TIDMTENG
RNS Number : 3507T
Ten Lifestyle Group PLC
24 November 2021
Embargoed: 07:00hrs 24 November 2021
Ten Lifestyle Group plc
("Ten", the "Company" or the "Group")
Preliminary results for the year ended 31 August 2021
Ten Lifestyle Group plc (AIM: TENG a leading technology-enabled,
global concierge platform for the world's wealthy and mass
affluent, announces its preliminary results for the year ended 31
August 2021.
Financial
-- Net Revenue(1) decreased 21.6% to GBP34.7m (2020: GBP44.2m)
due to impact of COVID-19 on member activity and travel, mitigated
by augmenting core services with relevant support services
o Corporate revenue decreased by 22% to GBP31.9m (2020:
GBP40.9m)
o Supplier revenue decreased by 15.2% to GBP2.8m (2020:
GBP3.3m)
-- Adjusted EBITDA(2) of GBP4.4m (2020 GBP4.8m); improved
adjusted EBITDA margin(3) of 12.8% (2020: 10.8%)
o Improved efficiencies and prudent cost reduction actions
o Maintained high level of investment in technology of GBP11.5m
(2020: GBP12.2m)
-- Reduced loss before tax of GBP(5.5)m (2020: GBP(5.9)m)
-- Net cash at GBP6.7m (2020: GBP10.0m)
-- Improved efficiencies (and government support) helped achieve
GBP9.2m reduction in total operating expenses from GBP39.4m in 2020
to GBP30.3m in 2021
Operational
-- Year-on-year record member satisfaction(4) which drives
repeat use and value to our corporate clients
-- Retained all Material Contracts(5) in the period, although a
Large EMEA contract transitioned from a Large corporate to a Small
affiliate contract
o Launched a Medium contract with Westpac in Australia in
September 2020
o Won a Large contract with Credit Saison in Japan, launched in
September 2021
-- Eligible Member(6) base grew as a result of expansion of
existing and addition of new corporate client programmes
-- Active Members(7) fell by only 6% to 210k (2020: 229k)
despite the impact of the pandemic, due to Ten adapting the member
proposition and improving communications to engage members
-- Continued digital development has driven business success
o Ten Digital Platform live with 27 client brands (2020: 22)
which drives engagement and service quality
o GBP11.5m (2020: GBP12.2m) invested in proprietary digital
platforms, communications and technologies to enhance member
experience and create competitive advantage
o Improved efficiencies and proposition from greater digital
capabilities, operational maturity and stronger supplier
partnerships mean over 70% of requests are now serviced using
automation (2020: 63%)
Current Trading and Outlook
As the effects of COVID-19 ease globally, we expect that demand
for our core services will recover and increase both from existing
Active Members and from new "first time users" from our growing
Eligible Member base, which will result in increased Net Revenue
from our corporate accounts. In addition, some of our pandemic
innovations will continue as important parts of our offering and
create revenue. Since the year end, demand has increased and
overall performance is in line with the Board's expectations.
Supplier revenue (largely generated by hotel bookings), which in
pre-COVID) FY2019 amounted to GBP5.5m of Net Revenue, is increasing
as travel recovers. We believe this will continue to improve in
FY2022 as COVID-19 continues to ease and travel returns. In the
final quarter of FY2021, we saw travel bookings return to the
pre-COVID-19 levels of FY2019 and in the first two months of the
current financial year supplier revenue is running ahead of the
same pre-COVID period. It is not yet certain if the level of
activity will sustain throughout the year.
We expect the Group will benefit from the full year impact of
new contract wins and extensions in 2021, which will increase the
number of Eligible Members, Active Members and as a result,
corporate revenue. We expect to increase revenue from existing
clients as well as to continue to convert our strong pipeline of
opportunities, helped by our proven ability to support clients to
engage, retain and acquire their most valuable customers, and the
increasing willingness of clients to commit to new initiatives.
We remain focused on continuing to increase Net Revenue and
Adjusted EBITDA, maintaining a positive cash position whilst
scaling up operations and maintaining our strategic investment in
technology. As we await full recovery from the effects of COVID-19,
we expect some reduction in net cash in the first half of the
year.
There are encouraging signs of recovery, albeit we are still
experiencing some COVID-19 headwinds in some markets. Our high
contract retention, record service levels, increasing supplier
revenue, improving margins, healthy sales pipeline and continued
investment to improve our technology and proposition, mean that the
Board is optimistic that the Group will take further steps on our
mission to becoming the most trusted service platform in the
world.
Alex Cheatle, CEO of Ten Lifestyle Group, said;
"We have built a stronger business during the pandemic and
delivered an improved Adjusted EBITDA margin, 100% client
retention, record levels of Eligible Members and record service
levels. We are now seeing demand and revenue starting to increase ,
which we expect will drive the Ten growth engine into 2022, taking
further steps on our mission to become the most trusted service
platform in the world."
(1) Net Revenue excludes the direct cost of sales relating to
certain member transactions managed by the Group.
2 Adjusted EBITDA is operating profit/(loss) before interest,
taxation, amortisation, depreciation, share-based payment expense
and exceptional items.
(3) Adjusted EBITDA margin is Adjusted EBITDA as a percentage of
Net Revenue.
(4) 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).
(5) 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
"Material Contracts".
(6) Eligible members are individuals who have an eligible
product, employment, account or card offered by one of Ten's
corporate partners and have legitimate access to the service.
(7) Active Members are members of Ten that have used the service
at least once in the past twelve months.
Analyst Presentation
An online analyst presentation will be held by video link at
9:00am on 24 November 2021. To attend, please email
investorrelations@tengroup.com
Dial-in details for the presentation are also available:
Dial-in number: +44 208 080 6592
Meeting ID: 893 8310 8943
Investor Presentation
The Group will also be presenting an Investor Presentation, open
to all existing and potential shareholders via the Investor Meet
Company platform on 30 November 2021 at 5:30pm GMT. Investors can
sign up to Investor Meet Company for free and "add to meet" Ten
Lifestyle Group plc via:
https://www.investormeetcompany.com/ten-lifestyle-group-plc/register-investor
Investors who already follow Ten Lifestyle Group plc on the
Investor Meet Company platform will automatically be invited.
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
Edward Knight
Paul Gillam +44 (0) 20 7418
J ames Smith 8900
Notes to Editors:
About Ten Lifestyle Group Plc
Ten Lifestyle Group Plc is a leading technology-enabled, global
concierge platform, helping wealthy and mass affluent individuals
and their families to discover, organise, and enjoy dining, live
entertainment, travel and premium retail (and other relevant
services) with better results and more quickly than they could
themselves. Many of the world's leading brands pay Ten to support
their most valued customers.
Underpinned by industry-first technology, Ten provides its
trusted concierge services to millions of members, in over 15
languages, 24/7, 365 days a year, wherever they are in the world.
Founded in 1998, the business listed on the AIM market of the
London Stock Exchange in November 2017 (AIM: TENG).
The growth engine at the heart of Ten's business model is the
driving force behind its progress towards its objective to become
the most trusted service platform in the world.
For further information about Ten Lifestyle Group Plc, please go
to: www.tenlifestylegroup.com
Chairman's Statement
Overview
I am pleased to present our annual results for the year ended 31
August 2021, which sets out the Group's progress towards becoming
the world's most trusted service by using expertise and a digital
engagement platform to create unique experiences for our members,
which generates brand loyalty for our clients and revenue for
Ten.
It would be easy to underestimate the effects the COVID-19
pandemic has had on our business over the last twelve months and is
indeed still having on our business. However, it is remarkable how
the business has responded to the challenges, developed its
offerings, continued to invest in technology and maintained member
and client focus.
In this difficult environment, the Group maintained Adjusted
EBITDA profitability and ends the year with net cash. Net Revenue
was impacted by the effects of the COVID-19 pandemic throughout the
year. Adjusted EBITDA Margin improved due to the resilience and
flexibility of our team, our technology-enabled service proposition
and the strength of the underlying business model. This enabled us
to tailor existing offerings and develop new services to meet the
needs of our members during the pandemic and enhance their loyalty
to our corporate clients.
Our technology also underpins the Group's competitive position
as a leading digitally enabled, global lifestyle and travel service
platform for individuals and their families. Continued investment
into technology, strategic partnerships and our people has enabled
the Group to build healthy foundations for growth through an
improved service and client proposition whilst also achieving
further efficiencies.
Strategy
The Group remains committed to its mission to become the world's
most trusted service. Our stated purpose is to allow valued members
to organise their travel, dining, entertainment and other lifestyle
needs by optimising our market-leading proprietary platform,
together with our unique access, our buying power and our expert
Lifestyle Managers. This in turn helps build the value and the
loyalty of the customers to our corporate clients, who enable them
to use our service. With offices with Lifestyle Managers in over 20
cities globally, we can help improve our members' lives wherever
they are, in business or in leisure, in over 15 languages, 24 hours
a day. High Net Promotor Scores (NPSs) evidence that our services
are appreciated by our members and drive value for our corporate
clients.
To achieve this, the Group utilises the Ten growth engine at the
heart of our business model by building an ever-stronger member
proposition, resulting in investment from corporate clients who in
turn are seeking to improve the profitability and loyalty of their
most valuable customers. Income from corporate clients is invested
back into technology, content and service quality, building member
proposition and further driving the growth engine.
The Group continues to benefit from strong partnerships with
corporate clients, primarily in the financial services sector,
seeking to improve the engagement, retention and acquisition of
their most valuable customers by offering access to our
technology-enabled travel and lifestyle services. The Group also
offers individuals the opportunity to access its services through a
private membership proposition, although this is a far smaller part
of our total business.
Ten offers its members access to a wide range of propositions
across key consumer markets, including dining, travel,
entertainment and premium retail. By combining the buying power of
its membership, the Group helps members secure attractive, and
often unique, access, service levels, offers and benefits, meaning
they can achieve better and more cost-effective outcomes, more
conveniently than they could on their own.
These services are all made available to members to search and
book online though Ten's market-leading lifestyle and travel
proprietary digital platform, the "Ten Digital Platform", or from
our expert Lifestyle Managers by phone, email, live chat and
WhatsApp.
Results
The Group's ongoing focus on efficiencies has contributed to an
improved Adjusted EBITDA margin of 12.8% (2020: 10.8%), resulting
in Adjusted EBITDA profitability for a second consecutive year with
Adjusted EBITDA of GBP4.4m (2020: GBP4.8m) and a net cash position
of GBP6.7m (2020: GBP10.0m). A decline in Net Revenue, largely
because of the pandemic (2021: GBP34.7m; 2020: GBP44.2m), led to
the small reduction in Adjusted EBITDA. The improved efficiencies
were backed by prudent cash management, including the
implementation of a Salary Sacrifice Scheme.
Adjusted EBITDA profitability and maintaining a net cash
position, whilst continuing to invest in technology, are key
performance indicators of the Group's strategic growth engine.
Net Revenue declined by 21.6% in the year to GBP34.7m (2020:
GBP44.2m), caused by COVID-19 and the resulting public health
actions throughout the year reducing member activity and revenue
from corporate clients paying for their customers' use of the
service. Lower rates of member travel bookings also caused supplier
revenue to be down 45% on pre-COVID-19 levels(8) .
The Board believes that the decline in Net Revenue caused by
COVID-19 was less than may have been expected at the beginning of
the crisis from a business that, pre-pandemic, had travel, eating
out and live entertainment as its core service categories. The
Group's agile response to our members' changing needs has allowed
the service proposition to remain relevant to our members and
corporate clients, partly mitigating the effects on our relevant
markets.
In a challenging commercial environment, the Group secured new
contract wins during the year, including a Large contract with
Credit Saison, a leading credit card issuer in APAC, which launched
in September 2021, a Medium contract with a wealth management
business in EMEA and a Medium contract with Westpac Banking
Corporation in Australia, which launched in September 2020.
The Group also benefited from multi-year contract extensions and
significant expansions of contracts with our existing corporate
clients, including a significant new mandate with an existing
client in EMEA, expanding the Extra Large contract with the
addition of a premium, high-engagement programme. I am delighted
that we have retained all Material Contracts in all markets,
although one Large contract in EMEA transitioned from a Large
corporate to a Small affiliate contract model. Both the new
contracts won and launched in the period and growth of existing
mandates have resulted in a record number of Eligible Members which
bodes well for a return to growth with returning consumer
activity.
Both growth from new contract wins and the development of
existing corporate programmes were held back in the year due to
wider economic uncertainty and the continued impact of the pandemic
on consumer behaviour. Nonetheless, by investing in technology and
content during the year, we have maintained a strong sales
pipeline. We believe that we remain differentiated from our
competitors and during the year continued to invest in our proven
ability to help clients engage, retain and acquire their most
valuable customers.
The digital transformation of the service since IPO accelerated
during the year, with over 70% of requests now serviced using
automation and a 74% increase in the number of fully automated
requests. Increased automation drives the speed and efficiency of
our service, which contributes to increased cash generation and the
improved Adjusted EBITDA margin of 12.8% (2020: 10.8%). This was
achieved whilst improving the quality of the service, reflected in
the record levels of member satisfaction in all regions.
People
The Group continues to benefit from a stable, founder-led
executive management team which has shown strong leadership,
innovation and resilience in all regions to overcome the challenges
faced since the start of the pandemic. We continued to develop our
people including graduating 26 employees from eight countries
through Ten's Global Leadership Programme, a twelve months'
internal development programme aimed at developing the Group's
future leaders.
The Group reduced its levels of full-time equivalent (FTE)
employees for the second consecutive year, in response to regional
growth rates, improved efficiencies and regional cost
optimisation.
On behalf of the Board I would like to thank the whole Ten team
for demonstrating adaptability, professionalism and steadfast
commitment throughout the year, for which we are extremely grateful
and proud.
Summary
In last year's Annual Report, Alex Cheatle, CEO, stated:
"Despite generating less Net Revenue, we are cautiously optimistic
that we can maintain healthy EBITDA profitability by continuing to
deliver efficiencies and cost savings, whilst maintaining decent
levels of investment into our technology."
I am very pleased to report that the Group has delivered on this
statement, despite the effects of the pandemic throughout the
financial year , by continuing to invest in technology and content
to improve the member proposition whilst maintaining a positive net
cash position as well as improving margin percentage. Restrictions
on consumer activity globally did, however, cause a decline in Net
Revenue.
We remain confident in the strength of our relationships with
our existing clients because we have proven our value in helping
corporate clients engage, retain and acquire their most valuable
customers. This bodes well for the future as we emerge from the
pandemic with a healthy business, strong service levels, improved
technology and an opportunity for our growth engine to prove itself
further with sustained increases in Net Revenue and
profitability.
Bruce Weatherill
Chairman
23 November 2021
(8) Ten's revenue from its supplier base, such as hotels,
airlines and event promoters which sometimes pay commission to Ten,
constituted 9% of Net Revenue in 2021, 7% of Net Revenue for the
2020 financial year (as reported in the 2020 Annual Report and
Accounts) and 12% of Net Revenue in 2019 (pre-COVID-19) (as
reported in the 2019 Annual Report and Accounts).
Chief Executive's statement
Overview
Our business has continued to prove itself, remaining healthy
with an Adjusted EBITDA of GBP4.4m (2020: GBP4.8m), despite the
effects of COVID-19, which caused Net Revenue to decline to
GBP34.7m (2020: GBP44.2m).
The success of the "growth engine" that lies at the heart of our
business has created efficiencies that have allowed us to continue
to invest into our technology and to improve our proposition to
both members and our corporate clients. After that investment, we
increased our Adjusted EBITDA percentage margin to 12.8% (2020:
10.8%), through a mixture of cost management, government funded
COVID-19 receipts and improving efficiencies, notwithstanding the
impact of the pandemic on Net Revenue.
We have continued our strategy of investing in technology,
content and supplier partnerships to improve our member
proposition. During the pandemic, we have expanded our service to
include virtual events, home delivery management and staycations.
These services have not fully compensated for the effective freeze
on international travel in some markets and the general reduction
in social activity globally but have helped mitigate the impact on
the business - and will remain important to our service in future
years too.
Member activity was down in the year, following the trend of
consumer activity in our core service categories globally, due to
COVID-19. The majority of our Net Revenue comes from service or
subscription fees, paid by our corporate clients or private
members. In contrast, almost all other providers of similar
services (e.g. travel agents or ticket portals) rely on commission
or mark-ups on bookings. This advantage allowed us to continue to
provide market-leading value and service to our members. Unlike
much of the travel industry in the UK and internationally, we did
not issue any Refund Credit Notes to members and returned all cash
to members when bookings were cancelled due to the pandemic. This
has helped build loyalty and trust.
Towards the end of the period and since the period end, we saw
member activity increase as restrictions eased in most regions,
particularly in travel, dining and live events. Commissions from
our travel bookings in the final quarter of FY2021 rose 28% when
compared with the same pre-COVID-19 period in 2019. Increased
member activity improves revenue from corporate clients and
suppliers, which has a positive effect on efficiencies and service
quality.
We have achieved record levels of satisfaction with our members,
for the fourth year in a row since IPO, and we continue to prove
our value to our corporate clients at a time when traditional
customer benefits have proven less relevant and flexible during the
pandemic (e.g. airport lounge access, travel insurance and physical
hospitality events).
I am extremely proud of our committed people, across over 20
cities globally, who have continued to deliver high-quality
services to our members and corporate clients in a challenging
environment.
REGIONAL ANALYSIS
We continued to operate in all existing markets from over 20
cities globally in the year and we have improved our Adjusted
EBITDA margin in APAC and the Americas as our business there has
matured.
We retained all Material Contracts globally, although one Large
contract in EMEA transitioned from a Large corporate to a Small
affiliate contract model.
EMEA
In EMEA we successfully maintained the relevance of our service
to our members and corporate clients, achieving record levels of
member satisfaction in the region.
Regional Net Revenue declined by 18% as a result of a full year
of the effects of the pandemic being felt in the region and the
replacement of a Large corporate-pay model contract with a Small
affiliate model contract in September 2020. We did not lose any
Material Contracts, won a Medium contract with a wealth management
business and extended as well as expanded some key contracts with
corporate clients in the region.
The overall decline in Net Revenue to GBP18.1m (2020: GBP22m)
was caused by corporate revenue reduction, due to reduced overall
levels of member activity as well as a significant decline in
supplier revenue, caused by lower travel commissions across the
region.
We continued to make prudent cost saving actions across the
region in the year, including office costs and headcount
reductions, and we participated in a limited number of the
available government funded COVID-19 initiatives. These actions,
along with the continued improvements in operational efficiencies,
limited the decline in Adjusted EBITDA margin to 34% in 2021 (2020:
37%).
Americas
A full year of the pandemic resulted in a decline of 28% in
regional Net Revenue to GBP9.9m (2020: GBP13.8m) due to a decline
in member activity. Further decline was mitigated through
successfully replacing core service activities with other support
services relevant to members during COVID-19 measures. This
resulted in record levels of member satisfaction in the region.
We retained all Material Contracts in the region and expanded
some mandates, supported by the opening of a new office in Denver
towards the end of the year.
Although Net Revenue declined, we reduced our Adjusted EBITDA
losses, to GBP2.2m (2020: GBP3.9m). This was achieved through
improved efficiency and various cost saving measures including the
US Payroll Protection Program (US PPP) loan forgiveness of GBP1.0m
which is reported in other income.
APAC
Our business in APAC has shown tremendous resilience during a
full year of tough COVID-19 restrictions, achieving record levels
of member satisfaction in the region. We retained all Material
Contracts and won a Large contract with Credit Saison, a leading
credit card issuer in Japan.
There has been very little international travel and few large
live events, and national lockdowns have reduced demand for our
dining services. However, our teams adapted well to the changing
local restrictions and offered relevant services to our members.
This mitigated the decline in Net Revenue to GBP6.7m (2020:
GBP8.5m). Net Revenue also benefited from the launch in September
2020 of a multi-year contract with Westpac Banking Corporation,
which now delivers Ten's concierge services to premium credit card
customers primarily from our Melbourne office and includes access
to the customised Ten Platform.
Although the effects of COVID-19 dampened the activity of
existing client contracts in the region, we improved operational
efficiencies, primarily driven by our continued digital
transformation, as well as significant cost saving measures and our
participation in relevant government funded COVID-19 initiatives.
This resulted in a small increase in Adjusted EBITDA to GBP0.5m
(2020: GBP0.4m).
Our investment in technology and content continues to drive our
market-leading digital capability
We continued to invest in the quality, operational and
competitive advantages that result from our digital capability. We
invested GBP11.5m into technology, communications and content
(2020: GBP12.2m) in the year and a total of GBP46.4m since IPO.
We believe that this clearly differentiates us from our
competitors, and that our market-leading digital capabilities are
at the core of the Group's health. Technology underpins our
long-term "growth engine" strategy to become the world's most
trusted service.
In the year, we delivered key milestones in our digital
transformation.
Stronger member proposition, satisfaction and engagement
Building a valued service and strong member proposition is the
key objective of the growth engine that underpins the business
model as it delivers member engagement, which is a key objective
for our corporate clients, who invest in our service to acquire,
engage and retain their most valued customers.
In the year we have strengthened our core propositions.
The more attractive and accessible our proposition is to new and
existing members, the more members engage, use and advocate for our
service. Member engagement and satisfaction is the key to building
value for corporate partners, looking to improve the engagement,
retention and acquisition of their most valued customers. This
justified their spending more with us - and encourages new
corporate partners and new suppliers to work with us.
We are delighted to have achieved another year-on-year record
level of member satisfaction, as measured by Net Promoter Score
(NPS).
We believe that our strengthened member proposition and member
satisfaction levels have resulted in an increase in repeat usage of
our service and sustained levels of Active Members using the
service. Strong member satisfaction levels also help us demonstrate
the return on corporate client investment into the service, which
contributes to the high levels of corporate client retention.
Summary
Our service is well positioned to add new contracts and grow
existing contracts. We have maintained all our Material Contracts
in the year and launched two new Material Contracts. This provides
a strong platform for growth as demand for our services
increases.
We believe our competitive position is stronger than ever,
backed by a market-leading member proposition, which delivers a
strong return on investment from our corporate clients. This has
been achieved by continuing to invest in our technology, content
and market expertise and better pricing, access, benefits and
integration with our supplier partners.
Although the effects of COVID-19 have constrained some of our
prospective clients from signing contracts, our pipeline is robust,
and we have secured some important new mandates and contract
extensions. We have maintained our record of never having lost a
material corporate client where we have launched our Ten Digital
Platform. By developing the relevance of our service to our
members, and in turn our corporate clients, we have limited Net
Revenue reduction from corporate clients to 22% during the year and
retained all our Material Contracts in the year. That said, it is
important that we recognise that the effects of COVID-19 have had
an impact upon the length of time it takes to convert our pipeline.
Whilst the "pitch process" has been taking longer, we have a
healthy pipeline of prospective clients.
Despite prudent cost controls we have maintained investments in
technology, content and supplier partnerships, which has enhanced
the service to clients. This was a deliberate strategy taken by
management as we recognise the importance of continued innovation
in building our market position and improving service levels. The
greater efficiencies that result, along with careful cash
management, have helped us to maintain a net cash position of
GBP6.7m (2020: GBP10.0m) and Adjusted EBITDA of GBP4.6m (2020:
GBP4.8m).
Our record service levels, strong technology platform, EBITDA
profitability and strong contract pipeline all combine to create
confidence in a strong future for our business.
The strong "trusted expert" culture at Ten, member focus and
commitment to innovation continues to make me proud. These values
have been especially evident during this year of challenge. We have
taken the opportunity during this period to strengthen our
operational effectiveness, nurture our corporate clients and have
communicated our longer-term strategic plans and ambitious vision
to continue to keep our people focused.
Alex Cheatle
Group Chief Executive Officer
23 November 2021
Financial review
We continued to experience challenging conditions as the impact
of the pandemic during the year reduced our Net Revenue by 21.6% to
GBP34.7m (2020: GBP44.2m). However, continued cost actions and
operational efficiencies ensured we again achieved Adjusted EBITDA
profitability of GBP4.4m (2020: GBP4.8m) with an improved Adjusted
EBITDA margin of 12.8% (2020: 10.8%).
GBPm 2021 2020
GBPm GBPm
Revenue 35.1 46.4
Net Revenue 34.7 44.2
Operating expenses and other income (30.3) (39.4)
--------------------------------------- ------ ------
Adjusted EBITDA 4.4 4.8
Adjusted EBITDA % 12.8% 10.8%
Depreciation (3.2) (4.4)
Amortisation (4.0) (3.4)
Share-based payments expense (1.6) (1.5)
Exceptional items (0.6) (0.4)
--------------------------------------- ------ ------
Operating loss before interest and tax (5.0) (4.9)
Net finance (expense) (0.5) (1.0)
--------------------------------------- ------ ------
Loss before taxation (5.5) (5.9)
Taxation (0.2) (1.0)
--------------------------------------- ------ ------
Loss for the period (5.7) (6.9)
Net cash 6.7 10.0
--------------------------------------- ------ ------
Adjusted EBITDA
Whilst Adjusted EBITDA is not a statutory measure, the Board
believes it is appropriate to include this as an additional metric
as it is one of the main measures of performance used by the Board.
It reflects the underlying profitability of our business
operations, excluding amortisation of investment in platform
infrastructures, exceptional charges and share-based payment
expenses.
Revenue and Net Revenue
Net Revenue(9) for the twelve months to 31 August 2021 was
GBP34.7m, down 21.6% compared to the prior year. Revenue for the
twelve months to 31 August 2021 was GBP35.1m, down 24.4% on the
twelve months to 31 August 2020. Net Revenue, which excludes the
direct cost of sales relating to member transactions managed by the
Group, is Ten's preferred measure of operating revenue as it
excludes the cost of member transactions where Ten is the principal
service provider (i.e., cost of airline tickets packaged with
hotels under the Group's ATOL licences).
The reduction in Net Revenue of 21.6% was principally due to the
impact of the COVID-19 pandemic. Whilst we continued to remain
relevant to our clients and members throughout the year by
continuing to offer relevant services including virtual events and
home delivery management, this did not fully compensate for lower
activity across our main service categories of travel, dining and
entertainment due to the various lockdown measures instigated
across all regions.
Our corporate revenue (paid by our corporate clients to service
their customers) decreased year on year by 22%, whilst our supplier
revenue (predominantly travel related) reduced by 15.2% against
prior year and by 49.8% against FY 2019 (pre-COVID-19). Note, some
of our corporate contracts have a guaranteed minimum which helped
support the activities we provided throughout the year. The lower
reduction in supplier revenue was due to travel activity starting
to pick up in the last quarter of the year as travel restrictions
eased across many countries. The table below sets out analysis of
H1 and H2 and demonstrates the recovery in supplier revenue from H2
2020 onwards (note: H1 2020 is prior to the impact of the
pandemic).
H1 2020 H2 2020 FY 2020 H1 2021 H2 2021 FY 2021
(unaudited) (unaudited) (unaudited) (unaudited)
------------------- ------------- ------------- -------- ------------- ------------- --------
Supplier revenue GBP2.5m GBP0.8m GBP3.3m GBP0.9m GBP1.9m GBP2.8m
Percentage of Net
revenue 10.7% 3.4% 7.4% 5.1% 10.8% 8%
(9) Net Revenue excludes the direct cost of sales relating to
certain member transactions managed by the Group.
Contract analysis
The following tables set out an analysis of our contracts by
size and by region. We have analysed only our Material Contracts.
Note, the contract size is 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. This does not include the
revenue generated from suppliers through the provision of these
concierge services
Contract
by Size 2021 2020 change
------------ ---- ---- ------
Extra Large 3 3 -
Large 5 6 -1
Medium 16 14 +2
------------ ---- ---- ------
24 23 +1
------------ ---- ---- ------
Contract
by region 2021 2020 change
----------- ---- ---- ------
EMEA 8 8 -
Americas 10 10 -
APAC 5 4 +1
Global 1 1 -
----------- ---- ---- ------
24 23 +1
----------- ---- ---- ------
During the year we won and launched two Medium contracts, one
Large contract transitioned from a Large corporate to a Small
affiliate contract model. We also won a Large contract, which
launched in September 2021, after year end (and so is not included
in the tables above), whereby Ten took over from an existing
in-house concierge service and external travel service provider.
This is an example of a contract with an existing "run rate"
meaning corporate revenue ramps-up more quickly than a contract for
the launch of an entirely new service.
Regional analysis
While there is a clear overlap between the geographic location
of our clients and their members' requests, members use our
concierge services across all the regions. Net Revenue by region
reflects our servicing location rather than the location of our
corporate clients. This allows us to track the efficiency and
profitability of our operations around the world and is therefore
presented on this basis.
Net Revenue 2021 2020 % change
GBPm GBPm
------------- ------ ------ ---------
EMEA 18.1 22.0 -18%
Americas 9.9 13.8 -28%
APAC 6.7 8.5 -21%
------------- ------ ------ ---------
34.7 44.2 -21.6%
------------- ------ ------ ---------
In EMEA Net Revenue decreased by 18% due primarily to the
pandemic impacting both corporate and supplier revenue. In
addition, as previously reported we lost a Large contract which
transitioned from a corporate to an affiliate contract model from
September 2020, and partially offsetting this loss, won a Medium
contract during the year. Supplier revenue started to recover in
the last quarter of the year as travel restrictions were gradually
lifted in the region.
In the Americas, Net Revenue reduced by 28% and in APAC Net
Revenue reduced by 21% again due to the impact of the pandemic on
both concierge revenue and supplier commissions in the regions. A
Medium contract was won and launched in APAC during the year.
Operating expenses and other income
Operating expenses and other income reduced by GBP9.1m to
GBP30.3m (2020: GBP39.4m).
As our business model has developed, we benefited from cost
reduction actions which helped offset the impact of the pandemic.
These actions included, but are not limited to:
-- ongoing improvements in operational efficiency due to more
developed technology and content and a more mature supplier
base;
-- successful renegotiation with suppliers where operationally it made sense;
-- a review of projects to focus on the most strategic core
investments (including development of our core technology platform,
where we continue to invest);
-- a freeze on employee bonuses and salary increases together with some redundancies;
-- voluntary Salary Sacrifice Scheme in exchange for share options (GBP1.2m (2019: GBP0.9m);
-- use of various countries', COVID-19 government support
schemes (e.g. furlough and Kurzarbeit) which totalled GBP2m (2020:
GBP1.6m); and
-- US Payroll Protection Program (US PPP) loan of GBP1m fully
forgiven in the second half of the year.
Average headcount in the year has decreased to 824 (2020: 970),
due to actions taken to manage our cost base as a result of the
reduced activity in the year.
Note, all Group property leases are short to medium term or have
appropriate break clauses incorporated, allowing flexibility when
assessing space requirements across the world, especially in the
current and future working environment.
Regional Adjusted EBITDA
Adjusted EBITDA is after expenses, other than deprecation of
GBP3.2m (2020: GBP4.4m), amortisation of GBP4.0m (2020: GBP3.4m),
and share-based payment and exceptional items expenses of GBP2.2m
(2020: GBP1.9m). On this basis, Adjusted EBITDA was GBP4.4m (2020:
GBP4.8m).
After allocating the costs of central IT infrastructure,
software development, property, senior management and other central
costs, the Adjusted EBITDA for each region is set out below:
Adjusted EBITDA 2021 2020
GBPm GBPm
----------------- ------ ------
EMEA 6.1 8.2
Americas (2.2) (3.9)
APAC 0.5 0.4
----------------- ------ ------
Total 4.4 4.8
Adjusted EBITDA
% 12.8% 10.8%
EMEA
Adjusted EBITDA of GBP6.1m (2020: GBP8.2m) is a reduction year
on year of GBP2.1m. However, Adjusted EBITDA margin, defined as
Adjusted EBITDA as a percentage of Net Revenue, only decreased by
3.5% to 33.8% as a result of operational efficiencies and the
various cost actions taken.
Americas
The Americas region Adjusted EBITDA loss has decreased by
GBP1.7m to GBP(2.2)m (2020: GBP(3.9)m). This improvement is despite
lower Net Revenue and is principally driven by cost actions and
operational efficiencies implemented including full forgiveness of
the US PPP loan of GBP1m taken out in the prior year which was used
to pay for predominantly salary costs through the period.
APAC
The APAC region Adjusted EBITDA of GBP0.5m (2020: GBP0.4m) has
improved in the year by GBP0.1m. The improved performance has also
been driven by operational efficiencies as well as cost saving
measures.
Amortisation
Amortisation costs, relating to the internal platform (TenMAID)
and the customer-facing platforms, were GBP4.0m in 2021 (2020:
GBP3.4m) reflecting continued investment in technology to drive
improvements in service levels, efficiency and competitive
advantage.
Net finance (expense)/income
Net finance expense in the year was GBP0.5m (2020: GBP1.0m); the
expense included IFRS 16 lease interest expense of GBP0.4m as well
as foreign exchange losses on the translation of inter-company
balances in the year.
Share-based payments
The share-based payments expense in the year was GBP1.6m (2020:
GBP1.5m). These related to share-based payments expense reflecting
share grants made under management incentive plans and also three
salary sacrifice share option schemes implemented during the year
(see note 27).
Exceptional items expense
The exceptional items expense of GBP0.6m (2020: GBP0.4m) was an
impairment expense following a review of a database previously
capitalised of GBP0.4m where a specific portion of this was less
likely to generate future economic benefits due to the fall-out
from the COVID-19 pandemic. In addition, there were some
exceptional project costs incurred during the year of GBP0.2m.
Loss before tax
The loss before tax improved to GBP(5.5)m from GBP(5.9)m in
2020.
Taxation
The taxation expense for the year was GBP0.2m (2020: GBP1.0m)
which related to tax liabilities and payments due to overseas
entities recording a statutory profit.
Loss per share
The total comprehensive loss for the year was GBP(5.8)m (2020:
GBP(6.9)m), resulting in a loss per share (excluding treasury
shares) of 7.2p (2020: loss per share of 8.6p). The Board does not
recommend the payment of a dividend.
Group cash flow
GBPm 2021 2020
GBPm GBPm
Loss before tax (5.5) (5.9)
Net finance expense 0.5 0.5
Working capital changes 0.7 2.9
Non-cash items (share-based payments, depreciation
and amortisation charges) 8.3 9.7
------ ------
Operating cash flow 4.0 7.2
------ ------
Capital expenditure (0.2) (0.2)
Investment in intangibles (5.4) (5.3)
Taxation (0.5) (0.2)
------ ------
Cash (outflow)/inflow (2.1) 1.5
------ ------
Cash flows from financing activities
Receipts on exercise of options 0.9 -
Loan receipts - 1.0
Repayment of leases and net interest (2.9) (3.6)
------ ------
Net cash used by financing activities (2.0) (2.6)
Foreign currency movements (0.2) (0.3)
Net decrease in cash and cash equivalents (4.3) (1.4)
------ ------
Cash and cash equivalents 6.7 11.0
Cash generated by operations was GBP4.0m (2020: GBP7.2m). The
cash generated in the year has been achieved by continuing
operational efficiencies and cost saving actions taken across the
business. Non-cash items in the year of GBP8.3m included the
increased amortisation charges, offset by the US PP loan
forgiveness and a reduction in depreciation charge relating to IFRS
16 Right-of-Use assets as we downsized or terminated property
leases across the Group. The expenditure that was capitalised on IT
infrastructure, the Ten Digital Platform and TenMAID totalled
GBP5.4m as we continue to invest in our technology. Cash inflow of
GBP0.9m was generated from share options exercised by employees.
Net cash used in financing activities is primarily due to IFRS 16
lease payments and interest of GBP2.9m. This has led to an overall
decrease in cash of GBP4.3m during the year.
Following the end of the period, a number of individuals chose
to exercise and sell a total of 1,510,860 options received pursuant
to the First Salary Sacrifice Scheme. The Company received GBP1.06m
of cash from the exercise of these options.
Group balance sheet
Summary balance sheet
GBP'm 2021 2020
------------------------------- ------- -------
Intangible assets 11.6 10.5
Property, plant and equipment 0.6 1.1
Right-of-use assets 2.6 5.1
Cash 6.7 11.0
Other current assets 5.8 7.0
Lease liabilities (1.5) (3.3)
Current liabilities (12.2) (12.5)
Long-term borrowings - (1.0)
Other non-current liabilities (1.7) (2.7)
------------------------------- -------
Net assets 11.9 15.2
------------------------------- ------- -------
Share capital/share premium 29.4 28.6
Reserves (17.5) (13.4)
------------------------------- ------- -------
Total equity 11.9 15.2
------------------------------- ------- -------
Net assets were GBP11.9m (2020: GBP15.2m). The reduction in the
year is principally due to a reduction in cash of GBP4.3m as we
continued to invest in our technology and support our operations.
Right-of-use assets of GBP2.6m (2020: GBP5.1m) reduced together
with corresponding lease liabilities of GBP1.5m (2020: GBP3.3m) as
we downsized our office capacity and costs across all regions.
Long-term borrowings of GBPnil (2020: GBP1.0m) related to the US
PPP loan which was fully forgiven in the second half of the
year.
Key Financial Performance Indicators (KFPIs)
Management accounts are prepared on a monthly basis and include
KPIs covering revenue, Adjusted EBITDA, Adjusted EBITDA margin,
cash balances and Material Contracts, and are measured against both
the Group's budget and the previous years' actual results. The
KFPIs for the year are:
2021 2020 2019 2018
Net Revenue (GBPm) 34.7 44.2 45.8 37.4
======= ====== ====== ======
Corporate (GBPm) 31.9 40.9 40.3 32.9
======= ====== ====== ======
Supplier (GBPm) 2.8 3.3 5.5 4.5
======= ====== ====== ======
Net Revenue growth % -21.6% -3.5% 23.0% 13.0%
======= ====== ====== ======
Adjusted EBITDA (Pre-IFRS16) -- -- -3.3 -3.2
======= ====== ====== ======
Adjusted EBITDA 4.4 4.8 -- --
======= ====== ====== ======
Adjusted EBITDA margin (pre-IFRS16)
(%) -- -- -7.2% -8.6%
======= ====== ====== ======
Adjusted EBITDA margin (%) 12.8% 10.8% -- --
======= ====== ====== ======
Net Cash (GBPm) 6.7 10.0 12.3 20.7
======= ====== ====== ======
Material Contracts 24 23 24 24
======= ====== ====== ======
Each month the Board assesses the performance of the Group based
on these KFPIs, operational performance indicators, including the
number of Active Members, sales performance, client development,
technology updates. The Group's performance against its KFPIs has
been impacted by the effects of COVID-19 on the business, as
described above.
Going concern
The impact of COVID-19 on Ten's business still warrants focus
and real-time management. Net Revenue since the year end has been
in line with our expectations as the COVID-19 pandemic continues to
have some impact. It is not yet fully clear when global economic
activity in travel and hospitality will recover to pre-pandemic
levels and whilst we have already seen some recovery in travel, we
must prepare the business for varying levels of revenue. To that
end, we have modelled the effects of differing levels of revenue
along with the measures we can take to ensure that the Group
remains within its available working capital, and we have prepared
cash flow forecasts for a period in excess of twelve months.
The Group has set its budget for FY2022 but we recognise that
there is a risk that the Group will continue to be impacted by
reductions in the number of member engagements and by prospective
corporate clients delaying launches. If revenue is not in line with
cash flow forecasts, the Directors have identified cost savings
associated with the reduction in revenue and can identify further
cost savings if necessary.
The Directors have no reason to believe that corporate revenue
and receipts will decline to the point that the Group no longer has
sufficient resources to fund its operations. However, in the
unlikely event that this should occur, the Group will continue to
manage its working capital position, as well as making significant
reductions in its fixed cost expenses.
Post Year End contract events
In September, the Group launched a Large contract with Credit
Saison, a leading credit card issuer in Japan making Ten's
concierge and lifestyle services, including Ten's proprietary
Digital Platform, available to many of the client's premium
cardholders.
The expansion of an Extra Large contract with a corporate client
in EMEA towards the end of 2021 has resulted in an increased rate
of member engagement, NPS and requests via the Ten Digital
Platform; a key success metric for the corporate client.
Since the year end, the Group has also won and renewed contracts
with new and existing corporate clients, including:
1. a multiple-year renewal of its Medium contract with Barclays
Bank UK plc with a mandate to move the service to an 'on-sale'
banking product with a larger customer base, which will grow
revenue;
2. a second contract with DNB Bank ASA to take over the
provision of concierge services to selected Private Banking
customers and launch its digital services in the spring; and
3. a contract to deliver Content services for an existing major
global financial services client to increase customer engagement
with Ten's digitally enabled concierge service and with the
client's customer proposition more generally.
Alan Donald
Chief Financial Officer
23 November 2021
Consolidated Statement of Comprehensive Income
for the year ended 31 August 2021
Note 2021 2020
GBP'000 GBP'000
Revenue 4 35,059 46,369
Cost of sales on principal member transactions (394) (2,145)
--------- ---------
Net Revenue 4 34,665 44,224
Other cost of sales (797) (828)
Gross profit 33,868 43,396
Administrative expenses (40,232) (48,943)
Other income 1,380 620
Operating profit/(loss) before amortisation, depreciation,
interest, share based payments, exceptional items
and taxation ("Adjusted EBITDA") 4,431 4,778
16 &
Depreciation 17 (3,186) (4,395)
Amortisation 15 (3,957) (3,380)
Share-based payment expense 27 (1,627) (1,525)
Exceptional items 4.1 (645) (405)
------------------------------------------------------------ ----- --------- ---------
Operating loss 5 (4,984) (4,927)
Finance income 12 1 2
Finance expense 12 (554) (966)
--------- ---------
Loss before taxation (5,537) (5,891)
Taxation expense 13 (237) (1,005)
--------- ---------
Loss for the year (5,774) (6,896)
========= =========
Other comprehensive (expense)/income:
Foreign currency translation differences (5) (60)
Total comprehensive loss for the year (5,779) (6,956)
========= =========
Basic and diluted loss per ordinary share 14 (7.2)p (8.6)p
Consolidated Statement of Financial Position as at 31 August 2021
Note 2021 2020
GBP'000 GBP'000
Non-current assets
Intangible assets 5 11,555 10,532
Property, plant and equipment 561 1,126
Right of use assets 2,601 5,116
Total non-current assets 14,717 16,774
--------- ---------
Current assets
Inventories 98 66
Trade and other receivables 5,707 6,941
Cash and cash equivalents 6,662 10,957
---------
Total current assets 12,467 17,964
--------- ---------
Total assets 27,184 34,738
========= =========
Current liabilities
Trade and other payables (11,487) (11,906)
Provisions (568) (596)
Lease Liabilities (1,504) (3,335)
Total current liabilities (13,559) (15,837)
--------- ---------
Net current (liabilities)/assets (1,092) 2,127
========= =========
Non-current liabilities
Borrowings - (1,000)
Lease Liabilities (1,678) (2,668)
Total non-current liabilities (1,678) (3,668)
--------- ---------
Total liabilities (15,237) (19,505)
========= =========
Net assets 11,947 15,233
========= =========
Equity
Called up share capital 82 81
Share premium account 29,356 28,480
Merger relief reserve 1,993 1,993
Treasury reserve 5 15
Foreign exchange reserve (410) (405)
Retained deficit (19,079) (14,931)
Total equity 11,947 15,233
========= =========
Consolidated Statement of Changes in Equity for the year ended
31 August 2021
Note 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 31 August
2019 81 28,480 1,993 (345) (30) (9,234) 20,945
---------- ------------- ------------ ------------- ------------- ----------- -----------
Period ended 31
August
2019:
Loss for the year - - - - - (6,896) (6,896)
Change in accounting
policy (326) (326)
Foreign exchange - - - (60) - - (60)
Total comprehensive
loss for the year - - - (60) - (7,222) (7,282)
Shares sold by Employee
Benefit Trust (EBT) - - - - 45 - 45
Equity-settled
share-based
payments charge - - - - - 1,525 1,525
Balance at 31 August
2020 81 28,480 1,993 (405) 15 (14,931) 15,233
Loss for the year - - - - - (5,774) (5,774)
Foreign exchange - - - (5) - - (5)
Total comprehensive
loss for the year - - - (5) - (5,774) (5,779)
Shares purchased
by Employee Benefit
Trust (EBT) - - - - (10) - (10)
Equity-settled
share-based
payments charge - - - - - 1,626 1,626
Issue of new share
capital 1 876 - - - - 877
Balance at 31 August
2021 82 29,356 1,993 (410) 5 (19,079) 11,947
========== ============= ============ ============= ============= =========== ===========
Consolidated Statement of Cash Flows for the year ended 31 August 2021
Note 2021 2020
GBP'000 GBP'000
Cash flows from operating activities
Loss for the year, after tax (5,774) (6,896)
Adjustments for:
Taxation expense 237 1,005
Finance expense 547 455
Investment income (1) (2)
Amortisation of intangible assets 5 3,957 3,380
Depreciation of property, plant and equipment 687 913
Depreciation of right-of-use asset 2,499 3,482
Equity-settled share based payment expense 1,627 1,525
Exceptional items 4 445 405
Forgiven Loan 1,000 -
Movement in working capital:
Increase in inventories (32) (9)
Decrease in trade and other receivables 1,234 4,128
Increase in trade and other payables (429) (1,190)
Cash from by operations 3,997 7,196
Tax paid (470) (150)
Net cash from by operating activities 3,527 7,046
----------- ---------------
Cashflows from Investing activities
Purchase of intangible assets 5 (5,393) (5,308)
Purchase of property, plant and equipment (177) (217)
Finance income 1 2
Net cash used by investing activities (5,569) (5,523)
----------- ---------------
Cash flows from financing activities
Lease Liability repayments (2,599) (3,162)
Sale/(Purchase) of treasury shares 10 (45)
Loan receipts - 1,000
Interest paid on loan (15) -
Interest received - 5
Interest paid on IFRS16 lease liabilities (284) (448)
Cash receipts from issue of share capital 876 -
Net cash used in financing activities (2,012) (2,650)
----------- ---------------
Foreign currency movements (241) (257)
Net decrease in cash and cash equivalents (4,295) (1,384)
Cash and cash equivalents at beginning of
period 10,957 12,341
Cash and cash equivalents at end of period
Cash at bank and in hand 6,662 10,957
Cash and cash equivalents 6,662 10,957
=========== ===============
4. Basis of Preparation
The financial information set out in this document does not
constitute the Company's statutory accounts for the years ended 31
August 2021 or 2020. Statutory accounts for the years ended 31
August 2020 and 31 August 2021, which were approved by the
directors on 23 November 2021, have been reported on by the
Independent Auditors. The Independent Auditors' Reports on the
Annual Report and Financial Statements for each of 2020 and 2021
were unqualified, did not draw attention to any matters by way of
emphasis, and did not contain a statement under 498(2) or 498(3) of
the Companies Act 2006.
Statutory accounts for the year ended 31 August 2020 have been
filed with the Registrar of Companies. The statutory accounts for
the year ended 31 August 2021 will be delivered to the Registrar in
due course, and are available from the Company's registered office
at Floor 2, 355 Euston Road, London, England, NW1 3AL and are
available from the Company's website:
https://www.tenlifestylegroup.com/investors .
The financial information set out in these results has been
prepared using the recognition and measurement principles of
International Accounting Standards, International Financial
Reporting Standards and Interpretations in conformity with the
requirements of the Companies Act 2006. The accounting policies
adopted in these results have been consistently applied to all the
years presented and are consistent with the policies used in the
preparation of the financial statements for the year ended 31
August 2020. There are deemed to be no new standards, amendments
and interpretations to existing standards, which have been adopted
by the Group that have had a material impact on the financial
statements
2. Going concern
The consolidated financial statements have been prepared on a
going concern basis. The ability of the Company 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. The current
economic conditions continue to create uncertainty, particularly
over (a) corporate members' engagement; and (b) supplier revenue
volumes. The Group's forecasts and projections, taking account of
reasonably possible changes in trading performance, show that the
Group expects to be able to operate within the level of its current
cash resources. Having assessed the principal risks and the other
matters discussed in connection with the going concern statement,
the Directors considered it appropriate to adopt the going concern
basis of accounting in preparing its consolidated financial
statements.
Various sensitivity analyses have been performed to reflect a
variety of possible cash flow scenarios, taking into account the
continued impact of COVID-19 pandemic, Overall, the Directors have
prepared cash flow forecasts covering a period of at least twelve
months from the date of approval of the financial statements, which
foresee that the Group will be able to operate within its existing
working capital facilities.
The COVID-19 pandemic has had an impact on our business and the
Company has managed costs firmly to ensure operating performances
align with pre-COVID-19 levels so the Board believes that the
business is able to navigate through the continued impact of
COVID-19 due to the strength of its member proposition, its balance
sheet and the net cash position of the Group.
The continued challenges of the coronavirus pandemic have caused
significant disruption to many businesses where the implementation
of various and changing social distancing measures, travel
restrictions and related rules and this, had an implication for the
wider global economy and specifically for the supply chain within
which we reside - primarily our member's willingness or ability to
use our services in the volumes planned. The selection of
assistance services available to our members has been increased in
the year, which has encouraged their engagement. There is, however,
a risk that the Group will be further impacted by continued social
distancing restrictions impacting the volume of member engagement
and by prospective corporate clients delaying launches. If Net
revenue is not in line with cash flow forecasts, the Directors have
identified cost savings associated with the reduction in revenue
and have the ability to identify further cost savings if
necessary.
Having assessed the principal risks and other matters discussed
in connection with the going concern statement, the Directors have
a reasonable expectation that the group has adequate resources to
continue in operational existence for the foreseeable future. For
these reasons, they continue to adopt the going concern basis of
accounting in preparing the financial statements.
3. Segment reporting
The total revenue for the Group has been derived from its
principal activity, the provision of concierge services. This has
been disaggregated appropriately into operational segment and
geographical location.
The Group has three reportable segments: Europe, the Middle East
and Africa (EMEA), North and South America ("The Americas") and
Asia-Pacific (APAC). Each segment is a strategic business unit and
includes businesses with similar operating characteristics. They
are managed separately in similar time zones to reflect the
geographical management structure.
2021 2020
GBP'000 GBP'000
EMEA 18,120 21,975
Americas 9,875 13,784
Asia 6,670 8,465
Net Revenue 34,665 44,224
Add back: Cost of sales on principal member transactions 394 2,145
Revenue 35,059 46,369
EMEA 6,157 8,205
Americas (2,192) (3,862)
Asia 466 435
-------------- --------
Adjusted EBITDA 4,431 4,778
Amortisation (3,957) (3,380)
Depreciation (3,186) (4,395)
Share-based payment expense (1,627) (1,525)
Exceptional Items (645) (405)
Operating loss (4,984) (4,927)
Foreign exchange loss (246) (511)
Other net finance expense (307) (453)
Loss before taxation (5,537) (5,891)
Taxation expense (237) (1,005)
Loss for the year (5,774) (6,896)
============== ========
Net Revenue is a non-GAAP company 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 company non-GAAP specific measure excluding
interest, taxation, amortisation, depreciation, share-based payment
and exceptional costs.
Adjusted EBITDA is the main measure of performance used by the
Group's Chief Executive Officer, who is considered to be the chief
operating decision maker. 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 Group
level.
4. Exceptional items
2021 2020
GBP'000 GBP'000
Impairment of intangible asset (445) (405)
Other exceptional costs (200) -
-------- ----------
(645) (405)
-------- ----------
The impairment charge in the year related to specific know-how,
enabling more cost-efficient servicing of concierge requests. An
assessment of the database capitalised determined that a specific
portion of this was less likely to generate future economic
benefits due to the fall-out of the COVID-19 pandemic. Such
impairment is considered to be one-off in nature and therefore
presented as an exceptional item.
In addition other exceptional costs were incurred in relation to
a non-recurring project considered exceptional in nature.
5. Intangible assets
Capitalised development Website Trademarks Total
costs
GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 31 August 2019 25,122 1,909 55 27,086
Additions 5,308 - - 5,308
Impairment (405) - - (405)
At 31 August 2020 30,025 1,909 55 31,989
------------------------ ----------- ------------------ --------
Additions 5,393 - - 5,393
Impairment (445) - - (445)
Reclassification (note 16) 63 - - 63
Write-off - - (55) (55)
At 31 August 2021 35,036 1,909 - 36,945
------------------------ ----------- ------------------ --------
Accumulated amortisation
At 31 August 2019 16,143 1,879 55 18,077
Charge for the year 3,350 30 - 3,380
At 31 August 2020 19,493 1,909 55 21,457
------------------------ ----------- ------------------ --------
Charge for the year 3,956 - - 3,956
Reclassification (note 16) 32 - - 32
Write-off - - (55) (55)
At 31 August 2021 23,481 1,909 - 25,390
------------------------ ----------- ------------------ --------
Carrying amount
At 31 August 2020 10,532 - - 10,532
------------------------ ----------- ------------------ --------
At 31 August 2021 11,555 - - 11,555
------------------------ ----------- ------------------ --------
All additions related to internal expenditure. The useful
economic lives of the capitalised development platforms and website
are assessed to be five years and three years respectively. The
impairment charge in the year related to specific know-how,
enabling more cost-efficient servicing of concierge requests. An
assessment of the database capitalised determined that a specific
portion of this was less likely to generate future economic
benefits due to the fall-out of the COVID-19 pandemic.
6. Cautionary Statement
This document contains certain forward-looking statements
relating to Ten Lifestyle plc (the "Group"). The Group 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
FR FIFFFLALSFIL
(END) Dow Jones Newswires
November 24, 2021 02:00 ET (07:00 GMT)
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