5 March 2024

 

Time Out Group plc

("Time Out," the "Company" or the "Group")

Unaudited results for the six months ended 31 December 2023

 

Strong growth in adjusted EBITDA

driven by improved margins and performance across both Media and Markets

Company well positioned for sustained growth

 

Time Out Group plc (AIM: TMO), the global media and hospitality business, today announces its unaudited results for the six months ended 31 December 2023.

 

Financial highlights

?     Group gross revenues increased by 7% on a 'like for like'⁽¹⁾ basis in constant currency

?     Reported gross revenue of £52.5m (2022: £53.8m) decreased by 2% due to stronger GBP vs USD

?     Gross margins increased by 300 basis points

?     Group adjusted EBITDA⁽²⁾ increased 151% to £6.0m (2022: £2.4m)

?     Group operating loss narrowed to £0.1m (2022: £6.8m loss)

?     Cash of £7.1m at 31 December 2023 (2022: £5.3m) and borrowings of £34.8m (2022: £31.4m), resulted in adjusted net debt⁽³⁾ of £27.7m (2022: £26.0m). Reported net debt was £49.0m (2022: £52.7m) including £21.3m of IFRS 16 lease liabilities (2022: £26.7m)

 

Operational highlights

?    Time Out Market: strong profitability and expanding global footprint

o Following Cape Town's successful opening in November 2023, the Group has seven Markets open with a further two under construction (Porto and Barcelona, both scheduled to open in 2024)

o Bahrain Market signed in the period, expected to open towards the end of 2024, in addition to five further sites contracted to open FY25-FY27

o Market 'like for like' gross revenue⁽¹⁾ grew 11% in constant currency to £36.5m (2022: £33.0m)

o Adjusted EBITDA increased significantly to £6.1m (2022: £2.5m) with improved gross margin and operational productivity gains⁽⁴⁾

 

?    Time Out Media: growing audience and high value campaigns driving profitability

o Global monthly brand audience grew by 12% to 136m⁽⁵⁾

o Media gross revenue was unchanged year-on-year in constant currency

o Winning big-ticket campaigns from an expanding client roster including a new global media campaign and cross-platform partnership with Coca-Cola spanning H2 FY24 and FY25 signed post period-end

o Adjusted EBITDA increased 43% to £2.5m (2022: £1.8m) with gross margin up by 200 basis points to 80% (2022: 78%)⁽⁴⁾

 

 

"We are making continuing progress in delivering our growth plan. Our trusted brand and 'best of the city' content continues to attract more traffic to our Media and more footfall to our Markets as we expand our global presence. By leveraging the growing synergies between Media and Markets, we keep our brand and proposition fresh, unique and suited to customer preferences alongside increasing our profitability. On behalf of the Board I would like to thank everyone at Time Out for their continued commitment and hard work, resulting in the delivery of these strong results.

 

"Whilst we made progress on many fronts, I am particularly pleased with two specific milestones: the successful opening and continued popularity of Time Out Market Cape Town - which expands the footprint of our food and cultural markets to four continents - and the launch of our partnership with Coca-Cola which is our first global advertising campaign for a client of its scale.

 

"Looking ahead, we will continue to focus on growing our creative campaign solutions for advertisers. We offer access to our global audience through both digital (Time Out Media) and In-Real-Life (Time Out Markets). We believe the synergies created by further increasing our digital audience in combination with the physical audience in our Time Out Markets are unique on a global scale. It is these synergies which make Time Out a differentiated and increasingly attractive partner for international brands and will help us to grow profits further in the future."

 

Outlook 

The business has made significant further progress in driving profitability and operational cash generation and has a number of potential growth avenues including:

 

?     Continuing to sign and open further Time Out Markets both Owned and Operated and Management Agreements through collaboration with leading landlords and developers

?     The nine Management Agreements signed to date, once all operational are expected to generate a minimum of £14m EBITDA per annum

?     Improving our Time Out digital technology proposition, growing our Media audience with engaging content with an increased focus on video, and offering creative solutions to global blue-chip clients

?     Further integration of Media and Markets to drive additional revenues and improve the audience experience

 

Our recent progress gives us confidence in our scaling proven models and we are well positioned for sustained growth.

 

(1)      'Like for like' revenue is calculated in reference to reported Gross revenues by using a constant currency (FY23 rates) and removing the prior year period sales from Miami Market, since closed.

(2)      Adjusted EBITDA is operating loss stated before interest, taxation, depreciation, amortisation, share-based payments, exceptional items and profit/(loss) on the disposal of fixed assets. This is a non-GAAP alternative performance measure ("APM") that management uses to aid understanding of the underlying business performance. See appendix Alternative Performance Measures for a reconciliation to the statutory numbers.

For further information, please contact:
Time Out Group plc	Tel: +44 (0)207 813 3000
Chris Ohlund, CEO
Matt Pritchard, CFO
Steven Tredget, Investor Relations Director
Liberum (Nominated Adviser and Broker)	Tel: +44 (0)203 100 2222
Andrew Godber / Edward Thomas / Josh Borlant
FTI Consulting LLP	Tel: +44 (0)203 727 1000
Edward Bridges / Fiona Walker

This document contains "forward-looking statements", which include all statements other than statements of historical facts, including, without limitation, any statements preceded by, followed by or that include the words "targets", "believes", "expects", "aims", "intends", "will", "may", "anticipates", "would", "could" or similar expressions or the negative thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Group's control that could cause the actual results, performance or achievements of the Group to be materially different from future results, performance or achievements expressed or implied by such forward-looking, including, among others, the achievement of anticipated levels of profitability, growth, the impact of competitive pricing, volatility in stock markets or in the price of the Group's shares, financial risk management and the impact of general business and global economic conditions. Such forward-looking statements are based on numerous assumptions regarding the Group's present and future business strategies and the environment in which the Group will operate in the future. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. These forward-looking statements speak only as at the date as of which they are made, and each of Time Out Group Plc and the Group expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in Time Out Group Plc's or the Group's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based. Neither the Group, nor any of its agents, employees or advisors intends or has any duty or obligation to supplement, amend, update or revise any of the forward-looking statements contained in this document.

 

 

Chief Executive's Review

Group overview

Financial summary

	Unaudited 6 months ended 31 December 2023	Unaudited 6 months ended 31 December 2022	Change
	£'000	£'000	%
Group 'like for like' revenue in constant currency(1)	54,897	51,372	7%
Gross revenue	52,509	53,801	(2)%
Market net revenue(2)	21,848	21,154	3%
Media net revenue(2)	17,697	18,353	(4)%
Group net revenue(2)	39,545	39,507	0%
Gross profit	32,804	31,752	3%
Gross margin %(3)	83%	80%	+300bps
Divisional Adjusted operating expenses(4)	(24,182)	(27,483)	(12)%
Divisional Adjusted EBITDA(4)	8,622	4,269	102%
Market	6,118	2,515	143%
Media	2,504	1,754	43%
Corporate costs	(2,650)	(1,894)	40%
Group Adjusted EBITDA(4)	5,972	2,375	151%
Loss before tax	(4,577)	(12,502)	(63)%

(1)    'Like for like' revenue is change in Gross Revenues at constant currency, excluding Miami Market (closed since HY23).

(2)    Net revenue is calculated as gross revenue less concessionaires' share of revenue. See appendix Alternative Performance Measures for a reconciliation to statutory numbers.

(3)    Gross margin is calculated as gross profit as a percentage of net revenue.

(4)    Adjusted measures are stated before interest, taxation, depreciation, amortisation, share-based payments, exceptional items and profit/(loss) on the disposal of fixed assets. These are APMs that management uses to aid understanding of the underlying business performance. See appendix Alternative Performance Measures for a reconciliation to statutory numbers.

 

 

Group revenue increased by 7% in constant currency on a 'like for like' basis and Group Adjusted EBITDA increased significantly to £6.0m (2022: £2.4m).

 

?     Reported net revenue unchanged year on year at £39.5m

?     Divisional operating expenses decreased by 12%, as a result of reductions in fixed costs and focus on operational efficiency; continued growth offers the scope to further dilute fixed costs as a % of sales

?     Improved divisional adjusted EBITDA of £8.6m (2022: £4.3m)

 

 

Time Out Market trading overview

	Unaudited 6 months ended 31 December 2023	Unaudited 6 months ended 31 December 2022	Change
	£'000	£'000	%
'Like for like' revenue in constant currency(1)	36,537	33,019	11%
Net revenue(2)	21,848	21,154	3%
Gross profit	18,626	17,393	7%
Gross margin %(3)	85%	82%	+300bps
Adjusted operating expenditure (trading)(4)(5)	(10,028)	(11,290)	(11)%
Trading EBITDA(3)(5)	8,598	6,103	41%
Market central costs(5)	(2,480)	(3,588)	(31)%
Adjusted EBITDA(4)(5)	6,118	2,515	143%

(1)    'Like for like' revenue is change in Gross Revenues at constant currency, excluding Miami Market (closed since HY23).

(2)    Net revenue is calculated as gross revenue less concessionaires' share of revenue. See appendix Alternative Performance Measures for a reconciliation to statutory numbers.

(3)    Gross margin calculated as gross profit as a percentage of net revenue.

(4)    Adjusted measures are stated before interest, taxation, depreciation, amortisation, share-based payments, exceptional items and profit/(loss) on the disposal of fixed assets. These are APMs that management uses to aid understanding of the underlying business performance. See appendix Alternative Performance Measures for a reconciliation to statutory numbers.

(5)    The prior period profit comparatives for Media and Markets have been restated to report corporate central cost recharges on a consistent basis.

 

 

Market 'like for like' gross revenues increased 11% in constant currency, with adjusted EBITDA of £6.1m, 143% higher than the comparative period (2022: £2.5m).

·     Successful opening of Time Out Market Cape Town, with strong local media coverage and footfall, resulting in high transaction volumes

·     Following the successful trial of new customer ordering technology in Cape Town, a roll out to US Markets will be completed in H2 FY24, alongside an increase in Media presence in-market

·     Optimising operations in existing Markets driving increased sales and higher EBITDA margins

·     The capex cost per square foot for upcoming openings in Barcelona and Porto is on track to be 40% lower than previous Owned and Operated Market openings, due to improvements in design process

·     Around 1,000 cultural activations a year, leveraging Media authority to drive awareness and footfall

 

The pipeline of eight new sites in development and scheduled to open over the next three years is as follows:

?     2024: Porto (Owned & Operated)

?     2024: Barcelona (Owned & Operated)

?     2024: Bahrain (Management Agreement)

?     2025: Vancouver (Management Agreement)

?     2025: Abu Dhabi (Management Agreement)

?     2025: Osaka (Management Agreement)

?     2027: Prague (Management Agreement)

?     2027: Riyadh (Management Agreement)

	Unaudited 6 months ended 31 December 2023	Unaudited 6 months ended 31 December 2022	Change
	£'000	£'000	%
Gross revenue in constant currency(1)	18,360	18,353	0%
Gross revenue as reported	17,697	18,353	(4)%
Gross profit	14,178	14,359	(1)%
Gross margin %(2)	80%	78%	+200bps
Adjusted operating expenditure(3)(4)	(11,674)	(12,605)	(7)%
Adjusted EBITDA(3)(4)	2,504	1,754	43%

(1)      Gross revenues using a constant currency (FY23 rates)

(2)      Gross margin calculated as gross profit as a percentage of gross revenue.

(3)      Adjusted measures are stated before interest, taxation, depreciation, amortisation, share-based payments, exceptional items and profit/(loss) on the disposal of fixed assets. These are APMs that management use to aid understanding of the underlying business performance. See appendix Alternative Performance Measures for a reconciliation to statutory numbers.

(4)      The prior period profit comparatives for Media and Markets have been restated to report corporate central cost recharges on a consistent basis.

 

On a constant currency basis, Media like for like revenue remained flat at £18.4m whilst gross margin increased by two percentage points to 80% and adjusted EBITDA grew by 43% to £2.5m.

Successful content strategy is driving Time Out's global monthly brand audience⁽¹⁾ which grew by 12% to 136m. A focus on increasing short-form video content and Gen Z engagement has resulted in overall reach on social media rising by 12 percentage points, along with continued growth in website traffic to TimeOut.com with visits up 12%:

·     200% increase in video views YoY

·     115% growth in Instagram audience and 100% on TikTok YoY

·     79% growth in audience aged 18-24 in London

 

Post period end, a new partnership was announced with Coca-Cola, to create a global travel guide inspired by cultural moments; "Foodmarks by Coca-Cola, powered by Time Out" which launched in February 2024. The campaign has global reach and will span H2 FY24 and FY25, leveraging Time Out's brand heritage and authenticity, grounded in dining, places, people and moments. 

Repeat business continues to be significant, with creative campaigns undertaken for brands including British Airways, Uber, Pernod, Hilton and Disney.

(1) Global brand audience is the estimated monthly average in the year including all Owned & Operated cities and franchises. It includes print circulation and unique website visitors (Owned & Operated), unique social users (as reported by Facebook and Instagram with social followers on other platforms used as a proxy for unique users), social followers (for other social media platforms), opted-in members and Market visitors.

 

Group Financial Review

	Unaudited 6 months ended 31 December 2023	Unaudited 6 months ended 31 December 2022	Change
	£'000	£'000	%
Group 'like for like' revenue in constant currency(1)	54,897	51,372	7%
Reported Gross revenue	52,509	53,801	(2)%
Concessionaire share	(12,964)	(14,294)	(9)%
Net revenue	39,545	39,507	-
Gross profit	32,804	31,752	3%
Gross margin(2)	83%	80%	+300bps
Administrative expenses	(32,913)	(38,561)	(15)%
Operating loss	(109)	(6,809)	(98)%
Operating loss	(109)	(6,809)	(98)%
Depreciation & amortisation
- Intangible assets	942	1,126	(16)%
- Property, plant, and equipment	2,548	3,679	(31)%
- Right-of-use assets	1,195	1,046	14%
Share-based payments	553	1,029	(46)%
Exceptional items	843	2,302	(63)%
Loss on disposal of property, plant and equipment	-	2	(100)%
Adjusted EBITDA(3)	5,972	2,375	151%
Finance income	18	11	64%
Finance costs	(4,486)	(5,704)	(21)%
Loss before tax	(4,577)	(12,502)	(63)%

(1)    'Like for like' revenue is change in Gross Revenues at constant currency, excluding Miami Market (closed since HY23).

(2)    Gross margin calculated as gross profit as a percentage of net revenue.

(3)    Adjusted measures are stated before interest, taxation, depreciation, amortisation, share-based payments, exceptional items and profit/(loss) on the disposal of fixed assets. These are APMs that management uses to aid understanding of the underlying business performance. See appendix Alternative Performance Measures for a reconciliation to statutory numbers.

 

Revenue and gross profit

'Like for like' revenue in constant currency increased by 7% to £54.9m (2022: £51.4m).

Reported net revenue for the year unchanged at £39.5m, with gross margins increased by three percentage points to 83%.

Operating expenses

Administrative expenses across the group reduced by 15% to £32.9m (2022: £38.6m).

Adjusted EBITDA

Group adjusted EBITDA of £6.0m (FY22 £2.4m) is stated before interest, taxation, depreciation and amortisation, share-based payment charges, exceptional items, and loss on disposal of fixed assets. The material improvement is a result of increased profitability and improved operational efficiency. Group adjusted EBITDA is a non-GAAP Alternative Performance Measure, which is used by the Board to manage business performance and to allocate resources across the Group.

Operating loss

The reported operating loss was £0.1m (2022: £6.8m loss), a £6.7m improvement comprising +£3.6m improvement in EBITDA, £(1.5)m lower exceptional cost, £(1.2)m lower depreciation and amortisation and £(0.5)m lower share based payment expense  

The exceptional costs of £0.8m (2022: £2.3m) includes redundancy costs of staff who left the Group following restructuring.

 

Foreign exchange

The revenue and costs of Group entities reporting in dollars and euros have been consolidated in these financial statements at an average exchange rate of $1.25 (2022 $1.18) and ?1.16 (2022: ?1.16) respectively.

 

Cash and debt

		Unaudited 31 December 2023 £'000	Unaudited 31 December 2022 £'000	Audited 30 June 2023 £'000
Cash and cash equivalents		7,124	5,344	5,094
Borrowings		(34,847)	(31,362)	(29,883)
Adjusted net debt		(27,723)	(26,018)	(24,789)
IFRS 16 Lease liabilities		(21,280)	(26,712)	(24,863)
Net debt		(49,003)	(52,730)	(49,652)

 

Cash and cash equivalents increased by £2.0m to £7.1m (30 June 2023: £5.1m). This was driven by the Group Adjusted EBITDA of £5.8m (2022: £2.4m), exceptional costs of £(0.8)m, tax paid of £(0.8)m, net working capital inflows of £1.6m, capital expenditure of £(3.4)m, net proceeds of financing of £2.2m and the repayment of lease liabilities of £(2.3)m.

The financial statements have been prepared under the going concern basis of accounting as the Directors have a reasonable expectation that the Group and Company will continue in operational existence and be able to settle their liabilities as they fall due for the foreseeable future, being a period of at least 12 months from the date of approval of the financial statements ("forecast period").

In making this determination, the Directors have considered the financial position of the Group, projections of its future performance and the financing facilities that are in place.

The Board is satisfied that the Group will be able to operate within the level of its current debt and financial covenants and will have sufficient liquidity to meet its financial obligations as they fall due for a period of at least 12 months from the date of signing these financial statements. For this reason, the Group and Company continue to adopt the going concern basis in preparing its financial statements.

Chris Ohlund

Group Chief Executive

5 March 2024

 

 

 

Consolidated Income statement

6 Months ended 31 December 2023

 

	Note	Unaudited 6 Months ended 31 December 2023		Unaudited 6 Months ended 31 December 2022		Audited Year ended 30 June 2023
		£'000		£'000		£'000
Gross revenue	1, 4	52,509		53,801		104,641
Cost of sales		(19,705)		(22,049)		(42,752)
Gross profit		32,804		31,752		61,889
Administrative expenses		(32,913)		(38,561)		(79,383)
Operating loss		(109)		(6,809)		(17,494)
Finance income		18		11		167
Finance costs		(4,486)		(5,704)		(7,664)
Loss before income tax		(4,577)		(12,502)		(24,991)
Income tax (charge)/credit		(592)		(518)		(1,132)
Loss for the period		(5,169)		(13,020)		(26,123)
Loss for the period attributable to:
Owners of the parent		(5,151)		(13,016)		(26,116)
Non-controlling interests		(18)		(4)		(7)
		(5,169)		(13,020)		(26,123)
Loss per share:
Basic and diluted loss per share (p)		1.6		3.9		7.8

 

 

Consolidated Statement of Other Comprehensive Income

6 Months ended 31 December 2023

 

	Unaudited 6 Months ended 31 December 2023		Unaudited 6 Months ended 31 December 2022		Audited Year ended 30 June 2023
	£'000		£'000		£'000
Loss for the period	(5,169)		(13,020)		(26,123)
Other comprehensive income:
Items that may be subsequently reclassified to the profit or loss:
Currency translation differences	(49)		536		(1,301)
Other comprehensive (expense)/income for the period, net of tax	(49)		536		(1,301)
Total comprehensive expense for the period	(5,218)		(12,484)		(27,424)
Total comprehensive expense for the period attributable to:
Owners of the parent	(5,200)		(6,963)		(27,417)
Non-controlling interests	(18)		(5)		(7)
	(5,218)		(6,968)		(27,424)

 

 

Condensed Consolidated Statement of Financial Position

At 31 December 2023

 

	Note	Unaudited 31 December 2023		Unaudited 31 December 2022		Audited 30 June 2023
		£'000		£'000		£'000
Assets
Non-current assets
Intangible assets - Goodwill		29,518		30,200		29,472
Intangible assets - Other		7,372		7,663		6,786
Property, plant, and equipment		28,800		35,549		26,189
Right-of-use assets		14,168		19,692		17,843
Other receivables		4,510		1,773		4,016
		84,368		94,877		84,306
Current assets
Inventories		781		971		774
Trade and other receivables		15,402		19,300		14,638
Cash and cash equivalents	6	7,124		5,344		5,094
		23,307		25,615		20,506
Total assets		107,675		120,492		104,812
Liabilities
Current liabilities
Trade and other payables		(23,901)		(17,475)		(17,967)
Borrowings	6	(65)		(5,254)		(5,878)
Lease liabilities	6	(4,698)		(4,701)		(4,581)
		(28,664)		(27,430)		(28,426)
Non-current liabilities
Deferred tax liability		(872)		(1,079)		(957)
Borrowings	6	(34,781)		(24,500)		(24,005)
Lease liabilities	6	(16,582)		(22,011)		(20,282)
		(52,235)		(49,197)		(45,244)
Total liabilities		(80,899)		(76,627)		(73,670)
Net assets		26,776		43,865		31,142
Equity
Called up share capital		338		336		338
Share premium		185,862		185,563		185,563
Translation reserve		6,512		8,398		6,561
Capital redemption reserve		1,105		1,105		1,105
Retained earnings / (losses)		(167,018)		(151,509)		(162,420)
Total parent shareholders' equity		26,799		43,893		31,147
Non-controlling interest		(23)		(28)		(5)
Total equity		26,776		43,865		31,142