Investor Presentation reach4entertainment enterprises plc Oct 2016 - - PowerPoint PPT Presentation

investor presentation reach4entertainment enterprises plc
SMART_READER_LITE
LIVE PREVIEW

Investor Presentation reach4entertainment enterprises plc Oct 2016 - - PowerPoint PPT Presentation

Investor Presentation reach4entertainment enterprises plc Oct 2016 Logo Disclaimer The information contained in this confidential document (Presentation) has been prepared by reach4entertainment enterprises plc (the Company) . It


slide-1
SLIDE 1

Investor Presentation reach4entertainment enterprises plc

Oct 2016

slide-2
SLIDE 2

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

  • Presentation. This Presentation is not to be disclosed to any other person or used for any other purpose.

Please note that the information in this Presentation has yet to be announced or otherwise made public and as such constitutes inside information and/or information of a precise nature for the purposes of the Market Abuse Regulation (Regulation 596/204), relevant information for the purposes of section 118 of FSMA, and non-public price sensitive information for the purposes of the Criminal Justice Act 1993. You should not therefore deal in any way in the securities of the Company until after the formal release of an announcement by the Company as to do so may result in civil and/or criminal liability. Allenby Capital Limited (“Allenby Capital”) is acting in the provision of corporate finance business to the Company, within the meaning of the Financial Conduct Authority’s Conduct of Business Sourcebook (“COBS”), and no-one else in connection with the proposals contained in this Presentation. Accordingly, recipients should note that Allenby Capital is neither advising nor treating as a client any other person and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Allenby Capital under the COBS nor for providing advice in relation to the proposals contained in this Presentation. While the information contained herein has been prepared in good faith, neither the Company nor any of its shareholders, directors, officers, agents, employees or advisers give, have given or have authority to give, any representations or warranties (express or implied) as to, or in relation to, the accuracy, reliability or completeness

  • f the information in this Presentation, or any revision thereof, or of any other written or oral information made or to be made available to any interested party or its

advisers (all such information being referred to as “Information”) and liability therefore is expressly disclaimed. Accordingly, neither the Company nor any of its shareholders, directors, officers, agents, employees or advisers take any responsibility for, or will accept any liability whether direct or indirect, express or implied, contractual, tortious, statutory or otherwise, in respect of, the accuracy or completeness of the Information or for any of the opinions contained herein or for any errors,

  • missions or misstatements or for any loss, howsoever arising, from the use of this Presentation.

This Presentation may contain forward-looking statements that involve substantial risks and uncertainties, and actual results and developments may differ materially from those expressed or implied by these statements. These forward-looking statements are statements regarding the Company's intentions, beliefs or current expectations concerning, among other things, the Company's results of operations, financial condition, prospects, growth, strategies and the industry in which the Company operates. 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 of the date of this Presentation and the Company does not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this Presentation. Neither the issue of this Presentation nor any part of its contents is to be taken as any form of commitment on the part of the Company to proceed with any transaction and the right is reserved to terminate any discussions or negotiations with any prospective investors. In no circumstances will the Company be responsible for any costs, losses or expenses incurred in connection with any appraisal or investigation of the Company. In furnishing this Presentation, the Company does not undertake or agree to any obligation to provide the recipient with access to any additional information or to update this Presentation or to correct any inaccuracies in, or omissions from, this Presentation which may become apparent. This Presentation should not be considered as the giving of investment advice by the Company or any of its shareholders, directors, officers, agents, employees or

  • advisers. In particular, this Presentation does not constitute an offer or invitation to subscribe for or purchase any securities and neither this Presentation nor anything

contained herein shall form the basis of any contract or commitment whatsoever. Each party to whom this Presentation is made available must make its own independent assessment of the Company after making such investigations and taking such advice as may be deemed necessary. In particular, any estimates or projections

  • r opinions contained herein necessarily involve significant elements of subjective judgment, analysis and assumptions and each recipient should satisfy itself in relation

to such matters. Neither this Presentation nor any copy of it may be (a) taken or transmitted into Australia, Canada, Japan, the Republic of Ireland, the Republic of South Africa or the United States of America (each a “Restricted Territory”), their territories or possessions; (b) distributed to any U.S. person (as defined in Regulation S under the United States Securities Act of 1933 (as amended)) or (c) distributed to any individual outside a Restricted Territory who is a resident thereof in any such case for the purpose of

  • ffer for sale or solicitation or invitation to buy or subscribe any securities or in the context where its distribution may be construed as such offer, solicitation or

invitation, in any such case except in compliance with any applicable exemption. The distribution of this document in or to persons subject to other jurisdictions may be restricted by law and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. Any failure to comply with these restrictions may constitute a violation of the laws of the relevant jurisdiction.

2

Logo

slide-3
SLIDE 3

Overview: Creativity and growth backed by data and technology

  • Transformative refinancing completed in December 2015
  • Announced strong H1 2016 trading performance and confirmed

being on track to meet targets for the full year

  • Established the foundations for the next stage of development

through: 1. Strengthened senior management team 2. Leveraging the market leadership positions to expand geographically (e.g. Germany) 3. Launching a new data-driven marketing and analytics division 4. Re-organisation of key functions

  • The strategies are in place and the Company is looking to raise

between £1.5m to £2.0m to support their implementation

3

Logo

slide-4
SLIDE 4
  • 1. Strengthened Senior Management
  • David Stoller – Executive Chairman & CEO
  • James Charrington – Dewynters CEO
  • Jim Edwards – Spot Co CEO
  • Michael Hildebrandt – Dewynters Germany CEO
  • Linzi Allen – Finance Director

4

Logo

slide-5
SLIDE 5
  • 2. Germany

5

  • Launched Dewynters Germany (“DG”), the world’s third largest commercial

theatre market

  • Secured Michael Hildebrandt as CEO, until recently Director of Strategy and

Development at Stage Entertainment Germany

  • Establishing an interactive strategy among the three agencies supporting

the award and transfer of individual shows and combining projects (including the new data marketing and analytics initiative) across all three markets

  • It is the Board’s view that DG will be the first agency of its kind in Central

Europe to provide creative, consultancy, and experiential events with two key service models:

  • Strategic and commercial support for brands in the entertainment and

leisure industry

  • Event creation for major brands looking for entertainment-driven

solutions to marketing challenges

  • Based in Hamburg, the home of theatre in Germany, it will be asset light

and focus initially on strategic advice

  • £500-600k of investment capital required to support the development of

DG

Logo

slide-6
SLIDE 6
  • 3. Data-Driven Marketing & Analytics Division (under Jampot)

6

  • Objective is to assist our clients to sell more tickets, at a higher yield, with a

lower cost. This can be rolled out to other diverse clients

  • Strong background in data-driven marketing (significantly enhanced by the

acquisition of Jampot)

  • Improvements in Application program interface (API) technology now enables

r4e to analyse the effectiveness of its advertising campaigns

  • r4e has natural access to a unique data set relating to:
  • Ticketing
  • Demand
  • Historic pricing
  • Capitalising on Jampot’s experience of data analysis to build its own suite
  • f data analytic tools and methodologies
  • Early mover advantage, opportunity to build data model for London and

New York simultaneously

  • Approximately £500-600k required to capitalise new data analytics division and

launching by spring 2017

Logo

slide-7
SLIDE 7
  • 4. Re-organisation of key functions

7

  • Re-aligning key functions to accelerate adoption of data-driven

marketing approach

  • Orienting all services currently delivered from the point of view of

the end customer experience

  • Leveraging specific current services and assets, including design

and digital media buying, and analytics to support and enhance the economics of geographical expansion, starting with Germany

  • Consolidating and redesigning office floor space – creating an
  • pen, dynamic environment promoting collaboration and speed

Logo

slide-8
SLIDE 8

H1 Results - Highlights

8

  • Completed a significant restructuring of the business including a £4

million equity raise in December 2015

  • Total borrowings reduced by £11 million to £4.6 million (30 June

2015: £15.6 million)

  • New asset based loan facility with PNC of up to £8.5m, has a

quarterly covenant test (previously annual) and as anticipated seasonal revenue fluctuations has meant a covenant breach in Q3 2016 – PNC have acknowledged the breach

  • Strong performance from SpotCo on the back of US shows investing

in advance of the Tony Awards in June 2016

  • Return to form for Newman Displays which has benefited from

bringing key services in-house

  • Consistent performance from Dewynters in a challenging market

place

Logo

slide-9
SLIDE 9

Half Year Results to 30 June 2016

(£’000s) Six months ended 30 June 2016 Six months ended 30 June 2015 Year ended 31 December 2015 Revenue 48,963 42,496 85,849 Gross Profit 11,532 9,696 20,165 Administrative expenses (10,517) (9,369) (14,973) EBITDA* 1,369 867 1,843 Operating profit/(loss) 1,015 327 5,192 Net finance costs (181) (339) (714) Profit / (loss) before tax 834 52 4,539 Taxation (523) (320) (273) Profit / (loss) for the period 311 (268) 4,266 Profit / (loss) per share 0.07 (0.36) 4.01 *Before exceptional administrative items

Consolidated income statement (summary)

9

Logo

slide-10
SLIDE 10

Half Year Results to 30 June 2016

(£’000s) 30 June 2016 30 June 2015 31 December 2015 Non-Current Assets 13,298 13,124 12,489 Cash and cash equivalents 522 2,511 1,160 Trade and other receivables 12,166 7,677 12,906 Other current assets 551 470 498 Total current assets 13,374 10,941 14,716 Total assets 26,672 24,065 27,205 Total current liabilities (19,459) (13,070) (20,711) Total liabilities (23,272) (30,109) (24,398) Net (liabilities)/assets 3,400 (6,044) 2,807

Consolidated balance sheet (summary)

10

Logo

slide-11
SLIDE 11

Commercial Theatre remains a growth market

  • r4e the clear market leader in two growth markets
  • Positive trends in both key territories – London and New York
  • Expansion into Germany will establish commanding presence in the three largest

commercial theatre markets in the world

11

Logo

250 260 270 280 290 300 310 380 430 480 530 580 630 680 2010 2011 2012 2013 2014 2015

  • No. of New Productions

Gross Box Offi ce Revenue - £m

Gross Box Office Revenue and New Show Openings - London

Source: The Society of London Theatre Box Office 2015

Gross Box Office Revenue

  • No. of New Productions

34 36 38 40 42 44 46 48 900 1000 1100 1200 1300 1400 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

  • No. of New Productions

Gross Box Offi ce 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
slide-12
SLIDE 12

Summary

  • Leveraging a stable, cash generative business - in a proven resilient

market sector – to drive growth

  • Adding to its two market leading positions in New York and London

with the launch of DG in the world’s third largest commercial theatre market

  • Underpinning current market leading positions and driving future

growth with new data-driven marketing and analytics division

  • The stage is set for driving growth

12

Logo

slide-13
SLIDE 13

Appendix

13

Logo

slide-14
SLIDE 14

Shareholders

Summary Shares in issue 479.56m Market Capitalisation

  • c. £7m

Shareholder overview Major Shareholders Amount (m) Holding % Nigel Wray 124.9 26.04% Gate Ventures plc 91.15 19.01% Herald Investment Management 67.32 14.04% Stoller Family Partners LLP 23.93 4.99% Stephen Hemsley 17.5 3.65%

14

Logo

slide-15
SLIDE 15

Group Financial Summary

  • Profit metrics highlight benefit of restructuring action that has

taken place over last few years

15

Logo

slide-16
SLIDE 16

New York Operations – SpotCo

  • Market leader on Broadway
  • 2015 revenues £54.6m
  • In 2015 SpotCo was involved in the launch of 22

theatre shows on Broadway and 14 more off Broadway

  • All competitive category Tony Awards won in the

2016 season were clients of SpotCo

  • Current shows include Hamilton, Cats, Chicago,

Something Rotten, Book of Mormon and School of Rock

  • Institutional clients include Lincoln Centre Theatre,

the Roundabout Theatre and Cirque du Soleil

* Adjusted EBITDA is EBITDA before exceptional items

16

Logo

43071 34011 39380 51827 54610 33557 10,000 20,000 30,000 40,000 50,000 60,000 2011 2012 2013 2014 2015 H1 2016 £'000

SpotCo Revenue

752 481 1123 2286 1,218 1,282 500 1,000 1,500 2,000 2,500 2011 2012 2013 2014 2015 H1 2016 £,000

SpotCo Adjusted EBITDA

slide-17
SLIDE 17

London Operations – Dewynters

  • Market leader in London, incorporated in 1924
  • Services include: marketing, design, advertising,

promotions, and digital media

  • 2015 revenues £27.5m
  • In 2015 Dewynters supported 5,295 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. Recent wins include 42nd Street, Bat out of Hell and Waitress.

  • Other non-West End related work includes ATP

World Tour, BFI Film Festival and the National Television Awards

* Adjusted EBITDA is EBITDA before exceptional items

17

Logo

28703 29014 32299 27600 27496 13467 5,000 10,000 15,000 20,000 25,000 30,000 35,000 2011 2012 2013 2014 2015 H1 2016 £,000

Dewyners Revenue

  • 82

754 787 458 846 201

  • 200
  • 100

100 200 300 400 500 600 700 800 900 2011 2012 2013 2014 2015 H1 2016 £,000

Dewynters Adjusted EBITDA

slide-18
SLIDE 18

London Operations – Newman Displays

* Adjusted EBITDA is EBITDA before exceptional items

18

Logo

  • One of the UK's leading large scale
  • utdoor signage, front of house, display

and installation companies

  • 2015 revenues £3.5m
  • Clients include major West End theatre

productions, leading film companies, cinemas and major global events

4042 4205 3704 3570 3512 1939 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 2011 2012 2013 2014 2015 H1 2016 £,000

Newman Revenue

398 611 466 223 161 216 100 200 300 400 500 600 700 2011 2012 2013 2014 2015 H1 2016 £,000

Newman Adjusted EBITDA