Release Date: September 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Gross profitability has significantly improved compared to the first half of 2023.
- Net cash position has improved linearly over the past few years, with continued debt repayment.
- Brand experience business saw a 98% year-on-year increase.
- Secured a new five-year contract with Network Rail and renewed major contracts in Germany.
- Expansion into new markets and products, including Rock Up and Pop Up services and the CORE data-driven sales tool.
Negative Points
- Operating loss, although reduced, still stands at roughly GBP150,000.
- Increased administrative expenses due to growth in sales and additional commission costs.
- Revenue figures have been restated due to a change in revenue recognition policy.
- Significant increase in receivables balance due to high trading activity in June 2024.
- Focus on debt repayment and balance sheet improvement means no immediate plans to resume dividend payments.
Q & A Highlights
Q: With the continued success of Rock Up and Pop Up kiosks in the UK and Germany, what feedback has the company received from retailers and landlords in these markets? Are there opportunities to introduce this concept in additional countries or new types of venues?
A: (Nancy Cullen, CEO) UK landlords have welcomed the service, bringing new and different products into centers. Retailers have had varying results, with some significant successes like Just Bee Honey expanding from one kiosk to five major UK centers. The company is also exploring opportunities to introduce this concept in Europe.
Q: What material impact, if any, will the resolution of train strikes have on the business?
A: (Andrew Keiller, COO) The resolution of train strikes will have a positive impact. The brand experience market was interrupted by the strikes, leading to bookings being moved or canceled. The resolution will reduce uncertainty for brand agencies choosing stations as venues.
Q: Could you explain the GBP830,000 increase in the receivables balance?
A: (Gregor Dunlay, CFO) June 2024 was one of the best trading months in the UK, leading to a significant amount of money owed for activities in that month. This receivable has since been collected, reflecting better trading performance.
Q: What is the company's plan regarding the net liabilities on the balance sheet and the resumption of dividends?
A: (Gregor Dunlay, CFO) The focus is on repaying significant borrowing taken during the pandemic and strengthening the balance sheet. Although the company aims to return to paying dividends in the future, the current priority is debt repayment and balance sheet improvement.
Q: How has trading been since the half-year numbers, and what does Q4 look like?
A: (Nancy Cullen, CEO) Q3 is on target, and while 40-45% of promotions income is booked late, the company remains positive about the market and Q4 outlook.
Q: How is the company managing its debt, and what are the repayment plans?
A: (Gregor Dunlay, CFO) The company is repaying debt at a rate of GBP322,000 annually, with a final paydown of GBP0.5 million due in early 2027. The company operates with substantial headroom and has significant overdraft facilities that have not been utilized.
Q: Are you confident in hitting your full-year targets?
A: (Nancy Cullen, CEO) Yes, the company is feeling positive about achieving its full-year targets.
Q: What are the future plans for international expansion?
A: (Nancy Cullen, CEO) The company is expanding internationally, working with overseas property companies and exploring opportunities in the Netherlands, Luxembourg, Czech Republic, Austria, France, and Portugal.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
