TIDMTENG
RNS Number : 1913Y
Ten Lifestyle Group PLC
03 May 2023
3 May 2023
Ten Lifestyle Group plc
("Ten", the "Company" or the "Group")
Interim results for the six months ended 28 February 2023
Ten Lifestyle Group plc (AIM: TENG), the platform driving
customer loyalty for global financial institutions and other
premium brands, is pleased to announce its unaudited Interim
Results for the six months ended 28 February 2023 ("H1").
Financial
-- Net Revenue (1) at GBP30.9m, an increase of 49%, compared to
the first half of the prior year (H1 2022: GBP20.8m); 18% higher
than the second half of the prior year (H2 2022: GBP26.1m)
o supplier revenue (2) increased 42% to GBP3.4m (H1 2022:
GBP2.4m)
o corporate revenue (3) increased 49% to GBP27.5m (H1 2022:
GBP18.4m)
o Net Corporate Revenue Retention Rate (4) of 144% (H1 2022:
105%)
-- Adjusted EBITDA (5) of GBP5.0m, an increase of GBP4.1m
compared to first half of the prior year (H1 2022: GBP0.9m) and
above the second half of the prior year (H2 2022: GBP4.0m)
-- Profit before tax of GBP0.4m, a GBP3.2m increase compared to
the first half of the prior year (H1 2022: GBP(2.8)m)
-- Cash and cash equivalents of GBP7.2m (FY 2022: GBP6.6m) and
net cash of GBP0.5m (FY 2022: GBP3.2m)
Operational
-- Record number of Active Members (6) , up 43% compared to the
first half of the prior year to 316k (H1 2022: 221k, H2 2022:
275k)
-- New mandate won in the Americas and 100% of Material
Contracts retained, a number of key contract renewals and contract
extensions signed
Maintained investment in proprietary digital platforms,
communications, and technologies to improve service quality and
efficiency, GBP7.1m (H1 2022: GBP6.5m)
-- Member satisfaction levels (7) have improved during the
period, a key indicator of repeat use and value to our corporate
clients
CURRENT TRADING AND OUTLOOK
Since the end of the first half of the financial year, member
activity remains robust in all regions. Ten continues to develop
its proposition and technology, having retained all Material
Contracts during the period and developed a healthy pipeline of
future potential launches.
The Board's expectations for the full financial year are
unchanged.
Alex Cheatle, CEO of Ten Lifestyle Group, said;
"We are pleased to report our first profit before tax since our
IPO in 2017, which provided capital to invest primarily in new
geographical markets and technology. Our digital platform is now
rolled out in over 40 countries. We reported an impressive 49% Net
Revenue growth year-on-year , meaning Ten is well positioned to
continue to drive our growth engine, even as we target sustained
cash generation."
Analyst Presentation
An online analyst presentation will be held by video link today
at 9:00am.
The Group will also be presenting an Investor Webinar for
current and prospective investors tomorrow, Thursday 4 May 2023 at
5:30pm BST .
To attend either the Analyst Presentation or the Investor
Webinar, please email investorrelations@tengroup.com .
For further information please visit www.tenlifestylegroup.com
or call:
Ten Lifestyle Group plc
Alex Cheatle, Chief Executive Officer +44 (0)20 7850
Alan Donald, Chief Financial Officer 2796
Peel Hunt LLP, Nominated Advisor and Broker
Paul Gillam +44 (0) 20 7418
James Smith 8900
(1) Net Revenue excludes the direct cost of sales relating to
certain member transactions managed by the Group.
(2) Supplier revenue is Net Revenue from Ten's supplier base,
such as hotels, airlines and event promoters which sometimes pay
commission to Ten.
(3) Corporate revenue is Net Revenue from Ten's corporate
clients, including service fees, implementation fees and fees for
the customisation of the Ten Digital Platform.
(4) Net Corporate Revenue Retention Rate is the annual
percentage change in corporate revenue, less non-recurring revenue
(i.e., non-recurring service fees, implementation fees and fees for
the customisation of the Ten Digital Platform), from corporate
client programmes operating in the previous year.
(5) Adjusted EBITDA is operating profit/(loss) before interest,
taxation, amortisation, depreciation, share-based payment expense
and exceptional items.
(6) Individuals holding an eligible product, employment, account
or card with one of Ten's corporate clients are "Eligible Members",
with access to Ten's platform, configured under the relevant
corporate client's programme, with Eligible Members who have used
the platform in the past twelve months becoming "Active
Members".
(7) Ten categorises its corporate client contracts based on the
annualised value paid, or expected to be paid, by the corporate
client for the provision of concierge and related services by Ten
as: Small contracts (below GBP0.25m); Medium contracts (between
GBP0.25m and GBP2m); Large contracts (between GBP2m and GBP5m); and
Extra Large contracts (over GBP5m). This does not include the
revenue generated from suppliers through the provision of concierge
services. Medium, Large and Extra Large contracts are collectively
Ten's "Material Contracts".
(8) Ten measures member satisfaction using the Net Promoter
Score management tool, which gauges the loyalty of a firm's
customer relationships ( https://en.wikipedia.org/wiki/Net_Promoter
).
OPERATING AND FINANCIAL REVIEW
CHIEF EXECUTIVE'S STATEMENT
The positive momentum seen in the business during 2022 has
continued, with Ten seeing increased Net Revenue and Active Members
for the fourth consecutive half-year period. Alongside this record
Net Revenue, Ten generated its first half year profit before tax
since its IPO in 2017, even whilst continuing to invest in its
proprietary technology and other innovations.
Net Revenue increased 49% to GBP30.9m (H1 2022: GBP20.8m), 39%
at constant currency, and Adjusted EBITDA increased GBP4.1m to
GBP5.0m (H1 2022: GBP0.9m), GBP3.9m at constant currency. Growth
has been achieved in all regions, with broad success in developing
existing contracts and winning new mandates with existing and new
corporate clients. This success has resulted in a 49% increase in
corporate revenue (H1: GBP27.5m; H1 2022: GBP18.4m).
Growth was especially high in the Americas following new
programme launches and good continued recovery in member activity.
Growth was slowest in APAC, where travel is still restricted in
some areas.
Throughout the period, we have focused on improving Ten's
proprietary technology, content, and service quality, further
improving our member proposition, which continued to boost the
number of Active Members.
FY 2019 FY 2020 FY 2021 H1 2022 FY 2022 H1 2023
Total Active
Members ('000) 192 226 203* 221 275 316
---------- ---------- ---------- ---------- ---------- ----------
*Impacted by COVID-19.
Member satisfaction, as measured by Net Promoter Score (NPS),
has also improved during the period. Our member engagement and
satisfaction metrics continue to be instrumental in demonstrating a
positive return on corporate client investment in the service. This
has helped us retain 100% of our Material Contracts .
We have maintained investment in technology, communications, and
content, with GBP7.1m invested in the period (H1 2022: GBP6.5m).
This includes development of the digital experience,
personalisation, automation and AI technology that drives member
engagement as well as greater efficiencies and scale. We believe
that our market-leading digital capability continues to clearly
differentiate us from our competition and that our strong client
retention and contract tender successes validate our strategy.
In addition to new contract wins and development of existing
contracts, such as the expansion of Large contracts in each of
Latin America and EMEA, we have continued to grow the penetration
of our service amongst Eligible Members, resulting in an increase
in the number of Active Members. This is enabled through a stronger
proposition, communicated even more effectively due to improved
automation and personalisation.
Our corporate clients often measure the usage of our platform as
a key metric to evaluate the Return on Investment from our service.
As we continue to expand our digital service, this will, in turn
help to reduce the cost "per interaction" to the Corporate Client
and further demonstrate the cost-effectiveness of our service.
Our proposition improvements are focused in our four service
pillars - dining, travel, live entertainment and retail - and
include improved access, better pricing (typically not available to
the public), value-add benefits and insightful editorial content.
Ten's high-quality concierge, content and support services are
delivered to our members and corporate clients from committed
experts in over 20 offices globally, led by an outstanding
management team.
We believe these results further strengthen Ten's position as
the platform driving customer loyalty for global financial
institutions and other premium brands, through service delivery,
technology integration, personalisation and unique content projects
that enhance member experience and improve customer loyalty metrics
for our corporate clients.
We remain committed to building a sustainable business and are
more aware than ever of the impact our business and members have on
the world around us. That's why we continue to expand our range of
ESG partners and services across travel, dining, retail and
entertainment to deliver increased member choice. Enhancing the
visibility of these options across all channels, including our
inspirational content, and digital platform will drive sustainable
decisions amongst our members.
FINANCIAL REVIEW
Results
H1 2023 H1 2022 change
GBPm GBPm GBPm
Revenue 32.4 21.3 11.1
Net Revenue 30.9 20.8 10.1
Operating expenses and Other income (25.9) (19.9) (6.0)
Adjusted EBITDA 5.0 0.9 4.1
-------- -------- -------
Adjusted EBITDA % 16.1% 4.3%
Depreciation (1.5) (1.3) (0.2)
Amortisation (2.5) (2.2) (0.4)
Share-based payments (0.4) (0.3) (0.1)
-------- -------- -------
Operating Profit/(Loss) before interest and tax 0.6 (2.9) (0.1)
Net finance (expense)/income (0.1) 0.1 (0.2)
-------- -------- -------
Profit/(Loss) before taxation 0.4 (2.8) 3.2
Taxation expense (0.6) (0.4) (0.3)
-------- -------- -------
Loss for the period (0.2) (3.2) 3.0
Revenue
Revenue for the current period has increased significantly to
GBP32.4m, a 52% increase compared to the first half of the prior
year (H1 2022: GBP21.3m). Net Revenue has increased to GBP30.9m, a
49% increase compared to the first half of the prior year (H1 2022:
GBP20.8m), 39% at constant currency. This increase in Net Revenue
was driven by an increase in activity across the existing business
as well as new mandates won and launched. Revenue for the period is
now higher than pre-pandemic levels, with a 27% increase compared
to H1 2020 (GBP25.6m), the last undisturbed period prior to the
pandemic.
Corporate revenue for H1 2023 was GBP27.5m, a 49% increase
compared to the first half of the prior year (H1 2022: GBP18.4m)
(38% at constant currency) and now 29% above pre-COVID levels (H1
2020: GBP21.3m), with a Net Corporate Revenue Retention Rate of
144% (H1 2022: 105%), as core recurring revenue increased from
GBP16.9m to GBP24.3m. Supplier revenue (predominantly travel
related) was GBP3.4m, a 42% increase compared to the first half of
the prior year (H1 2022: GBP2.4m) and 36% higher than pre-COVID
levels (H1 2020: GBP2.5m).
Operating expenses & other income excluding depreciation,
amortisation, share-based payments and exceptional items
Operating expenses and other income for the period was GBP25.9m,
an increase of GBP6.0m (30%), compared to the first half of the
prior year (H1 2022: GBP19.9m), mainly due to an increase in
employee costs, reflecting higher headcount to support growth as
activity increased.
Adjusted EBITDA
Adjusted EBITDA, as reported, takes into account all Group
operating costs, other than the depreciation of GBP1.5m (H1 2022:
GBP1.3m), amortisation of GBP2.5m (H1 2022: GBP2.2m), and
share-based payment expenses of GBP0.4m (H1 2022: GBP0.4m). On this
basis, Adjusted EBITDA was a profit of GBP5.0m (H1 2022: GBP0.9m),
GBP3.9m at constant currency rates.
Depreciation has increased by GBP0.2m and amortisation increased
by GBP0.3m, reflecting our continued technology investment.
Share-based payment expenses increased by GBP0.1m as the number of
options granted in the period was higher than in the prior
year.
Profit before tax
Profit before tax was GBP0.4m, a GBP3.2m improvement compared to
the first half of the prior year (H1 2022: GBP(2.8)m), and our
first reported half year profit before tax since IPO in November
2017.
Regional performance
Segmental Net Revenue reporting reflects our servicing location
rather than the location of our corporate clients. This allows us
to understand and track the efficiency and profitability of our
operations around the world.
GBPm H1 2023 H1 2022 % change
EMEA 13.3 10.0 +33%
-------- -------- ---------
Americas 13.1 6.5 +102%
-------- -------- ---------
APAC 4.5 4.3 +6%
-------- -------- ---------
Total 30.9 20.8 +49%
-------- -------- ---------
After fully allocating our indirect central costs including IT,
platform support, non-lease costs and management across the
regions, in line with headcount, the Adjusted EBITDA profitability
of each regional segment is:
GBPm H1 2023 H1 2022
EMEA 4.0 1.8
-------- --------
Americas 1.0 (1.1)
-------- --------
APAC (0.1) 0.2
-------- --------
Total 5.0 0.9
-------- --------
Adjusted EBITDA % of Net Revenue 16.1% 4.3%
-------- --------
EMEA
Net Revenue in the region during the period increased by 33%
compared to the first half of the prior year, to GBP13.3m (H1 2022:
GBP10.0m). The increase in Net Revenue was primarily driven by a
recovery of the base business, new business launched together with
higher supplier revenue due to increased member requests across
dining, entertainment, travel and events. We also improved
operational efficiency across the region. This has resulted in
Adjusted EBITDA of GBP4.0m (H1 2022: GBP1.8m), an increase of
GBP2.2m.
Americas
Net Revenue from the region during the period increased by 102%
compared to the first half of the prior year, to GBP13.1m (H1 2022:
GBP6.5m). The GBP6.6m increase in revenue in the region reflected
the recovery in base business activity and new business launched
together with an increase in supplier revenue as travel activity
returned. As the region grew it drove operational efficiencies as
we leveraged the Net Revenue growth. As a result, Adjusted EBITDA
was a profit of GBP1.0m (H1 2022 loss: GBP(1.1)m).
APAC
Net Revenue from the region during the period has increased by
6% compared to the first half of the prior year, to GBP4.5m (H1
2022: GBP4.3m). Adjusted EBITDA loss for the region was GBP(0.1)m
(H1 2022: GBP0.2m),slightly below prior year as we invested
additional resources specifically in Japan to service the post
Covid increase in activity.
Cash flow
H1 2023
GBPm
Profit before tax 0.4
Net finance expense 0.1
Working capital changes (1.4)
Non-cash items (share-based payments, depreciation and
amortisation) 4.4
--------
Operating cash flow 3.5
Capital expenditure (0.2)
Investment in intangibles (3.7)
Taxation (0.4)
--------
Cash outflow (0.8)
Cash flows from financing activities
Interest on loan paid (0.2)
Loan Receipts - Invoice financing 2.1
Loan Receipts - Loan notes 1.2
Repayment of leases and net interest (1.4)
--------
Net cash generated by financing activities 1.7
Foreign currency movements (0.3)
--------
Net increase in cash and cash equivalents 0.6
Cash and cash equivalents 7.2
--------
The pre-tax operating cash inflows of GBP3.5m reflected a profit
before tax of GBP0.4m, decreased net working capital of GBP1.4m
(due to a specific late client receipt of GBP1.0m; now received)
and add-back of non-cash items of GBP4.4m.
Additionally, during the period, we made GBP3.7m of capital
investment into our global content, internal CRM platform (TenMAID)
and the continued development of our digital platform.
Additional loan notes of GBP1.2m were issued during the period
and a new GBP2.1m invoice financing facility was entered into
during the period with the Group's bank. Repayment of leases and
net interest of GBP1.4m resulted in an increase in cash and cash
equivalents during the period of GBP0.6m.
Balance sheet
H1 FY
2023 2022
GBP'm GBP'm
Intangible assets 14.5 13.4
Property, plant and equipment 0.9 0.9
Right-of-use assets 1.9 2.2
Cash 7.2 6.6
Other current assets 11.7 10.1
Current lease liabilities (1.8) (1.8)
Current liabilities (17.6) (17.3)
Short term borrowings (3.6) (1.5)
Long term borrowings (3.1) (1.9)
Non-current lease liabilities (0.4) (0.9)
------- -------
Net assets 9.7 9.8
------- -------
Share capital/Share premium 30.8 30.7
Reserves (21.1) (20.9)
------- -------
Total equity 9.7 9.8
------- -------
Net assets decreased slightly to GBP9.7m at 28 February 2023
compared to GBP9.8m at 31 August 2022. This was primarily due to an
increase in long term borrowings, increasing to GBP3.1m (FY 2022:
GBP1.9m) and short-term borrowings, increasing to GBP3.6m (FY 2022:
GBP1.5m) to support the continued growth in the business.
Principal Risks and Uncertainties
The principal risks and uncertainties facing the Group remain
broadly consistent with the principal risks and uncertainties
reported in Ten's 2022 Annual Report. Regional inflation and cost
of living pressures have increased costs and led to some price
increases with corporate clients in the year. Macroeconomic changes
in each region are monitored by the Senior Leadership Team as well
as by the Board. The Group reviews its pricing in line with changes
in the macroeconomic environment and external cost pressures.
Alex Cheatle Alan Donald
Chief Executive Officer Chief Finance Officer
03 May 2023 03 May 2023
Consolidated statement of comprehensive income
Note 6 months 6 months
to 28 to 28
Feb 2023 Feb 2022
Unaudited Unaudited
GBP'000 GBP'000
Revenue 2 32,382 21,326
Cost of sales on principal member transactions (1,528) (574)
---------- ----------
Net Revenue 2 30,854 20,752
Other cost of sales (849) (638)
Gross profit 30,005 20,114
Administrative expenses (29,767) (23,139)
Other income 300 150
Operating profit before amortisation, depreciation,
interest, share based payments, exceptional items
and taxation ("Adjusted EBITDA") 4,953 886
Depreciation (1,473) (1,305)
Amortisation 3 (2,526) (2,156)
Share-based payment expense (416) (300)
Exceptional items - -
----------------------------------------------------- ----- ---------- ----------
Operating profit 538 (2,875)
Net finance (expense) / income (149) 36
---------- ----------
Profit / (loss) before taxation 389 (2,839)
Taxation expense 4 (574) (316)
---------- ----------
Loss for the period (185) (3,155)
========== ==========
Other comprehensive (expense)/income:
Foreign currency translation differences (407) (174)
Total comprehensive loss for the period (592) (3,329)
========== ==========
Basic and diluted loss per ordinary share 5 (0.2)p (3.8)p
The consolidated statement of comprehensive income has been
prepared on the basis that all operations are continuing
operations.
Consolidated statement of financial position
Note 28 Feb 2023 31 August
2022
Unaudited Audited
GBP'000 GBP'000
Non-current assets
Intangible assets 3 14,554 13,397
Property, plant and equipment 886 939
Right-of-use assets 1,880 2,274
----------
Total non-current assets 17,320 16,610
------------ ----------
Current assets
Inventories 67 118
Trade and other receivables 11,619 9,930
Cash and cash equivalents 7,158 6,584
----------
Total current assets 18,844 16,632
------------ ----------
Total assets 36,164 33,242
============ ==========
Current liabilities
Trade and other payables (16,759) (16,459)
Provisions (850) (846)
Borrowings 6 (3,591) (1,500)
Lease Liabilities (1,755) (1,834)
Total current liabilities (22,955) (20,639)
------------ ----------
Net current liabilities (4,111) (4,007)
============ ==========
Non-current liabilities
Borrowings 6 (3,086) (1,940)
Lease liabilities (441) (820)
Total non-current liabilities (3,527) (2,760)
------------ ----------
Total liabilities (26,482) (23,399)
============ ==========
Net assets 9,682 9,843
============ ==========
Equity
Called up share capital 84 84
Share premium account 30,673 30,658
Merger relief reserve 1,993 1,993
Treasury reserve 513 513
Foreign exchange reserve (954) (547)
Retained deficit (22,627) (22,858)
Total equity 9,682 9,843
============ ==========
Consolidated statement of changes in equity
Share Share Merger Foreign Treasury Retained Total
capital premium relief exchange reserve deficit
account reserve reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 September 2021
(Audited) 82 29,356 1,993 (410) 5 (19,079) 11,947
--------- --------- --------- ---------- --------- --------- --------
Loss for the year - - - - - (4,316) (4,316)
Foreign exchange - - - (137) - - (137)
Total comprehensive income
for the year - - - (137) - (4,316) (4,453)
Shares purchased by Employee
Benefit Trust (EBT) - - - - 508 - 508
Issue of share capital 2 1,302 - - - - 1,304
Equity-settled share-based
payments charge - - - - - 537 537
Balance at 31 August 2022
(Audited) 84 30,658 1,993 (547) 513 (22,858) 9,843
Loss for the period - - - - - (185) (185)
Foreign exchange - - - (407) - - (407)
Total comprehensive income
for the period - - - (407) - (185) (592)
Issue of share capital - 15 - - - - 15
Equity-settled share-based
payments charge - - - - - 416 416
Balance at 28 February 2023
(Unaudited) 84 30,673 1,993 (954) 513 (22,627) 9,682
========= ========= ========= ========== ========= ========= ========
Condensed consolidated statement of cash flows
6 months 6 months
to 28 Feb to 28 Feb
2023 2022
GBP'000 GBP'000
Cash flows from operating activities
Loss for the period, after tax (185) (3,155)
Adjustments for:
Taxation expense 574 316
Net finance expense 149 (36)
Amortisation of intangible assets 2,526 2,156
Depreciation of property, plant and equipment 254 229
Depreciation of right-of-use asset 1,219 1,076
Equity-settled share-based payment expense 416 300
Movement in working capital:
Decrease in inventories 51 28
Increase/(Decrease) in trade and other payables 205 (2,723)
(Increase)/Decrease in trade and other receivables (1,689) 3,201
Cash from/(used in) by operations 3,520 1,392
Tax paid (401) (236)
Net cash from by operating activities 3,119 1,156
----------- -----------
Cashflows from Investing activities
Purchase of intangible assets (3,683) (2,927)
Purchase of property, plant and equipment (250) (457)
Finance income 6 -
Net cash used by investing activities (3,927) (3,384)
----------- -----------
Cash flows from financing activities
Lease Liability repayments (1,280) (1,093)
Sale of treasury shares - 518
Interest paid (178) -
Loan Receipts - Invoice financing 2,084 -
Loan Receipts - Loan notes 1,185 -
Interest paid on IFRS 16 lease liabilities (81) (93)
Cash receipts from issue of share capital 15 1,302
Net cash used by financing activities 1,745 634
----------- -----------
Foreign currency movements (363) 54
Net increase /(decrease) in cash and cash
equivalents 574 (1,540)
Cash and cash equivalents at beginning
of period 6,584 6,662
Cash and cash equivalents at end of period
Cash at bank and in hand 7,158 5,122
Cash and cash equivalents 7,158 5,122
=========== ===========
Notes to the Interim Financial Information
1. Basis of preparation
These condensed consolidated financial statements have been
prepared using accounting policies based on International Financial
Reporting Standards (IFRS and IFRIC Interpretations) issued by the
International Accounting Standards Board ("IASB") as contained in
UK-adopted IFRS. They do not include all disclosures that would
otherwise be required in a complete set of financial statements and
should be read in conjunction with the 31 August 2022 Annual
Report. The financial information for the half years ended 28
February 2023 and 28 February 2022 does not constitute statutory
accounts within the meaning of Section 434 (3) of the Companies Act
2006 and both periods are unaudited.
The annual financial statements of Ten Lifestyle Group plc ('the
Group') are prepared in accordance with International standards in
conformity with the requirements of the Companies Act 2006 ('IFRS')
and with those parts of the Companies Act 2006 applicable to
companies reporting under IFRS (except as otherwise stated). The
comparative financial information for the year ended 31 August 2022
included within this report does not constitute the full statutory
Annual Report for that period. The statutory Annual Report and
Financial Statements for year ended 31 August 2022 have been filed
with the Registrar of Companies. The Independent Auditors' Report
in the Annual Report and Financial Statements for the year ended 31
August 2022 was unqualified, did not draw attention to any matters
by way of emphasis and did not contain a statement under 498(2)-(3)
of the Companies Act 2006.
The Group has applied the same accounting policies and methods
of computation in its interim consolidated financial statements as
in its year ended 31 August 2022 annual financial statements other
than the Groups tax charge is not accounted for under the same
basis as IAS 34. The tax charge is calculated using the expected
effective tax rate at the reporting date. There are no new
standards effective yet and that would be expected to have a
material impact on the entity in the current period.
Going Concern
The ability of the Group to continue as a going concern is
contingent on the ongoing viability of the Group. The Group meets
its day-to-day working capital requirements through its cash
balances and wider working capital management. As at 28 February
2023, the date of the interim consolidated financial statements,
the Group had cash of GBP7.2m. The Group also has loans totalling
GBP4.6m, of which GBP1.5m is short term and due to be repaid in
June 2023 and GBP3.1m which are long term and due to be repaid in
August 2025. Additionally, GBP2.1m of debt was raised during the
period under a new invoice financing facility, which was entered
into in January 2023, to support the Group's working capital
requirements
To evaluate the Group's ability to operate as a going concern,
the Directors have reviewed the cash flow forecasts covering a
period of at least twelve months from the date of approval of the
interim consolidated financial statements. The Group's forecasts
and projections, taking account of reasonably possible changes in
trading performance for the principal risks, show that the Group
expects to be able to operate as a going concern within the level
of its current cash resources.
The Directors have considered the following scenarios when
considering forecasts to support their going concern conclusion
-- Base case cashflow forecast to 31 August 2024
-- Downside cashflow forecast to 31 August 2024 and mitigating actions available
Base Case Scenario
The Base Case forecast reviewed by the Directors is in line with
expectations for the current financial year and FY 2024. The Net
Revenue assumptions are consistent with growth trends around base
business growth, net contract wins and supplier revenue growth.
Cost assumptions reflect changes in Net Revenue as well as
continual improvements in operational efficiencies.
Downside scenario and mitigating actions
This scenario assumes a reduction of 20% in our variable Net
Revenue for the year to 31(st) August 2024. If this scenario was to
develop. The Group has a number of mitigating actions available to
it, including reducing direct operating costs to align to Net
Revenue growth rates as well as reducing indirect costs supporting
the business. Note, as per base case long term debt of GBP3.1m
(repayable in August 2025) and invoice discounting facility of
GBP2.1m remains in place with short term debt of GBP1.5m repaid in
June 2023.
Conclusion
The Directors have evaluated the Groups ability to operate as a
going concern under the above scenarios and has determined that it
has adequate resources to continue in operational existence for the
foreseeable future. The Group's cash flow forecasts show that it
expects to be able to operate as a going concern within the level
of its current cash resources. The Group has also identified cost
savings available to it should it experience a reduction in
revenue. The Group has assessed the principal risks and other
matters discussed in connection with the going concern statement
and has a reasonable expectation that it has adequate resources to
continue in operational existence for the foreseeable future.
Accordingly, the consolidated financial statements have been
prepared on a going concern basis.
The Board of Directors approved this interim report on 3 May
2023.
2. Segmental Information
The total revenue for the Group has been derived from its
principal activity; the provision of concierge services.
6 months 6 months
to 28 Feb to 28 Feb
2023 2022
(Unaudited) (Unaudited)
GBP'000 GBP'000
EMEA 13,278 10,014
Americas 13,069 6,483
APAC 4,507 4,255
------------ ------------
Net Revenue 30,854 20,752
Add back: Cost of sales on principal transactions 1,528 574
------------ ------------
Revenue 32,382 21,326
EMEA 4,036 1,830
Americas 1,007 (1,143)
APAC (90) 199
------------ ------------
Adjusted EBITDA 4,953 886
Amortisation (2,526) (2,156)
Depreciation (1,473) (1,305)
Share-based payment expense (416) (300)
------------ ------------
Operating profit / (loss) 538 (2,875)
Foreign exchange (loss)/gain 106 129
Other net finance expense (255) (93)
------------ ------------
Profit / (loss) before taxation 389 (2,839)
Taxation expense (574) (316)
------------ ------------
Loss for the period (185) (3,155)
============ ============
Net Revenue is a non-GAAP Group measure that excludes the direct
cost of sales relating to member transactions managed by the Group,
such as the cost of airline tickets sold under the Group's ATOL
licences. Net Revenue is the measure of the Group's income on which
segmental performance is measured.
Adjusted EBITDA is a non-GAAP Company specific measure excluding
interest, taxation, amortisation, depreciation, share-based
payment, and exceptional costs. Adjusted EBITDA is the main measure
of performance used by the Board, who are considered to be the
chief operating decision makers. Adjusted EBITDA is the principal
operating metric for a segment.
The statement of financial position is not analysed between
reporting segments. Management and the chief operating
decision-maker consider the statement of financial position at a
Group level.
3. Intangible Assets
The Group capitalised GBP3.7m (H1 2022: GBP2.9m, FY 2022:
GBP6.6m) of costs representing the development of Ten's global
digital platform, TenMAID (Ten's proprietary customer relationship
management system) resulting in a net book value of GBP14.6m (H1
2022: GBP12.3m, FY 2022: GBP13.4m) after an amortisation charge of
GBP2.5m (H1 2022: GBP2.2m, FY 2022: GBP4.6m).
4. Taxation
The income tax expense has been recognised based on the best
estimate of the weighted average annual effective Group tax rate
expected for the full financial year. The income tax expense of
GBP0.6m (H1 2022: GBP0.4m) includes foreign taxes recognised by
overseas Group companies on a territory-by-territory basis using
the expected effective tax rate for the full year.
5. Earnings Per Share
6 months to 28 Feb 2023 6 months to 28 Feb 2022
GBP'000 GBP'000
Loss attributable to equity shareholders of the parent (185) (3,155)
------------------------ ------------------------
Weighted average number of ordinary shares in issue (net of
treasury) 83,808,935 83,195,255
Basic loss per share (pence) (0.2)p (3.8)p
------------------------ ------------------------
Where the Group has incurred a loss in the six-month period to
28 February 2023, the diluted earnings per share is the same as the
basic loss per share as the loss has an anti-dilutive effect.
6. Borrowings
In addition to the Group's GBP4.6m of loans (FY 2022: GBP3.4m),
on the 25(th) of January 2023 the Group entered an invoice
financing facility available up to a maximum of GBP2.1m, of which
the full facility of GBP2.1m has been utilised at 28 February 2023.
The Group has invoice financing facilities in place relating to
trade receivables due from large corporate clients of Ten Lifestyle
Management Ltd that are denominated in USD$ and GBPGBP. The trade
receivables guaranteed under the arrangement totalled GBP3.3m (PY:
GBPnil). The Group retains the credit risk associated to these
trade receivables and therefore presents these trade receivables
gross within the reported current assets. The liability arising
from the invoice financing is presented as borrowings within
current liabilities. The invoice financing facility is guaranteed
to the value of the debts advanced and accrues interest at a rate
of 2% over the base rate.
8. Cautionary Statement
This document contains certain forward-looking statements
relating to Ten Lifestyle Group plc. The Company considers any
statements that are not historical facts as "forward-looking
statements". They relate to events and trends that are subject to
risk and uncertainty that may cause actual results and the
financial performance of the Company to differ materially from
those contained in any forward-looking statement. These statements
are made by the Directors in good faith based on information
available to them and such statements should be treated with
caution due to the inherent uncertainties, including both economic
and business risk factors, underlying any such forward-looking
information.
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END
IR EAFSAEEDDEAA
(END) Dow Jones Newswires
May 03, 2023 02:00 ET (06:00 GMT)
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