28 September 2023
Let's Explore Group plc
("Let's Explore Group", the "Company" or the "Group")
Interim Results
Let's Explore Group plc (AIM:LETS), is pleased to announce its unaudited interim results for the six months to 30 June 2023. During the period, the Location Based Entertainment (LBE) and Uvisan divisions were sold and there was a subsequent return of cash to shareholders via a tender offer.
Highlights
| · | Cash proceeds from the sale of LBE and Uvisan £18,964,000 (net of expenses and cash disposed with subsidiaries). |
| · | Profit of £15,115,000 on disposal of the LBE and Uvisan divisions. |
| · | Profit after tax from total operations for the period £14,060,000 (H1 2022: £491,000 loss). |
| · | Cash on hand at the reporting date £6,827,000. |
| · | Further cash of $1,250,000 due to be received in February 2024 in respect of loan note from the buyer of the LBE business. |
| · | Share buyback programme returned £11,364,000 to shareholders in the period (net of share option exercise proceeds of £1,163,000). |
| · | Adjusted EBITDA loss from continuing operations £455,000 (H1 2022: £770,000). |
Post period highlights
| · | Launch of three new Let's Explore products: revamped Let's Explore Oceans, Let's Explore Space and Let's Explore Wildlife. |
| · | Orders received for circa 26,000 Vodiac units to be fulfilled in Q4. |
Change of Name of Nominated Adviser and Broker
The Company also announces that its Nominated Adviser and Joint Broker has changed its name to Cavendish Securities plc following completion of its own corporate merger.
Martin Higginson, Chief Executive Officer of Let's Explore Group, commented:
"During the period, we delivered significant value to shareholders through the sale of LBE and Uvisan businesses. The return of £12.52m to shareholders left us with £6.8m of cash on hand, plus a further $1.25m of cash due in February 2024. As such the Group is well positioned for further investments as it seeks value enhancing opportunities for shareholders."
Enquiries:
For further information please visit www.LetsExploreGroup.com, or contact:
| Let's Explore Group plc
| Martin Higginson David Marks Dan Wortley | |
| Cavendish Securities plc (Nomad and Sole Broker)
| Adrian Hadden Charlie Combe
| Tel + 44 (0) 207 7397 890 |
| Alma Financial PR adviser | Rebecca Sanders-Hewett Sam Modlin Kieran Breheny |
Chairman's Statement
The Group entered the year with three divisions: Location Based Entertainment (LBE), Home Based Entertainment (HBE) and Uvisan.
As previously announced on 2 February 2023 and 1 March 2023 respectively, we took the strategic decision to sell the LBE business (including the Immotion trading name) to minimise risk for shareholders and provide a significant liquidity event in highly uncertain markets. We also sold the Uvisan business, leaving the Group with HBE as its only remaining trading business.
The sale of these businesses brought in proceeds of £18,964,000 net of costs and cash disposed of with these businesses. Further cash of $1,250,000 (circa £1,000,000) in respect of repayment of loan note from the buyer of the LBE business is due to be received in February 2024.
Following completion of these sales, the Company set about returning the majority of the sale proceeds to shareholders via a tender offer process which concluded in June 2023 with a total of £12,527,000 distributed (the net cash outflow being £11,364,000 when taking account of share option exercise proceeds).
With £6,827,000 cash on hand at the period end, plus the loan note due to be repaid in February 2024, we believe the Company is well positioned to capitalise upon opportunities in front of it.
Chief Executive's Review
Whilst the sale of the LBE and Uvisan businesses left the group with the HBE business as its only trading business at present, this was never the long-term plan for the Group. As previously announced, the Board's intention was to find a suitable opportunity for the Group, which we would expect to become its principal activity. I am pleased to report that we have identified an acquisition target, full details of which will be provided in an announcement to be released later today.
Home Based Entertainment (HBE)
The Group's HBE business comprises themed 'Immersive Learning' Let's Explore products, as well as the affordable 'Vodiac' VR headset, an affordable smartphone-powered VR headset and companion app which provides the user with 75 different virtual reality experiences across seven channels. These products retail to consumers via a variety of channels including QVC, Amazon as well as direct to consumer offering via Facebook and other social media channels.
The HBE business is predominantly a Q4 focused business, with the first half of the year being about investment into the development and planning of new products.
As expected, HBE revenue was modest in the period at £62,000 (H1 2022: £103,000) reflecting the seasonality of the business. This revenue was primarily generated through the sale of 6,000 units of the Vodiac product. HBE cost of sales of £139,000 included a £32,000 write-off in respect of materials previously purchased which are now obsolete due to the redesign of the Let's Explore product range. This produced a gross loss of £77,000 from HBE in the period (H1 2022: £65,000), and a divisional adjusted EBITDA loss of £175,000 (H1 2022: £151,000).
As announced earlier in the year, the Group has developed three new Let's Explore products: a revamped 'Let's Explore Oceans' offering as well as 'Let's Explore Space' and 'Let's Explore Wildlife' which are two completely new products, all focused on delivering a comprehensive immersive learning experience.
Each pack comes complete with the new improved smartphone-powered VR headset, a range of VR experiences, a holographic cube which unlocks a selection of in-app augmented reality experiences, a full-colour hardback fact book, a sticker book, a giant poster, and an interactive model. The Group has produced a total of 22,500 units in conjunction with a respected publisher on a profit-sharing basis for an initial test of these new products and, subject to the results in Q4, the intention is to expand the product range as well as the territories in which they are sold over the coming year.
The RRP of each pack will be £99, or $125. Sales will be focused around the busy Q4 period and will, as in previous years, be offered via either a direct sale, or through Amazon both in the UK and USA.
Following technical improvements in the Vodiac offering, and a successful TV airing in August 2023 on QVC USA, during which some 4,000 Vodiac headsets were sold, the Group has received additional orders worth over $330,000 for circa 26,000 Vodiac units. These will predominantly be sold through QVC USA, and UK, as well as two tests on QVC Canada, and Australia, all to be fulfilled in Q4.
Financial review
Overall profit after tax for the period was £14,060,000. The results of LBE and Uvisan are included within discontinued operations in the period as they were in the published full year 2022 results. The 2022 interim figures have been restated for comparison purposes.
The split between continuing and discontinued activities is summarised below:
| | Continuing Operations | Discontinued Operations | Total Operations |
| | £'000 | £'000 | £'000 |
| | | | |
| Revenue | 62 | 1,626 | 1,688 |
| Cost of sales | (139) | (924) | (1,063) |
| | --------------- | --------------- | --------------- |
| Gross profit | (77) | 702 | 625 |
| | | | |
| Other income | 129 | - | 129 |
| Admin expenses* | (507) | (390) | (897) |
| | --------------- | --------------- | --------------- |
| Adjusted EBITDA** | (455) | 312 | (143) |
| | | | |
| Amortisation | (86) | (39) | (125) |
| Depreciation | (10) | (173) | (183) |
| Impairment | - | (459) | (459) |
| Loss on disposal of assets | - | (3) | (3) |
| Gain on disposal of subsidiaries | - | 15,115 | 15,115 |
| Share based payments | (332) | - | (332) |
| One-off costs | (418) | (23) | (441) |
| Finance costs | (1) | (4) | (5) |
| Finance income | 189 | - | 189 |
| Taxation | (4) | (8) | (12) |
| | ------------- | ----------------- | ---------------- |
| Profit/(loss) for the period | (1,117) | 15,177 | 14,060 |
| | ------------- | ----------------- | ---------------- |
*Administrative expenses exclude depreciation, amortisation, impairment, gains/losses on disposal, share based payments and one-off costs.
**Adjusted EBITDA is a non-GAAP metric.
Adjusted EBITDA loss from continuing operations (comprising HBE and head office costs) in the period was £455,000 (H1 2022: £770,000).
The Company has been able to mitigate its head office costs in the period through income of £129,000 received for the provision of transitional finance and other services to the disposed subsidiaries (recognised in other income).
The Company also received £189,000 finance income in the period on its cash deposits and the accrued loan note interest payable by the buyer of the LBE business.
The Group recorded a profit of £15,115,000 on the sale of the LBE and Uvisan subsidiaries and, as a result of the UK Substantial Shareholding Exemption (SSE) legislation applying to the disposals, no tax is expected to be payable on this gain.
The cash proceeds of the disposals net of deal costs and cash disposed with the entities were £18,964,000. This excludes the repayment of the $1,250,000 loan note (plus interest at 6% per annum) to be received from the buyers of the LBE business on 28 February 2024. Repayment of the loan note is subject to adjustments for any warranty claims made under the LBE business sale and purchase agreement. The board is not aware presently of any information which would result in any other than full repayment of the loan notes being received.
Outlook
We are excited by the launch of the new Let's Explore range ready for the peak gifting season. The mix of virtual reality, augmented reality, interactive models and traditional books has allowed us to create a range of immersive learning products.
With a strong balance sheet, we are optimistic about the potential the Group has to deliver shareholder value, both through the HBE business and acquisition opportunities.
LET'S EXPLORE GROUP PLC
CONSOLIDATED INCOME STATEMENT
for the six months ended 30 June 2023
| |
|
| Restated* |
|
| | Notes | Unaudited | Unaudited | Audited |
| |
| Six months to 30 June 2023 | Six months to 30 June 2022 | 12 months to 31 December 2022 |
| Continuing operations |
| £'000 | £'000 | £'000 |
|
|
| | | |
| Revenue |
| 62 | 103 | 796 |
| | | | | |
| Cost of sales | | (139) | (168) | (865) |
| | | _______ | _______ | _______ |
| Gross loss |
| (77) | (65) | (69) |
| | | | | |
| Other income | 5 | 129 | - | - |
| | | | | |
| Administrative expenses | | (1,353) | (858) | (1,848) |
| | | _______ | _______ | _______ |
| Operating loss |
| (1,301) | (923) | (1,917) |
| | | | | |
| Memorandum: Adjusted EBITDA | |
(455) |
(770) |
(1,582) |
| Amortisation | | (86) | (76) | (168) |
| Depreciation | | (10) | - | (1) |
| Share based payments | | (332) | (72) | (133) |
| Transaction costs | 6 | (418) | (5) | (33) |
| | | ______ | ______ | ______ |
| Operating loss | | (1,301) | (923) | (1,917) |
| | | | | |
| Finance costs | | (1) | (15) | (11) |
| Finance income | | 189 | - | - |
| | | ______ | ______ | ______ |
| Loss before taxation | | (1,113) | (938) | (1,928) |
| | | | | |
| Tax (charge)/credit | | (4) | - | - |
| | | ______ | ______ | ______ |
| Loss for the period from continuing operations
operations | | (1,117) | (938) | (1,928) |
| | | | | |
| Discontinued operations | | | | |
| | | | | |
| Profit after tax from discontinued operations | 4 | 15,177 | 447 | 1,267 |
| | | ________ | ______ | ______ |
| Profit/(loss) for the period | | 14,060 | (491) | (661) |
| | | ======== | ======== | ======== |
| Other comprehensive income / (expense) for the period | | | | |
| | | | | |
| Profit/(loss) on translation of subsidiaries | | (285) | (51) | 129 |
| Cumulative translation differences transferred to the income statement on disposal of subsidiaries | | 155 | - | - |
| | | ________ | ______ | ______ |
| Total comprehensive expense for the period | | 13,930 | (542) | (532) |
| | | ======== | ======== | ======== |
| | | | | |
*The results for the six months ended 30 June 2022 have been restated for consistency with the 30 June 2023 and 31 December 2022 results (refer to note 2).
LET'S EXPLORE GROUP PLC
CONSOLIDATED INCOME STATEMENT (CONTINUED)
for the six months ended 30 June 2023
|
|
|
| Restated |
|
|
| Notes | Unaudited | Unaudited | Audited |
|
|
| Six months to 30 June 2023 | Six months to 30 June 2022 | 12 months to 31 December 2022 |
| Earnings/(loss) per share | 7 | £0.01 | £0.01 | £0.01 |
|
|
|
|
|
|
| From continuing and discontinued operations |
|
|
|
|
| Basic EPS |
| 3.50 | (0.12) | (0.16) |
| Diluted EPS |
| 3.50 | (0.12) | (0.16) |
|
|
|
|
|
|
| From continuing operations |
|
|
|
|
| Basic EPS |
| (0.28) | (0.23) | (0.46) |
| Diluted EPS |
| (0.28) | (0.23) | (0.46) |
| |
| | | |
| From discontinued operations |
| | | |
| Basic EPS |
| 3.78 | 0.11 | 0.30 |
| Diluted EPS |
| 3.78 | 0.11 | 0.30 |
|
|
|
|
|
|
*The results for the six months ended 30 June 2022 have been restated for consistency with the 30 June 2023 and 31 December 2022 results (refer to note 2).
LET'S EXPLORE GROUP PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 June 2023
(Unaudited)
| | Share capital | Share premium | Foreign exchange reserve | Capital redemption reserve | Retained (deficit)/ earnings | Total equity |
| | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
| | | | | | | |
| Balance at 1 January 2022 | 166 | 20,556 | (36) | - | (14,966) | 5,720 |
| | | | | | | |
| Loss for the period (restated)* | - | - | - | - | (491) | (491) |
| | | | | | | |
| Currency translation of overseas subsidiary | - | - | 180 | -
| - | 180 |
| Share based payment expense | - | - | - | - | 72 | 72 |
| | _____ | _____ | _____ | _____ | _____ | _____ |
| Balance at 30 June 2022 (restated)* | 166 | 20,556 | 144 | - | (15,385) | 5,481 |
| | _____ | _____ | _____ | _____ | _____ | _____ |
| | | | | | | |
| Loss for the period | - | - | - | - | (170) | (170) |
|
| | | | | | |
| Share based payment expense | - | - | - | - | 61 | 61 |
| | | | | | | |
| Currency translation of overseas subsidiary | - | - | (51) | - | - | (51) |
| | _____ | _____ | _____ | _____ | _____ | _____ |
| Balance at 31 December 2022 | 166 | 20,556 | 93 | - | (15,494) | 5,321 |
| | _____ | _____ | _____ | _____ | _____ | _____ |
| | | | | | | |
| Profit for the period | - | - | - | - | 14,060 | 14,060 |
| | | | | | | |
| Currency translation of overseas subsidiary | - | - | (285) | - | - | (285) |
| | | | | | | |
| Cumulative translation differences transferred to the income statement on disposal of subsidiaries | - | - | 155 | - | - | 155 |
| | | | | | | |
| Issue of new shares | 19 | 1,159 | - | - | - | 1,178 |
| | | | | | | |
| Reduction in share premium | - | (20,572) | - | - | 20,572 | - |
| | | | | | | |
| Buyback and cancellation of shares | (109) | - | - | 109 | (12,527) | (12,527) |
| | | | | | | |
| Share based payment expense | - | - | - | - | 332 | 332 |
| | | | | | | |
| | _____ | _____ | _____ | _____ | _____ | _____ |
| Balance at 30 June 2023 | 76 | 1,143 | (37) | 109 | 6,943 | 8,234 |
| | _____ | _____ | _____ | _____ | _____ | _____ |
| | | | | | | |
*The results for the six months ended 30 June 2022 have been restated for consistency with the 30 June 2023 and 31 December 2022 results (refer to note 2).
LET'S EXPLORE GROUP PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 30 June 2023
|
|
|
| Restated* |
|
|
|
| Unaudited | Unaudited | Audited |
|
| Notes | 30 June 2023 | 30 June 2022 | 31 December 2022 |
|
|
| £'000 | £'000 | £'000 |
| ASSETS |
| | | |
| Non-current assets |
| | | |
| Property, plant and equipment | 8 | 152 | 1,595 | 3 |
| Intangible assets | 9 | 159 | 3,252 | 214 |
| |
| ______ | ______ | ______ |
| Total non-current assets |
| 311 | 4,847 | 217 |
| Current assets |
| | | |
| Inventories |
| 47 | 145 | 67 |
| Trade and other receivables | 10 | 1,594 | 966 | 786 |
| Contract assets |
| 17 | 530 | 2 |
| Cash and cash equivalents |
| 6,827 | 418 | 51 |
| |
| ______ | ______ | ______ |
| Total current assets |
| 8,485 | 2,059 | 906 |
| |
| | | |
| Assets held for sale |
| - | 157 | 6,362 |
| |
| ______ | ______ | ______ |
| Total assets |
| 8,796 | 7,063 | 7,485 |
| |
| ______ | ______ | ______ |
| LIABILITIES |
| | | |
| Current liabilities |
| | | |
| Trade and other payables | 11 | (529) | (1,184) | (786) |
| Finance leases |
| - | (61) | - |
| Loans |
| (10) | (98) | (45) |
| Contract liabilities |
| - | (20) | (7) |
| |
| _______ | _______ | _______ |
| Total current liabilities |
| (539) | (1,363) | (838) |
| |
| | | |
| Non-current liabilities |
| | | |
| Loans |
| (23) | (162) | (28) |
| Lease liabilities |
| - | - | - |
| |
| _______ | _______ | _______ |
| Total non-current liabilities |
| (23) | (162) | (28) |
| |
| | | |
| Liabilities associated with assets held for sale |
| - | (57) | (1,298) |
| |
| ______ | ______ | ______ |
| Total liabilities |
| (562) | (1,582) | (2,164) |
| |
| ______ | _______ | _______ |
| NET ASSETS |
| 8,234 | 5,481 | 5,321 |
| |
| ======== | ======== | ======== |
|
|
| | | |
| CAPITAL AND RESERVES ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT |
| | | |
| Share capital | 12 | 76 | 166 | 166 |
| Share premium account | 13 | 1,143 | 20,556 | 20,556 |
| Foreign exchange reserve | 13 | (37) | 144 | 93 |
| Capital redemption reserve | 13 | 109 | - | - |
| Retained earnings | 13 | 6,943 | (15,385) | (15,494) |
| |
| _______ | _______ | _______ |
| TOTAL EQUITY |
| 8,234 | 5,481 | 5,321 |
| |
| ======== | ======== | ======== |
*The results for the six months ended 30 June 2022 have been restated for consistency with the 30 June 2023 and 31 December 2022 results (refer to note 2).
LET'S EXPLORE GROUP PLC
CONSOLIDATED CASH FLOW STATEMENT
for the six months ended 30 June 2023
|
|
| Restated* |
|
|
| Unaudited | Unaudited | Audited |
|
| Six months to 30 June 2023 | Six months to 30 June 2022 | 12 months to 31 December 2022 |
|
| £'000 | £'000 | £'000 |
| OPERATING ACTIVITIES | | | |
| Loss before tax from continuing operations | (1,113) | (938) | (1,928) |
| Loss before tax from discontinued operations | 15,185 | 451 | 1,297 |
| | | | |
| Adjustments for: | | | |
| Amortisation | 125 | 304 | 601 |
| Depreciation | 183 | 501 | 1,036 |
| Impairment | - | 26 | 176 |
| Loss/(gain) on disposal of non-current assets | 3 | (8) | (19) |
| Gain on disposal of subsidiary undertakings | (15,115) | - | - |
| Share based payments | 332 | 72 | 133 |
| Net foreign exchange differences | (285) | 100 | 37 |
| Finance costs | 5 | 15 | 37 |
| Finance income | (189) | - | (1) |
| Taxation (paid)/refunded | (12) | (3) | 14 |
| | _____ | ____ _ | _____ |
| Operating profit/(loss) before changes in working capital and provisions | (881) | 520 | 1,383 |
| | | | |
| (Increase)/decrease in inventories | 36 | (124) | (11) |
| (Increase)/decrease in receivables and contract assets | (603) | 321 | (46) |
| Increase/(decrease) in payables and contract liabilities | (427) | (120) | 278 |
| | _____ | _____ | _____ |
| Net cash flows from / (used in) operating activities | (1,875) | 597 | 1,604 |
| | _____ | _____ | _____ |
| INVESTING ACTIVITIES | | | |
| Purchase of property, plant and equipment | (266) | (859) | (1,797) |
| Purchase of intangible assets | (100) | (274) | (510) |
| Proceeds from sale of property, plant and equipment | - | 9 | 24 |
| Proceeds from sale of subsidiary undertakings | 20,321 | - | - |
| Cash disposed on sale of subsidiary undertakings | (354) | - | - |
| | _____ | _____ | _____ |
| Net cash flows from investing activities | 19,601 | (1,124) | (2,283) |
|
| | | |
| FINANCING ACTIVITIES | | | |
| Finance costs | (5) | (15) | (37) |
| Finance income | 189 | - | 1 |
| New loans and finance leases | - | 101 | 328 |
| Loan repayments | (42) | (152) | (204) |
| Finance lease repayments | (21) | (124) | (218) |
| Foreign exchange on retranslation of financing | - | 36 | 39 |
| Issue of ordinary shares | 1,178 | - | - |
| Share buybacks | (12,527) | - | - |
| | _____ | _____ | _____ |
| Net cash flows from financing activities | (11,228) | (154) | (91) |
|
|
|
|
|
| INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS | 6,498 | (681) | (770) |
| | _____ | _____ | _____ |
| Cash and cash equivalents brought forward | 329 | 1,099 | 1,099 |
| | _____ | _____ | _____ |
| CASH AND CASH EQUIVALENTS CARRIED FORWARD | 6,827 | 418 | 329 |
| | _____ | _____ | _____ |
*The results for the six months ended 30 June 2022 have been restated for consistency with the 30 June 2023 and 31 December 2022 results (refer to note 2).
LET'S EXPLORE GROUP PLC
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
for the six months ended 30 June 2023
1 Corporate information
The interim consolidated financial statements of the Group for the period ended 30 June 2023 were authorised for issue in accordance with a resolution of the directors on 27 September 2023. Let's Explore Group plc ("the Company") is a Public Limited Company quoted on AIM, incorporated in England and Wales. The interim consolidated financial statements do not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006.
2 Statement of accounting policies
2.1 Basis of preparation
The interim consolidated financial statements of the Group for the six months ended 30 June 2023 have been prepared in accordance with the UK-adopted International Accounting Standard 34 Interim Financial Reporting.
The entities consolidated in the interim financial statements of the Group for the six months to 30 June 2023 comprise the Company and its subsidiaries (together referred to as "the Group").
The interim consolidated financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Group's annual audited consolidated financial statements for the year ended 31 December 2022.
The directors are satisfied that, at the time of approving the interim consolidated financial statements, it is appropriate to adopt a going concern basis in accordance with the recognition and measurement criteria of International Financial Reporting Standards ("IFRS") as adopted by the European Union.
In reaching this conclusion, the directors considered the financial position of the Group and prepared forecasts and projections for the next 12 months, taking into account reasonably possible changes in trading performance and capital expenditure requirements.
The financial statements do not include any adjustments that would result from the going concern basis of preparation being inappropriate.
2.2 Accounting policies
The principal accounting policies adopted in the preparation of these interim statements are consistent with those applied in the preparation of the Group's annual consolidated financial statements for the year ended 31 December 2022 other than the Group has adopted amended financial standards effective as of 1 January 2023. None of the amendments adopted on 1 January 2023 have had a material impact on the interim statements of the Group.
The preparation of these consolidated interim financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates in preparing these consolidated interim financial statements.
Discontinued operations
On 2 February 2023, the Company announced that it had completed the sale of the Uvisan division for cash consideration of £100,000.
On 1 March 2023, the Company announced the completion of the sale of the Location Based Entertainment (LBE) virtual
reality division for consideration of $25,119,739. The sale proceeds were comprised of cash paid at completion of $23,869,739 and a loan note of $1,250,000 repayable 12 months following completion, subject to any price adjustments under the terms of the sale and purchase agreement.
The LBE and Uvisan results have been separated from those of continuing operations and are shown as discontinued operations within the consolidated income statement. Comparative periods within the consolidated income statement have been restated accordingly. Further information on discontinued operations is contained in note 4.
2 Statement of accounting policies (continued)
Restatement of prior period comparative figures for the six months to 30 June 2022
The prior period comparative figures for the six months to 30 June 2022 have been restated for consistency with the current reporting period.
When the results for the six months to 30 June 2022 were originally released, the Home Based Entertainment (HBE) and Uvisan divisions were recognised in discontinued operations and assets held for sale. An impairment charge of £155,000 against the net realisable value of the HBE business was recognised in the accounts at the time, assessed against the expected sale proceeds had the disposal taken place.
The comparative figures for the six months to 30 June 2022 have been restated to recognise the LBE and Uvisan businesses in discontinued operations. The Uvisan business is included in assets held for sale as the decision to discontinue that division was made prior to 30 June 2022.
The restated figures no longer include HBE in assets held for sale and the directors are of the opinion that impairment of the division's net assets would not be appropriate at the time if the division was held as a continuing operation.
A reconciliation of the restated comparative figures to the original published figures shows below:
| | Six months to 30 June 2022 |
| | £'000 |
| | |
| Loss after tax from total operations originally reported | (646) |
| | |
| Reversal of impairment of HBE assets held for sale | 155 |
| | _____ |
|
|
|
| Restated Loss after tax from total operations | (491) |
| | _____ |
3 Segmental information
The Group's primary reporting format for segmental information is business segments which reflect the management reporting structure in the Group. The information for discontinued segments is aggregated and shown as a separate segment.
Six months to 30 June 2023
| | Home Based Entertainment |
Head Office | Total Continuing Operations |
Discontinued Operations |
Total Operations |
| | £'000 | £'000 | £'000 | £'000 | £'000 |
| | | | | | |
| Revenue | 62 | - | 62 | 1,626 | 1,688 |
| Cost of sales | (139) | - | (139) | (924) | (1,063) |
| | ---------------- | ---------------- | --------------- | --------------- | --------------- |
| Gross profit | (77) | - | (77) | 702 | 625 |
| | | | | | |
| Other income | - | 129 | 129 | - | 129 |
| Admin expenses* | (98) | (409) | (507) | (390) | (897) |
| | ---------------- | ---------------- | --------------- | --------------- | --------------- |
| Adjusted EBITDA** | (175) | (280) | (455) | 312 | (143) |
| | | | | | |
| Amortisation | (84) | (2) | (86) | (39) | (125) |
| Depreciation | (1) | (9) | (10) | (173) | (183) |
| Loss on disposal of assets | - | - | - | (3) | (3) |
| Gain on disposal of subsidiaries | - | - | - | 15,115 | 15,115 |
| Share based payments | - | (332) | (332) | - | (332) |
| One-off costs | - | (418) | (418) | (23) | (441) |
| Finance costs | - | (1) | (1) | (4) | (5) |
| Finance income | - | 189 | 189 | - | 189 |
| Taxation | (4) | - | (4) | (8) | (12) |
| | ---------------- | ---------------- | ------------- | ----------------- | ---------------- |
| Profit/(loss) for the period | (264) | (853) | (1,117) | 15,177 | 14,060 |
| | ---------------- | ---------------- | ------------- | ----------------- | ---------------- |
The segments included within discontinued operations were the Location Based Entertainment (LBE) VR and Uvisan businesses.
*Administrative expenses exclude depreciation, amortisation, impairment, gains/losses on disposal, share based payments and one-off costs.
**Adjusted EBITDA is a non-GAAP metric.
3 Segment information (continued)
Geographical disclosures
The geographical breakdown of the Group's revenue, assets and net tangible capital expenditure is as follows.
| | External revenue by location of customer | Location of assets | Net tangible capital expenditure by location of assets | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| Restated |
|
| Restated |
|
| Restated |
|
|
| 30 June 2023 | 30 June 2022 | 31 Dec 2022 | 30 June 2023 | 30 June 2022 | 31 Dec 2022 | 30 June 2023 | 30 June 2022 | 31 Dec 2022 |
|
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
|
| | | | | | | | | |
| UK | 59 | 36 | 396 | 8,763 | 4,199 | 1,062 | 159 | 51 | 3 |
| USA & Canada | 3 | 67 | 400 | 33 | 2,682 | 61 | - | 792 | - |
| Australia | - | - | - | - | 5 | - | - | 6 | - |
| Rest of Europe | - | - | - | - | 15 | - | - | - | - |
| Middle East | - | - | - | - | 5 | - | - | - | - |
| | | | | | | | | | |
| Assets held for sale | - | - | - | - | 157 | 6,362 | - | 10 | 1,794 |
| | _____ | _____ | _____ | _____ | _____ | _____ | _____ | _____ | _____ |
| Total | 62 | 103 | 796 | 8,796 | 7,063 | 7,485 | 159 | 859 | 1,797 |
|
| _____ | _____ | _____ | _____ | _____ | _____ | _____ | _____ | _____ |
|
| | | | | | | | | |
The Group had certain customers whose revenue individually represented 10% or more of the Group's total revenue. For the six months ended 30 June 2023, one customer accounted for 94% of total revenue.
4 Discontinued operations
The Location Based Entertainment (LBE) and Uvisan businesses were sold during the six months to 30 June 2023. The results for these businesses have been excluded from the continuing results of the Group for the period ended 30 June 2023. The results for the periods ended 30 June 2022 and 31 December 2022 have been restated to exclude the results of these businesses from the continuing operations of the Group in those periods.
Summary income statement
The results for LBE and Uvisan included in the income statement as discontinued operations are as follows:
| |
LBE |
Uvisan |
Unaudited Total Six months to 30 June 2023 | Restated Unaudited Total Six months to 30 June 2022 |
Audited Total 12 months to 31 Dec 2022 |
| Discontinued operations | £'000 | £'000 | £'000 | £'000 | £'000 |
| | | | | | |
| Revenue | 1,532 | 94 | 1,626 | 4,749 | 10,781 |
| Cost of sales | (886) | (38) | (924) | (2,550) | (5,696) |
| Other income | - | - | - | 26 | 39 |
| Admin expenses* | (367) | (23) | (390) | (1,020) | (2,167) |
| | ---------------- | ---------------- | --------------- | --------------- | --------------- |
| Adjusted EBITDA** | 279 | 33 | 312 | 1,205 | 2,957 |
| | | | | | |
| Amortisation | (37) | (2) | (39) | (228) | (433) |
| Depreciation | (172) | (1) | (173) | (501) | (1,035) |
| Impairment | - | - | - | (26) | (175) |
| Gain on disposal of assets | (3) | - | (3) | 8 | 19 |
| One-off costs | - | (23) | (23) | (7) | (12) |
| Finance costs | (4) | - | (4) | - | (25) |
| Finance income | - | - | - | - | 1 |
| Taxation | (8) | - | (8) | (3) | (30) |
| | ---------------- | ---------------- | ------------- | ------------- | ---------------- |
| Profit from discontinued operations before disposal of subsidiaries | 55 | 7 | 62 | 448 | 1,267 |
| | ---------------- | ---------------- | ------------- | ------------- | ---------------- |
| | | | | | |
| Gain on disposal of subsidiaries | 15,073 | 42 | 15,115 | - | - |
| | | | | | |
| | ---------------- | ---------------- | ------------- | ------------- | ---------------- |
| Profit from discontinued operations | 15,128 | 49 | 15,177 | 448 | 1,267 |
| | ---------------- | ---------------- | ------------- | ------------- | ---------------- |
*Administrative expenses exclude depreciation, amortisation, impairment, gains/losses on disposal, share based payments and one-off costs.
**Adjusted EBITDA is a non-GAAP metric.
4 Discontinued operations (continued)
Summary cash flow statement
The results for LBE and Uvisan included in the cash flow statement are as follows:
| |
LBE |
Uvisan |
Unaudited Total Six months to 30 June 2023 | Restated Unaudited Total Six months to 30 June 2022 |
Audited Total 12 months to 31 Dec 2022 |
| Discontinued operations | £'000 | £'000 | £'000 | £'000 | £'000 |
| | | | | | |
| Operating activities | (44) | 58 | 14 | 1,417 | 3,216 |
| Investing activities | 19,716 | (29) | 19,687 | (1,187) | (2,070) |
| Financing activities | (27) | - | (27) | (230) | (105) |
|
| ---------------- | ---------------- | ------------- | ------------- | ---------------- |
| Net cash inflow/(outflow) | 19,645 | 29 | 19,674 | - | 1,041 |
|
| ---------------- | ---------------- | ------------- | ------------- | ---------------- |
5 Other income
|
|
| Restated |
|
|
| Unaudited Six months to 30 June 2023 | Unaudited Six months to 30 June 2022 | Audited 12 months to 31 Dec 2022 |
|
| £'000 | £'000 | £'000 |
| Continuing operations | | | |
| Transitional services provided to disposed subsidiaries | 129 | - | - |
| | ---------------- | ---------------- | ---------------- |
| | 129 | - | - |
| | ---------------- | ---------------- | ---------------- |
6 Transaction costs
|
|
| Restated |
|
|
| Unaudited Six months to 30 June 2023 | Unaudited Six months to 30 June 2022 | Audited 12 months to 31 Dec 2022 |
|
| £'000 | £'000 | £'000 |
| Continuing operations | | | |
| Costs related to the capital reduction and share buybacks | 225 | - | - |
| Bonuses awarded in relation to the LBE business sale | 181 | - | - |
| Costs relating to the LBE business sale | - | - | 13 |
| Aborted project costs | 12 | 5 | 20 |
| | ---------------- | ---------------- | ---------------- |
| | 418 | 5 | 33 |
| | ---------------- | ---------------- | ---------------- |
7 Earnings per share
The calculation of the group basic and diluted loss per ordinary share is based on the following data:
|
|
| Restated |
|
|
| Unaudited Six months to 30 June 2023 | Unaudited Six months to 30 June 2022 | Audited 12 months to 31 Dec 2022 |
|
| £'000 | £'000 | £'000 |
| Profit attributable to shareholders | | | |
| Continuing operations | (1,117) | (938) | (1,928) |
| Discontinued operations | 15,177 | 448 | 1,267 |
| | -------------------- | -------------------- | -------------------- |
| Total profit attributable to shareholders | 14,060 | (490) | (661) |
| | -------------------- | -------------------- | -------------------- |
| | | | |
| Basic weighted average number of shares | 401,733,235 | 415,538,083 | 415,538,083 |
| Diluted weighted average number of shares | 450,865,644 | 474,267,283 | 473,775,097 |
| | ========= ===== | ============== | ============== |
| | | | |
| | £0.01 | £0.01 | £0.01 |
| Earnings per share | | | |
| Basic earnings per share | 3.50 | (0.12) | (0.16) |
| Diluted earnings per share | 3.50 | (0.12) | (0.16) |
| | ========= | ========= | ========= |
| Earnings per share from continuing operations | | | |
| Basic earnings per share from continuing operations | (0.28) | (0.23) | (0.46) |
| Diluted earnings per share from continuing operations | (0.28) | (0.23) | (0.46) |
| | ========= | ========= | ========= |
| Earnings per share from discontinued operations | | | |
| Basic earnings per share from continuing operations | 3.78 | 0.11 | 0.30 |
| Diluted earnings per share from continuing operations | 3.78 | 0.11 | 0.30 |
| | ========= | ========= | ========= |
Earnings per ordinary share has been calculated using the weighted average number of shares in issue during the period. The weighted average number of equity shares in issue in the period to 30 June 2023 was 401,733,235.
8 Property, plant and equipment
|
The method of depreciation for each class of depreciable asset is:
Fixtures, fittings and equipment - three years on a straight-line basis
Motor vehicles - seven years on a straight-line basis
9 Intangible assets
|
Development costs are comprised of software, virtual reality and augmented reality content. Development costs are amortised on a straight-line basis over 3 years. No amortisation is charged against projects which are still in development.
Other intangible assets comprise website development and trademark costs. Website development costs are amortised over 3 years and trademark costs over 2 years.
Amortisation is charged to administrative costs in the Consolidated Statement of Comprehensive income.
10 Trade and other receivables
|
| Unaudited | Unaudited | Audited |
|
| 30 June 2023 | 30 June 2022 | 31 Dec 2022 |
|
| £'000 | £'000 | £'000 |
|
| | | |
| Trade receivables | 81 | 422 | 403 |
| Prepayments | 103 | 435 | 304 |
| Corporation tax | - | 23 | - |
| Other receivables | 1,410 | 86 | 79 |
| | ---------------- | ---------------- | ---------------- |
| | 1,594 | 966 | 786 |
| | ---------------- | ---------------- | ---------------- |
11 Trade and other payables
|
| Unaudited | Unaudited | Audited |
|
| 30 June 2023 | 30 June 2022 | 31 Dec 2022 |
|
| £'000 | £'000 | £'000 |
|
| | | |
| Trade payables | 54 | 272 | 464 |
| Accruals | 173 | 575 | 288 |
| Taxation and social security | 296 | 176 | 31 |
| Other payables | 6 | 161 | 3 |
| | ---------------- | ---------------- | ---------------- |
| | 529 | 1,184 | 786 |
| | ---------------- | ---------------- | ---------------- |
12 Share capital
|
| Shares | £'000 |
| Ordinary shares of 0.040108663 pence issued and fully paid up | | |
| As at 1 January 2023 | 415,538,083 | 166 |
| Share options exercised at 2.5p per share | 47,125,978 | 19 |
| Buyback and cancellation of shares at 3.65p per share | (34,941,026) | (14) |
| Buyback and cancellation of shares at 4.75p per share | (236,873,162) | (95) |
| | ------------------------------- | ------------------- |
| As at 30 June 2023 | 190,849,873 | 76 |
| | ------------------------------- | ------------------- |
13 Reserves
Full details of movements in reserves are set out in the consolidated statement of changes in equity. The following describes the nature and purpose of each reserve within owners' equity:
Share premium: the amount subscribed for share capital in excess of nominal value.
Foreign exchange reserve: reserve arising on translation of the Group's overseas subsidiaries.
Capital redemption reserve: the nominal value of cancelled ordinary shares.
Retained earnings: cumulative net gains and losses recognised in the consolidated statement of comprehensive income.
14 Related party transactions
M J Higginson, a director of Let's Explore Group plc, is a director and controlling shareholder of M Capital Investment Properties Limited. Services to the value of £12,000 (year to 31 December 2022: £43,000) were invoiced in the period by M Capital Investment Properties Limited to Let's Explore Group plc. At 30 June 2023, Let's Explore Group plc owed £Nil (31 December 2022: £Nil) to M Capital Investment Properties Limited.
R Miller, a director of Let's Explore Group plc, is a director of Robin Miller Consultants Ltd. In the period, services totalling £19,000 (year to 31 December 2022: £16,000) were billed to Let's Explore Group plc from Robin Miller Consultants Ltd. At 30 June 2023, £Nil (31 December 2022: £Nil) was owing from Let's Explore Group plc to Robin Miller Consultants Ltd.
M J Higginson and D F G Wortley, both directors of Let's Explore Group plc, are directors and shareholders in Huddled Group Limited. Services to the value of £3,000 (year to 31 December 2022: £279,000) were invoiced in the period by Huddled Group Limited to Let's Explore Group plc. At 30 June 2023, the Group owed £Nil (31 December 2021: £196,000) to Huddled Group Limited.
D Marks, a director of Let's Explore Group plc, was advanced a loan in a prior period. Interest is currently charged on the loan at 2% per annum. At 30 June 2023, D Marks owed £16,000 (31 December 2022: £16,000) inclusive of interest, to the Group.
D F G Wortley, a director of Let's Explore Group plc, was advanced a loan in a prior period. Interest is currently charged on the loan at 2% per annum. At 30 June 2023, D F G Wortley owed £5,000 (31 December 2022: £5,000) inclusive of interest, to the Group.
The key management personnel are considered to be the Board of Directors. The total amounts paid to key management personnel during the period was £580,000, which includes £160,000 paid in bonuses for the successful completion of the sale of the LBE business for $25.1m. The total amounts paid to key management personnel during the year to 31 December 2022 was £942,000.
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