SpaceandPeople

www.spaceandpeople.com
Ticker: SAL Exchange: AIM

SpaceandPeople sells promotional and retail space in high footfall venues in the UK and Germany, and also in India via an associate company. In addition, Retail Profile (a 100% sub of SpaceandPeople) has a licence agreement with Retail Profile Russia who has contracted with shopping centres (owned by IKEA) for retail merchandising units (RMUs) subletting in their Russian shopping centres.

Latest Reports

Contract renewals underpin outlook

Published: 25th March 2019
SAL provides property owners with ways to capitalise upon the full commercial potential of retail assets. 

The FY18 results were in line with SAL’s January update. Normal trade in its UK and German venues was disrupted by last year’s weather extremes. On top of that, the World Cup provided an unhelpful distraction for brands which would typically engage with the group over the period. Although normal service did resume in autumn/winter, it was too late to make up for the slow start to the year, especially as December was then weaker than anticipated.

Conversely, SAL reported reassuring UK contract renewals with Landsec and M&G, and new clients such as Hammerson, in January this year, which includes promotional and short-term retail experience in its flagship UK shopping centres, and roll-out of MPKs into a portfolio which includes Bullring, Grand Central, Birmingham, and Brent Cross in London.  It also extended its contract with ECE in Germany on slightly improved terms. 

The above challenges are reflected in a 21% fall in net revenue to £7.9m (FY17: £10m) and a £0.1m pre-tax loss excluding non-recurring items (FY17: £1.2m profit). SAL however finished the year with £0.8m net cash (end 2017: £2.7m). Our projections assume current run rates prevail. These would see revenues recover slightly in FY19, although we take a deliberately cautious view. SAL’s team will focus on securing opportunities to grow its portfolio of MPKs/RMUs and push up occupancy and net returns.

Despite a disappointing 2018, SAL’s cash position, improved expectations for 2019 and pipeline of potential new business give it confidence to recommend a 0.5p/share dividend. Our projections suggest it will end the current year with c £1m net cash. 
Download Now

Hot summer dents retail appeal

Published: 28th September 2018
SpaceandPeople (SAL) provides property owners with ways to capitalise upon the full commercial potential of retail assets. It markets, sells and administers free space in venues including shopping malls, garden and city centres, retail parks and travel hubs (over 750 venues with a weekly footfall of 70m).

The first half messages were a mix of strategic progress and the dampening impact of a hot summer on UK and German retailing. H1 revenue at £3.9m was 20% down y o y, with a £0.1m pre-tax loss (H117: £0.2m profit). 

SAL’s venues experienced some of the issues reported by other retail-related operations. The appeal of shopping centres to advertisers was suppressed until other distractions i.e. the weather and England’s World Cup run eased off. 

Conversely, SAL reported encouraging progress vs key strategic objectives for 2018 and a strong start to H2. It secured new clients in H118 for the venues added to its portfolio in 2017, and successfully rolled-out its PopUp concept. Momentum for both is being established and it has seen a solid pick-up in volumes since early August. 

Recent trading provides a stronger base for FY19 and suggests that the performance up to July was at least in some respects an anomaly. However, current momentum won’t enable SAL to make-up all the ground lost during the first half, and we have cut our FY18e operating profit forecast to £0.2m, from £1.1m previously (FY17: £1.2m). 

The group closed H118 with £0.5m net cash (H117: £0.8m). The prospective 1.5p/share dividend, equivalent to a 7.1% yield, should provide support as anticipated recovery regains visibility.

Download Now

The benefits of experience

Published: 26th March 2018
The Group provides property owners with ways to capitalise upon the full commercial potential of retail assets. It markets, sells and administers free space in venues including shopping malls, garden and city centres, retail parks and travel hubs (over 750 venues with a weekly footfall of 70m).

FY17 results confirmed the anticipated recovery vs FY16, attributed to a strategic focus on core UK and German operations. Appropriately for a business which capitalises upon footfall rather than underlying retail trends, brand experiences were SAL’s largest source of revenues last year. Client wins both during 2017 and post the year end have enhanced its venue portfolio and the potential attractions for major brands. SAL venues now include Network Rail, Broadgate Estates and an extended list of Landsec properties.

Profit before tax attributable to shareholders was £1.2m (FY16 £0.1m before non-recurring costs).  That was driven by stronger performances by UK brand experiences, MPKs and German RMUs. Net revenue was 3% up at £10m, gross margin by 20% to £6.6m, which reflected administrative cost savings secured in FY16, maintained in FY17. 

Operating profit was £1.2m, a £1.1m underlying improvement after non-recurring costs, as inherent operational gearing steered revenue growth to the operating line. There was a parallel improvement in underlying cashflow i.e. £2.4m net cash generated from operating activities (FY16: £0.4m). That enabled SAL to repay all outstanding debt. Year-end net cash was £2.66m, an underlying £1.6m improvement y o y, net of £0.7m due to clients, paid post the year end. A proposed 1.5p/share final dividend is equivalent to a 4.4% prospective yield. 

FY18 should continue to benefit from recent refocus on core UK and German operations, plus ongoing efforts to work existing Retail Merchandising Units (RMU) and Mobile Promotions Kiosk (MPK) installations to improve occupancy and sales rates. The strategy aimed to establish more a diversified, sustainable revenue and profit base, less dependent on any single market or client. Both, combined with significant growth in brand experience revenues are features of the FY17 results and our forecasts.



Download Now

Positive update, dividend resumption

Published: 15th January 2018
SpaceandPeople (SAL) provides property owners with ways to capitalise upon the full commercial potential of retail assets. It markets, sells and administers free space in venues including shopping malls, garden and city centres, retail parks and travel hubs (over 750 venues with a weekly footfall of 70m).

This morning’s pre-close trading update confirmed that SAL’s FY17 finished on a positive note. A strong final quarter meant that both pre-tax profit and cash generation were better than anticipated, and the latter prompted a proposed 1.5p/share final dividend, vs our 1.0p/share forecast.

Although FY17 overall should be broadly in line with expectations, year-end adjusted net cash of £1.9m (FY16: £0.4m net cash) is c £0.2m better than we had forecast. SAL has repaid all outstanding debt over the last 12 months despite a relatively challenging retail environment, but can still access £1.25m of undrawn facilities if required. 

Whilst UK Promotions and German RMUs are likely to have been among the stronger areas in FY17, other components of SAP’s operations in Germany remain weak.  We have reduced our FY18 forecast to reflect possible costs, related to prospective rationalisation and restructuring of that business. As, however, we don’t expect that to materially impact the group’s distribution capacity or indeed appetite, we forecast another 1.5p/share dividend for FY18.

Restoration of the dividend moves the shares onto a prospective 4.5% yield, covered by forecast EPS and cash generation, both of which have been beneficiaries of recent focus on improving individual divisional profitability and productivity, to create sustainable revenues and margins. The results should provide clarity on country and divisional performances, as well as progress on the roll out of Mobile Promotions Kiosks, and Brand Experiences on behalf of significant new clients secured over the last 18 months. The £1.9m year-end net cash represents significant underpinning for the shares at the current price, and reassurance regarding SAP’s ability to deliver its planned strategy.

Download Now

Compelling evidence of recovery

Published: 24th September 2017
The group provides property owners with ways to capitalise upon the full commercial potential of retail assets. It markets, sells and administers free space in venues including shopping malls, garden and city centres, retail parks and travel hubs (over 750 venues with a weekly footfall of 70m).

We think that today’s interims are most reassuring. Last year’s reorganisation cut costs and has improved productivity, a direct result of which is a positive contribution from each division in H1.

More streamlined operations are better placed to profitably deliver services to clients which, based on recent trading, appear to remain highly relevant to retailers and brands. The outlook is underpinned by additions to the client list over the last year, H1 performance and a positive start to the typically stronger second half.

UK promotions (up 20% y-o-y in H1) benefited from reorganised UK sales and progress on the Network Rail contract, and included a 38% increase in Brand Experience activity. German Retail contributed £0.09m profit vs breakeven last year, as it renegotiated rents paid, and achieved higher occupancy rates and average sales.

As recovery continues to take shape and help restore management credibility, it should progressively be matched in the share price and rating. We have held our forecasts from May for now, but regard these as conservative in the context of progress since, and expect to review them as SAL updates on trading. Restoration of the dividend is another important milestone. 

Download Now

Continued turnaround in fortunes

Published: 11th May 2017
The group has issued a positive trading statement, which covers the first four months of the current year. It suggests that actions taken by management over the past 12-18 months have progressively steadied the ship. 
UK Promotions made a better than anticipated start to the year, and SAL has renegotiated its German retail division’s contract with ECE, which will reduce rental charges.  That combination of higher revenues and lower costs results in projected FY17 pre-tax profit which is above our previous forecasts, and year-end net cash of c £1.25m. 
SAL has built on the beneficial effect of restructuring during 2016. With a full staff complement and a stronger client list it traded well in January, which has put it back on track after a slower finish to 2016 prompted a more cautious outlook.  
We have upgraded our FY17e pre-tax profit forecast to £1.1m (£0.7m previously), post-tax profit to c £0.8m, and basic EPS to 4.3p. We expect strong cash generation to continue. 
Although the statement expressed confidence that the strong start to 2017 will be maintained throughout the year, we have held our dividend forecast. The projected distribution is comfortably covered, but we expect management to revisit this as the year progresses. Group trading/revenues are weighted towards the second-half, so any decision in that respect will await clarity on H2 trading. 
The update prompted a 45% increase in the share price.  Management is gradually regaining investor confidence, so further positive news regarding sales and margins should generate further outperformance and a commensurate improvement in the rating.
Download Now

Building on solid UK presence

Published: 27th March 2017

SpaceandPeople (SAL) provides property owners with ways to capitalise upon the full commercial potential of retail assets. It markets, sells and administers free space in venues including shopping malls, garden and city centres, retail parks and travel hubs (over 750 venues with a weekly footfall of 70m). It provides a range of strategies and introduces retail and other brands which fit specific opportunities.

FY16 results were in line with the previously advised impact of a volatile trading period, which also included closures (S&P+), cost cuts and the one-off cost of a pilot mobile promotions kiosk (MPK) project in France. Beneath these, however, is evidence of progress vs a shortlist of strategic objectives designed to create a business model which is as robust and sustainable. Recent contract wins should strengthen the group’s competitive positioning and drive the benefits of a renewed focus on activities which fit its skillset, and optimise available management and financial resources. 

Pre-tax losses (attributable to shareholders) were c £0.6m, or breakeven without some substantial one-offs - £0.7m of non-recurring costs - related to actions taken to reduce the cost base, carry out a pilot MPK project in France and close S&P+ in July. Actions taken to cut group running costs sought to bring them in line with the reduced business scale. SAL cut expenses by £0.6m pa, including lower payroll costs in retail and administration positions, and knocked another £0.1m off IT, travel and logistics. There was a 16% fall in like-for-like administrative expenses to £5.6m, which principally reflects restructuring in FY15, with some additional savings. Average employee numbers fell 14 to 118 in FY16 as the commercial and telesales staff complement was cut, mainly related to the S&P+ closure.

The FY17 statement remains relatively cautious, but looks ahead to more positive reports and confirms a strong start to 2017. As the group is emerging from a turbulent period we have taken a conservative view. Our forecasts do not include any material turnaround by weaker parts of the operation in Germany and assume steady performances by the group’s better placed UK segments.

The outlook is, however, underpinned by new venues added to a portfolio which extends to shopping centres, retail parks, leisure assets, major railway stations and airports. The next six months is arguably about restoring credibility and investors’ faith in management ability to deliver the kind of performance which will enable it to resume distributions. Evidence that the worst is behind SAL will be reflected in a higher share price and improved rating. 
Download Now

Deeper foundations post restructuring

Published: 12th January 2017

SpaceandPeople provides property owners with ways to capitalise upon the full commercial potential of retail assets. It markets, sells and administers free space in venues including shopping malls, garden and city centres, retail parks and travel hubs.

We have trimmed our revenue forecasts to reflect the content of the pre-close update, but still anticipate a £0.7m adjusted profit in FY ‘17. Q4 ‘16 was slower than expected, with some installations delayed into the current year and more non-recurring expenses related to restructuring (which has cut ongoing costs). The result is a £0.7m shortfall in FY ‘16 revenues vs forecasts, pre-tax profit c £0.43m below expectations, but the FY ‘17 bottom line will benefit from materially lower running costs and new venues.

Divisional performances were mixed. Revenues from UK/German promotions and German retail were in line with management expectations, but UK Retail Merchandising Unit (RMU) sales were well below forecast and demand over the important Christmas period particularly weak. MPK revenues were also below budget, although partly due to delays in the scheduled roll out into new venues into 2017 where sites were not yet available. At £1.6m MPK revenues were still 138% up on the prior year. 

The prelims should confirm a more positive FY17 outlook, underpinned by new venues including two shopping centres, leisure assets and three Network Rail stations. SAL renewed its promotional contract with MEC in Germany until December 2017 and reported a pipeline of other potential gains.

Our forecasts take these into account, but assume loss of venues where contracts are due for renewal in FY17, a flat performance by UK retail and lower revenue from German retail during the last year of the existing contract with ECE. That conservative outlook puts the group on track to deliver £0.7m adjusted FY17 pre-tax profit, 2.5p/share EPS and restore distributions at the year end.

Download Now

View the Results Webinar

Published: 30th September 2016
You can now hear Matthew Bending, Chief Executive Officer, and Gregor Dunlay, Chief Financial Officer, present the interim results for SpaceandPeople and answer investor questions.

To view simply click on the video below.

Trading update

Published: 1st July 2016

SpaceandPeople provides property owners with ways to capitalise upon the full commercial potential of retail assets. It markets, sells and administers free space in venues including shopping malls, garden and city centres, retail parks and travel hubs (over 750 venues with a weekly footfall of 70m). 

The group confirmed today that its core retail and promotions businesses in UK and Germany are trading in line with expectations. However, FY16 will be affected by closure of the group's 51% owned above-the-line advertising support company S&P+, where cancellation or delay of two substantial deals expected to be booked last month led it to conclude that the subsidiary's outlook did not justify further financial support. 

Although such news is disappointing, it does not affect other areas of group operations. Both the promotions and retail businesses trade in line with management expectations and our forecasts.

We have adjusted our FY16 forecasts for an anticipated £0.2m loss at S&P+ (vs previously a £0.18m forecast profit) and c. £0.28m write-off of SAL's loan to S&P+ and other intercompany debt (net of minorities). Lower revenue forecasts reflect the loss of S&P+'s contribution, but the impact is otherwise non-cash, and mostly one-off.

At 40p/share the valuation currently discounts considerable risk, and should be underpinned by a high prospective yield. We still expect the group to finish FY15 with net cash.    

Download Now

View the Results Webinar

Published: 31st March 2016
You can now hear Matthew Bending, CEO, and Gregor Dunlay, CFO, present the FY15 results for SpaceandPeople and answer investor questions.

To view simply click on the video below.

Recent contract wins underpin outlook

Published: 28th March 2016

The group provides property owners with ways to capitalise upon the full commercial potential of retail assets. It markets, sells and administers free space in venues including shopping malls, garden and city centres, retail parks and travel hubs (over 750 venues with a weekly footfall of 70m).

FY15 profit matched expectations despite a tough retail trading environment for all divisions. Underlying adjusted pre-tax profit was broadly in line y-o-y at £1.1m, excluding £0.4m of non-recurring costs in FY14.

Headline revenues were below forecast, mainly due to the impact of weaker GBP/EUR on German income and lower sales at 50% owned S&P+ relative to a strong FY14 bolstered by one very large contract. Basic EPS was 4.26p (FY14: 3.91p) and the recommended FY15 dividend 2.20p (FY14: 2.00p).

The two new UK clients underpin the outlook. SAL has an exclusive long-term contract to carry out promotional activities in Network Rail's UK stations and recently announced a new contract with British Land which provides access to one of the leading UK shopping centre and retail park portfolios. 

The MPK roll out, from a virtual standing start last year, had 56 operational units at the year-end in UK and Germany, with a target of at least 80-90 by end FY16. In addition, the pilot project in France with Immochan will trial MPKs in five malls this year, and provide a possible expansion route into a valuable new market. 

Overall, we expect this revenue to outweigh business reversals and margins to grow progressively as revenues scale up, due to increased focus on more profitable operations. The shares look attractive on a twice-covered 4% prospective FY16e yield, at 11.3x FY16e PER, falling to 9.7x in FY17e, on relatively cautious predicted earnings growth.   

NB the CEO and FD will host a webinar at 1.15pm tomorrow (Wed 30th): Click here to register


Download Now

Trading in line, new contract sets up FY 2016

Published: 31st January 2016

SpaceandPeople provides retail property owners with ways to capitalise upon the full commercial potential of their assets. It markets, sells and administers space in a range of venues including shopping malls, garden centres, city centres, retail parks and travel hubs

A positive pre-close update today has confirmed that underlying FY15 results will be in line with expectations, and significant new business wins are transforming the outlook.

H2 2015 trading was in line with forecasts. FY15 pre-tax profit attributable to shareholders is expected at c. £1m, slightly below prior estimates, although this was not due to lower business volumes. Brokered deals generate commission-based fees, recognised when contracted. This deferred £0.15m of revenues previously expected to be recognised in Nov/Dec into early 2016.

The statement included details of another ''significant win'' for the Group (CEO), and further evidence of how prospects have been transformed over the last 12 months. SAL has secured a new contract with British Land, one of the UK's leading retail shopping centre owners and operators.

Basic EPS is expected to be nearer prior forecasts at 4.3p, due to a lower tax charge and SAL indicated its intention to propose a 2.2p/share final dividend, 10% up y-o-y.

Download Now

Playing the long game

Published: 25th September 2016
SpaceandPeople's (SAL) underlying first-half performance was broadly in line with H1'15, excluding costs associated with closing S&P+ and running the MPK pilot project in France. SAL reported a £0.17m adjusted H1'16 pre-tax loss (H1'15: £0.06m profit) from continuing operations. The decline vs the comparable period mainly relates to declines within German operations as contracts fell away, and the c £0.1m upfront costs of the pilot MPK project for Immochan in France. 

Future growth pivots upon the UK MPK and Pop Up kiosk programmes, while SAL will continue to source and develop new products with client appeal. In order to offset a more uncertain retail backdrop the group has decided to step up investment in its MPK programme next year.

The statement referred a more subdued trading period since the half-year end, which SAP believes is in common with the experience of other retail related businesses. We take a cautious view of the short-term UK retailing environment, particularly as Brexit adds uncertainty to the economic outlook. We have cut our FY'16 and FY'17 forecasts which puts the shares on an 11.6x prospective FY'17e EPS. We expect the group to have net cash at the end of the current year, and invest in the acceleration of the UK MPK roll out to underpin prospects for FY17 and beyond.

NB We will be hosting a webinar with the management of SpaceandPeople on Wednesday the 28th September at 12.45pm. In order to register please click here.

Download Now

Playing the long game

Published: 25th September 2016
SpaceandPeople's (SAL) underlying first-half performance was broadly in line with H1'15, excluding costs associated with closing S&P+ and running the MPK pilot project in France. SAL reported a £0.17m adjusted H1'16 pre-tax loss (H1'15: £0.06m profit) from continuing operations. The decline vs the comparable period mainly relates to declines within German operations as contracts fell away, and the c £0.1m upfront costs of the pilot MPK project for Immochan in France. 

Future growth pivots upon the UK MPK and Pop Up kiosk programmes, while SAL will continue to source and develop new products with client appeal. In order to offset a more uncertain retail backdrop the group has decided to step up investment in its MPK programme next year.

The statement referred a more subdued trading period since the half-year end, which SAP believes is in common with the experience of other retail related businesses. We take a cautious view of the short-term UK retailing environment, particularly as Brexit adds uncertainty to the economic outlook. We have cut our FY'16 and FY'17 forecasts which puts the shares on an 11.6x prospective FY'17e EPS. We expect the group to have net cash at the end of the current year, and invest in the acceleration of the UK MPK roll out to underpin prospects for FY17 and beyond.

NB We will be hosting a webinar with the management of SpaceandPeople on Wednesday the 28th September at 12.45pm. In order to register please click here.

Download Now