EVERYMAN MEDIA GROUP PLC

Interim / Quarterly Report • Sep 1, 2017

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RNS Number : 5105P

Everyman Media Group PLC

01 September 2017

1 September 2017

Everyman Media Group PLC

("Everyman" or the "Group")

Interim Results (unaudited) for the six-month period ended 29 June 2017

Highlights

·      Revenue for the period up 55% to £18.8m (H1 2016: £12.1m)

·      Adjusted EBITDA up 123% to £3.0m (H1 2016: £1.3m)

·      One new venue added in the period, expanding the current estate to 21 venues

·      Committed to a further 9 new venues plus the permanent venue at Kings Cross, and a strong pipeline established for future years, including a new venue in Glasgow to be opened in 2018

·      Trading since the period end has continued in line with expectations

For further information, please contact:
Everyman Media Group PLC Crispin Lilly	Tel: 020 3145 0500
Cenkos Securities PLC (NOMAD and Broker) Bobbie Hilliam	Tel: 020 7397 8900

Chairman's Statement

I am pleased to report on the Group's results for first 6 months ended 29 June 2017. Revenue for the half year ended 29 June 2017 was up 55% on the comparative six-month period to £18,830,000 (30 June 2016: £12,128,000, full year to 29 December 2016: £29,554,000).

The first six months to 29 June 2017 saw us open a new venue in Stratford-Upon-Avon. In addition, the Group exchanged contracts on five further sites at York, Liverpool, Newcastle, Glasgow and Borough Market (London) in the period. The temporary one-screen venue at Kings Cross will continue to trade after the opening of the main venue later in 2017.

The Group now operates 21 venues and 58 screens.

Since the period-end, trading has been in line with expectations, continuing a reasonable overall summer in the cinema market

Review of the business

For the 26 weeks ended 29 June 2017, the Group's box office revenue was up 51.9% on the previous period, reflecting favourably compared to a market movement of 10.3%. This resulted in the Group's market share increasing to 1.98% for the period (30 June 2016: 1.46%, 29 December 2016: 1.64%) (Source: Comscore).

With 21 venues and 58 screens now spread increasingly across the country, the Everyman experience continues to be successful in a wide range of towns and cities and remains a trusted and highly regarded brand in the cinema and leisure industry.

Everyman differentiates by focusing on delivering a high-quality offer, through its venues, content, staff and F&B. The Board's long held belief in this model as being the bedrock for significant growth within the UK has been further strengthened in the last six months and our ambitions continue to grow.

With a further 9 committed venues plus the permanent venue at Kings Cross, and a strong pipeline for future years, the Board is committed to further growth of our footprint across the UK.

Openings

During the period, the Group opened a new four-screen venue in Stratford-Upon-Avon in June.

The Group exchanged contracts on five further sites at York, Liverpool, Newcastle, Glasgow and Borough Market (London) since the beginning of 2017. These are in addition to the pre-existing contracts for Kings Cross, Horsham, Durham, Wokingham and Edinburgh.

The temporary one-screen venue at Kings Cross will continue to trade after the opening of the main venue later in 2017. It is delivering excellent Everyman brand- awareness in the area as well as serving (and gaining great affection from) the early residents, both private and corporate, in the developer's transformative Kings Cross Central development.

Financial Overview

As previously stated, revenue for the half year ended 29 June 2017 was up 55% on the comparative six-month period to £18,830,000 (30 June 2016: £12,128,000, full year to 29 December 2016: £29,554,000).

The Group's adjusted operating profit before depreciation, amortisation, pre-opening expenses, exceptional items and share-based payments was £3,010,000 (30 June 2016: £1,348,000, full year to 29 December 2016: £3,954,000). The Group generated a profit for the period of £438,000 (30 June 2016: loss of £670,000, full year to 29 December 2016: profit of £61,000).

The effective tax rate is higher than the standard rate of corporation tax for the six-month period ended 29 June 2017 due to the effect of significant continuing capital expenditure incurred by the Group.

The share-based payment expense for the period was £144,000 (30 June 2016: £104,000, full year to 29 December 2016: £293,000) reflecting share option incentives provided to the Group's senior management and employees.

Cash Flows

Net cash generated from operating activities was £3,759,000 (30 June 2016: £1,940,000 used in operating activities, full year to 29 December 2016: £5,515,000 generated). Net cash outflows for the year, before financing, were £2,180,000 (30 June 2016: £7,443,000, full year to 29 December 2016: £10,393,000). This is largely represented by capital expenditure on the expansion of the business through build costs and refurbishment of sites.

Cash held at the end of the period was £1,221,000 (30 June 2016: £1,692,000, 29 December 2016: £1,566,000). The cash held will be invested in the continuing

development and expansion of the Group's business.

During the period the Group entered into a new debt facility with Barclays Bank PLC to replace the existing £8m facility. The new facility is a £20m four-year revolving loan facility. The facility provides an additional finance stream, in addition to the Group's existing cash resources, to allow continued expansion of the Group's cinema estate. A total £5m drawdown had taken place as at 29 June 2017.

The Board does not recommend the payment of a dividend at this stage of the Group's development.

Current Trading

Trading since the period end has been in line with expectations, continuing a reasonable overall summer in the cinema market.

Paul Wise

Chairman

1 September 2017

Consolidated statement of comprehensive income for the six-month period ended 29 June 2017 (unaudited)

								Six-month period	Six-month period	Year Ended
								ended 29 June	ended 30 June	29 December
								2017	2016	2016
					Note			£000	£000	£000
Revenue					3			18,830	12,128	29,554
Cost of Sales								(7,268)	(4,722)	(11,830)
Gross profit								11,562	7,406	17,724
Other operating income								45	-	167
Administrative expenses								(10,828)	(7,673)	(17,324)
Operating profit/(loss)								779	(267)	567
Non-GAAP measure: adjusted profit from operations								3,010	1,348	3,954
(before depreciation and amortisation, acquisition, pre-opening & share-based payment expenses)
Depreciation and amortisation								(1,750)	(1,230)	(2,435)
Pre-opening expenses								(337)	(281)	(659)
Share-based payment expense								(144)	(104)	(293)
Profit / (loss) from operations								779	(267)	567
Financial income								4	10	11
Financial expenses								-	(38)	(38)
Profit / (loss) before taxation					4			783	(295)	540
Income tax (expense)/credit								(345)	(375)	(479)
Profit/(loss) for the period								438	(670)	61
Total comprehensive income/(loss) attributable to equity holders of the  Company
438	(670)	61
Basic loss per share (pence)	5							0.73	(1.12)	0.10
Diluted loss per share (pence)		5						0.71	(1.12)	0.10
All amounts relate to continuing activities.

Consolidated statement of financial position at 29 June 2017 (unaudited)

					29 June	30 June		29 December
					2017	2016		2016
					£000	£000		£000
Assets
Non-current assets
Property, plant and equipment					39,864	28,268		35,603
Intangible assets					8,398	8,040		8,256
Trade and other receivables					199	199		199
					48,461	36,507		44,058
Current assets
Inventories					242	223		245
Trade and other receivables					2,274	1,763		1,596
Cash and cash equivalents					1,221	1,692		1,566
					3,737	3,678		3,407
Total assets					52,198	40,185		47,465
Current liabilities
Other interest-bearing loans and borrowings					9	-		24
Trade and other payables					6,422	3,337		6,575
					6,431	3,337		6,599
Non-current liabilities
Other interest-bearing loans and borrowings					5,000	-		3,000
Other payables					5,343	3,397		3,397
Provisions					1,395	1,436		1,430
Deferred tax liabilities					607	671		775
					12,345	5,504		8,602
Total liabilities					18,776	8,841		15,201
Net Assets					33,422	31,344		32,264
Equity
Equity attributable to owners of the Company
Share capital					5,989	5,982		5,982
Share premium					22,773	22,720		22,720
Merger reserve					11,152	11,152		11,152
Retained deficit					(6,492)	(8,510)		(7,590)
Total equity					33,422	31,344		32,264

Consolidated statement of changes in equity for the six-month period ended 29 June 2017 (unaudited)

	Share	Share	Merger	Retained	Total
	capital	premium	reserve	deficit	equity
	£000	£000	£000	£000	£000
Balance at 1 January 2016	5,982	22,720	11,152	(7,944)	31,910
Loss for the period	-	-	-	(670)	(670)
Total comprehensive income/(loss) for the period	-	-	-	(670)	(670)
Share-based payments	-	-	-	104	104
Total transactions with owners of the parent	-	-	-	104	104
Balance at 30 June 2016	5,982	22,720	11,152	(8,510)	31,344
Balance at 1 July 2016	5,982	22,720	11,152	(8,510)	31,344
Profit for the period	-	-	-	731	731
Total comprehensive income for the period	-	-	-	731	731
Share-based payments	-	-	-	189	189
Total transactions with owners of the parent	-	-	-	189	189
Balance at 29 December 2016	5,982	22,720	11,152	(7,590)	32,264
Balance at 30 December 2016	5,982	22,720	11,152	(7,590)	32,264
Profit for the period	-	-	-	438	438
Total comprehensive income for the period	-	-	-	438	438
Deferred tax on share-based payments	-	-	-	516	516
Shares issued in the period	7	53	-	-	60
Share-based payments	-	-	-	144	144
Total transactions with owners of the parent	7	53	-	660	720
Balance at 29 June 2017	5,989	22,773	11,152	(6,492)	33,422

Consolidated statement of cash flows for the six-month period ended 29 June 2017 (unaudited)

	29 June	30 June	29 December
	2017	2016	2016
	£000	£000	£000
Cash flows from operating activities
Profit/(loss) for the period	438	(670)	61
Adjusted for:
Financial income	(4)	(10)	(11)
Financial expenses	-	38	38
Income tax expense	345	375	479
Operating  profit/(loss)	779	(267)	567
Depreciation and amortisation	1,750	1,229	2,435
Loss on disposal of property, plant and equipment	-	-	66
Lease incentives	86	-	-
Market rent provisions	(35)	-	(71)
Equity-settled share-based payment expenses	144	104	293
	2,724	1,066	3,290
(Increase)/decrease in inventories	3	4	(18)
(Increase)/decrease in trade and other receivables	(678)	(745)	1,030
Increase/(decrease) in trade and other payables	1,710	(2,265)	1,198
Cash generated from/(used in) operating activities	3,759	(1,940)	5,500
Corporation tax refunded	-	-	15
Net cash generated from/(used in) operating activities	3,759	(1,940)	5,515
Cash flows from investing activities
Acquisition of property, plant and equipment	(5,757)	(7,121)	(19,154)
Proceeds from sale of property, plant and equipment	-	-	3,463
Acquisition of intangibles	(186)	1	(228)
Refund on long leasehold property	-	1,607	-
Interest received	4	10	11
Net cash used in investing activities	(5,939)	(5,503)	(15,908)
Cash flows from financing activities
Proceeds from the issuance of ordinary shares	60	-	-
Proceeds from bank borrowings	2,000	-	3,000
Repayment of derivative financial instruments	-	-	(176)
Interest paid	(225)	(38)	(38)
Net cash (used in)/generated from financing activities	1,835	(38)	2,786
Net (decrease) in cash and cash equivalents	(345)	(7,481)	(7,607)
Cash and cash equivalents at the beginning of the period	1,566	9,173	9,173
Cash and cash equivalents at the end of the period	1,221	1,692	1,566

Notes to the interim 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 domiciled and incorporated in England and Wales (registered number 08684079). The address of its registered office is Studio 4, 2 Downshire Hill, London NW3 1NR.

2       Basis of preparation

These condensed interim financial statements of the Group for the period ended 29 June 2017 (the Period) have been prepared using accounting policies consistent with International Financial Reporting Standards (IFRSs) as adopted by the European Union. The same accounting policies, presentation and methods of computation are followed in the condensed set of financial statements as applied in the Group's latest audited financial statements for the year ended 29 December 2016. Amendments made to IFRSs since 29 June 2017 have not had a material effect on the Group's results or financial position for the period.

The financial statements presented in this report have been prepared in accordance with IFRSs applicable to interim periods. However, as permitted, this interim report has been prepared in accordance with the AIM Rules for Companies and does not seek to comply with IAS34 "Interim Financial Reporting".

These condensed interim financial statements have not been audited, do not include all of the information required for full annual financial statements and should be read in conjunction with the Group's statutory consolidated annual financial statements for the year ended 29 December 2016. The auditors' opinion on these Statutory Accounts was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under s498(2) or s498(3) of the Companies Act 2006.

3       Revenue

	Six-month period	Six-month period	Year ended
	ended 29 June	ended 30 June	29 December
	2017	2016	2016
	£000	£000	£000
Film and entertainment	11,718	7,714	18,505
Food and beverages	6,078	3,752	9,384
Other income	1,034	662	1,665
	18,830	12,128	29,554

4       Income Tax

	Six-month period	Six-month period	Year ended
	ended 29 June	ended 30 June	29 December
	2017	2016	2016
	£000	£000	£000
Deferred  tax (credit)/expense	-	-	-
Origination and reversal of temporary differences	(170)	375	803
Adjustments in respect of prior years	515	-	(394)
Effect of other differences	-	-	70
Total tax charge	345	375	479

The reasons for the difference between the actual tax charge for the period and the standard rate of corporation tax in the United Kingdom applied to the profit/(loss) for the period are as follows:

	Six-month period	Six-month period	Year ended
	ended 29 June	ended 30 June	29 December
	2017	2016	2016
	£000	£000	£000
Profit/(loss) before taxation	783	(295)	540
Applied corporation tax rates:	19.25%	20.00%	20.00%
Tax at the UK corporation tax rate of 19.25%/20.00%	151	(59)	108
Expenses not deductible for tax purposes	51	58	695
Brought forward losses utilised in current year	(381)	-	-
Adjustments in respect of prior years	515	-	(394)
Effect of other differences	9	22	70
Total tax expense	345	375	479

Reductions in the UK corporation tax rate from 23% to 21% (effective from 1 April 2014) and 20% (effective from 1 April 2015) were substantively enacted on 2 July 2013. Further reductions to 19% (effective from 1 April 2017) and to 18% (effective 1 April 2020) were substantively enacted on 26 October 2015. An additional reduction to 17% (effective from 1 April 2020) was announced in the Budget on 16 March 2016. Accordingly, the Group's profits for this accounting period are subject to tax at a rate of 19% (2016: 20%).

5       Earnings/(loss) per share

	Six-month period	Six-month period	Year ended
	ended 29 June	ended 30 June	29 December
	2017	2016	2016
	£000	£000	£000
Profit/(loss) used in calculating basic and diluted earnings/(loss) per share	438	(670)	61
Number of shares (000's) Weighted average number of shares for the purpose of basic loss per share
59,843	59,820	58,820
Number of shares (000's) Weighted average number of shares for the purpose of diluted loss per share
61,421	59,820	60,353
Basic earnings/(loss) per share (pence)	0.73	(1.12)	0.10
Diluted earnings/(loss) per share (pence)	0.71	(1.12)	0.10

Basic earnings/(loss) per share amounts 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.

Where the Group has incurred a loss in a year, the diluted earnings per share is the same as the basic earnings per share as the loss has an anti-dilutive effect. The dilutive loss per share for the period ended 30 June 2016 is therefore the same as the basic loss per share for the year and the diluted weighted average of shares is the same as the basic weighted average number of shares. The actual diluted weighted average number of shares for the year ended 30 June 2016 before disregarding due to anti-dilutive effect was 59,886,000.

The Company has 4,094,000 potentially issuable shares (2016: 4,846,000, plus 130,000 granted immediately after the year-end), all of which relate to the potential dilution from both the Group's 'A' shares and share options issued to the Directors and certain employees and contractors, under the Group's incentive arrangements

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