072
------------ ------------
13,999 7,921
Changes in working capital:
Decrease/ (Increase) in inventories 21 (326)
Increase in trade and other receivables (187) (2,844)
(Decrease)/Increase in trade and other
payables (1,658) 7,067
(Decrease)/ Increase in provisions (378) 384
------------ ------------
Net cash generated from operating
activities 11,797 12,202
------------ ------------
Cash flows from investing activities
Acquisition of property, plant and
equipment (18,884) (7,391)
Acquisition of intangible assets (1,058) (422)
------------ ------------
Net cash used in investing activities (19,942) (7,813)
------------ ------------
Cash flows from financing activities
Proceeds from the issuance of shares 29 16 86
Drawdown of bank borrowings 24 9,500 6,000
Repayment of bank borrowings 24 - (2,500)
Lease payments - interest 17 (2,851) (2,587)
Lease payments - capital 17 (3,210) (1,526)
Landlord capital contributions received 17 5,005 500
Interest paid (854) (519)
------------ ------------
Net cash generated from/ (used in)
financing activities 7,606 (546)
------------ ------------
Net (decrease)/ increase in cash and
cash equivalents (539) 3,843
Exchange loss on cash and cash equivalents - 69
Cash and cash equivalents at the beginning
of the year 4,240 328
------------ ------------
Cash and cash equivalents at the
end of the year 3,701 4,240
------------ ------------
The Group had GBP18,000,000 of undrawn funds available (2021:
GBP27,500,000) of the loan facility at the year end
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
This final results announcement for the year ended 29 December
2022 has been prepared in accordance with the UK adopted
International Accounting Standards. The accounting policies applied
are consistent with those set out in the Everyman Media Group plc
Annual Report and Accounts for the year ended 29 December 2022.
The financial information contained within this final results
announcement for the year ended 29 December 2022 and the year ended
30 December 2021 is derived from but does not comprise statutory
financial statements within the meaning of section 434 of the
Companies Act 2006. Statutory accounts for the year ended 30
December 2021 have been filed with the Registrar of Companies and
those for the year ended 29 December 2022 will be filed following
the Company's annual general meeting. The auditors' report on the
statutory accounts for the year ended 29 December 2022 is
unqualified, does not draw attention to any matters by way of
emphasis and does not contain any statement under section 498 of
the Companies Act 2006.
Going concern
Current trading is in line with management expectations. Given
the increased number of wide releases year-on-year, commitment to
the theatrical window from distributors and new investment from
streamers in content for cinema, management expect admissions to
continue to recover towards pre-pandemic levels. Paid for Average
Ticket Price and Spend per Head have continued to grow steadily
despite well-publicised concerns over consumer spends.
Banking
The Group's banking arrangements consist of a GBP25m Revolving
Credit Facility ("RCF") and a GBP15m Coronavirus Large Business
Interruption Loan Scheme ("CLBILS"). On the 14(th) March 2023 the
RCF was extended by 3 months, to 17(th) April 2024. The CLBILS,
which cannot be extended, will mature on the previous maturity date
of 17(th) January 2024. The Group's forecasts demonstrate headroom
without the CLBILS component of the facility.
The Group is actively engaged with its banking partners on a
re-finance of both the RCF and the CLBILS and expects to complete
this process in the coming months.
At the end of the year, the Group had drawn down GBP22.2m on its
facilities and held GBP3.7m in cash; the undrawn facility was
therefore GBP18m and net banking debt GBP18.5m.
The facility covenants were amended temporarily to provide
liquidity through the pandemic, when the facility amendments were
made in the first quarter of 2021. From June 2022, the covenants
returned to the pre-pandemic tests based on leverage and fixed
cover charge. The Group has operated within these covenants all
year and expects to continue to do so going forward.
Sale of Crystal Palace Freehold
On 16 January 2023, the Group completed the sale and leaseback
of its freehold property at 25 Church Road, London SE19 2TE.
Proceeds from the sale, after associated fees and disbursements,
were GBP3.8m. At the balance sheet date, the property was held for
sale in ECPee Limited, with a carrying value of GBP3.2m.
This additional liquidity has reduced the Group's reliance on
debt to finance its expansion programme during 2023.
Salisbury Freehold
During the year the Group acquired the freehold at Gala Clubs,
Endless Street, Salisbury SP1 1DP, which will open as a new
four-screen cinema during 2023. The Group's forecasts do not
consider the sale of this freehold and subsequent leaseback within
the next 12 months. However, should the need for additional
liquidity arise, management are of the view that this could be
brought forward, as required.
Base case Scenario
The period forecast is up to 30 June 2024.
The business has now traded for in excess of 18 months without
Government-enforced closures due to the pandemic, and the Board
approved budget and latest forecasts assume that this will continue
indefinitely. The forecast assumes growth in like-for-like
admissions vs. 2022, given the fuller film release schedule as the
industry recovers from pandemic-related production delays, but
remain below pre-pandemic levels. Increases in forecast costs
reflect the current inflationary environment. New openings are
forecast at 6 for 2023, with corresponding capital investment.
In this scenario the Group maintains significant headroom in its
banking facilities and complies with covenants.
Stress testing
The Board considers budget assumptions on admissions to be very
conservative , given that they do not demonstrate a return to
pre-pandemic levels until 2025. A reduction in budgeted admissions
of 8% each month from March 2023 has been modelled. This scenario
would cause a breach in the Fixed Cover Charge covenant in May
2023.
If such a scenario were to occur, Management would be able to
temporarily reduce administrative expenditure to increase EBITDA
and avoid a breach, without material impact to the Group's
operations and the quality of customer experience. In this
scenario, the Group would remain compliant with the Adjusted
Leverage covenant.
The Directors believe that the Group is well-placed to manage
its financing and other business risks satisfactorily and have a
reasonable expectation that the Group will have adequate resources
to continue in operation for at least 12 months from the approval
of the financial statements. The Board considers that an 8%
reduction in budgeted admissions is unlikely, particularly in light
of business performance in January and February 2023 and the
increase in the number of wide releases expected over the remainder
of the year. As a result, the Board does not believe this to
represent a material uncertainty, and therefore consider it
appropriate to adopt the going concern basis of accounting in
preparing the financial statements.
Use of non-GAAP profit and loss measures
The Group believes that along with operating profit, adjusted
EBITDA provides additional guidance to the statutory measures of
the performance of the business during the financial year. The
reconciliation between operating profit and adjusted EBITDA is
shown after the consolidated statement of profit and loss and other
comprehensive income.
Adjusted EBITDA is calculated by adding back depreciation,
amortisation, profit or loss on disposal of Property, Plant &
Equipment, pre-opening expenses and certain non-recurring or
non-cash items. Adjusted EBITDA is an internal measure used by
management as they believe it better reflects the underlying
performance of the Group beyond generally accepted accounting
principles.
Exceptional items that have been added back when calculating
adjusted EBITDA relate to restructuring costs within the Head
Office team.
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 29 December 2022 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.
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.
Most of the Group's revenue is derived from the sale of tickets
for film admissions and the sale of food and beverage, and
therefore the amount of revenue earned is determined by reference
to the prices of those items. 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.
Bookings, 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 obligation.
All contractual-based revenue from memberships is initially
classified as deferred revenue and subsequently recognised on a
straight-line basis over the year. Advertising revenue is
recognised at the point the advertisement is shown in the
cinemas.
Fees charged for advanced bookings of tickets is recognised at
the point when the tickets are purchased.
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), this is
usually an individual cinema venue. 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. Once goodwill has been
impaired, the impairment cannot be reversed in future periods.
Intangible assets
Software and website 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:
Software assets - 3 to 5 years
Amortisation on software in development does not commence until
it is complete and available for use.
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)
Impairment tests on goodwill and other intangible assets with
indefinite useful economic lives are undertaken annually at the
financial year end. Other non-financial assets are subject to
impairment tests whenever events or changes in circumstances
indicate that their carrying amount may not be recoverable. Where
the carrying value of an asset exceeds its recoverable amount (i.e.
the higher of value in use and fair value less costs to sell), the
asset is written down accordingly.
Where it is not possible to estimate the recoverable amount of
an individual asset, the impairment test is carried out on the
smallest group of assets to which it belongs for which there are
separately identifiable cash flows; its cash generating units
('CGUs'). Goodwill is allocated on initial recognition to each of
the Group's CGUs that are expected to benefit from a business
combination that gives rise to the goodwill.
Impairment losses (including reversals of impairment losses or
impairment gains) are included in profit or loss, except to the
extent they reverse gains previously recognised in other
comprehensive income. An impairment loss recognised for goodwill is
not reversed.
Non-current assets held for sale
Non-current assets are classified as held for sale when:
- They are available for immediate sale
- Management is committed to a plan to sell
- It is unlikely that significant changes to the plan will be
made or that the plan will be withdrawn
- An active programme to locate a buyer has been initiated
- The asset or disposal group is being marketed at a reasonable
price in relation to its fair value, and
- A sale is expected to complete within 12 months from the date
of classification.
Non-current assets classified as held for sale are measured at
the lower of:
- Their carrying amount immediately prior to being classified as
held for sale in accordance with the group's accounting policy;
and
- Fair value less costs of disposal.
Following their classification as held for sale, non-current
assets are not depreciated.
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. Lease dilapidation provisions are recognised when
entering into a lease where an obligation is created. This
obligation may be to return the leasehold property to its original
state at the end of the lease in accordance with the lease terms.
Leasehold dilapidations are recognised at the net present value and
discounted over the remaining lease period.
Leases
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.
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.
Leases in which the Group is a lessee
The Group 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 lessee'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.
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.
IFRS 16: Leases - Covid-19 Related Rent concessions
amendment
The Group has adopted the amendment to IFRS 16 that provides an
optional practical expedient for lessees from assessing whether a
rent concession related to Covid-19 is a lease modification. Where
the rent concession is a direct consequence of the Covid-19
pandemic, the revised consideration for the lease is substantially
the same or less, the reduction affects only payments originally
due on or before 30 June 2021, this was subsequently extended to 30
June 2022, and there were no other substantive changes to the lease
then the concessions can be credited to the profit and loss in the
period in which the event or condition that triggers the rent
concession occurs, rather than as a lease modification.
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 nor 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
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 equity-settled
share-based payment transactions, whereby employees render services
as consideration for equity instruments (equity-settled
transactions, through the Growth Share Scheme, Approved and
Unapproved Options Schemes). The cost of share-based payments is
recharged by the Company to subsidiary undertakings in proportion
to the services recognised.
Equity-settled share based schemes are measured at fair value,
excluding the effect of non-market based vesting conditions, 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.
3 Financial Instruments
The Group is exposed through its operations to the following
financial risks:
-- Credit risk
-- Interest rate risk
-- Liquidity Risk
In common with all other businesses, the Group is exposed to
risks that arise from its use of financial instruments. This note
describes the Group's objectives, policies and processes for
managing those risks and the methods used to measure them. Further
quantitative information in respect of these risks is presented
throughout these financial statements.
There have been no substantive changes in the Group's exposure
to financial instrument risks, it's objectives, policies and
processes for managing those risks or the methods used to measure
them from previous periods unless otherwise stated in this
note.
The principal financial instruments used by the Group, from
which financial instrument risk arises are as follows:
-- Trade receivables
-- Cash and cash equivalents
-- Trade and other payables
-- Floating rate bank revolving credit facilities and lease liabilities
Financial assets
All the Group's financial assets are subsequently accounted for
at amortised cost. These assets arise principally from the
provision of goods and services to customers (e.g. trade
receivables), but also incorporate other types of financial assets
where the objective is to hold these assets in order to collect
contractual cash flows and the contractual cash flows are solely
payments of principal and interest. They are initially recognised
at fair value plus transaction costs that are directly attributable
to their acquisition or issue, and are subsequently carried at
amortised cost using the effective interest rate method, less
provision for impairment.
Impairment provisions for trade receivables are recognised based
on the simplified approach within IFRS 9 using a provision matrix
in the determination of the lifetime expected credit losses. During
this process the probability of the non-payment of the trade
receivables is assessed. This probability is then multiplied by the
amount of the expected loss arising from default to determine the
lifetime expected credit loss for the trade receivables. For trade
receivables, which are reported net, such provisions are recorded
in a separate provision account with the loss being recognised in
profit or loss. On confirmation that the trade receivable will not
be collectable, the gross carrying value of the asset is written
off against the associated provision.
The Group's financial assets measured at amortised cost comprise
trade and other receivables and cash and cash equivalents in the
consolidated balance sheet.
Cash and cash equivalents comprise cash balances, call deposits
and cash amounts in transit due from credit cards which are settled
within seven days from the date of the reporting period. 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 Statement of Cash
Flows.
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 and initially
recognised at fair value net of any transaction costs directly
attributable. Such interest-bearing liabilities are subsequently
measured at amortised cost using the effective interest rate
method, which ensures that any interest expense over the period to
repayment is at a constant rate on the balance of the liability
carried in the consolidated statement of financial position. For
the purposes of each financial liability, interest expense includes
initial transaction costs and any premium payable on redemption, as
well as any interest or coupon payable while the liability is
outstanding.
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. The Group is mainly exposed to credit
risk from credit sales. It is Group policy, to assess the credit
risk of new customers before entering material contracts.
Credit risk also arises from cash and cash equivalents and
deposits with banks and financial institutions. For banks and
financial institutions, only independently rated parties with
minimum rating "A" are accepted.
Further disclosures regarding trade and other receivables, which
are neither past due nor impaired, are provided in note 26.
Interest rate risk
The Group is exposed to cash flow interest rate risk from its
revolving credit facility at variable rates. During 2022 and 2021,
the Group's borrowings at variable rate were denominated in
GBP.
The Group analyses the interest rate exposure on a monthly
basis. A sensitivity analysis is performed by applying various
reasonable expectations on rate changes to the expected facility
drawdown.
Liquidity Risk
Liquidity risk arises from the Group's management of working
capital and the finance charges and principal repayments on its
debt instruments. 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.
The Board receives rolling 12-month cash flow projections on a
monthly basis as well as information regarding cash balances. At
the end of the financial year, these projections indicated that the
Group expected to have sufficient liquid resources to meet its
obligations under all reasonably expected circumstances, through
utilisation of its revolving credit facility.
4 Changes in accounting policies
New standards, interpretations and amendments adopted from 1
January 2022
There are a number of standards, amendments to standards, and
interpretations which have been issued by the IASB that are
effective in future accounting periods that the Group has decided
not to adopt early.
The following amendments are effective for the period beginning
1 January 2023:
-- Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2);
-- Definition of Accounting Estimates (Amendments to IAS 8); and
-- Deferred Tax Related to Assets and Liabilities arising from a
Single Transaction (Amendments to IAS 12)
The following amendments are effective for the period beginning
1 January 2024:
-- IFRS 16 Leases (Amendment - Liability in a Sale and Leaseback);
-- IAS 1 Presentation of Financial Statements (Amendment -
Classification of Liabilities as Current or Non-Current)
-- IAS 1 Presentation of Financial Statements (Amendment -
Non-Current Liabilities with Covenants)
The Group is currently assessing the impact of these new
accounting standard and amendments.
The Group does not expect any other standards issued, but not
yet effective, to have a material impact on the Group.
5 Critical accounting estimates and judgements
The Group makes certain estimates and assumptions regarding the
future. Estimates and judgements are continually evaluated based on
historical experience and other factors, including expectations of
future events that are believed to be reasonable under the
circumstances. In the future, actual experience may differ from
these estimates and assumptions. The estimates and assumptions that
have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next
financial year are discussed below.
Impairment of goodwill, right-of-use assets and property, plant
and equipment
The Group determines whether the above are impaired when
impairment indicators exist or based on the annual impairment
assessment. The annual assessment requires an estimate of the value
in use of the CGUs to which the intangible and tangible fixed
assets are allocated, which is predominantly at the individual
cinema site level.
Estimating the value in use requires the Group to make an
estimate of the expected future cash flows from each cinema and
discount these to their net present value at an appropriate
discount rate. All venues are located in the UK and therefore a
single discount rate has been used for all CGUs. The resulting
calculation is sensitive to the assumptions in respect of future
cash flows and the discount rate applied. The Directors consider
that the assumptions made represent their best estimate of the
future cash flows generated by the CGUs and that the discount rates
used are appropriate given the risks associated with the specific
cash flows. A sensitivity analysis has been performed over the
estimates (see Note 18).
Lease dilapidations
Future costs of repair and reinstatement obligations have been
estimated by management using quotes or historical costs incurred
for similar work and judgement based on experience and technical
knowledge of employees with detailed knowledge of the premises and
experience managing the estate. The costs are reviewed at least
annually and updated based on physical inspections performed
periodically.
6 Revenue
Year ended Year ended
29 December 30 December
2022 2021
GBP000 GBP000
Film and entertainment 39,764 25,150
Food and beverages 32,250 20,360
Venue Hire, Advertising
and Membership
Income 6,803 3,517
------------ ------------
78,817 49,027
------------ ------------
All trade takes place in the United Kingdom.
The following provides information about opening and closing
receivables, contract assets and liabilities from contracts with
customers.
Contract balances 29 December 30 December
2022 2021
GBP000 GBP000
Trade and other receivables 3,308 3,847
Deferred income 4,143 4,284
------------ ------------
Deferred income relates to advanced consideration received from
customers in respect of memberships, gift cards and advanced
screenings.
7 Loss before taxation
Loss before taxation is stated after charging:
Year ended Year ended
29 December 30 December
2022 2021
GBP000 GBP000
Depreciation of tangible assets 7,721 8,030
Amortisation of right-of-use
assets 3,342 3,078
Amortisation of intangible assets 662 619
Impairment reversal on right-of-use
asset and property plant and
equipment - (2,504)
Loss on disposal of property,
plant and equipment 434 533
Operating lease income (57) (87)
Share-based payment expense 1,537 1,072
Rent concession gains from practical
expedient - (701)
------------ ------------
8 Staff numbers and employment costs
The average number of employees (including Directors) during the
year, analysed by category, was as follows:
29 December 30 December
2022 2021
Number Number
Management 222 186
Operations 1,032 731
1,254 917
------------ ------------
At the year end the number of employees (including Directors)
was 1,380 (2021: 1,342)
Management staff represent all full-time employees in the
Group.
Year ended Year ended
29 December 30 December
2022 2021
GBP000 GBP000
Wages and salaries 20,374 14,982
Social security
costs 1,718 1,211
Pension costs 306 224
Share-based payment
expense 1,537 1,072
Other staff benefits 31 5
23,966 17,494
------------ ------------
There were pension liabilities outstanding as at 29 December
2022 of GBP62,000 (30 December 2021: GBP66,000).
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
29 December 30 December
2022 2021
GBP000 GBP000
Salaries/fees 807 748
Bonuses 88 115
Other benefits 22 18
Pension contributions 14 15
------------ ------------
931 896
Share-based payment
expense 869 720
1,800 1,616
------------ ------------
Information regarding the highest paid Director is as
follows:
Year ended Year ended
29 December 30 December
2022 2021
GBP000 GBP000
Salaries/fees 294 244
Bonuses 44 40
Other benefits 21 15
Pension contributions 10 9
------------ -----------------------
369 308
Share-based payment
expense 598 750
967 1,058
------------ -----------------------
Directors remuneration for each Director is disclosed in the
Remuneration Committee report. The costs relating to the Directors
remuneration are wholly incurred by Everyman Media Limited for the
wider Group. No Directors exercised options over shares in the
Company during the year (2021: None).
10 Auditor's remuneration
Year ended Year ended
29 December 30 December
2022 2021
Fees payable to the Company's auditor
for: GBP000 GBP000
Audit of the Company's financial statements 24 12
Audit of the subsidiary undertakings
of the Company 159 77
Taxation services to the Group - 20
183 109
------------ ------------
11 Other Operating Income
Year ended Year ended
29 December 30 December
2022 2021
GBP'000 GBP'000
Coronavirus Job Retention Scheme - 2,801
Business Grants 155 999
Landlord compensation 467 -
------------- -------------
622 3,800
------------- -------------
12 Financial expenses
Year ended Year ended
29 December 30 December
2022 2021
GBP000 GBP000
Interest on bank loans and overdrafts 983 595
Bank loan arrangement fees 60 85
Interest on lease liabilities 2,851 2,587
Interest on dilapidations provision 12 9
Reassessment of dilapidations NPV - (21)
3,906 3,255
------------ ------------
13 Taxation
Year ended Year ended
29 December 30 December
2022 2021
GBP000 GBP000
Tax expense
Current tax - -
------------- ------------
Adjustment in respect of prior years - -
Total current tax credit
Deferred tax expense
Origination and reversal of temporary differences - 416
Adjustment in respect of prior years - (101)
Effect of tax rate change - (301)
------------- ------------
Total tax (credit)/expense - 14
------------- ------------
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 (loss)/ profit for the year are as
follows:
Reconciliation of effective tax rate Year ended Year ended
29 December 30 December
2022 2021
GBP000 GBP000
Loss before tax (3,504) (5,416)
------------ ------------
Tax at the UK corporation tax rate of
19.00% (666) (1,029)
Permanent differences (expenses not
deductible for tax purposes) 840 750
Impact of difference in overseas tax
rates - 1
De-recognition of losses 32 605
Effect of change in expected future
statutory rates on deferred tax (206) (217)
Impact of a drop in share-based payments
intrinsic value - 5
Adjustment in respect of previous periods - (101)
Other - -
Total tax (credit)/expense - 14
------------ ------------
A reduction to 17% (effective 1 April 2020) was substantively
enacted on 6 September 2016. In March 2020, it was announced that a
rate of 19% would continue to apply with effect from 1 April 2020
and this change was substantively enacted from 17 March 2020.
An increase in the UK corporation rate from 19% to 25%
(effective 1 April 2023) was substantively enacted on 24 May 2021.
This will increase the company's future current tax charge
accordingly.
14 Earnings per share
Year ended Year ended
29 December 30 December
2022 2021
2021 2020
GBP000 GBP000
Loss used in calculating basic and diluted
earnings per share (3,504) (5,430)
------------ ------------
Number of shares (000's)
Weighted average number of shares for
the purpose of basic earnings per share 91,178 91,129
------------ ------------
Number of shares (000's)
Weighted average number of shares for
the purpose of diluted earnings per share 91,178 91,129
------------ ------------
Basic loss per share (pence) (3.84) (5.96)
------------ ------------
Diluted loss per share (pence) (3.84) (5.96)
------------ ------------
29 December 30 December
2022 2021
Weighted
Weighted average average
no. 000's no. 000's
Issued at beginning of the year 91,163 91,095
Share options exercised 15 34
Weighted average number of shares at end
of the year 91,178 91,129
----------------- ------------
Weighted average number of shares for
the purpose of diluted
earnings per share
Basic weighted average number of shares 91,178 91,129
Effect of share options in issue - -
------- -------
Weighted average number of shares at end
of the year 91,178 91,129
------- -------
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 shares issued in the year in the
above table reflect the weighted number of shares rather than the
actual number of shares issued.
The Company has 7m potentially issuable Ordinary shares (2021:
7m) 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. In the
current year these options are anti-dilutive as they would reduce
the loss per share and so haven't been included in the diluted
earnings per share.
15 Property, plant and equipment
Plant Fixtures
Land & Leasehold & & Assets under
Buildings improvements machinery Fittings construction Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Cost
At 31 December
2020 6,529 75,623 15,998 9,940 1,624 109,714
Acquired in the
year - 1,648 954 395 4,394 7,391
Disposals - (1,189) (4,382) (1,156) (59) (6,786)
Transfer on completion - 96 - - (96) -
---------- ------------- ---------- --------- ----------------------- --------
At 30 December
2021 6,529 76,178 12,570 9,179 5,863 110,319
---------- ------------- ---------- --------- ----------------------- --------
Acquired in the
year 1,278 977 830 406 16,102 19,593
Disposals - (648) (284) (425) - (1,357)
Transfer on completion - 7,950 3,060 4,433 (15,443) -
Re-classified
to non-current
assets held for
sale (3,398) - - - - (3,398)
At 29 December
2022 4,409 84,457 16,176 13,593 6,522 125,157
---------- ------------- ---------- --------- ----------------------- --------
Depreciation
At 31 December
2020 159 14,415 9,173 4,402 - 28,149
Charge for the
year 48 4,104 2,574 1,304 - 8,030
Impairment - (1,124) (75) (167) - (1,366)
On Disposals - (925) (4,312) (1,105) - (6,342)
At 30 December
2021 207 16,470 7,360 4,434 - 28,471
---------- ------------- ---------- --------- ----------------------- --------
Charge for the
year 42 3,850 2,536 1,293 - 7,721
On Disposals - (523) (129) (271) - (923)
Re-classified
to non-current
assets held for
sale (179) - - - - (179)
---------- ------------- ---------- --------- ----------------------- --------
At 29 December
2022 70 19,797 9,767 5,456 - 35,090
---------- ------------- ---------- --------- ----------------------- --------
Net book value
At 29 December
2022 4,339 64,660 6,409 8,137 6,522 90,067
---------- ------------- ---------- --------- ----------------------- --------
At 30 December
2021 6,322 59,708 5,210 4,745 5,863 81,848
---------- ------------- ---------- --------- ----------------------- --------
At 31 December
2020 6,433 61,143 6,825 5,538 1,626 81,565
---------- ------------- ---------- --------- ----------------------- --------
For impairment considerations of tangible fixed assets this was
considered using the value in use basis disclosed in Note 18.
16 Non-current assets held for sale
General description:
In September 2022, the board announced its intention to sell the
Freehold Investment property, 25 Church Road, London SE19 2TE to a
suitable buyer. Therefore, as at 1 October 2022, the property was
no longer depreciated and was re-classified as held for sale.
The property is owned by ECPEE Limited, a subsidiary of the
Group.
Subject to contract, ECPEE will sell the freehold interest in
the property to the buyer, and the buyer will then grant the lease
back to ECPEE. The sale was not completed as at 29 December 2022,
and therefore the property has been classified as held for
sale.
Disposal activities after reporting period not recognised:
The sale and leaseback of 25 Church Road, London SE19 2TE was
concluded through exchange of contracts on 16 January 2023 with a
suitable buyer.
Assets and liabilities held for sale:
29 December 30 December
2022 2021
GBP'000 GBP'000
Freehold property 3,219 -
------------ ------------
Assets held for sale 3,219 -
------------ ------------
The freehold property transferred from Property, plant and
equipment to assets held for sale was valued immediately before the
transfer, using a fair market value carried out by external
qualified valuers. Fair value less cost to sell was higher than net
book value and consequently no impairment charge is required.
17 Leases
Lease liabilities are measured at the present value of the
contractual payments due to the lessor over the lease term, with
the discount rate determined by reference to the rate inherent in
the lease unless (as is typically the case) this is not readily
determinable, in which case the Group's incremental borrowing rate
on commencement of the lease is used.
On initial recognition, the carrying value of the lease
liability also includes:
-- amounts expected to be payable under any residual value guarantee;
Right of use assets are initially measured at the amount of the
lease liability, reduced for any lease incentives received, and
increased for:
-- lease payments made at or before commencement of the lease;
-- initial direct costs incurred; and
-- the amount of any provision recognised where the Group is
contractually required to dismantle, remove or restore the leased
asset (typically leasehold dilapidations - see note 27).
Subsequent to initial measurement lease liabilities increase as
a result of interest charged at a constant rate on the balance
outstanding and are reduced for lease payments made. Right-of-use
assets are amortised on a straight-line basis over the remaining
term of the lease or over the remaining economic life of the asset
if, rarely, this is judged to be shorter than the lease term.
If the Group revises its estimate of the term of any lease it
adjusts the carrying amount of the lease liability to reflect the
payments to make over the revised term, which are discounted using
a revised discount rate. An equivalent adjustment is made to the
carrying value of the right-of-use asset, with the revised carrying
amount being amortised over the remaining (revised) lease term. If
the carrying amount of the right-of-use asset is adjusted to zero,
any further reduction is recognised in profit or loss.
Nature of leasing activities
The Group leases a number of properties in the towns and cities
from which it operates. In some locations, depending on the lease
contract signed, the lease payments may increase each year by
inflation or and in others they are reset periodically to market
rental rates. For some property leases the periodic rent is fixed
over the lease term.
The Group also leases certain vehicles. Leases of vehicles
comprise only fixed payments over the lease terms.
The percentages in the table below reflect the current
proportions of lease payments that are either fixed or variable.
The sensitivity reflects the impact on the carrying amount of lease
liabilities and right-of-use assets if there was an uplift of 5% on
the balance sheet date to lease payments that are variable.
During 2022 the Group entered into two property leases for new
venues for a period of 20 and 25 years. The leases had not
commenced by the year end and as a result, a lease liability and
right-of-use asset has not been recognised at 29 December 2022. The
aggregate future cash outflows to which the Group is exposed in
respect of these contracts is fixed payments of GBP222,000 per year
for the next 5 years, with upward only rent reviews every 5
years.
29 December 2022 Lease Fixed Variable Sensitivity
contract payments payments (+/-)
No. % % GBP'000
Property leases with payments linked
to inflation 21 - 50% 2,799
Property leases with periodic uplifts
to market rentals 17 - 43% 1,316
Property leases with fixed payments 2 6% - -
Vehicle leases 3 1% - -
---------- ---------- ---------- ------------
43 7% 93% 4,115
---------- ---------- ---------- ------------
The percentages in the table below reflect the proportions of
lease payments that are either fixed or variable for the
comparative period.
30 December 2021 Lease Fixed Variable Sensitivity
contract payments payments (+/-)
No. % % GBP'000
Property leases with payments linked
to inflation 19 - 51% 2,635
Property leases with periodic uplifts
to market rentals 16 - 41% 1,255
Property leases with fixed payments 2 7% - -
Vehicle leases 3 1% - -
---------- ---------- ---------- ------------
40 8% 92% 3,890
---------- ---------- ---------- ------------
Right-of-Use Assets
Land & Buildings Motor Vehicles
GBP'000 GBP'000 Total
GBP'000
As at 31 December 2020 56,723 22 56,745
Additions 4,357 30 4,387
Amortisation (3,055) (23) (3,078)
Impairment reversal 1,133 - 1,133
Effect of modification to lease terms (594) - (594)
----------------- --------------- ----------
At 30 December 2021 58,564 29 58,593
Additions 2,540 43 2,583
Amortisation (3,325) (17) (3,342)
Effect of modification to lease terms 1,086 - 1,086
At 29 December 2022 58,865 55 58,920
----------------- --------------- ----------
Lease Liabilities
Land Motor
& Buildings Vehicles Total GBP'000
GBP'000 GBP'000
At 31 December 2020 79,050 18 79,068
Additions 5,003 30 5,033
Interest expense 2,586 1 2,587
Effect of modification to lease terms (594) - (594)
Rent concession gains (701) - (701)
Lease payments (4,088) (25) (4,113)
Landlord contributions 500 - 500
At 30 December 2021 81,756 24 81,780
Additions 2,465 43 2,508
Interest expense 2,850 1 2,851
Effect of modification to lease terms 845 - 845
Lease payments (6,045) (16) (6,061)
Landlord contributions 4,550 - 4,550
At 29 December 2022 86,421 52 86,473
------------- ---------- ----------------
Landlord contributions received after lease
commencement date are shown in the table
above. A further contribution of GBP455,000
(2021: GBPnil) was received prior to lease
commencement and therefore total cash received
from landlords during the year, as presented 29 December 30 December
in the cash flow statement, was GBP5,005,000 2022 2021
(2021: GBP500,000). GBP'000 GBP'000
Lease liabilities
Current 3,014 2,633
Non-current 83,459 79,147
------------ ------------
86,473 81,780
------------ ------------
Rent Concessions
During 2020 and 2021, the Group received numerous forms of rent
concessions from lessors due to the Group being unable to operate
for significant periods of time. These concessions included rent
forgiveness and deferrals.
As discussed in note 2 in the annual financial statements for
the year ended 30 December 2021, the Group has elected to apply the
practical expedient introduced by the amendments to IFRS 16 to all
rent concessions that satisfy the criteria. Substantially all the
rent concessions entered into during 2021 satisfied the criteria to
apply the practical expedient. For any of the modifications that
did not meet the practical expedient requirements; the lease
liability was remeasured using the discount rate applicable at the
date of modification, with the right of use being adjusted by the
same amount.
The application of the practical expedient in 2021 resulted in
the reduction of total lease liabilities of GBP701,000. During the
year ended 29 December 2022 no new rent concessions were
agreed.
Maturity analysis of lease payments
29 December 30 December
2022 2021
GBP'000 GBP'000
Contractual future cash outflows
Land and buildings
Less than one year 5,998 5,291
Between one and five years 24,916 22,794
Over five years 90,989 87,239
-------------- --------------
121,903 115,324
-------------- --------------
Motor Vehicles
Less than one year 24 13
Between one and five years 29 11
-------------- --------------
53 24
-------------- --------------
Other lease disclosures
29 December 30 December
2022 2021
GBP'000 GBP'000
Expenses relating to variable lease payments
not included in the measurement of lease
liabilities 113 38
-------------- --------------
Maturity analysis of lease receipts
(Receipts arising from the Group being a lessor)
29 December 30 December
2022 2021
GBP'000 GBP'000
Contractual future cash inflows
Land and buildings
Less than one year 4 65
Between one and five years - 16
4 81
------------ ----------------
The reduction in future cash inflows at 29 December 2022 arises
from a termination in the leasing arrangement for the property.
18 Goodwill, intangible assets and impairment
The Group is required to test, on an annual basis, whether
goodwill has suffered any impairment. The recoverable amount is
determined based on value in use calculations. The use of this
method requires the estimation of future cash flows and the
determination of a discount rate in order to calculate the present
value of the cash flows.
Goodwill Software Total
GBP'000 GBP'000 GBP'000
Cost
At 31 December 2020 8,951 2,991 11,942
Acquired in the year - 423 423
Disposed in the year - (546) (546)
At 30 December 2021 8,951 2,868 11,819
Acquired in the year - 1,068 1,068
At 29 December 2022 8,951 3,936 12,887
--------- --------- ---------
Amortisation and impairment -
At 30 December 2020 1,599 1,203 2,802
Charge for the year - 619 619
Disposed in the year - (503) (503)
Impairment - (5) (5)
--------- --------- ---------
At 30 December 2021 1,599 1,314 2,913
Charge for the year - 662 662
At 29 December 2022 1,599 1,976 3,575
--------- --------- ---------
Net book value
At 29 December 2022 7,352 1,960 9,312
--------- --------- ---------
At 30 December 2021 7,352 1,554 8,906
--------- --------- ---------
At 2 January 2020 7,352 1,788 9,140
--------- --------- ---------
Impairment Review
The Group evaluates assets for impairment annually or when
indicators of impairment exist. As required by IAS 36, the Group
assessed whether there was an indication that a previously
recognised impairment no longer exists or may have decreased. A
reversal of an impairment is only recognised if there has been a
change in the estimates used to determine the asset's recoverable
amount since the last impairment loss was recognised.
The annual impairment assessment requires an estimate of the
value in use of each cash-generating unit (CGU) to which goodwill,
property plant and equipment and right-of-use assets are allocated,
which is the individual cinema level. The recoverable amount of a
CGU is the higher of value in use and fair value less cost of
disposal. The Group determines the recoverable amount with
reference to its value in use.
Goodwill is allocated to the following CGUs:
29 December 30 December
2022 2021
GBP000 GBP000
Baker Street 103 103
Barnet 1,309 1,309
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
7,352 7,352
------------ ------------
Estimating the value in use requires estimate of the expected
future cash flows from each CGU and discount these to their net
present value at a pre-tax discount rate. Forecast cash flows are
derived from adjusted EBITDA generated by each CGU which is based
on management's forecast performance. Cash flow forecasts have been
prepared for each CGU by applying growth assumptions to key drivers
of cash flows, including admissions, average ticket price, spend
per head, direct and overhead costs.
The key assumptions of this calculation are shown below:
29 December 30 December
2022 2021
Discount rate 15.3% 13.1%
Long term growth rate 2% 2%
Number of years projected 5 years 5 years
Adjusted EBITDA used for 2023 is based on the Board approved
budget and represents managements best estimate of future
cashflows, it has been used as the base assumption within the
forecast. In the remaining five-year forecast the following
assumptions have been applied:
-- Admissions increase by 5.5% in 2024 representing continued
recovery from impact of the pandemic. In 2024, forecast admissions
remain 10% below pre- Covid19 levels.
-- EBITDA growth from 2025 -2027 includes lower admission growth
rate than 2024 and expectations about increases in average ticket
prices and spend per head.
-- For venues opened since 2019 that are early in their maturity
curve, specific assumptions have been applied to the key drivers
over the five- year forecast period.
Sensitivity analysis
Impairment reviews are sensitive to changes in key assumptions.
Sensitivity analysis has been performed by considering incremental
changes in assumptions of admission levels and discount rates.
Goodwill cannot be written back once impaired. As a result,
impairment of goodwill brought forward of GBP1,599,000 was excluded
from the calculations.
Scenarios
The following sensitivity scenarios have been applied to the
cash flow forecasts for stress testing purposes:
-- Admissions levels were increased by 1% in the upside case and
decreased by 1% in the downside case; and
-- WACC was decreased by 1.5% in the upside case and increased
by 1.5% in the downside case. WACC has been included in sensitivity
analysis due to the increase in the cost of debt over the past
financial year and relative uncertainty over the cost of debt going
forward.
Upside Case Downside Case
Change Reversal Change Additional
of Previous Impairment
Impairment
GBP000 GBP000
Admissions +1.0% 360 -1.0% (699)
WACC -1.5% 895 +1.5% (1,514)
Reversal of previous impairment relates to two venues impaired
in prior periods. Additional impairment relates to two venues
impaired in prior periods and three further venues.
The impact on the total impairment charge of applying the
different scenarios explained above relates to two venues that were
impaired in previous years. An impairment charge would not be
triggered on any other venues based on the changes in these
assumptions.
The following cumulative impairment charges have been recognised
in previous periods and have not been reversed. Bought forward
impairment of right-of-use assets and property, plant and equipment
relates to two venues.
29 December 30 December
2022 2021
GBP000 GBP000
Goodwill 1,599 1,599
Right-of-use assets 724 724
Property, plant & equipment 808 808
------------ ------------
Total 3,131 3,131
------------ ------------
19 Inventories
29 December 30 December
2022 2021
GBP000 GBP000
Food and beverages 656 638
Projection 34 73
------------ ------------
690 711
------------ ------------
Finished goods recognised as cost of sales in the year amounted
to GBP7,848,000 (2021: GBP5,054,000). The write-down of inventories
to net realisable value amounted to GBPnil (2021: GBPnil).
20 Cash and cash equivalents
29 December 30 December
2022 2021
GBP000 GBP000
Per balance sheet 3,701 4,240
------------ ------------
Per cash flow statement 3,701 4,240
------------ ------------
21 Trade and other receivables
29 December 30 December
2022 2021
GBP000 GBP000
Included in current assets 5,840 5,649
Included in non-current
assets 173 177
------------ ------------
6,013 5,826
------------ ------------
Trade receivables 3,308 3,847
Social security and other
taxation - 1
Other receivables 241 210
Prepayments and accrued
income 2,464 1,768
6,013 5,826
------------ ------------
There were no receivables that were considered to be impaired.
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 have been
recognised as non-current assets.
22 Trade and other payables
29 December 30 December
2022 2021
GBP000 GBP000
Trade creditors 2,305 3,640
Social security and other taxation 1,819 1,051
Other creditors 589 10
Accrued expenses 6,344 7,009
Deferred income 4,514 4,284
15,571 15,994
------------ ------------
23 Loans and borrowings
29 December 30 December
2022 2021
GBP000 GBP000
Bank borrowings
Current 247 119
Non-current 22,000 12,500
------------ ------------
Total Bank Debt 22,247 12,619
Cash (3,701) (4,240)
------------ ------------
Net Bank Debt 18,546 8,379
------------ ------------
The Company agreed a GBP25 million RCF and GBP15m CLBILS loan
facility with Barclays Bank PLC and Santander UK PLC in March 2021.
Interest is charged at LIBOR/SONIA 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 of the RCF is repayable in full on or
before 17 April 2024. The capital sum of the CLBILS is repayable in
full on or before 17 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 GBP22
million of the GBP40 million debt facility as at 29 December 2022
(2021: GBP12.5 million).
24 Changes in liabilities from financing activities
Non- current Current Lease liabilities Total
loans and loans and
borrowings borrowings
GBP000 GBP000 GBP000 GBP000
At 31 December 2021 12,500 119 81,780 94,399
Cash flows 9,500 - (1,056) 8,444
Non- cash flows:
Interest accruing
in period - 128 2,851 2,979
Lease additions - - 3,680 3,680
Effect of modifications
to lease terms - - (782) (782)
------------- ------------ ------------------ --------
At 29 December 2022 22,000 247 86,473 108,720
------------- ------------ ------------------ --------
At 1 January 2021 9,000 43 79,068 88,111
Cash flows 3,500 (3,613) (113)
Non- cash flows:
Interest accruing
in period - 76 2,587 2,663
Lease additions - - 5,033 5,033
Effect of modifications
to lease terms - - (701) (701)
Rent concessions - - (594) (594)
At 30 December 2021 12,500 119 81,780 94,399
------------- ------------ ------------------ --------
25 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.
29 December 30 December
2022 2021
GBP000 GBP000
Financial assets measured at amortised
cost
Cash and cash equivalents 3,704 4,240
Trade and other receivables 3,549 4,057
Accrued income 692 221
7,945 8,518
------------ ------------
29 December 30 December
2022 2021
GBP000 GBP000
Financial liabilities measured at
amortised cost
Bank borrowings 22,247 12,619
Trade Creditors 2,305 3,640
Leases 86,473 81,780
Other Creditors 589 8
Accrued expenses 6,344 7,009
------------ ------------
117,958 105,056
------------ ------------
26 Financial risks
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 29 December 2022 and 30 December
2021.
Trade and other receivables are measured at amortised cost. Book
values and expected cash flows are reviewed by the Board and there
have been no impairment losses recognised on these assets.
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.
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 Group 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 29 December 2022 the Group has trade receivables of
GBP3,308,000 (2021: GBP4,243,000). Trade receivables arise mainly
from advertising and sponsorship revenue. 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
29 December 2022 the Directors have recognised expected credit
losses of GBPNil (2021: GBP109,000).
The maximum exposure to credit risk at the balance sheet date by
class of financial instrument was:
29 December 30 December
2022 2021
GBP000 GBP000
Ageing of receivables
<30 days 2,224 3,927
31-60 days 914 84
61-120 days 63 232
>120 days 107 -
------------ ------------
3,308 4,243
------------ ------------
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
(2021: 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.
The Group's forecasts show sufficient headroom in banking
covenants for the next 12 months.
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
-----------------------------------------------------------
Between Between
Carrying Less than one and three and Over five
29 December 2022 amount one year two years five years years Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Non-derivative
financial liabilities
Secured bank
facility 22,247 247 22,000 - 22,247
Trade creditors 2,305 2,305 - - - 2,305
Leases 86,473 5,998 6,230 18,687 90,988 121,903
Other creditors 589 589 - - - 589
Accrued expenses 6,344 6,344 - - - 6,344
--------- ---------- ----------- ------------ ---------- --------
117,958 15,483 28,230 18,687 90,988 153,388
--------- ---------- ----------- ------------ ---------- --------
Contractual cash flows
-----------------------------------------------------
Between Between
30 December 2021 Carrying Less than one three Over five
and two and five
amount one year years years years Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Secured bank facility 12,619 2 496 13,992 - 14,490
Trade creditors 3,640 3,640 - - - 3,640
Leases 81,780 5,290 5,990 16,804 87,239 115,323
Other creditors 8 8 - - - 8
Accrued expenses 7,009 7,009 - - - 7,009
--------- ---------- -------- --------- ---------- --------
105,056 15,949 6,486 30,796 87,239 140,470
--------- ---------- -------- --------- ---------- --------
Interest rate risk
Interest rate risk arose from the Group's holding of
interest-bearing loans linked to LIBOR/SONIA. 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 is set out below.
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 30 December 2021
Bank borrowings 2.72% 119 - 12,500
Bank current and deposit
balances 0.01% 4,240 - -
---------- --------- ---------- ---------
At 29 December 2022
Bank borrowings 2.40% 247 22,000 -
Bank current and deposit
balances 0.01% 3,701 - -
---------- --------- ---------- ---------
The following table demonstrates the sensitivity to a reasonably
plausible 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 29 December 30 December
rate 2022 2021
% GBP000 GBP000
Bank borrowings 0.5% 111 63
1.0% 222 126
1.5% 333 189
Bank current and deposit
balances 0.5% 18 19
1.0% 37 37
1.5% 55 56
Capital management
The Group's capital is made up of share capital, share premium,
merger reserve and retained earnings totalling GBP46.3m (2021
GBP48.2m).
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.
27 Provisions
Leasehold
Other provisions Dilapidations Total
GBP,000 GBP,000 GBP,000
As at 30 December 2021 393 1,118 1,511
Utilised in the year (393) - (393)
Additions - 97 97
Other increases - 135 135
Unwinding of discount - 12 12
-------------------
As at 29 December 2022 - 1,362 1,362
------------------- --------------- ----------
Due within one year or less - - -
Due within one to five years - 44 44
Due after more than five years - 1,318 1,318
------------------- --------------- ----------
- 1,362 1,362
------------------- --------------- ----------
Leasehold dilapidations relate to the estimated cost of
returning leasehold property to its original state at the end of
the lease in accordance with lease terms. The cost is recognised as
depreciation of leasehold improvements over the remaining term of
the lease. The main uncertainty relates to estimating the cost that
will be incurred at the end of the lease term, the average
remaining lease term for leases held at 29 December 2022 was 18
years (2021:18 years).
28 Deferred tax
29 December 30 December
2022 2021
GBP000 GBP000
Deferred tax gross movements
Opening balance deferred tax liability - (14)
Recognised in profit and loss
Arising on loss carried forward (1,455) (426)
Net book value in excess of tax written down
value 1,206 784
Movement on share option intrinsic value 245 (257)
Amortisation of IFRS accumulated restatement 49 (144)
Lease acquired (62) (29)
Other temporary differences 17 86
Credit/Charge to profit and loss - 14
------------ ------------
Deferred tax comprises:
Temporary differences on property, plant and
equipment 5,723 4,627
Temporary differences on IFRS 16 accumulated
restatement (598) (646)
Temporary differences on leases acquired - 62
Share-option scheme intrinsic value (28) (273)
Available losses (5,376) (4,030)
Other temporary and deductible differences 279 260
------------ ------------
- -
------------ ------------
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 25% from 1 April
2023. 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. Deferred tax assets have been
recognised in respect of tax losses and other temporary differences
giving rise to deferred tax assets where the Directors believe it
is probable that they will be recovered. The Group has unused tax
losses of approximately GBP30.0m in relation to UK losses and an
unprovided deferred tax asset of GBP2.1m.
29 Share capital and reserves
29 December 30 December
Nominal 2022 2021
value GBP000 GBP000
Authorised, issued and fully paid
Ordinary shares GBP0.10
At the start of the year 9,117 9,110
Issued in the year 1 7
------------ ------------
At the end of the year 9,118 9,117
------------ ------------
Number of shares 29 December 30 December
2022 2021
Number Number
Authorised, issued and fully paid
Ordinary shares
At the start of the year 91,162,969 91,095,469
Issued in the year 15,000 67,500
------------ ------------
At the end of the year 91,177,969 91,162,969
------------ ------------
The holders of Ordinary shares are entitled to one vote per
share. During the year the Company issued 15,000 Ordinary shares at
a price of 109.5p (2021 67,500 Ordinary shares at prices ranging
from 93.5p to 100p)..
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 (2021:
GBPnil)
30 Share-based payment arrangements
EMI, Non-Qualifying and LTIP Schemes
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, non-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 98 1 10 years
Management employees,
Directors and
contractors 29.10.2013 Equity-settled 150 2 10 years
Directors 04.11.2013 Equity-settled 50 2 10 years
Management employees,
Directors and
contractors 29.10.2015 Equity-settled 218 3 10 years
Management employees 15.12.2016 Equity-settled 80 4 10 years
Management employees 10.01.2017 Equity-settled 30 4 10 years
Directors 13.03.2017 Equity-settled 250 4 10 years
Management employees
and contractors 11.10.2017 Equity-settled 425 4 10 years
Management employees
and Directors 23.11.2017 Equity-settled 87 5 10 years
Management employees
and Directors 23.04.2018 Equity-settled 30 6 10 years
Management employees
and contractors 02.10.2018 Equity-settled 205 4 10 years
Management employees 03.10.2018 Equity-settled 15 7 10 years
Management employees 05.11.2018 Equity-settled 1 7 10 years
Management employees
and Directors 24.09.2019 Equity-settled 698 4 10 years
Management employees
and Directors 30.04.2020 Equity-settled 550 4 10 years
Management employees 30.09.2020 Equity-settled 250 4 10 years
Directors 12.11.2020 Equity-settled 1,600 4 10 years
Management employees
and Directors 22.12.2020 Equity-settled 150 4 10 years
Directors 08.04.2021 Equity-settled 1,000 8 10 years
Management employees 22.11.2021 Equity-settled 75 4 10 years
Management employees 17.03.2022 Equity-settled 585 4 10 years
Management employees 30.04.2022 Equity-settled 5 4 10 years
Management employees
and Directors 05.05.2022 Equity-settled 175 4 10 years
Management employees
and Directors 27.06.2022 Equity-settled 125 4 10 years
Management employees
and Directors 24.10.2022 Equity settled 123 9 10 years
6,974
-------------------
*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 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.
*4 Unapproved options. These vest on the third anniversary of
the date of grant.
*5 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 based on internal Adjusted EBITDA
targets.
*6 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 based on internal Adjusted EBITDA targets.
*7 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 based on internal Adjusted EBITDA targets.
*8 Unapproved options. These vested on the 31(st) December 2021
and can be exercised subject to continued employment. The exercise
price is GBP1.50.
*9 Unapproved options as part of the long-term incentive plan.
These vest 3 years and 2 months from the date of grant. Between 40%
and 100% of the options are exercisable based on internal Adjusted
EBITDA targets.
All equity-settled share options are measured at fair value as
determined through use of the Binomial technique, at the date of
grant, aside from those with market-based performance conditions,
which are valued using the Monte Carlo model. During the year, no
equity-settled share options were issued with market-based
performance conditions.
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 Binomial model for the share options issued
in the year were as follows:
Option scheme conditions
for options issued in the
year: 29 December 29 December
2022 2022
Performance No performance
criteria criteria
Weighted average share price
at grant date (pence) 0.95 120.0
Weighted average option exercise
prices (pence) 0.10 120.0
Expected volatility 40.0% 40.0%
Expected option life 4 years 3 years
Weighted average contractual
life of outstanding share
options 10 years 10 years
Risk-free interest rate 1.57% 1.57%
Expected dividend yield 0.0% 0.0%
Fair value of options granted
in the year (pence) 0.85 0.54
Volatility has been calculated based on historical share price
movements of the Company as at each grant date. Prospective
volatility estimates have been adjusted to remove the impact of
high volatility experienced in mid-March 2020, related to
Covid-19.
Weighted average
exercise
price per share
in the year ended
29 December 30 December 29 December 30 December
2022 2021 2022 2021
Pence Pence Number Number
Options at the beginning
of the year 142.00 109.50 6,925,003 6,559,818
Options issued in the year 0.75 0.72 1,518,543 1,860,888
Options exercised in the
year 1.09 0.94 (15,000) (67,500)
Option forfeited in the
year 0.69 0.89 (1,454,713) (1,428,203)
------------ ------------ ------------ ------------
Options at the end of the
year 104.28 142.00 6,973,833 6,925,003
------------ ------------ ------------ ------------
No options lapsed beyond their contractual life in the year
(Year ended 2021: nil).
Growth Shares
Under the A Growth Share Scheme, Alex Scrimgeour was issued with
2,000,000 A shares in Everyman Media Holdings Limited on 8 April
2021. The rights attaching to the A shares include a put option
which, when exercised, enable the shareholder to convert the shares
into ordinary shares of the Company. The Growth Shares in Everyman
Media Holdings Ltd will vest subject to the achievement of share
price targets. 1,000,000 Growth Shares in Everyman Media Holdings
Ltd will vest if the Company has an average closing mid-market
price of GBP2.25 or more over any 15 consecutive trading days
("Target 1"). The remaining 1,000,000 Growth Shares in Everyman
Media Holdings Ltd will vest if the Company has an average closing
mid-market price of GBP3.00 or more over any 15 consecutive trading
days ("Target 2").
To the extent that the performance targets have been met, the
Growth Shares in Everyman Media Holdings Limited will entitle Mr
Scrimgeour to receive an amount equivalent to the market value of
an ordinary share in the Company less GBP1. The vested Growth
Shares shall be exchanged for ordinary shares in the Company on or
after 31 December 2022 if Target 1 has been achieved and on or
after 31 December 2023 if Target 2 has been achieved, provided that
if a change of control of the Company occurs at any time, any
vested Growth Shares which have not been exchanged by then, shall
be exchanged on the change of control of the Company.
Details of the outstanding shares under the A Growth Share
Scheme are as follows:
29 December 30 December
2022 2021
Outstanding at beginning of year 2,000,000 -
Granted in year - 2,000,000
Exercised in year - -
------------ ------------
Outstanding at end of year 2,000,000 2,000,000
------------ ------------
The Monte Carlo model was used for fair valuing the A Growth
Share awards at the date of grant. The inputs to the model were as
follows:
A Growth Share Scheme
Target 1 Target 2
=========== ===========
Number of
shares 1,000,000 1,000,000
=========== ===========
Share price GBP2.25 GBP3.00
target
=========== ===========
Expected volatility 45% 45%
=========== ===========
Risk free
interest rate 0.10% 0.10%
=========== ===========
Option life
(years) 5 5
=========== ===========
Starting share GBP1.41 GBP1.41
price
=========== ===========
Share-based payments charged to the profit and loss were as
follows:
29 December 30 December
2022 2021
GBP000 GBP000
Share options charge 939 625
Growth shares charge 598 447
------------ ------------
Administrative costs 1,537 1,072
------------ ------------
The charge for the Company was GBPnil (2021: GBPnil) after
recharging subsidiary undertakings with a charge of GBP1,537,000
(2021: GBP1,072,000). The relevant charge is included within
administrative costs.
There are 3,336,124 options exercisable at 29 December 2022 in
respect of the current arrangements (2021: 1,488,103). 15,000
options were exercised in the year (2021: 67,500).
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.
31 Commitments
There were capital commitments for tangible assets at 29
December 2022 of GBP15,878,000 (2021: GBP9,407,000). This amount is
net of landlord contributions of GBP7,055,000 (2021:
GBP7,820,000).
32 Events after the balance sheet date
Sale and Leaseback of Crystal Palace Venue
On 16 January 2023, the Group completed the sale and leaseback
of its freehold property at 25 Church Road, London SE19 2TE.
Proceeds from the sale, after associated fees and disbursements,
were GBP3.8m. At the balance sheet date, the property was held for
sale in ECPee Limited, with a carrying value of GBP3.2m.
As a result of the transaction, the Group will recognise a net
profit on disposal of GBP0.6m in 52-week period ended 28 December
2023.
The leaseback element of the transaction is accounted for as a
finance lease under IFRS 16. This will result in the recognition of
a right of use asset and a lease liability in 2023.
Under the terms of the lease agreement, the Group has leased
back the property for a period of 25 years at annual rent of
GBP240,000. The rent is to be reviewed every five years. The first
and second reviews are to be upwards only on an indexed basis by
reference to increases in the Retail Prices All Items Indexed with
a collar of 1% per annum and a cap of 4% per annum. The third and
fourth reviews are on an upwards only basis to be the higher of the
indexed rent (increased in accordance with the mechanism agreed for
the first two reviews) and the open market rent pursuant to an open
market rent review mechanism.
Extension of Banking Facilities
On 14th March 2023, the Group extended its GBP25m revolving
credit facility ("RCF") by a period of 3 months, to 17 April 2024.
The Group's residual GBP15m facility is a Coronavirus Large
Business Interruption Loan Scheme ("CLBILS") and cannot be extended
beyond its original maturity date of 17 January 2024.
The Group has begun a process to re-finance both the RCF and the
CLBILS and expects to complete this in due course.
33 Related party transactions
In the year to 29 December 2022 the Group engaged services from
entities related to the Directors and key management personnel of
GBP617,000 (2021: GBP566,000) comprising consultancy services of
GBP31,000 (2021: GBP10,000), office rental of GBP100,000 (2021:
GBP98,000) and venue rental for Bristol, Harrogate and Maida Vale
of GBP486,000 (2021: GBP458,000). Due to the pandemic the Group
received rent discounts on the related properties amounting to a
saving in 2022 of GBPnil (2021: GBP123,000). There were no other
related party transactions. There are no key management personnel
other than the Directors.
The Group's commitment to leases is set out in the above notes.
Within the total of GBP122,000,000 (2021:GBP116,000,000) is an
amount of GBP550,000 (2021:GBP650,000) relating to office rental,
GBP4,523,000 (2021:GBP4,800,000) relating to Stratford-Upon-Avon,
GBP3,596,000 (2021:GBP2,100,000) relating to Bristol and
GBP4,670,000 (2021:GBP4,900,000) relating to Harrogate. The
landlords of the sites are entities related to the Directors of the
Company.
34 Ultimate controlling party
The Company has a diverse shareholding and is not under the
control of any one person or entity.
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END
FR NKDBQNBKBKQD
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