Investor Presentation reach4entertainment enterprises plc Sept/Oct - - PowerPoint PPT Presentation
Investor Presentation reach4entertainment enterprises plc Sept/Oct - - PowerPoint PPT Presentation
Investor Presentation reach4entertainment enterprises plc Sept/Oct 2015 Disclaimer The information contained in this confidential document (Presentation) has been prepared by reach4entertainment enterprises plc (the Company) . It has
Disclaimer
The information contained in this confidential document (“Presentation”) has been prepared by reach4entertainment enterprises plc (the “Company”). It has not been fully verified and is subject to material updating, revision and further amendment. This Presentation has not been approved by an authorised person in accordance with Section 21 of the Financial Services and Markets Act 2000 (“FSMA”) and therefore it is being delivered for information purposes only to a very limited number of persons and companies who are persons who have professional experience in matters relating to investments and who fall within the category of person set out in Article 19 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or are high net worth companies within the meaning set out in Article 49 of the Order or are otherwise permitted to receive it. Any other person who receives this Presentation should not rely or act upon it. By accepting this Presentation and not immediately returning it, the recipient represents and warrants that they are a person who falls within the above description of persons entitled to receive the
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Board & Management
- David Stoller – Executive Chairman & CEO
- Linzi Allen – Finance Director (non-Board)
- Marcus Yeoman – Non-executive Director
- Richard Ingham – Non-executive Director
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What We Do
- r4e is a world leader in providing promotion, advertising and marketing services to the theatre and live entertainment industries
- The company operates in the two largest theatre markets in the world through Dewynters in London and SpotCo in New York
- Highly-skilled team of agencies that deliver across a complete range of creative services with the aim of maximising awareness and
driving ticket sales
Creative Design & Branding Interactive Design, Media & Marketing Media Strategy & Buying TV & Radio Production Ticketing, Pricing & Yield Management Print Production Marketing & Sales Promotions Publishing Direct Marketing Front of House Signage Market Research Sponsorship & Corporate Partnerships
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reach4entertainment Today
Current Market Capitalisation Profit Before Tax in 2014* Gross Profit in 2014 Gross Profit Margin in 2014 Net Debt in 2014
- c. £2m
£83m £1.5m 24% £14m
* Stated before goodwill impairment of £6.43m, amortisation of acquired intangibles and other exceptionals
Revenue in 2014
£20m
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Well Placed in Growth Markets
250 260 270 280 290 300 310 380 430 480 530 580 630 680 2009 2010 2011 2012 2013 2014
- No. of New Productions
Gross Box Office Revenue - £m
Gross Box Office Revenue and New Show Openings - London
Source: The Society of London Theatre Box Office 2014
Gross Box Office Revenue
- No. of New Productions
34 39 44 49 900 1000 1100 1200 1300 1400 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15
- No. of New Productions
Gross Box Office Revenue - £m
Gross Box Office Revenue and New Show Openings - Broadway
Source: www.broadwayleague.com (Official website of the Broadway theatre industry)
Gross Box Office Revenue
- No. of New Productions
- 2014 saw record attendance and gross revenues in London’s West End and New York’s Broadway
- Positive trends in both key territories – London and New York
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London Operations – Dewynters
- Market leader in London, incorporated in 1924
- Services include: marketing, design, advertising, promotions, and digital media
- In 2014 Dewynters supported 5,014 performances seen by approximately 6 million people including many of the major musicals
running in London
- Current shows include Les Miserables, Wicked, Charlie and the Chocolate Factory and the Lion King
- Other non-West End related work includes ATP World Tour and the British Museum
* Adjusted EBITDA is EBITDA before exceptional items
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London Operations – Newman Displays
- One of the UK's leading large scale outdoor signage, front of house, display and installation company
- Clients include major West End theatre productions, leading film companies, cinemas and major global events
* Adjusted EBITDA is EBITDA before exceptional items
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New York Operations – SpotCo
- Market leader on Broadway
- In 2014 SpotCo was involved in the launch of 19 new theatre shows on Broadway and 14 more off Broadway
- 16 of SpotCo's shows won Tony Awards in the 2015 season
- Current shows include Chicago, Something Rotten, Book of Mormon and School of Rock
- Institutional clients include Lincoln Centre Theatre, the Roundabout Theatre and Manhattan Theatre Club
* Adjusted EBITDA is EBITDA before exceptional items
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Group Financial Summary
- Profit metrics highlight benefit of restructuring action that has taken place over last
few years
- H1 2015 group revenue: £42.5m
- H1 2015 group adjusted EBITDA*: £0.87m
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* Adjusted EBITDA is EBITDA before exceptional administrative items. Adjusted EBITDA figures are shown before intergroup management fees.
Growth Opportunities
- Leverage our leading brands to increase cross-over of shows between London and New York
- Broader geographic coverage of existing West End and Broadway shows to new markets such
as Asia
- Accretive expansion into adjacent markets, geographies and customer bases leveraging r4e’s
brands and reputation
- Expansion of digital and online
- Online advertising and marketing – data and analytics; customer experience (voice of the customer);
- Mobile – location targeted advertising
- Social media – advertising, engagement and interaction (Facebook, Twitter, Instagram)
- Content – behind the scenes, performer interviews, digital presentation of live stage content (Stage
17), video related to online advertising creation of trailers, branded content, full-feature capture
- Digital screens and displays for outdoor signage and front-of-house
- Utilising capacity and value within existing structure – investing in intrapreneurial staff
AIB deal creates an opportunity to recapitalise & grow the business
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Refinancing
- r4e has been held back by the quantum and cost of debt it has accrued (under previous
management)
- current management team have now addressed this issue
- On 10 June 2015 a conditional agreement to restructure r4e’s £14.6m loan facility with AIB
was announced:
- Cash repayment of £9.4m to AIB
- £5.2m to convert into new ordinary shares in r4e – to represent 12.5% of fully diluted
share capital of r4e on completion of the refinancing
- r4e to grant AIB a five year European put option on its settlement shares, exercisable
- n fifth anniversary of grant for £2m in cash
- PNC debt offer announced on 25 Sept:
- £1m cash flow term facility
- £8.5m revolving credit facility based on qualifying accounts receivable – initial
drawdown expected to be c.£6m
- Equity funding sought - £4m
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Summary
- A world leading business generating revenues in excess of £80m
- Group trading profitably and the Board is confident of delivering further progress
- Highly cash-generative business
- Clear strategy to generate future growth
- Re-financing presents an opportunity to transform business and re-launch r4e
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Appendices
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Shareholders
Summary Shares in issue 74.89m Market Capitalisation
- c. £2m
Shareholder overview Major Shareholders Amount (m) Holding % Stoller Family Partners LLP 18.93 25.27% Francis Maclean 8.90 11.88% Herald Investment Management 7.33 9.78% Roy Nominees Limited 6.00 8.01% Jonathan Smith 3.12 4.16% Philip Smith 2.84 3.79% Marcus Yeoman (NED) 0.20 0.30% Richard Ingham (NED) 0.23 0.31 Management share option scheme to be put in place after the refinancing: 15% of issued share capital
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Half Year Results to 30 June 2015
(£’000s) Six months ended 30 June 2015 (unaudited) Six months ended 30 June 2014 (unaudited) Year ended 31 December 2014 (audited) Revenue 42,496 41,500 83,282 Gross Profit 9,696 9,863 20,112 Administrative expenses (9,369) (8,733) (24,413) EBITDA* 867 1,405 2,647 Operating profit/(loss) 327 1,130 (4,301) Net finance costs (275) (421) (819) Profit / (loss) before tax 52 709 (5,120) Taxation (320) (395) (873) Profit / (loss) for the period (268) 314 (5,993) Profit / (loss) per share (0.36) 0.42 (8.03) *Before exceptional administrative items
Consolidated income statement (summary)
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Half Year Results to 30 June 2015
(£’000s) 30 June 2015 (unaudited) 30 June 2014 (unaudited) 31 December 2014 (unaudited) Non-Current Assets 13,124 19,341 13,395 Cash and cash equivalents 2,511 3,115 2,446 Trade and other receivables 7,677 8,971 12,240 Other current assets 753 735 874 Total current assets 10,941 12,821 15,560 Total assets 24,065 32,162 28,955 Total current liabilities (13,070) (14,068) (17,736) Total liabilities (30,109) (31,971) (34,700) Net (liabilities)/assets (6,044) 191 (5,745)
Consolidated balance sheet (summary)
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Half Year Results to 30 June 2015
(£’000s) 30 June 2015 (unaudited) 30 June 2014 (unaudited) 31 December 2014 (audited) Cash generated from operating activities 1,027 1,890 2,494 Income taxes paid (166) (67) (723) Net cash inflow from operating activities 861 1,823 1,771 Purchase of PPE* (59) (122) (194) Proceeds from disposal of PPE
- 3
Payment of deferred consideration (332) (307) (615) Dividends received from associated undertaking 60
- 60
Net cash used in investing activities (331) (429) (746) Repayment of borrowings (200)
- Interest paid
(263) (235) (502) Net cash used in financing activities (463) (235) (502) Net increase in cash and cash equivalents 67 1,159 523 Cash and cash equivalents at beginning of period 2,446 1,876 1,876 Effect of foreign exchange rate changes (2) 80 47 Cash and cash equivalents at end of period 2,511 3,115 2,446
Consolidated cash flow
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* PPE = Property, plant and equipment
The Board
- David Stoller – Executive Chairman & CEO
David was appointed to the reach4entertainment enterprises plc board on 16 December 2010. Mr Stoller began his professional career as an attorney in 1982. He was a partner and co-head of global project finance for Milbank, Tweed, Hadley & McCloy, LLP where he helped build one of the world's largest and most successful project finance practices, participating personally in financings totalling more than $4 billion. At the end of 1992, Mr Stoller joined Charterhouse Group International, a large New York City-based private equity firm, as Chairman of its Environmental Capital Group. In 1993, Mr Stoller, through the Charterhouse Environmental Capital Group, launched American Disposal Services, an integrated waste management company that ultimately acquired and consolidated, with $34 million in equity capital, more than 80 waste management companies. American Disposal had a successful IPO in July 1996 and was sold in 1998 to Allied Waste at a price exceeding $1.1 billion. In August of 1998, Mr Stoller left Charterhouse to launch Americana Financial Services, raising over $40 million in private equity capital. Americana (now the American Wholesale Insurance Group) is currently among the largest private wholesale insurance brokerage in the United States. Mr Stoller holds a BA from the University of Pennsylvania, an MA from the Graduate Faculty of the New School for Social Research and a J.D. from Fordham University School of Law. He is also a graduate of the Harvard Business School Advanced Management Program.
- Marcus Yeoman – Non-executive Director
Marcus is currently non-executive director of three other AIM listed companies and one ISDX quoted company. His early career started with the formation of three companies in IT infrastructure and distribution, after which he moved into small company broking and corporate work with Rathbone Stockbrokers Limited and Cheviot Capital (Nominees) Limited. In 2003, Marcus established Springtime Consultants Ltd and has been acting as a consultant or non-executive director to a number of listed companies & SME ventures, that require help with their growth strategies, including M&A activity.
- Richard Ingham – Non-executive Director
Richard has extensive experience of the finance industry having worked at Chase Manhattan Bank for 19 years, as well as ABN Amro where he was head of the Special Industries Groups in Amsterdam and subsequently Director of Corporate Finance in its London office. He left ABN Amro in 2002 to establish Glen House Capital Strategies, a corporate finance boutique. Richard has a proven track record in advising on and raising substantial sums of capital in a wide diversity of industries.
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