TIDMEMAN
RNS Number : 6318H
Everyman Media Group PLC
14 March 2018
Everyman Media Group plc
("Everyman" or the "Company")
Preliminary results for the 52 weeks ended 28 December 2017
Highlights
-- Revenue for the year up 37% to GBP40.6m (2016: GBP29.6m)
-- Adjusted EBITDA* up 67% to GBP6.6m (2016: GBP4.0m)
-- Admissions up 32% on last year to 2.2m (2016: 1.7m)
-- A further three new Everyman venues opened in the last 12
months, growing the estate to 22 sites
-- Exchanged contracts on 9 further sites in Newcastle, Glasgow,
Liverpool, Altrincham, Lincoln, Cirencester, London's Borough
Market, Tunbridge Wells and Crystal Palace since January 2017
-- Raised GBP17m through an equity raise in October 2017 to help
to fund the continued expansion of the estate
*Adjusted for pre-opening costs, acquisition expenses and share
based payments
For further information, please contact:
Everyman Media Group PLC Tel: 020 3145
Crispin Lilly 0500
Cenkos Securities plc (NOMAD Tel: 020 7397
and Broker) 8900
Bobbie Hilliam
Harry Hargreaves
Chairman's statement
I am pleased to report on the Group's results for the 52 weeks
ended 28 December 2017.
With 2 new openings in the year in Stratford-upon-Avon and Kings
Cross, together with the completion of some significant
refurbishments in Muswell Hill and Oxted, 2017 marked another year
of strong growth. The business delivered in line with the Board's
expectations across all key areas.
The Group now operates 22 venues, up from 20 at the beginning of
2017. This includes a 4 screen venue in York that opened
immediately after the end of the year. The 3 screen Kings Cross
venue that opened during the year added to the small, temporary, 1
screen venue that was already in place.
Review of the business
Everyman continues to evolve into a trusted and highly regarded
brand within the cinema and leisure industry with 22 venues and 69
screens (as at 13 March 2018).
Our team of enthusiastic employees is growing significantly and
they continue to be our greatest strength with their attention to
hospitality and customer experience remaining our most important
differentiator. This was reinforced during the year with the
appointment of Gavin Hughes as operations director, an expanded
regional management team and an increased focus on internal
succession planning.
The Board's long held belief in this model as being the bedrock
for significant growth within the UK has been further strengthened
in the last 12 months and our ambitions continue to grow. The
business currently has a further 13 committed venues and a pipeline
that is still growing with an increasing geographic footprint
across the UK.
Results
Revenue for the year was up 37.4% on last year to GBP40,620,000
(2016: GBP29,554,000).
The Group's adjusted operating profit before depreciation,
amortisation, pre-opening expenses, acquisition costs and
share-based payments was up 67.3% to GBP6,615,000 (2016:
GBP3,954,000). This is an adjusted IFRS measure which has been
further explained in note 2 and on the face of the statement of
profit and loss and other comprehensive income. The Group generated
a profit for the year of GBP1,268,000 (2016: GBP61,000).
The Directors believe that the Group's balance sheet is strong,
with sufficient working capital to service all its day-to-day
requirements. The Directors take a prudent approach to the Group's
leverage ratio and regularly review its balance sheet with this in
mind. The Board does not recommend the payment of a dividend at
this stage of the Group's development (2016: GBPnil).
Openings
The Group opened new sites during the year in
Stratford-upon-Avon (4 screens, June 2017) as well as our permanent
venue in Kings Cross (3 screens, November 2017).
Muswell Hill saw the final phase of its refurbishment works
completed in June 2017 with the addition of 2 further screens to
bring it to 5 in total.
A full redevelopment of our Oxted venue took place during the
year, creating a 3 screen cinema from 1 screen previously, together
with a full food and beverage offer. The site was reopened in
November 2017 by Dame Judy Dench.
The Group conditionally exchanged contracts on 8 further sites
in Newcastle, Glasgow, Liverpool, Altrincham, Lincoln, Cirencester,
London's Borough Market and Tunbridge Wells during the year.
Immediately after the year end, the Group opened a 4 screen
venue in York, following its acquisition and subsequent
refurbishment during 2017.
In January 2018, the Group exchanged on the purchase of the
freehold of a site in Crystal Palace, London for GBP3.225m. It is
expected that a 4 screen venue will open during 2018.
Cash flows
Net cash generated from operating activities was GBP13,739,000
(2016: GBP5,465,000). Net cash outflows for the year, before
financing, were GBP3,538,000 (2016: GBP10,393,000). This is largely
represented by capital expenditure on the expansion of the business
through build costs and refurbishment of sites opened in the
year.
Cash held at the end of the year was GBP18,366,000 (2016:
GBP1,566,000). The cash held will be invested in the continuing
development and expansion of the Group's business in 2018.
On 10 March 2017 the Group agreed a new loan facility of GBP20m
with Barclays Bank PLC. This replaced the GBP8m loan facility
signed in March 2016. At the year end the Group had drawn down
GBP7,000,000 (2016: GBP3,000,000) of the available funds.
On 9 October 2017 the Group raised GBP17,176,000 from the
issuance of new Ordinary shares.
Pre-opening costs
Pre-opening costs, which have been expensed within
administrative expenses, were GBP916,000 (2016: GBP659,000). These
costs include expenses which are necessarily incurred in the period
prior to a new venue being opened but which are specific to the
opening of that unit.
Current trading
Since the year end trading has been in line with expectations
and the film release schedule for 2018 looks both strong and
diverse.
Marketing activity
We continue to believe in delivering events and experiences that
surprise and exceed our customers' expectations, building loyalty
and goodwill whilst fostering tremendous word of mouth,
increasingly capitalising on social media. Our premiere opening
night events (including both 'Fifty Shades Darker' and 'Murder on
the Orient Express' in 2017) as well as other activities such as
the 3rd Everyman Music and Film Festival are great examples of
these.
Staff
Our team of employees, from 40 countries, averaged 677 in 2017
(2016: 523). Once again I would like to recognise them all, and
thank them, for their continued efforts and support that are a
major part of our business success.
Annual general meeting
The Directors look forward to welcoming shareholders to the
annual general meeting of the Company which will be held at 10:30am
on 3 May 2018 at Everyman Cinema Hampstead, 5 Holly Bush Vale,
London NW3 6TX.
Future of the Company
Whilst the pipeline for further new venues continues to develop
well, the opportunities for growth organically from our existing
estate are becoming increasingly important for the business. The
Directors believe that developing like for like growth, alongside
continued footprint growth, will stand us in good stead to deliver
venues that are used and appreciated by communities around the
country and to grow the business for our shareholders.
Paul Wise
Chairman
13 March 2018
Strategic report
The Directors present their strategic report for the Group for
the 52 weeks ended 28 December 2017.
Principal activities and review of the business
The Group is a leading independent cinema group in the UK. The
principal activity of the Company is that of a holding company.
Results
The Group made a profit after tax of GBP1,268,000 (2016:
GBP61,000).
Further details are shown in the Chairman's statement and
consolidated statement of profit and loss and other comprehensive
income, together with the related notes to the financial
statements.
Development of the Group's business
The Everyman offering
The positioning of the Everyman brand remains unchanged at the
premium end of the UK leisure/cinema market. We deliver unique,
high quality, intimate venues, usually of a smaller capacity and in
relatively central high street locations. Hospitality is our
primary focus.
The true differentiation lies in our ambition to deliver a
personal, exceptional experience for all our customers whenever
they visit. This is achieved by combining the strengths of our
cinema design with a strong, credible food and drink offer,
expansive programming and our tremendous front of house team
members and managers.
Our customers enjoy a wide and diverse range of films, live
streamed events or corporate hospitality, in venues fitted with
high end digital projection and sound equipment.
Growth strategy
The Directors believe the opportunities for more Everyman venues
within the UK continues to be significant and this is reflected in
the strength and variety of venues in our pipeline. Key
opportunities in more urban areas (e.g. Edinburgh and London's
Borough Market) sit alongside smaller market town locations such as
Wokingham and Altrıncham. Wherever Everyman opens however, we
strive to be an integral part of the local community and be a part
of a collective rejuvenation of the area.
The buildings that we develop can be part of a large traditional
developer-led complex, the refurbishment of an old existing
traditional cinema or building into small existing spaces in larger
structures.
Continuing expansion will be financed from current resources
including the bank facility, retained earnings and where
appropriate, further financing.
The Group continues to invest in opportunities at existing
venues to drive admissions and revenues as well as in new
sites.
In May 2017 our venue at Muswell Hill was completed, with the
final phase adding 2 additional screens, making a total of 5. In
November 2017 we re-opened our Oxted venue following a complete
redevelopment to our modern Everyman offer, including our sofa
seating and an expanded bar area, together with an increase from 1
to 3 screens. In addition, a refurbishment of our Hampstead venue
took place earlier in the year. A programmed plan of maintenance
work across the growing estate is in place.
The Group is placing an increasing focus on the use of
technology throughout the business both behind the scenes,
digitally online and within venues, especially where this can ease
and improve the customer journey. A new membership scheme was
launched in September 2017 and it is a priority for the business to
increase the number of members it has in order to improve customer
relations and encourage increased frequency.
Our bars, and the food and drink products we sell, are an
integral part of the Everyman experience that customers make time
to enjoy as part of their visit and as such it is an area of
constant review. We continue to deliver encouraging growth in this
area both through appropriate development of our range and offer
but also through improved operational delivery.
Current estate
The Group currently has venues in the following locations:
Number Number
of of
Screens Seats
Location
Birmingham 3 328
Bristol 3 438
Chelmsford 5 379
Esher 4 329
Gerrards Cross 2 215
Harrogate 5 410
Leeds 5 598
London, Baker Street 2 118
London, Barnet 5 429
London, Belsize Park 1 126
London, Canary Wharf 3 266
London, Hampstead 2 192
London, Islington 1 129
London, Kings Cross* 4 278
London, Maida Vale 2 150
London, Muswell Hill* 5 469
Oxted* 3 212
Reigate 2 170
Stratford-Upon-Avon* 4 384
Walton-On-Thames 2 158
Winchester 2 234
York* 4 255
69 6,267
----------- ----------
*Venues added/significantly refurbished during/after
the year.
Over the course of 2017 the Group conditionally exchanged
contracts on a further 8 new venues in Newcastle (4 screens),
Glasgow (3 screens), Liverpool (4 screens), Altrincham (4 screens),
Lincoln (4 screens), Cirencester (4 screens), London's Borough
Market (2 screens) and Tunbridge Wells (3 screens). In 2018 we
expect to open 6 venues in total, including York, which opened
immediately after the year end.
On 10 March 2017 the Group agreed a GBP20m facility from
Barclays Bank PLC to help fund further expansion of our estate.
This facility replaced an existing GBP8m facility that was signed
in March 2016.
On 9 October 2017 the Group raised GBP17m through an equity
raise. This raise together with the increased debt facility will
help to fund the continued expansion of the estate.
UK cinema market
Market performance
Admissions in the UK increased slightly in 2017, ending the year
up 2.3m at 170.6m (source: Cinema Advertising Association). Gross
box office for the UK and Ireland increased 4.7% to GBP1.4bn
(source: Comscore).
Our share of box office revenue in 2017, albeit fuelled by the
continued expansion program, rose from 1.64% in 2016 to 2.11%
(source: ComScore).
The volume of films and event cinema being released in cinemas
theatrically in the UK continues to grow with nearly 900 titles in
2017. The breadth and quality of this content remains strong. With
these factors as a backdrop, the Directors continue to believe that
the cinema market is healthy and that the Group's continued focus
on delivering great value in the overall experience puts us in a
strong and robust position within that market.
Competition
The UK cinema market continues to be dominated by the three main
multiplex players: Cineworld, Odeon and Vue. All of these chains
expanded with new locations in the UK in 2017 and in addition
Cineworld announced its intention to purchase Regal Entertainment
Group, the second largest exhibitor in the US.
Empire and The Light, both smaller multiplex operators, opened
new sites in 2017 and National Amusements continued to refurbish
existing multiplexes.
Curzon opened a new cinema in Oxford and saw continued growth
from its Aldgate cinema that opened in late 2016. Picturehouse did
not open any new cinemas in the year. Both have ambitions to open
at least 1 new site in 2018.
Key performance indicators
The growth in revenue in the current year reflects the effect of
an increase in the number of sites and admissions, an increase in
box office pricing and an improved spend per head on food and
beverages.
The Group uses the following key performance indicators, in
addition to total revenues, to monitor the progress of the Group's
activities:
Year ended Year ended
28 December 29 December
2017 2016
Admissions +32% 2,227,885 1,692,031
Box office average ticket
price +3% GBP11.28 GBP10.94
Food and beverage spend
per head +8% GBP5.97 GBP5.55
Both box office average ticket price and food and beverage spend
per head have increased in line with expectations. The growth in
average ticket price continued to be diluted by the
disproportionate growth in admissions from our regional venues at a
lower ticket price to our London venues.
In contrast, the food and beverage spend per head continues to
develop both as a consequence of new venues opening (with
uncompromised kitchens and full menus in comparison to some of our
older venues) but also from underlying growth across the board as
we continue to successfully focus on menu development and improved
operational delivery.
Principal risks and uncertainties
Risks relating to the Group's business
The identified risks remain largely unchanged from our last
Annual Report:
1. The Group's revenues are dependent on admissions: both box
office and food and beverage revenues are linked to this. As a
result, the Group's financial position is largely reliant on the
continued popularity and the overall quantity and quality of the
films (and other content) which it shows. The Board believes that
the Group's strategy mitigates this risk somewhat as customers are
more willing to try smaller, more diverse films that may not get
the same exposure either in above-the-line advertising spend or
through wider platform releases by the industry.
2. The Group's ability to license films on acceptable terms is
also largely dependent on its relationships with film distributors
and remains a core risk to the costs of the business. This risk is
managed through healthy partnership-based relations with
distributors of all sizes as well as careful week-to-week
negotiation on specific titles.
3. The proliferation of alternative media channels, including
streaming, has introduced new competitive forces for the film-going
audience. To date this has proven to be a more virtuous
relationship, both increasing the investment in film production and
further fuelling an overall interest in film with customers of all
ages. It remains an ever-present caution however, that we must
continue to deliver an exceptional experience in order to deliver
real added value for our customers who choose to see a film at our
venues.
4. Film piracy (aided by technological advances) continues to be
a real threat to the cinema industry generally, although for
Everyman specifically, as with the previous point, this ıs
mitigated through our focus on the overall experience and higher
levels of staffıng.
5. The level of the Group's box office sales, and hence the
Group's revenues, fluctuate throughout the course of any given year
and are largely dependent on the timing of release of films, over
which the Group has no control. As a result, the Group's revenues
may vary significantly from month to month within any given
financial year. The Board mitigates this risk by reviewing changes
in the release schedule and through the development and promotion
of special events at certain times of the year.
6. The Group's business could suffer as a result of extreme or
unseasonal weather conditions or other exceptional events, as well
as the general economic outlook within the United Kingdom. Cinema
admissions are affected by periods of abnormal, severe or
unseasonal weather conditions, such as exceptionally hot weather or
heavy snowfall. In addition, cinema admissions may occasionally be
impacted by large sporting or other major events.
7. Retail sales of food and drink form an important part of the
revenues of the Group. The Group's retail sales generally fluctuate
in line with admissions. The cinemas also sell freshly prepared
food and drink items where stringent operational procedures exist
to ensure compliance with all necessary regulations.
8. The Group also earns revenue from advertising which may
fluctuate due to broader macro-economic factors. Revenue earned
from advertising is also influenced by the level of admissions and
the size of the Group's portfolio of properties and as such, may
decrease in line with any reduction of admissions.
9. The Group's operating costs include rent and energy costs.
These costs may be volatile, for example due to increased market
fluctuations in the price of property rentals, gas and electricity.
The Board mitigates this risk by regularly assessing alternative
energy suppliers and rental costs when open market rent reviews are
due on each property.
10. Where the Group has an existing cinema it could be subject
to competition from the introduction of new and/or upgraded cinemas
operated by other chains.
11. The Group is reliant on certain key contracts and
arrangements with partners and suppliers. The loss of some of these
arrangements may cause temporary disruption to the operations and
financial performance of the Group. The Board mitigates this risk
by maintaining relationships with a number of alternative suppliers
as well as appropriate review of these contracts.
12. The strong positive reputation of the Everyman brand is a
key benefit, helping to ensure the successful future performance
and growth which also serves to mitigate many of the risks
identified above.
13. Whilst the full business implications of Brexit remain
uncertain, and will do for some time, the Board believes the Group
to be well positioned to react to the potential challenges and
opportunities ahead. The Group has no exchange rate exposure, and
is only indirectly impacted by the fall in sterling due to cost
pressure on some food and beverage purchases. Such pressures are
small and for the most part offset by increased buying power due to
our rapid expansion. The cinema industry is historically resilient
to recessionary pressures, however the Board is continuing to
monitor the situation closely. The Group has secured financing to
allow it to fully fund its next phase of expansion.
Financial risks
The Group does not have a significant exposure to foreign
currency movements and does not contract any hedging arrangements
in respect of currency positions.
The Group takes out suitable insurance against property and
operational risks where considered material to the anticipated
revenue of the Group.
C Lilly
CEO
13 March 2018
Directors' report
The Directors present their annual report and the audited
financial statements for the Group for the 52 weeks ended 28
December 2017.
Results and dividends
The results of the Group are included in the strategic report.
Further details are shown in the consolidated statement of profit
and loss and other comprehensive income and the related notes to
the financial statements. As mentioned in the Chairman's statement,
the Directors do not recommend the payment of a dividend (2016:
GBPnil).
Principal activities and review of the business
The Group is a leading independent cinema group in the UK.
Further information is contained in the strategic report. The
principal activity of the Company is that of a holding company. The
subsidiaries of the Group are set out in the related notes to the
financial statements.
Financial risk management: objectives and policies
The financial and other risks to which the Group is exposed,
together with the Group's objectives and policies in respect of
these risks, are set out in the strategic report.
Capital structure
10,206,667 new shares were issued in 2017. The number of
Ordinary shares in issue at 28 December 2017 was 70,027,103 (2016:
59,820,436).
The Company has also issued options over the share capital of
the Company to members of the Board and to certain employees and
contractors which amounted to 5,861,152 Ordinary shares (2016:
5,248,329 Ordinary shares) which, if exercised, would comprise 8.7%
(2016: 8.99%) of the current issued share capital of the Company
(see also Directors' interests below and the related notes). Of
these, 1,392,864 (2016: 1,392,864) are represented by 'A' Ordinary
shares issued by Everyman Media Holdings Ltd which are convertible
into Ordinary shares of the Company, subject to certain market
conditions. The shares of the Company are quoted on the London AIM
market..
Going concern
The Directors have a reasonable expectation that the Group has
adequate resources to continue in operational existence for 12
months from the date of signing these accounts. Therefore, they
continue to adopt a going concern basis in preparing the financial
statements. In adopting a going concern basis for preparing the
financial statements, the Directors have considered the business
activities and the principal risks and uncertainties set out in the
strategic report. The balance sheet of the Group, its cash flows,
liquidity position and borrowing facilities, as well as the Group's
objectives, policies and processes for managing capital, are
described in the strategic report. Financial risk management
objectives, details of financial instruments and hedging activities
and exposure to credit risk and liquidity risk are described in the
proceeding notes to the financial statements. Letters of support
have been given to the Group's subsidiaries that financial
obligations will be met and that it will not seek repayment of any
amounts currently made available.
Significant shareholdings
As at 28 December 2017 the Company was aware of the following
interests in 3% or more of the Company's Ordinary share capital as
set out below. No notifications relating to major shareholdings
have been made to the Company under disclosure and transparency
rule 5 (vote holder and issuer notification rules) since this
date.
% of issued % of issued
Share Share
capital capital
Shareholder 2017 2016
Blue Coast Private
Equity LP 19.70% 19.12%
Schroders PLC 9.87% 12.39%
Canaccord Genuity
Group Inc 9.23% 6.80%
Mr Adam Kaye* 8.12% 7.83%
Mr Charles Dorfman** 7.86% 8.10%
Mr Samuel Kaye 6.29% 5.57%
Walker Crips Group
PLC 5.09% 1.93%
Killik & Co LLP 4.76% 3.73%
Mr Paul Wise*** 4.09% 5.12%
BlackRock Inc 3.90% 3.85%
Mr Phillip Kaye 3.24% 3.79%
Mr Jonathan Kaye 3.12% 3.31%
* Mr Adam Kaye's dependent children acquired 441,777 Ordinary
shares in the year.
** Of the 5,505,041 Ordinary shares Mr Charles Dorfman is
interested in, 3,592,565 (2016: 3,213,876) Ordinary shares are held
by the Lloyd Dorfman Children's Settlement. Mr Charles Dorfman is
one of the potential beneficiaries of the settlement.
*** Of the 2,863,840 Ordinary shares Mr Paul Wise is interested
in, 2,812,374 (2016: nil) Ordinary shares are held by the Paul Wise
Family Trust. Mr Paul Wise is one of the potential beneficiaries of
the Trust.
Directors
The Directors of the Company during the financial year were:
Name Function
Adam Kaye Executive Director
Charles Dorfman
*1 *2 Non-Executive Director
Paul Wise *1 *2
*3 Executive Chairman
Philip Jacobson Independent Non-Executive
FCA *1 *2 *3 Director
Michael Rosehill
FCA Non-Executive Director
Crispin Lilly Chief Executive Officer
Jonathan Peters
FCA Finance Director
*1 Member of the remuneration committee
*2 Member of the nominations committee
*3 Member of the audit committee
Biographical details of continuing Directors are set out on the
Company's website: investors.everymancinema.com.
Directors' interests in the Company
The following Directors held shares in the Company at the
year-end (there were no significant changes between the
shareholdings at the year end and one month before notice of the
annual general meeting):
Number Number
of % of issued of % of issued
Ordinary share Ordinary share
shares capital shares capital
Director 2017 2017 2016 2016
Mr Adam Kaye 5,686,280 8.12% 4,684,809 7.83%
Mr Charles
Dorfman 5,505,041 7.86% 4,847,360 8.10%
Mr Paul Wise 2,863,840 4.09% 3,060,134 5.12%
Mr Michael
Rosehill FCA* 188,410 0.27% 188,410 0.31%
Mr Philip Jacobson
FCA 73,776 0.11% 36,000 0.06%
*Mr Michael Rosehill is a director of Blue Coast Private Equity
LP and therefore has an interest in its shareholding.
As at the date of this announcement, the following options over
Ordinary shares were held by the Directors:
29 December Issued Exercised 28 December
Exercise in the in the
Grant Vesting price 2016 year year 2017
Director date conditions Pence Number Number Number Number
Mr Crispin 1 Dec
Lilly 14 5 83 287,356 - - 287,356
1 Dec
14 6 83 257,009 - - 257,009
29 Oct
15 9 85 352,942 - - 352,942
13 Mar
17 10 109.5 - 250,000 - 250,000
23 Nov
17 11 10 - 52,746 - 52,746
Mr Jonathan 20 Apr
Peters FCA 15 7 85 274,725 - (100,000) 174,725
20 Apr
15 8 85 233,349 - - 233,349
29 Oct
15 9 85 90,130 - - 90,130
23 Nov
17 11 10 - 35,659 - 35,659
29 Oct
Mr Paul Wise 15 9 85 499,977 - - 499,977
29 Oct
13 *4 83 696,432 - - 696,432
29 Oct
Mr Adam Kaye 15 9 85 499,977 - - 499,977
29 Oct
13 *4 83 696,432 - - 696,432
Mr Philip 29 Oct
Jacobson FCA 13 2 83 100,000 - - 100,000
Mr Charles 29 Oct
Dorfman 13 2 83 50,000 - - 50,000
Mr Michael 29 Oct
Rosehill FCA 13 2 83 50,000 - - 50,000
* The benefit of holding 'A' Ordinary shares in Everyman Media
Holdings Limited is considered by the Board to be similar to the
benefit of holding an EMI option.
Details of the option scheme vesting and performance conditions
are set out at note 27 of the financial statements. 100,000 share
options were exercised by Directors during the year, resulting in a
gain of GBP102,000.
Directors' remuneration
For the year ended 28 December 2017
Pension Other Share-based
Director Salary Fees contributions benefits Bonus payments Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Mr Crispin
Lilly 168 - 17 - 59 77 321
Mr Jonathan
Peters FCA 112 - 8 - 39 43 202
Mr Paul Wise 50 50 - 2 - 30 132
Mr Adam Kaye 30 - - 2 - 30 62
Mr Philip - - - - - - -
Jacobson FCA
------- ------- -------------- --------- ------- ------------ -------
390 50 25 4 98 180 747
------- ------- -------------- --------- ------- ------------ -------
For the year ended 29 December 2016
Pension Other Share-based
Salary Fees contributions benefits Bonus payments Total
Director GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Mr Crispin
Lilly 164 - 14 4 74 49 305
Mr Jonathan
Peters FCA 93 - 4 1 42 40 180
Mr Paul Wise 50 50 - 2 - 31 133
Mr Adam Kaye 30 - - 2 - 31 63
Mr Philip
Jacobson FCA 23 8 - - - 9 40
Mr Charles
Dorfman - - - - - 4 4
Mr Michael
Rosehill FCA - - - - - 4 4
------- ------- --------------- ---------- ------- ------------ -------
360 58 18 9 116 168 729
------- ------- --------------- ---------- ------- ------------ -------
Other benefits include interest in respect of an amount of
uncalled share capital due in respect of the issue of performance
shares in Everyman Media Holdings Ltd, a subsidiary of the Company,
to certain members of the Board.
Share-based payments are valued using the share price at the
original grant date.
Policy and practice on the payment of creditors
The policy of the Group is to settle supplier invoices within
the terms and conditions of trade agreed with individual
suppliers.
Employees
Employee involvement
The Group places considerable emphasis on maintaining good
relations with all its employees. The Group places great importance
on managers at each venue being well trained and capable of
recruiting, training and developing a strong team and we equip them
with the necessary tools in order to provide a positive working
atmosphere. The Group regularly communicates important updates with
employees and seeks engagement and consultation whenever making
decisions that affect them or their interests. Employees are
provided with regular on-the-job training and career development
opportunities and the Group places a significant importance on
developing from within.
Employment of disabled persons
The Group is an equal opportunities employer and is committed to
the employment of people with disabilities and guarantees an
interview for those who meet the minimum selection criteria. The
Group provides training and development for people with
disabilities tailored, where appropriate, to ensure they have the
opportunity to achieve their potential. If a Group employee becomes
disabled while in our employment the Group will do its best to
retain them, including consulting with them about their
requirements, making reasonable and appropriate adjustments and
providing alternative suitable employment where possible.
Political and charitable donations
The Group made charitable donations of GBP12,000 in the year
(2016: GBP28,000).
Post-balance sheet events
On 19 January 2018, Everyman Media Ltd acquired 100 Ordinary
shares of 1 pence each in ECPEE Ltd, a company which has exchanged
contracts on the freehold for a site in Crystal Palace.
Disclosure of information to auditor
In the case of each person who was a Director at the time this
report was approved:
- So far as that each Director was aware, there was no relevant
available information of which the Company's auditor is
unaware.
- Each Director has taken all steps that they ought to have
taken as a Director to make himself aware of any relevant audit
information and to establish that the Company's auditor was aware
of that information.
Auditor
In accordance with s489 of the Companies Act 2006, a resolution
for the re-appointment of KPMG LLP as auditor of the Company is to
be proposed at the forthcoming annual general meeting.
Internal financial control
The Group operates a system of internal financial controls
commensurate with its current size and activities, which is
designed to ensure that the possibility of misstatement or loss is
kept to a minimum. There is a system in place for financial
reporting and the Board receives regular reports to enable it to
carry out these functions in the most efficient manner. These
procedures include the preparation of management accounts, forecast
variance analysis and other ad hoc reports. There are clearly
defined authority limits throughout the Group, including those
matters which are reserved specifically for the Board.
The Board has responsibility for the effectiveness of the
internal financial control framework. Such a system can only
provide reasonable and not absolute assurance against material
misstatement. The Group does not currently have, nor considers
there is currently a need for, an internal audit function. As the
number of sites operated by the Group increases the Board intends
to regularly assess the ongoing need for strengthening internal
financial controls.
The Board's financial risk management, objectives and policies
together with the Board's policies in respect of price risk, credit
risk, liquidity risk and cash flow risk are set out in the notes to
the financial statements.
C Lilly
CEO
13 March 2018
Everyman Media Group PLC
Studio 4, 2 Downshire Hill
London
NW3 1NR
Statement of Directors' responsibilities in respect of the
annual report and financial statements
The Directors are responsible for preparing the annual report
and the Group and parent Company financial statements in accordance
with applicable laws and regulations.
Company law requires the Directors to prepare Group and parent
Company financial statements for each financial year. As required
by the AIM Rules of the London Stock Exchange they are required to
prepare the Group financial statements in accordance with
International Financial Reporting Standards as adopted by the
European Union (IFRS as adopted by the EU) and applicable law and
have elected to prepare the parent Company financial statements in
accordance with UK accounting standards and applicable law (UK
Generally Accepted Accounting Practice), including FRS101 Reduced
Disclosure Framework.
Under company law the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and parent Company and of
their profit or loss for that period. In preparing each of the
Group and Parent company financial statements, the Directors are
required to:
- Select suitable accounting policies and then apply them consistently.
- Make judgements and estimates that are reasonable, relevant, reliable and prudent.
- For the Group financial statements, state whether they have
been prepared in accordance with IFRS as adopted by the EU.
- For the parent Company financial statements, state whether
applicable UK accounting standards have been followed, subject to
any material departures disclosed and explained in the financial
statements.
- Assess the Group and parent Company's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern.
- Use the going concern basis of accounting unless they either
intend to liquidate the Group or the parent Company or to cease
operations, or have no realistic alternative but to do so.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the parent
Company's transactions and disclose with reasonable accuracy at any
time the financial position of the parent Company and enable them
to ensure that its financial statements comply with the Companies
Act 2006. They are responsible for such internal control as they
determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to
fraud or error, and have general responsibility for taking such
steps as are reasonably open to them to safeguard the assets of the
Group and to prevent and detect fraud and other irregularities.
Under applicable law and regulations, the Directors are also
responsible for preparing a strategic report and a directors'
report that complies with that law and those regulations.
Independent auditor's report to the members of Everyman Media
Group PLC
1. Our opinion is unmodified
We have audited the financial statements of Everyman Media Group
PLC (the Company) for the 52 weeks (year) ended 28 December 2017
which comprise the consolidated statement of profit and loss and
other comprehensive income, the consolidated balance sheet, the
consolidated statement of changes in equity, the consolidated cash
flow statement, the Company balance sheet, the Company statement of
changes in equity and the related notes, including the accounting
policies in note 2.
In our opinion:
- The financial statements give a true and fair view of the
state of the Group's and of the parent Company's affairs as at 28
December 2017 and of the Group's profit for the year then
ended.
- The Group financial statements have been properly prepared in
accordance with IFRS as adopted by the EU.
- The parent Company financial statements have been properly
prepared in accordance with UK Generally Accepted Accounting
Practice, including FRS101 Reduced Disclosure Framework.
- The financial statements have been prepared in accordance with
the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) and applicable law. Our responsibilities
are described below. We have fulfilled our ethical responsibilities
under, and are independent of the Group in accordance with, UK
ethical requirements including the FRC Ethical Standard as applied
to listed entities. We believe that the audit evidence we have
obtained is a sufficient and appropriate basis for our opinion.
2. Key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional
judgment, were of most significance in the audit of the financial
statements and include the most significant assessed risks of
material misstatement (whether or not due to fraud) identified by
us, including those which had the greatest effect on: the overall
audit strategy; the allocation of resources in the audit and
directing the efforts of the engagement team. These matters were
addressed in the context of our audit of the financial statements
as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. In arriving at our
audit opinion above, the key audit matters, in decreasing order of
audit significance, were as follows:
Recoverability of property, plant and equipment, goodwill and
parent company investment in subsidiary (risk vs 2016: )
Group: GBP58.3m (2016: GBP43.9m), parent: GBP30.3m (2016:
GBP30.3m) - refer to accounting policy note 2 and financial
disclosures notes 13-15 in the notes to the financial
statements.
The risk: forecast-based valuation
Plant, property and equipment and goodwill in the Group, and the
carrying amount of the parent company's investment in its trading
subsidiary, are significant and at risk of potential impairment due
to the Group operating in a competitive industry where box office
and food & beverage revenues and associated profits are
dependent on admissions. The estimated recoverable amount of these
balances is subjective due to the inherent uncertainty involved in
forecasting and discounting the related future cash flows.
Our response: our procedures included:
Our sector experience
- We challenged the cash flow forecasts based on our knowledge
of the industry for all cinema sites with goodwill, and those
others where there was an indicator of impairment such as potential
loss-making sites, identified by inspecting the group's records of
performance by site.
- We challenged the Group's impairment assessment, including the
assumptions behind the cash flow forecasts, based on our knowledge
of the business and of the market.
Historical comparisons
- We compared the EBITDA of each site against budget and prior
year results for any changes that could have a potential impairment
impact.
- We assessed the historical accuracy of the forecast used in
the impairment model by considering actual prior year performance
to budget.
Benchmarking assumptions
We compared the Group's assumptions to externally derived data
in relation to key inputs such as projected growth and the discount
rate using our own valuation specialists.
Sensitivity analysis
For all cinemas with goodwill, and those with impairment
indicators over plant, property and equipment, we calculated the
degree to which the key inputs and assumptions would need to
fluctuate before an impairment was triggered and considered the
likelihood of this occurring.
Comparing valuations
We compared the carrying amount of the parent company's
investment in its trading subsidiary with the expected value of the
business based on the Group's year end market capitalisation.
Business combinations (risk vs 2016: )
GBP1.3m (2016: GBPnil) - refer to accounting policy note 2 and
financial disclosures note 30 in the notes to the financial
statements.
The risk: accounting treatment
The Group continues to be acquisitive in line with their
development and expansion strategy. On 1 September 2017, the Group
acquired a former Reel cinema site in York for GBP1.3m which has
been accounted for as a business combination. Judgment was involved
in determining whether this acquisition should be accounted for as
a business combination at fair value or an asset purchase at
cost.
The risk: subjective valuation
The fair value of identifiable net liabilities acquired of
GBP0.2m and the resultant goodwill of GBP1.5m represent a key audit
matter due to the judgement involved in identifying and estimating
the fair value of the separate assets and liabilities acquired.
Our response: our procedures included:
Accounting analysis
We examined the sale and purchase agreement and the Group's
technical papers to assess whether it was appropriate to treat the
acquisition as a business combination under the relevant accounting
standard.
Assessing valuer's credentials
We assessed the professional competency, capability and
objectivity of the valuation specialists engaged by the Group.
Our valuation expertise
We used our own valuation specialists to assist in evaluating
whether all assets and liabilities had been identified,
specifically considering whether any separate intangible assets
should be recognised, and whether their fair values were
appropriate. Our evaluation was based on standard industry practice
and our own knowledge of the business.
Assessing transparency
We assessed the adequacy of the Group's disclosures regarding
the acquisition and the underlying assumptions applied.
3. Our application of materiality and an overview of the scope of our audit
Materiality for the group financial statements as a whole was
set at GBP340,000 (2016: GBP267,000), determined with reference to
a benchmark of group revenue, of which it represents 0.9% (2016:
1.5%). We consider revenue to be an appropriate benchmark as the
group is in the early stages of its growth, and therefore is a more
stable measure than profit or loss before tax.
Materiality for the parent company financial statements as a
whole was set at GBP323,000 (2016: GBP266,999), determined with
reference to a benchmark of total assets and chosen to be lower
than materiality for the group financial statements as a whole.
We agreed to report to the Audit Committee any corrected or
uncorrected identified misstatements exceeding GBP14,000 (2016:
GBP11,000), in addition to other identified misstatements that
warranted reporting on qualitative grounds.
The Group audit team subjected all (2016: all) of the Group's
three reporting components to full scope audits for group purposes
and performed the audit of the parent company. The Group team
approved the component materialities, which ranged from GBP323,000
to GBP340,000, having regard to the mix of size and risk profile of
the Group across the components.
4. We have nothing to report on going concern
We are required to report to you if we have concluded that the
use of the going concern basis of accounting is inappropriate or
there is an undisclosed material uncertainty that may cast
significant doubt over the use of that basis for a period of at
least 12 months from the date of approval of the financial
statements. We have nothing to report in these respects.
5. We have nothing to report on the other information in the annual report
The Directors are responsible for the other information
presented in the annual report together with the financial
statements. Our opinion on the financial statements does not cover
the other information and, accordingly, we do not express an audit
opinion or, except as explicitly stated below, any form of
assurance conclusion thereon.
Our responsibility is to read the other information and, in
doing so, consider whether, based on our financial statements audit
work, the information therein is materially misstated or
inconsistent with the financial statements or our audit knowledge.
Based solely on that work we have not identified material
misstatements in the other information.
Strategic report and directors' report
Based solely on our work on the other information:
- We have not identified material misstatements in the strategic
report and the directors' report.
- In our opinion the information given in those reports for the
financial year is consistent with the financial statements.
- In our opinion those reports have been prepared in accordance with the Companies Act 2006.
6. We have nothing to report on the other matters on which we
are required to report by exception
Under the Companies Act 2006 we are required to report to you
if, in our opinion:
- Adequate accounting records have not been kept by the parent
Company, or returns adequate for our audit have not been received
from branches not visited by us.
- The parent Company financial statements are not in agreement
with the accounting records and returns.
- Certain disclosures of directors' remuneration specified by law are not made.
- We have not received all the information and explanations we require for our audit.
We have nothing to report in these respects.
7. Respective responsibilities
Directors' responsibilities
As explained more fully in the statement of Directors'
responsibilities in respect of the annual report and financial
statements, the Directors are responsible for: the preparation of
the financial statements including being satisfied that they give a
true and fair view; such internal control as they determine is
necessary to enable the preparation of financial statements that
are free from material misstatement, whether due to fraud or error;
assessing the Group and parent Company's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern; and using the going concern basis of accounting unless
they either intend to liquidate the Group or the parent Company or
to cease operations, or have no realistic alternative but to do
so.
Auditor's responsibilities
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue our
opinion in an auditor's report. Reasonable assurance is a high
level of assurance, but does not guarantee that an audit conducted
in accordance with International Standards on Auditing (UK) will
always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if,
individually or in aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of the
financial statements. A fuller description of our responsibilities
is provided on the FRC's website at:
frc.org.uk/auditorsresponsibilities.
8. The purpose of our audit work and to whom we owe our responsibilities
This report is made solely to the Company's members, as a body,
in accordance with chapter 3 of part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
Company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the Company and the Company's members, as a body,
for our audit work, for this report, or for the opinions we have
formed.
Kelly Dunn
Senior Statutory Auditor
13 March 2018
KPMG LLP
15 Canada Square
Canary Wharf
E14 5GL
Consolidated statement of profit and loss and other
comprehensive income for the year ended 28 December 2017
Year Year
ended ended
28 December 29 December
2017 2016
Note GBP000 GBP000
Revenue 5 40,620 29,554
Cost of sales (15,937) (11,830)
Gross profit 24,683 17,724
Other operating income 48 167
Administrative expenses (23,107) (17,324)
Operating profit 1,624 567
Financial income 4 11
Financial expenses - (38)
------------ ------------
Net financing income/(expense) 4 (27)
Profit before taxation 1,628 540
Income tax expense 11 (360) (479)
Profit for the year 1,268 61
Other comprehensive income for
the year 24 851 -
------------ ------------
Total comprehensive income for
the year 2,119 61
Total comprehensive income attributable
to equity holders 2,119 61
------------ ------------
of the Company
Basic earnings per share (pence) 12 2.04 0.10
------------ ------------
Diluted earnings per share (pence) 12 1.97 0.10
------------ ------------
All amounts relate to continuing
activities.
Non-GAAP measure: adjusted profit
from operations
Adjusted profit from operations 6,615 3,954
Before:
Depreciation and amortisation 13,14 (3,688) (2,435)
Acquisition expenses 30 (86) -
Pre-opening expenses (916) (659)
Share-based payment expense 27 (301) (293)
------------ ------------
Operating profit 1,624 567
----------------------------------------- ------ ------------ ------------
Consolidated balance sheet at 28 December 2017
Registered
in England
& Wales
08684079
28 December 29 December
2017 2016
Note GBP000 GBP000
Assets
Non-current assets
Property, plant and equipment 13 48,239 35,603
Intangible assets 14 10,066 8,256
Trade and other receivables 18 173 199
58,478 44,058
------------ ------------
Current assets
Inventories 16 308 245
Trade and other receivables 18 1,044 1,596
Cash and cash equivalents 17 18,366 1,566
------------ ------------
19,718 3,407
------------ ------------
Total assets 78,196 47,465
------------ ------------
Liabilities
Current liabilities
Other interest-bearing
loans and borrowings 20 43 24
Trade and other payables 19 12,479 6,575
12,522 6,599
------------ ------------
Non-current liabilities
Other interest-bearing
loans and borrowings 20 7,000 3,000
Other payables 19 5,168 3,397
Provisions 23 1,883 1,430
Deferred tax liabilities 24 284 775
------------ ------------
14,335 8,602
------------ ------------
Total liabilities 26,857 15,201
------------ ------------
Net assets 51,339 32,264
------------ ------------
Equity attributable to
owners of the Company
Share capital 25 7,003 5,982
Share premium 25 38,354 22,720
Merger reserve 25 11,152 11,152
Retained earnings (5,170) (7,590)
------------ ------------
Total equity 51,339 32,264
------------ ------------
These financial statements were approved by the Board of
Directors on 13 March 2018 and signed on its behalf by:
C Lilly
CEO
Consolidated statement of changes in equity for the year ended
28 December 2017
Share Share Merger Retained Total
capital premium reserve earnings equity
Note GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 1 January
2016 5,982 22,720 11,152 (7,944) 31,910
-------- --------- -------- --------- ---------
Profit for the year - - - 61 61
Total comprehensive
income - - - 61 61
-------- --------- -------- --------- ---------
Share-based payments 27 - - - 293 293
Balance at 29 December
2016 5,982 22,720 11,152 (7,590) 32,264
-------- --------- -------- --------- ---------
Balance at 30 December
2016 5,982 22,720 11,152 (7,590) 32,264
-------- --------- -------- --------- ---------
Profit for the year - - - 1,268 1,268
Other comprehensive
income 24 - - - 851 851
Total comprehensive
income - - - 2,119 2,119
-------- --------- -------- --------- ---------
Shares issued in the
period 25 1,021 16,155 - - 17,176
Share issue expenses 25 - (521) - - (521)
Share-based payment
expense 27 - - - 301 301
Total transactions with
owners of the parent 1,021 15,634 - 301 16,956
-------- --------- -------- --------- ---------
Balance at 28 December
2017 7,003 38,354 11,152 (5,170) 51,339
-------- --------- -------- --------- ---------
Consolidated cash flow statement for the year ended 28 December
2017
28 December 29 December
2017 2016
Note GBP000 GBP000
Cash flows from operating
activities
Profit for the period 1,268 61
Adjustments for:
Financial income 10 (4) (11)
Financial expenses 10 - 38
Income tax expense 11 360 479
------------ ------------
Operating profit 1,624 567
Depreciation and amortisation 13,14 3,688 2,435
Loss on disposal of property,
plant and equipment 13 13 16
Bad debts (91) -
Lease incentives 135 -
Market rent provisions 23 (76) (71)
Equity-settled share-based
payment expenses 27 301 293
------------ ------------
5,594 3,240
Increase in inventories (63) (18)
Decrease in trade and other
receivables 669 1,030
Increase in trade and other
payables 7,539 1,198
------------ ------------
Cash generated from operating
activities 13,739 5,450
Corporation tax refunded - 15
Net cash generated from operating
activities 13,739 5,465
------------ ------------
Cash flows from investing
activities
Acquisition as business combination 30 (1,302) -
Acquisition of property,
plant and equipment (15,588) (19,104)
Proceeds from sale of property,
plant and equipment - 3,463
Acquisition of intangible
assets (391) (228)
Interest received 10 4 11
Net cash used in investing
activities (17,277) (15,858)
------------ ------------
Cash flows from financing
activities
Proceeds from the issuance
of Ordinary shares 17,176 -
Share issue expenses 25 (521) -
Proceeds from bank borrowings 20 4,000 3,000
Repayment of derivative financial
instruments - (176)
Interest paid (317) (38)
Net cash generated from financing
activities 20,338 2,786
------------ ------------
Net increase/(decrease) in
cash and cash equivalents 16,800 (7,607)
------------ ------------
Cash and cash equivalents
at the beginning of the period 1,566 9,173
------------ ------------
Cash and cash equivalents
at the end of the period 18,366 1,566
------------ ------------
The Group had GBP13,000,000 of undrawn funds available (2016:
GBP5,000,000) of the Barclays Bank PLC facility at the year
end.
Company balance sheet as at 28 December 2017
Registered
in England
& Wales
08684079
28 December 29 December
2017 2016
Note GBP000 GBP000
Assets
Non-current assets
Property, plant and equipment 13 477 606
Investments 15 30,337 30,337
Intangible assets 14 584 619
------------
31,398 31,562
------------ ------------
Current assets
Trade and other receivables 18 43,231 28,890
------------ ------------
Total assets 74,629 60,452
------------ ------------
Liabilities
Current liabilities
Trade and other payables 19 - 6,604
Loans and borrowings 20 43 24
43 6,628
------------ ------------
Non-current liabilities
Interest-bearing borrowings 20 7,000 3,000
Provisions for other liabilities 23 1,360 1,430
Deferred tax liabilities 24 43 110
------------
8,403 4,540
------------ ------------
Total liabilities 8,446 11,168
------------ ------------
Net assets 66,183 49,284
------------ ------------
Equity
Equity attributable to
owners of the Company
Ordinary shares 25 7,003 5,982
Share premium 25 38,354 22,719
Merger reserve 25 20,336 20,336
Retained earnings 490 247
------------
Total equity 66,183 49,284
------------ ------------
These financial statements were approved by the Board of
Directors on 13 March 2018 and signed on its behalf by:
C Lilly
CEO
Company statement of changes in equity for the year ended 28
December 2017
Share Share Merger Retained Total
capital premium reserve earnings equity
Note GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 1 January
2016 5,982 22,719 20,336 (1) 49,036
Loss for the year - - - (45) (45)
Share-based payments 27 - - - 293 293
-------- -------- -------- ---------- ----------
Balance at 29
December 2016 5,982 22,719 20,336 247 49,284
-------- -------- -------- ---------- ----------
Balance at 30
December 2016 5,982 22,719 20,336 247 49,284
Loss for the year - - - (58) (58)
Shares issued
in the period 1,021 16,156 - - 17,177
Share issue expenses 25 - (521) - - (521)
Share-based payment
expense 27 - - - 301 301
-------- -------- -------- ---------- ----------
Balance at 28
December 2017 7,003 38,354 20,336 490 66,183
-------- -------- -------- ---------- ----------
Notes to the financial statements
1. General information
Everyman Media Group PLC and its subsidiaries (together, 'the
Group') are engaged in the ownership and management of cinemas in
the United Kingdom. Everyman Media Group PLC (the Company) is a
public company limited by shares registered, domiciled and
incorporated in England and Wales, in the United Kingdom
(registered number 08684079). The address of its registered office
is Studio 4, 2 Downshire Hill, London NW3 1NR. All trade takes
place in the United Kingdom.
2. Basis of preparation and accounting policies
The Group financial statements have been prepared and approved
by the Directors in accordance with International Financial
Reporting Standards as adopted by the EU ("Adopted IFRSs"). The
Company has elected to prepare its parent company financial
statements in accordance with FRS101.
The financial statements are prepared on the historical cost
basis except that the following assets and liabilities are stated
at their fair value: derivative financial instruments, financial
instruments classified as fair value through the profit or loss or
as available-for-sale.
The accounting policies set out below have, unless otherwise
stated, been applied consistently to all periods presented in these
Group financial statements. The Group prepares its financial
statements on a 52/53 week basis. The year end date is determined
by the 52nd Thursday in the year. A 53rd week is reported where the
year end date is no longer aligned with 7 days either side of 31st
December.
Company basis of preparation
The Company financial statements were prepared in accordance
with Financial Reporting Standard 101 Reduced Disclosure Framework
(FRS101). The amendments to FRS101 (2014/15 cycle) issued in July
2015 have been applied.
In preparing these financial statements, the Company applies the
recognition, measurement and disclosure requirements of
International Financial Reporting Standards as adopted by the EU
but makes amendments where necessary in order to comply with the
Companies Act 2006 and has set out below where advantage of the
FRS101 disclosure exemptions has been taken.
Under s408 of the Companies Act 2006 the Company is exempt from
the requirement to present its own profit and loss account.
In these financial statements, the Company has applied the
exemptions available under FRS101 in respect of the following
disclosures:
- A cash flow statement and related notes.
- Disclosures in respect of transactions with wholly-owned subsidiaries.
- Disclosures in respect of capital management.
- Disclosures in respect of the compensation of key management personnel.
- New but not yet effective IFRS.
As the consolidated financial statements include the equivalent
disclosures, the Company has also taken the exemptions under FRS101
available in respect of the following disclosures:
- IFRS2 Share Based Payments in respect of Group-settled share based payments.
- Certain disclosures required by IAS36 Impairment Of Assets in
respect of the impairment of goodwill and indefinite-life
intangible assets.
- Certain disclosures required by IFRS3 Business Combinations in
respect of business combinations undertaken by the Company in the
current and prior periods including the comparative period
reconciliation for goodwill.
- Certain disclosures required by IFRS13 Fair Value Measurement.
- Certain disclosures required by IFRS7 Financial Instruments.
Going concern
The Directors have a reasonable expectation that the Group has
adequate resources to continue in operational existence for 12
months from the date of signing these accounts. Thus they continue
to adopt a going concern basis in preparing the financial
statements. In adopting a going concern basis for preparing the
financial statements, the Directors have considered the business
activities, the principal risks and uncertainties, the financial
position of the Group, its cash flows, liquidity position and
borrowing facilities, as well as the Groups objectives, policies
and processes for managing capital.
At the year end the Group was able to meet its day-to-day
working capital requirements and funding of new site purchases
through its bank loan facility, existing cash deposits and ongoing
trading activities. Letters of support have been given to the
Group's subsidiaries that financial obligations will be met and
will not seek repayment of any amounts currently made
available.
The loan facility is subject to three covenants: the ratio of
adjusted EBITDAR to net finance charges, adjusted EBITDA to net
debt and minimum net tangible asset requirements. The Group's
forecasts and projections show that the Group is able to operate
within the level of its current facility for at least 12 months
from the approval date of the financial statements, including
meeting requirements for planned refurbishments and openings and
compliance with the bank facility covenants. The Group therefore
continues to adopt a going concern basis for the presentation of
the financial statements.
Use of non-GAAP profit and loss measures
The Group believes that along with operating profit, the
'adjusted profit from operations' provides additional guidance to
the statutory measures of the performance of the business during
the financial year.
Adjusted profit from operations is calculated by adding back
depreciation, amortisation, and certain non-recurring or non cash
items. Adjusted profit is an internal measure used by management as
they believe it better reflects the underlying performance of the
Group.
Basis of consolidation
Where the Group has power, either directly or indirectly, to
govern the financial and operating policies of an entity so as to
have the ability to affect the amount of the investor returns and
has exposure or rights to variable returns from its involvement
with the investee, it is classified as a subsidiary. The balance
sheet at 28 December 2017 incorporates the results of all
subsidiaries of the Group for all years and periods, as set out in
the basis of preparation.
Intra-group balances and transactions, and any unrealised income
and expenses arising from intra-group transactions, are eliminated.
Unrealised losses are eliminated in the same way as unrealised
gains, but only to the extent that there is no evidence of
impairment.
The consolidated financial statements include the results of the
Company and all its subsidiary undertakings made up to the same
accounting date.
Merger reserve
On 29 October 2013 the Company became the new holding company
for the Group. This was put into effect through a share-for-share
exchange of 1 ordinary share of 10 pence in Everyman Media Group
PLC for 1 ordinary share of 10 pence in Everyman Media Holdings Ltd
(previously, Everyman Media Group Limited), the previous holding
company for the Group. The value of 1 share in the Company was
equivalent to the value of 1 share in Everyman Media Holdings
Ltd.
The accounting treatment for group reorganisations is presented
under the scope of IFRS3. The introduction of the new holding
company was accounted for as a capital reorganisation using the
principles of reverse acquisition accounting under IFRS3.
Therefore, the consolidated financial statements are presented as
if Everyman Media Group PLC has always been the holding company for
the Group. The Company was incorporated on 10 September 2013.
The use of merger accounting principles has resulted in a
balance in Group capital and reserves which has been classified as
a merger reserve and included in the Group's shareholders'
funds.
The Company recognised the value of its investment in Everyman
Media Holdings Ltd at fair value based on the initial share placing
price on admission to AIM. As permitted by s612 of the Companies
Act 2006, the amount attributable to share premium was transferred
to the merger reserve. The investment in the Company is recorded at
fair value.
Revenue recognition
Revenue for the Group is measured at the fair value of the
consideration received or receivable. The Group recognises revenue
for services provided when the amount of revenue can be reliably
measured and it is probable that future economic benefits will flow
to the entity.
The Group's revenues from film and entertainment activities are
recognised on completion of the showing of the relevant film. The
Group's revenues for food and beverages are recognised at the point
of sale. The Group's other revenues, which include commissions, are
recognised when all performance conditions have been satisfied.
All advanced booking fees and similar income which are received
in advance of the related performance are classified as deferred
revenue and shown as a liability until completion of the
performance.
All contractual-based revenue from memberships is initially
classified as deferred revenue and released over the course of 12
months in accordance with seasonal admissions.
Goodwill
Goodwill is stated at cost less any accumulated impairment
losses. Goodwill is allocated to cash-generating units and is not
amortised but is tested annually for impairment. Goodwill
represents the excess of the costs of a business combination over
the total acquisition date fair values of the identifiable assets,
liabilities and contingent liabilities acquired. Goodwill is
capitalised as an intangible asset. Costs incurred in a business
combination are expensed as incurred with the exception that for
business combinations completed prior to 1 January 2010, cost
comprised the fair value of assets given, liabilities assumed and
equity instruments issued, plus any direct costs of
acquisition.
The recoverable amount of an asset or cash-generating unit (CGU)
is the greater of its value-in-use and its fair value less costs to
sell. In assessing value-in-use, the estimated future cash flows
are discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money
and the risks specific to the asset. For the purpose of impairment
testing, assets that cannot be tested individually are grouped
together into the smallest group of assets that generates cash
inflows from continuing use that are largely independent of the
cash inflows of other assets or groups of assets (the CGU). The
goodwill acquired in a business combination, for the purpose of
impairment testing, is allocated to CGUs. Subject to an operating
segment ceiling test, for the purposes of goodwill impairment
testing, CGUs to which goodwill has been allocated are aggregated
so that the level at which impairment is tested reflects the lowest
level at which goodwill is monitored for internal reporting
purposes. Goodwill acquired in a business combination is allocated
to groups of CGUs that are expected to benefit from the synergies
of the combination.
An impairment loss is recognised if the carrying amount of an
asset or its CGU exceeds its estimated recoverable amount.
Impairment losses are recognised in the profit and loss. Impairment
losses recognised in respect of CGUs are allocated first to reduce
the carrying amount of any goodwill allocated to the units, and
then to reduce the carrying amounts of the other assets in the
unit/group of units on a pro-rata basis.
Business combinations
Acquisitions that are deemed to be the transfer of a 'business'
per IFRS13 requirements, are valued at fair value through the use
of an external valuation specialist. As such, any identifiable
tangible and intangible assets and liabilities are valued prior to
acquisition and any excess consideration is treated as goodwill and
reviewed for impairment annually.
Intangible assets
Interests in property-based leases acquired in a business
combination are recognised at fair value at the acquisition date.
Amortisation is calculated on a straight-line basis to allocate the
cost of property-based leases across the term of the relevant
leasehold interest.
Amortisation on assets under construction does not commence
until they are complete and available for use.
Software assets acquired by the Group are stated at cost less
accumulated amortisation and impairment losses. Amortisation is
provided on all software assets so as to write off their carrying
value over the expected useful economic lives. The estimated useful
lives are as follows:
Leasehold - straight line on cost over
interest the remaining life of the
lease
Software
assets - 5 years
Property, plant and equipment
Items of property, plant and equipment are recognised at cost
less accumulated depreciation and accumulated impairment losses. As
well as the purchase price, cost includes directly attributable
costs.
Depreciation on assets under construction does not commence
until they are complete and available for use. These assets
represent fit-outs. Depreciation is provided on all other leasehold
improvements and all other items of property, plant and equipment
so as to write off their carrying value over the expected useful
economic lives. The estimated useful lives are as follows:
- straight line on cost over
the remaining life of the
Leasehold improvements lease
Plant and machinery - 4 to 10 years
Fixtures and
fittings - 4 to 10 years
Depreciation methods, useful lives and residual values are
reviewed at each balance sheet date.
Impairment (excluding inventories)
A financial asset not carried at fair value through the profit
and loss is assessed at each reporting date to determine whether
there is objective evidence that it is impaired. A financial asset
is impaired if objective evidence indicates that a loss event has
occurred after the initial recognition of the asset and that the
loss event had a negative effect on the estimated future cash flows
of that asset that can be estimated reliably.
An impairment loss in respect of a financial asset measured at
amortised cost is calculated as the difference between its carrying
amount and the present value of the estimated future cash flows
discounted at the asset's original effective interest rate.
Interest on the impaired asset continues to be recognised through
the unwinding of the discount. When a subsequent event causes the
amount of impairment loss to decrease, the decrease in impairment
loss is reversed through the profit and loss.
Inventories
Inventories are valued at the lower of cost and net realisable
value. The cost incurred in bringing each product to its present
location and condition is accounted for as follows:
- purchase cost on a first-in,
Food and beverages first-out basis.
- purchase cost on a first-in,
Projection stock first-out basis.
Net realisable value is the estimated selling price in the
ordinary course of business.
Trade and other receivables
These assets are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. They
arise through rental deposits and the provision of services to
customers (e.g. trade receivables) but also incorporate other types
of contractual monetary assets. They are initially recognised at
fair value plus transactions costs that are directly attributable
to their acquisition or issue and are subsequently carried at
amortised cost using the effective interest rate method, less
provision for any impairment.
Impairment provisions are recognised when there is objective
evidence (such as significant financial difficulties on the part of
the counterparty or default or significant delay in payment) that
the Group will be unable to collect all of the amounts due under
the terms receivable, the amount of such a provision being the
difference between the net carrying amount and the present value of
the future expected cash flows associated with the impaired
receivable.
Provisions
A provision is recognised in the balance sheet when the Group
has a present legal or constructive obligation as a result of a
past event, that can be reliably measured and it is probable that
an outflow of economic benefits will be required to settle the
obligation. Market rent provisions are determined by discounting
the expected future cash flows at a pre-tax rate that reflects
risks specific to the liability.
Cash and cash equivalents
Cash and cash equivalents comprise cash.
Trade and other payables
Trade and other payables are recognised initially at fair value.
Subsequent to initial recognition they are measured at amortised
cost using the effective interest method.
Financial liabilities
Non-derivative financial liabilities are recognised initially at
fair value less attributable transaction costs and subsequently
measured at amortised cost using the effective interest method.
Fair value hierarchy
All financial instruments measured at fair value must be
classified into one of the levels below:
- Level 1: Quoted prices, in active markets.
- Level 2: Level 1 quoted prices are not allowable but fair
value is based on observable market data.
- Level 3: Inputs that are not based on observable market
data.
Share capital
Financial instruments issued by the Group are treated as equity
only to the extent that they do not meet the definition of a
financial liability. The Group's ordinary shares are classified as
equity instruments.
Leased assets
Where substantially all of the risks and rewards incidental to
ownership are not transferred to the Group (an operating lease),
the total rentals payable under the lease are charged to the
consolidated profit and loss on a straight line basis over the
lease term. The aggregate benefit of lease incentives is recognised
as a reduction of the rental expense over the lease term.
Taxation
Tax on the profit and loss for the year comprises current and
deferred tax. Tax is recognised in the profit and loss except to
the extent that it relates to items recognised directly in equity,
in which case it is recognised in equity. Current tax is the
expected tax payable or receivable on the taxable income or loss
for the year, using tax rates enacted or substantively enacted at
the balance sheet date, and any adjustment to tax payable in
respect of previous years.
Deferred tax assets and liabilities are recognised where the
carrying amount of an asset or liability in the consolidated
balance sheet differs from its tax base, except for differences
arising on:
- The initial recognition of goodwill.
- The initial recognition of an asset or liability in a
transaction which is not a business combination and at the time of
the transaction affects neither accounting or taxable profit.
- Investments in subsidiaries and jointly controlled entities
where the Group is able to control the timing of the reversal of
the difference and it is probable that the difference will not
reverse in the foreseeable future.
Recognition of deferred tax assets is restricted to those
instances where it is probable that taxable profit will be
available against which the difference can be utilised.
The amount of the asset or liability is determined using tax
rates that have been enacted or substantively enacted by the
reporting date and are expected to apply when the deferred tax
liabilities or assets are settled or recovered. Deferred tax
balances are not discounted.
Deferred tax assets and liabilities are offset when the Group
has a legally enforceable right to offset current tax assets and
liabilities and the deferred tax assets and liabilities relate to
taxes levied by the same tax authority on either:
- The same taxable group company; or
- Different company entities which intend either to settle
current tax assets and liabilities on a net basis or to realise the
assets and settle the liabilities simultaneously, in each future
period in which significant amounts of deferred tax assets and
liabilities are expected to be settled or recovered.
Operating segments
The Board, the chief operating decision maker, considers that
the Group's primary activity constitutes one reporting segment, as
defined under IFRS8. Operationally, cinemas and restaurants are
managed separately but these are reported together as one unit as
they have similar characteristics that they can be expected to have
essentially the same future prospects.
The total profit measures are operating profit and profit for
the year, both disclosed on the face of the consolidated profit and
loss. No differences exist between the basis of preparation of the
performance measures used by management and the figures used in the
Group financial information.
All of the revenues generated relate to cinema tickets, sale of
food and beverages and ancillary income, an analysis of which
appears in the notes below. All revenues are wholly generated
within the UK. Accordingly there are no additional disclosures
provided to the financial information.
Pre-opening expenses
Property rentals and other related overhead expenses incurred
prior to a new site opening are expensed to the profit and loss in
the year that they are incurred. Similarly, the costs of training
new staff during the pre-opening phase are expensed as incurred.
These expenses are included within administrative expenses.
Employee benefits
Defined contribution plans
A defined contribution plan is a post-employment benefit plan
under which the company pays fixed contributions into a separate
entity and will have no legal or constructive obligation to pay
further amounts. Obligations for contributions to defined
contribution pension plans are recognised as an expense in the
profit and loss in the periods during which services are rendered
by employees.
Share-based payments
Certain employees (including Directors and senior executives) of
the Group receive remuneration in the form of share-based payment
transactions, whereby employees render services as consideration
for equity instruments (equity-settled transactions). The cost of
share-based payments is recharged by the Company to subsidiary
undertakings in proportion to the services recognised.
The cost of equity-settled transactions with employees is
measured by reference to the fair value at the date on which they
are granted. The fair value is determined by using an appropriate
pricing model.
The cost of equity-settled transactions is recognised, together
with a corresponding increase in equity, over the period in which
the performance and/or service conditions are fulfilled, ending on
the date on which the relevant employees become fully entitled to
the award (the vesting date). The cumulative expense recognised for
equity-settled transactions at each reporting date until the
vesting date reflects the extent to which the vesting period has
expired and the Group's best estimate of the number of equity
instruments that will ultimately vest. The profit or loss charge or
credit for a period represents the movement in cumulative expense
recognised as at the beginning and end of that period.
No expense is recognised for awards that do not ultimately vest,
except for awards where vesting is conditional upon a market
condition, which are treated as vesting irrespective of whether or
not the market condition is satisfied, provided that all other
performance and/or service conditions are satisfied. The dilutive
effect of outstanding options is reflected as additional share
dilution in the computation of earnings per share.
3. Adoption of new and revised Standards
Amendments to IFRS that are mandatorily effective for the
current year
The following new standards and interpretations to existing
standards have been published and are mandatory for the Group's
future accounting. The application of the amendments has had no
material impact on the disclosures or the amounts recognised in the
Group's consolidated financial statements.
- IAS16 and IAS38 (amendments): clarification of acceptable
methods of depreciation and amortisation
- IAS1 (disclosure initiative): the amendments are on
presentation of the financial statements and should not require any
significant change to current practice but should facilitate
improved reporting.
New and revised IFRSs in issue but not yet effective
The following adopted IFRS have been issued but have not yet
been applied (by the Group) in these financial statements:
- IFRS9: Financial Instruments (effective date 1 January 2018)
- IFRS15: Revenue From Contracts With Customers (effective date 1 January 2018)
- IFRS16: Leases (effective date 1 January 2019)
- IFRS2 (amendments): Share-based Payments classification and
measurement of share-based payment transactions (effective date to
be confirmed)
- IAS12 (amendments): Income Taxes recognition of deferred tax
assets for unrealised losses (effective date to be confirmed).
IFRS15 is not expected to have any material impact since revenue
derived from memberships is already being treated as contract-based
revenue and as such, is released over the year on a seasonal basis
in line with admissions. No other revenue streams are expected to
be impacted.
The Directors do not expect that the adoption of the standards
listed above will have a material impact on the financial
statements of the Group in future periods, except that IFRS16 will
impact both the measurement and disclosures. IFRS16 is expected to
add GBP60m (using the current estate's net present obligations) to
right-of-use assets before discounting within non-current assets
with an equivalent current and non-current liability. Finance
charges will be front-loaded such that the impact on the profit and
loss account will be higher than under the current guidance on
operating leases. Beyond the information above, it is not
practicable to provide a reasonable estimate of the effect of
IFRS16 and IFRS15 until a detailed review has been completed.
4. Critical accounting estimates
In the application of the Group's accounting policies, the
Directors are required to make judgements, estimates and
assumptions about the carrying amounts of assets and liabilities
that are not readily apparent from other sources. The estimates and
associated assumptions are based on historical experience and other
facts that are considered to be relevant. Actual results may differ
from these estimates.
These estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised, if the revision
affects only that period, or in the period of the revision and
future periods if the revision affects both current and future
periods.
The estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of assets and
liabilities are addressed below.
Impairment of intangible assets
Determining whether intangible assets are impaired requires an
estimate of the fair value of the cash-generating units less costs
to sell. The determination of a fair value and of suitable selling
costs require a level of estimation. In situations where this is
lower than the book value of the net assets of the cash generating
unit, a value-in-use calculation will need to be performed. The
value-in-use calculation requires the entity to estimate the future
cash flows expected to arise from the cash-generating unit and a
suitable discount rate in order to calculate present value. Details
of the impairment accounting policies are set out in the above
notes.
Impairment of tangible assets
Determining whether tangible assets are impaired requires an
assessment at each reporting date to determine whether there is
objective evidence that it is impaired. A tangible asset is
impaired if objective evidence indicates that a loss event has
occurred after the initial recognition of the asset which has a
negative impact on the estimated future cash flows of that asset.
In situations where there are impairment indicators, an impairment
loss will be recognised as the difference between its carrying
amount and the present value of the estimated future cash flows
discounted at the asset's original effective interest rate. The
value-in-use calculation requires the entity to estimate the future
cash flows expected to arise from the cash-generating unit and a
suitable discount rate in order to calculate present value.
5. Revenue
Year ended Year ended
28 December 29 December
2017 2016
GBP000 GBP000
Film and entertainment 25,124 18,505
Food and beverages 13,306 9,384
Other income 2,190 1,665
40,620 29,554
------------ ------------
6. Profit before taxation
Profit before taxation is stated after charging:
Year ended Year ended
28 December 29 December
2017 2016
GBP000 GBP000
Depreciation of tangible
assets 3,575 2,390
Amortisation of intangible
assets 113 45
Loss on disposal of property,
plant and equipment 13 16
Operating lease rentals 2,762 2,449
Share-based payments 301 293
Acquisition expenses 86 -
------------ ------------
7. Average number of employees
The average number of persons employed by the Group (including
Directors) during the year, analysed by category, was as
follows:
28 December 29 December
2017 2016
Number Number
Management 105 88
Operations 572 438
677 526
------------ ------------
Management staff represent all full-time employees in the
Group.
8. Employee costs including Directors
Year ended Year ended
28 December 29 December
2017 2016
GBP000 GBP000
Wages and salaries 9,138 7,071
Social security costs 668 463
Pension costs 71 46
Share-based payments 301 293
Other staff benefits 4 10
10,182 7,883
------------ ------------
9. Directors' remuneration
The remuneration of the Directors, who are the key management
personnel of the Group, is set out below in aggregate for each of
the categories specified in IAS24 Related Party Disclosures:
Year ended Year ended
28 December 29 December
2017 2016
GBP000 GBP000
Salaries/fees 440 418
Bonuses 98 116
Other benefits 4 9
Pension contributions 25 18
------------ ------------
567 561
Share-based payments 180 168
747 729
------------ ------------
Information regarding the highest-paid
Director is as follows:
Salaries/fees 168 164
Bonuses 59 74
Other benefits - 4
Pension contributions 17 14
------------ ------------
244 256
Share-based payments 77 49
321 305
------------ ------------
Directors remuneration for each Director is disclosed in the
Directors' report. The costs relating to the Directors remuneration
are wholly incurred by Everyman Media Ltd for the wider Group. The
amount attributable to services provided to the Company was
GBP172,000 (2016: GBP184,000). A Director exercised options over
shares in the Company during the year (2016: nil).
10. Auditor's remuneration
Year ended Year ended
28 December 29 December
2017 2016
Fees payable to the Company's
auditor for: GBP000 GBP000
Audit of the Company's financial
statements 12 8
Audit of the subsidiary undertakings
of the Company 55 50
Taxation and compliance services
to the Group 12 12
Other services 27 97
106 167
------------ ------------
The Group's policy on the use of the external auditor for
non-audit services is to ensure that any work undertaken does not
impair the auditor's independence. We have considered the auditor's
independence and we continue to believe that KPMG LLP is
independent within the meaning of all UK regulatory and
professional requirements and the objectivity of the audit
engagement partner and audit staff are not impaired.
11. Income tax
Year ended Year ended
28 December 29 December
2017 2016
GBP000 GBP000
Current tax - -
------------ ------------
Deferred tax expense (note 24)
Origination and reversal of
temporary differences 259 189
Adjustments in respect of prior
years 101 290
Total tax charge 360 479
------------ ------------
The reasons for the difference between the actual tax charge for
the period and the standard rate of corporation tax in the United
Kingdom applied to the profit for the year are as follows:
Reconciliation of effective tax rate
Year ended Year ended
28 December 29 December
2017 2016
GBP000 GBP000
Profit before taxation 1,628 540
------------ ------------
Tax at the UK corporation tax rate
of 19.25%/20.00% 313 108
Permanent differences (expenses
not deductible for tax purposes) 13 45
Recognition of previously unrecognised
deferred tax liabilities 101 290
Other short term timing differences (40) 50
Effect of change in expected future
statutory rates on deferred tax (27) (14)
------------ ------------
Total tax expense 360 479
------------ ------------
Reductions in the UK corporation tax rate from 20% to 19%
(effective from 1 April 2017) and to 18% (effective 1 April 2020)
were substantively enacted on 26 October 2015. Accordingly, the
Group's profits for this accounting period are subject to tax at a
blended rate of 19.25% (2016: 20.%). An additional reduction to 17%
was substantively enacted on 6 October 2016.
12. Earnings per share
Year ended Year ended
28 December 29 December
2017 2016
GBP000 GBP000
Profit used in calculating basic and
diluted earnings per share 1,268 61
------------ ------------
Number of shares (000's)
Weighted average number of shares for
the purpose of basic earnings per share 62,099 59,820
------------ ------------
Number of shares (000's)
Weighted average number of shares for
the purpose of diluted earnings per share 64,528 60,310
------------ ------------
Basic earnings per share (pence) 2.04 0.10
------------ ------------
Diluted earnings per share (pence) 1.97 0.10
------------ ------------
Basic earnings per share values are calculated by dividing net
profit/(loss) for the year attributable to Ordinary equity holders
of the parent by the weighted average number of Ordinary shares
outstanding during the year.
The Company has 5,818,000 potentially issuable Ordinary shares
(2016: 5,248,000) all of which relate to the potential dilution
from both the Group's A Ordinary shares and share options issued to
the Directors and certain employees and contractors, under the
Group's incentive arrangements.
The Company made a loss for the year of GBP58,000 (2016:
GBP45,000).
13. Property, plant and equipment
Plant Fixtures Assets
Leasehold & & under
(Group) improvements machinery fittings construction Total
GBP000 GBP000 GBP000 GBP000 GBP000
Cost
At 1 January 2016 17,387 4,056 4,794 1,477 27,714
Acquired in the
year 15,217 1,982 1,708 58 18,965
Disposals (3,308) - (189) - (3,497)
Transfer on completion 1,106 - - (1,106) -
------------- ---------- --------- ------------- --------
At 29 December
2016 30,402 6,038 6,313 429 43,182
Acquired in the
year 12,259 1,895 1,101 669 15,924
Acquired in business
combination - 250 50 - 300
Disposals - - (13) - (13)
Transfer on completion 301 - - (301) -
At 28 December
2017 42,962 8,183 7,451 797 59,393
------------- ---------- --------- ------------- --------
Depreciation
At 1 January 2016 1,664 1,166 2,540 - 5,370
Charge for the
year 1,263 764 363 - 2,390
On disposals (8) - (173) - (181)
------------- ---------- --------- ------------- --------
At 29 December
2016 2,919 1,930 2,730 - 7,579
Charge for the
year 1,847 1,205 523 - 3,575
At 28 December
2017 4,766 3,135 3,253 - 11,154
------------- ---------- --------- ------------- --------
Net book value
At 28 December
2017 38,196 5,048 4,198 797 48,239
------------- ---------- --------- ------------- --------
At 29 December
2016 27,483 4,108 3,583 429 35,603
------------- ---------- --------- ------------- --------
At 31 December
2015 15,723 2,890 2,254 1,477 22,344
------------- ---------- --------- ------------- --------
The Group held no assets under finance leases as at 28 December
2017 (29 December 2016: GBPnil). No costs relating to assets under
construction were expensed in the year.
Property, plant Plant Fixtures
and equipment & &
(Company only) machinery fittings Total
GBP000 GBP000 GBP000
Cost
At 1 January 2016 485 255 740
Acquired in the
year - - -
At 29 December
2016 485 255 740
Acquired in the
year - - -
At 28 December
2017 485 255 740
---------- --------- -------
Depreciation
At 1 January 2016 4 2 6
Charge for the
year 96 32 128
At 29 December
2016 100 34 134
Charge for the
year 98 31 129
At 28 December
2017 198 65 263
---------- --------- -------
Net book value
At 28 December
2017 287 190 477
---------- --------- -------
At 29 December
2016 385 221 606
---------- --------- -------
At 31 December
2015 481 253 734
---------- --------- -------
14. Intangible assets
Leasehold Software
(Group) Goodwill Interests Assets Total
GBP000 GBP000 GBP000 GBP000
Cost
At 1 January 2016 7,419 674 - 8,093
Acquired in the
year - - 228 228
At 29 December 2016 7,419 674 228 8,321
Acquired in the
year - - 391 391
Acquired in business
combination 1,532 - - 1,532
At 28 December 2017 8,951 674 619 10,244
--------- ---------- ---------- -------
Amortisation and
impairment
At 1 January 2016 - 20 - 20
Charge for the year - 35 10 45
At 29 December 2016 - 55 10 65
Charge for the year - 35 78 113
At 28 December 2017 - 90 88 178
--------- ---------- ---------- -------
Net book value
At 28 December 2017 8,951 584 531 10,066
--------- ---------- ---------- -------
At 29 December 2016 7,419 619 218 8,256
--------- ---------- ---------- -------
At 31 December 2015 7,419 654 - 8,073
--------- ---------- ---------- -------
Intangible assets Leasehold
(Company only) Interests Total
GBP000 GBP000
Cost
At 1 January 2016 674 674
Acquired in the
year - -
At 29 December 2016 674 674
Acquired in the
year - -
At 28 December 2017 674 674
---------- -------
Amortisation and
impairment
At 1 January 2016 20 20
Charge for the year 35 35
At 29 December 2016 55 55
Charge for the year 35 35
At 28 December 2017 90 90
---------- -------
Net book value
At 28 December 2017 584 584
---------- -------
At 29 December 2016 619 619
---------- -------
At 31 December 2015 654 654
---------- -------
Value in use calculations are performed annually and at each
reporting date for each cash-generating unit (CGU) which represents
each site acquired. Value-in-use was calculated as the net present
value of the projected risk-adjusted post-tax cash flows plus a
terminal value of the CGU. A pre-tax discount rate was applied to
calculate the net present value of pre-tax cash flows.
Goodwill and indefinite-life intangible assets considered
significant in comparison to the Group's total carrying amount of
such assets have been allocated to CGUs or groups of CGUs as
follows:
28 December 29 December
2017 2016
GBP000 GBP000
Baker Street 103 103
Barnet 1,309 1,309
Belsize Park 67 67
Esher 2,804 2,804
Gerrards Cross 1,309 1,309
Islington 86 86
Muswell Hill 1,215 1,215
Oxted 102 102
Reigate 113 113
Walton-On-Thames 94 94
Winchester 217 217
York 1,532 -
8,951 7,419
------------ ------------
The recoverable amount of each CGU has been calculated with
reference to its value-in-use. The key assumptions of this
calculation are shown below:
28 December 29 December
2017 2016
Sales and cost growth (over a 5
year period) 0% 3%
Discount rate (the Group's adjusted
weighted average cost of capital) 9.51% 9.50%
Terminal value 8 x EBITDA 8 x EBITDA
Number of years projected 5 years 5 years
There have been no impairments indicated in the year to 28
December 2017 (2016: GBPnil). The projected sales growth was based
upon the Group's latest forecasts at the time of review and is in
line with the average growth rate for the industry within the
United Kingdom. The key assumptions in the cash flow pertain to
revenue growth. Management have determined that growth based on
industry average growth rates and actuals achieved historically are
the best indication of growth going forward. There have been no
significant changes made to the key assumptions used above for
reviews conducted subsequently. The Group has increased the level
of its weighted average cost of capital to 9.51% due to the
increased ratio of capital to debt. The Directors are confident
that the Group is largely immune from the effects of Brexit and the
impact on the wider economic environment. Additionally the Group
believes that there has been no significant impact on the structure
of the Company that should result in a changed weighted average
cost of capital. Management has performed sensitivity testing on
all inputs to the model and noted no highly sensitive
variables.
15. Investments
Total
(Company only) GBP000
At 29 December 2016 and
28 December 2017 30,337
-------
Investments are held at fair value through the profit and loss.
The subsidiaries of the Company are as follows (all of which are
included on consolidation):
Country Proportion
Principal of Class of of
shares
Name activity incorporation share held held
Everyman Media Cinema management
Holdings Ltd and ownership UK Ordinary 100%
A Ordinary,
Series
1, 2 and
3 28%
Everyman Media Cinema management
Ltd* and ownership UK Ordinary 100%
CISAC Ltd* Dormant UK Ordinary 100%
Bloom Martin Ltd** Dormant UK Ordinary 100%
Bloom Theatres
Ltd*** Dormant UK Ordinary 100%
Mainline Pictures
Ltd*** Dormant UK Ordinary 100%
* Shareholding is held by Everyman Media Holdings Limited
** Shareholding is held by Everyman Media Limited
*** Shareholding is held by Bloom Martin Limited
All dormant companies listed above are exempt from an audit of
their individual accounts due to the existence of a parental
guarantee given by this parent undertaking which prepares
consolidated accounts.
The A Ordinary shares have no rights to a dividend. Everyman
Media Group PLC directly holds all the Ordinary shares (GBP27,015)
and 535,718 A Ordinary shares (GBP1,819) of Everyman Media Holdings
Ltd. The remainder of the A Ordinary shares (GBP4,736) are held by
Directors Paul Wise and Adam Kaye. The A Ordinary shares are
convertible into Ordinary shares of Everyman Media Group PLC if the
share price of Everyman Media Group PLC has remained at or above
the performance criteria set out in note 27. The conversion rights
were accounted for as a share-based payment.
Everyman Media Ltd has 285,000 Ordinary shares of GBP1.00 each
in issue, all of which are held by Everyman Media Holdings Ltd and
therefore indirectly held by Everyman Media Group PLC. All other
subsidiaries are also indirectly-held investments.
With respect to the class and proportion of shares held, the
amounts remain the same for the year ended 28 December 2017 and the
year ended 29 December 2016. Everyman Media Ltd acquired 100
Ordinary shares in ECPEE Ltd, a property management company, on 18
January 2018, representing 100% of the issued share capital of the
company to become a wholly owned subsidiary after the balance sheet
date.
The registered office address of all investments is Studio 4, 2
Downshire Hill, London NW3 1NR. All companies listed above are
included in the consolidated financial statements. All consolidated
companies have the same financial year and apply the same
accounting policies.
Bloom Martin Ltd, Bloom Theatres Ltd, Mainline Pictures Ltd and
CISAC Ltd are all dormant companies and exempt from the requirement
for an audit for the year.
16. Inventories
28 December 29 December
(Group) 2017 2016
GBP000 GBP000
Food and beverages 263 205
Projection 45 40
------------ ------------
308 245
------------ ------------
Included within inventories is GBPnil (2016: GBPnil) expected to
be recovered in more than 12 months. Finished goods recognised as
cost of sales in the year amounted to GBP3,337,000 (2016:
GBP2,411,000).The write-down of inventories to net realisable value
amounted to GBPnil (2016: GBPnil).
17. Cash and cash equivalents
(Group)
28 December 29 December
2017 2016
GBP000 GBP000
Per balance sheet 18,366 1,566
------------ ------------
Per cash flow statement 18,366 1,566
------------ ------------
18. Trade and other receivables
(Group)
28 December 29 December
2017 2016
GBP000 GBP000
Included in current
assets 1,044 1,596
Included in non-current
assets 173 199
------------ ------------
1,217 1,795
------------ ------------
Trade and other receivables 230 521
Other debtors 211 474
Prepayments and accrued
income 776 800
------------
1,217 1,795
------------ ------------
Trade and other receivables 28 December 29 December
(Company only) 2017 2016
GBP000 GBP000
Included in current
assets 43,231 28,890
------------ ------------
Amounts due from company
undertakings 43,231 28,890
------------ ------------
There were no receivables that were considered to be impaired.
There is no significant difference between the fair value of the
receivables and the values stated above. Other debtors include
deposits paid in respect of a long-term leases. All other amounts
are due for payment within 1 year. Interest is only charged on
inter-company loans to the extent that it is incurred as a result
of agreements with third parties (see note 20). The loans are
repayable on demand.
19. Trade and other payables
(Group)
28 December 29 December
2017 2016
GBP000 GBP000
Included in current
liabilities 12,479 6,575
Included in non-current
liabilities 5,168 3,397
------------ ------------
17,647 9,972
------------ ------------
Trade creditors 1,427 545
Social security and
other taxation 1,115 615
Other creditors 27 34
Accrued expenses 7,808 3,858
Lease incentives 5,391 3,611
Deferred income 1,879 1,309
------------ ------------
17,647 9,972
------------ ------------
Included within lease incentives is GBP5,168,000 (2016:
GBP3,397,000) expected to be settled in more than 12 months.
Trade and other payables 28 December 29 December
(Company only) 2017 2016
GBP000 GBP000
Amounts due to company
undertakings - 6,604
------------- ------------
Interest is only charged on inter-company loans to the extent
that it is incurred as a result of agreements with third parties
(see note 20). The loans are repayable on demand.
20. Other interest-bearing loans and borrowings
(Group and Company)
28 December 29 December
2017 2016
GBP000 GBP000
Bank borrowings
Current 43 24
Non-current 7,000 3,000
------------ ------------
7,043 3,024
------------ ------------
The Company agreed a loan facility with Barclays Bank PLC for
the sum of GBP8m on 29 March 2016. Interest is charged at LIBOR on
the drawn-down balance on a 365/ACT D-basis (the nominal interest
rate ranging between 2.57% and 2.90% in 2017). On 10 March 2017 the
Company replaced the loan facility with a GBP20m sum. The capital
sum is repayable in full on or before 9 March 2021. Commitment fees
are charged quarterly on any balances not drawn at a flat rate of
0.9%. The face value is deemed to be the carrying value. The Group
had drawn down GBP7m of the GBP20m debt facility by the year to 28
December 2017 (2016: GBP3m).
21. Financial assets and financial liabilities
(Group)
In respect of interest-earning financial assets and
interest-bearing financial liabilities, the following indicates
their effective interest rates at the end of the year and the
periods in which they mature:
Effective Maturing Maturing Maturing
between between
interest within 1 to 2 to
rate 1 year 2 years 5 years
% GBP000 GBP000 GBP000
At 29 December 2016
Bank borrowings 2.7% (24) - (3,000)
Bank current and
deposit balances 1.0% 1,566 - -
---------- --------- --------- ---------
At 28 December 2017
Bank borrowings 2.7% (43) - (7,000)
Bank current and
deposit balances 1.0% 18,366 - -
---------- --------- --------- ---------
The following table demonstrates the sensitivity to a reasonably
possible change in interest rates, with all other variables held
constant, of the Group's profit and loss before tax through the
impact on floating rate borrowings and bank deposits and cash
flows:
Change
in 28 December 29 December
rate 2017 2016
% GBP000 GBP000
Bank borrowings (7,043) (3,024)
------------ ------------
-0.5% 35 15
-1.0% 70 30
------- ------------ ------------
0.5% (35) (15)
1.0% (70) (30)
1.5% (106) (45)
------- ------------ ------------
Bank current and
deposit balances 18,366 1,566
------------ ------------
-0.5% (92) 15
-1.0% (184) 30
------- ------------ ------------
0.5% 92 (15)
1.0% 184 (30)
1.5% 275 (45)
------- ------------ ------------
22. Financial instruments
(Group and Company)
Investments, loans and receivables, cash and cash equivalents
and other interest-bearing loans and borrowings are measured at
amortised cost and the Directors believe their present value is a
reasonable approximation to their fair value.
28 December 29 December
2017 2016
GBP000 GBP000
Financial liabilities
measured at amortised
cost
Bank borrowings 7,043 3,024
------------ ------------
Financial instruments not measured at fair value
Fair value is calculated based on the present value of future
principal and interest cash flows, discounted at the market rate of
interest at the balance sheet date.
Non-derivative financial
liabilities 28 December 29 December
2017 2016
GBP000 GBP000
Unsecured bank facility
Carrying amount 7,043 3,024
------------ ------------
Contractual cash flows:
Less than one year 43 24
Between one and two years - -
Between three and five
years - -
Over five years 7,000 3,000
------------ ------------
7,043 3,024
------------ ------------
Risk management
(Group)
The Board has overall responsibility for the determination of
the Group's risk management objectives and policies. The overall
objective of the Board is to set policies that seek to reduce risk
as far as possible without unduly affecting the Group's
competitiveness and flexibility. The Group has not issued or used
any financial instruments of a speculative nature and the Group
does not contract derivative financial instruments such as forward
currency contracts, interest rate swaps or similar instruments.
The Group is exposed to the following financial risks:
- Credit risk
- Liquidity risk
- Interest rate risk
To the extent financial instruments are not carried at fair
value in the consolidated Balance Sheet, net book value
approximates to fair value at 28 December 2017 and 29 December
2016.
Trade and other receivables are measured at amortised cost. Book
values and expected cash flows are reviewed by the Board and any
impairment charged to the consolidated statement of profit and loss
and other comprehensive income in the relevant period. Cash and
cash equivalents are held in sterling and placed on deposit in UK
banks. Trade and other payables are measured at book value and held
at amortised cost.
Credit risk
Credit risk is the risk of financial loss to the Group if a
customer or counterparty to a financial instrument fails to meet
its contractual obligations and arises principally from the Group's
receivables from customers and investment securities.
At 28 December 2017 the Group has trade receivables of
GBP230,000 (2016: GBP521,000). The Group is exposed to credit risk
in respect of these balances such that, if one or more of the
customers encounters financial difficulties, this could materially
and adversely affect the Group's financial results. The Group
attempts to mitigate credit risk by assessing the credit rating of
new customers prior to entering into contracts and by entering into
contracts with customers with agreed credit terms. At 28 December
2017 the Directors were aware of a few factors affecting the
recoverability of outstanding balances and consequently have
provided for GBP10,000 as doubtful debts (2016: GBPnil).
The Company is exposed to credit risk in respect of its
receivables from its subsidiary companies. The recoverability of
these balances is dependent upon the performance of these
subsidiaries in future periods. The performance of the Company's
subsidiaries is closely monitored by the Company's Board of
Directors.
The maximum exposure to credit risk at the balance sheet date by
class of financial instrument was:
28 December 29 December
2017 2016
GBP000 GBP000
Ageing of past-due but
not impaired receivables
31-60 days 25 144
61-120 days 9 289
>120 days 46 52
------------ ------------
80 485
------------ ------------
In determining the recoverability of trade receivables the Group
considers any change in the credit quality of the trade receivable
from the date credit was initially granted up to the reporting
date. The concentration of credit risk is limited due to the
customer base being diverse and unrelated.
There has not been any impairment in respect of trade
receivables during the year (2016: GBPnil).
Liquidity risk
Liquidity risk arises from the Group's management of working
capital. It is the risk that the Group will encounter difficulty in
meeting its financial obligations as they fall due. The Group's
policy is to ensure that it will always have sufficient cash to
allow it to meet its liabilities when they become due. To achieve
this aim, it seeks to maintain cash balances to meet its expected
cash requirements as determined by regular cash flow forecasts
prepared by management.
Interest rate risk
Interest rate risk arose from the Group's holding of
interest-bearing loans linked to LIBOR. The Group is also exposed
to interest rate risk in respect of its cash balances held pending
investment in the growth of the Group's operations. The effect of
interest rate changes in the Group's interest-bearing assets and
liabilities are set out in note 21.
Capital management
The Group's capital is made up of share capital, share premium,
merger reserve and retained earnings totalling GBP51,339,000 (29
December 2016: GBP32,264,000).
The Group's objectives when maintaining capital are:
- To safeguard the entity's ability to continue as a going
concern so that it can continue to provide returns for shareholders
and benefits for other stakeholders
- To provide an adequate return to shareholders by pricing
products and services commensurately with the level of risk.
The capital structure of the Group consists of shareholders
equity as set out in the consolidated statement of changes in
equity. All funding required to set-up new cinema sites and for
working capital purposes are financed from existing cash resources
where possible. Management will also consider future fundraising or
bank finance where appropriate.
23. Provisions
(Group)
28 December 29 December
2017 2016
GBP000 GBP000
Market rent provisions
Opening balance 1,430 1,501
Additional provisions arising
on acquisition 529 -
Utilised against rent during
the period (76) (71)
------------ ------------
Closing balance 1,883 1,430
------------ ------------
Provisions 28 December 29 December
(Company only) 2017 2016
GBP000 GBP000
Market rent provisions
Opening balance 1,430 1,501
Utilised against rent during
the period (70) (71)
------------ ------------
Closing balance 1,360 1,430
------------ ------------
Market rent provisions relate to the fair value of liabilities
on leases acquired in 2015 and 2017. The market rent provisions are
being amortised over the term of the individual leases.
24. Deferred tax
(Group)
28 December 29 December
2017 2016
GBP000 GBP000
Included in non-current liabilities 284 775
------------ ------------
Deferred tax gross movements
Opening balance 775 296
------------ ------------
Recognised in the profit and
loss
Arising on loss carried forward 603 (814)
Rollover gain released (12) (6)
Other provisions released - (10)
NBV in excess of tax WDV (164) 982
Movement on share option intrinsic
value (67) 66
Unrealisable balances on loss
carried forward - 240
On derecognition of financial
swap instrument - 28
Amortisation of acquisition-related
deferred tax - (7)
------------ ------------
Charge to profit and loss 360 479
------------ ------------
Not recognised in the profit
and loss
Movement on share option intrinsic
value (851) -
------------ ------------
Closing balance 284 775
------------ ------------
The deferred tax liability
comprises:
Temporary differences on property,
plant and equipment 1,083 1,219
Temporary differences on leases
acquired 111 111
Share-option scheme intrinsic
value (973) (55)
Available losses (158) (1,001)
Other temporary and deductible
differences 221 501
------------ ------------
Closing balance 284 775
------------ ------------
Deferred tax is calculated in full on temporary differences
under the liability method using the tax rates that have been
substantively enacted for future periods, being 19%. The deferred
tax liability has arisen due to the timing difference on property,
plant and equipment, the deferral of capital gains tax arising from
the sale of a property and other temporary and deductible
differences. The Group has unutilised tax allowances of GBP158,000
at expected tax rates in future periods.
In accordance with IAS12 Income taxes, the credit of GBP851,000
has been recognised outside of profit and loss to the extent that
the deferred tax asset has arisen on expected allowable deductions
for tax purposes at future tax rates in excess of the fair value of
the share option charge that will be recognised in the profit and
loss. In this instance, the expected gain on the exercise of share
options is anticipated to exceed the full share option charge
recognised in the profit and loss at initial fair value.
Deferred tax 28 December 29 December
(Company only) 2017 2016
GBP000 GBP000
Included in non-current liabilities 43 110
------------ ------------
Deferred tax gross movements
Opening balance 110 117
Recognised in the profit and
loss
NBV in excess of tax WDV (46) -
Movement in loss carried forward (21) -
Amortisation of acquisition-related
deferred tax - (7)
------------ ------------
Credit to profit and loss (67) (7)
------------ ------------
Closing balance 43 110
------------ ------------
28 December 29 December
2017 2016
GBP000 GBP000
The deferred tax liability
comprises:
Temporary differences on property,
plant and equipment (47) (29)
Temporary differences on leases
acquired 111 111
Available losses (21) -
Other temporary and deductible
differences - 28
------------ ------------
Closing balance 43 110
------------ ------------
The Company has a deferred tax liability due to the timing
difference on property, plant and equipment. The Company has
unutilised tax allowances of GBP21,000 at expected tax rates in
future periods.
25. Share capital and reserves
(Group and Company)
28 December 29 December
Nominal 2017 2016
value GBP000 GBP000
Ordinary shares GBP0.10
At the start of the year 5,982 5,982
Issued in the year 1,021 -
------------ ------------
At the end of the year 7,003 5,982
------------ ------------
Number of shares 28 December 29 December
Nominal 2017 2016
value Number Number
Authorised, issued and fully
paid
Ordinary shares GBP0.10
At the start of the year 59,820,436 59,820,436
Issued in the year 10,206,667 -
------------ ------------
At the end of the year 70,027,103 59,820,436
The holders of Ordinary shares are entitled to one vote per
share.
On 9 October 2017 the Company issued 10,000,000 Ordinary shares
at a price of GBP1.70 per share. Share issue costs of GBP521,000
were deducted from share premium.
Merger reserve
In accordance with s612 of the Companies Act, the premium on
Ordinary shares issued in relation to acquisitions is recorded as a
merger reserve.
Share premium
Share premium is stated net of share issue costs.
Dividends
No dividends were declared or paid during the period (2016:
GBPnil).
26. Obligations under operating leases
(Group)
28 December 29 December
2017 2016
GBP000 GBP000
Land and buildings
Less than one year 3,051 2,563
Between one and two years 2,976 2,570
Between three and five years 8,874 7,811
Over five years 45,445 41,194
------------
60,346 54,138
------------ ------------
The Group conditionally entered into new operating leases at
Cirencester, Tunbridge Wells, Glasgow, Newcastle, Liverpool,
London's Borough Market, Altrincham and Lincoln. The total
commitment of these new leases in addition to those previously
announced is GBP44,840,000. This is not included within operating
lease obligations as they are conditional. Rentals will commence
after the fit-outs have been completed.
Obligations under operating
leases 28 December 29 December
(Company) 2017 2016
GBP000 GBP000
Land and buildings
Less than one year 719 694
Between one and two years 719 694
Between three and five years 2,156 2,081
Over five years 9,931 10,971
------------
13,525 14,440
------------ ------------
27. Share-based payment arrangements
(Group and Company)
Everyman Media Group PLC operates three equity-settled share
based remuneration schemes for employees. The schemes combine a
long term incentive scheme, an EMI scheme and an unapproved scheme
for certain senior management and executive Directors. A subsidiary
of the Company has also issued A Ordinary shares to certain
Directors which contain terms equating to a share option over the
Company conditional upon future performance. In 2014 the Company
acquired 535,718 A Ordinary shares in Everyman Media Holdings Ltd,
a subsidiary of the Company, from A Myers following his resignation
as a Director on 1 December 2014. There were no acquisitions in the
year ended 28 December 2017.
The terms and conditions of the grants are as follows:
Number
of
instruments Contractual
Method
of outstanding Vesting life
Grant
Persons entitled date settlement 000 conditions of options
Management employees, 29.10.2013 Equity-settled 165 *1 10 years
Directors and contractors
170 *2 10 years
1,393 *4 10 years
80 *3 10 years
Directors 04.11.2013 Equity-settled 50 *2 10 years
Management employees 11.11.2014 Equity-settled - *1 10 years
Directors 01.12.2014 Equity-settled 287 *5 10 years
257 *6 10 years
Management employees 18.12.2014 Equity-settled 75 *1 10 years
Directors 20.04.2015 Equity-settled 175 *7 10 years
233 *8 10 years
Management employees, 29.10.2015 Equity-settled 1,733 *9 10 years
Directors and contractors
Management employees 15.12.2016 Equity-settled 285 *10 10 years
Management employees 10.01.2017 Equity-settled 110 *10 10 years
Directors 13.03.2017 Equity-settled 250 *10 10 years
Management employees 11.10.2017 Equity-settled 445 *10 10 years
Management employees 09.11.2017 Equity-settled 10 *10 10 years
Management employees, 23.11.2017 Equity-settled 143 *11 10 years
Directors and contractors
*1 EMI options. These vest in equal tranches on the first,
second and third anniversaries of the date of grant.
*2 Unapproved options. These vest in equal tranches on the
first, second and third anniversaries of the date of grant.
*3 EMI options. These vest in equal tranches on the first,
second and third anniversaries of the date of grant. Each tranche
is exercisable if the Company's share price exceeds GBP1.20,
GBP1.40 and GBP1.70 respectively for 15 consecutive trading
days.
*4 Series 1, 2 and 3 A Ordinary shares in Everyman Media
Holdings Ltd. Holders of these shares have a right to require
Everyman Media Group PLC to purchase the shares at a price
essentially equivalent to the market value of an Everyman Media
Group PLC Ordinary share less 83p provided that the share price has
been, for 15 consecutive trading days after 8 May 2014, GBP1.20 or
more for Series 1 shares, GBP1.40 or more for Series 2 shares and
GBP1.70 or more for Series 3 shares. The A Ordinary shares will
convert into essentially worthless deferred shares to the extent
that these targets are not met by 7 November 2023. As such, the
Directors consider these shares to be largely equivalent to an EMI
option. The rights described above were accounted for as
share-based payments.
*5 EMI options. These vest in two tranches: 181,455 on the first
anniversary of the date of grant and 105,901 on the second
anniversary of the date of grant. The tranches may be exercised if
the Company share price is above GBP1.20 and GBP1.40 respectively
for 15 consecutive trading days.
*6 Unapproved options. These vest in two tranches: 75,554 on the
second anniversary of the date of grant and 181,455 on the third
anniversary of the date of grant. The tranches may be exercised if
the Company share price is above GBP1.40 and GBP1.70 respectively
for 15 consecutive trading days.
*7 EMI options. These vest in two tranches: 169,358 on the first
anniversary of the date of grant and 105,367 on the second
anniversary of the date of grant. The tranches may be exercised if
the Company share price is above GBP1.20 and GBP1.40 respectively
for 15 consecutive trading days.
*8 Unapproved options. These vest in two tranches: 63,991 on the
second anniversary of the date of grant and 169,358 on the third
anniversary of the date of grant. The tranches may be exercised if
the Company share price is above GBP1.40 and GBP1.70 respectively
for 15 consecutive trading days.
*9 Unapproved options. These vest in equal tranches on the
first, second and third anniversaries of the date of grant. Each
tranche is exercisable if the Company share price exceeds GBP1.30,
GBP1.50 and GBP1.80 respectively for 15 consecutive trading
days.
*10 Unapproved options. These vest on the third anniversary of
the date of grant.
*11 Unapproved options as part of the long-term incentive plan.
These vest on the fifth anniversary of the date of grant. Half of
the options are exercisable if the share price exceeds GBP2.10 for
2 consecutive trading days within 60 days following the
announcement of the preliminary results for 2017. The other half of
the options are exercisable if the Adjusted Profit measure for 2017
exceeds GBP6.4m, GBP6.5m and GBP6.6m respectively.
Equity-settled share-based payments are measured at fair value
(excluding the effect of non-market-based vesting conditions) as
determined through use of the Black-Scholes technique, at the date
of grant. The fair value determined at the grant date of the
equity-settled share-based payments is expensed on a straight-line
basis over the vesting period, based on the Group and Company's
estimate of shares that will eventually vest and adjusted for the
effect of non-market-based vesting conditions.
The inputs into the Black-Scholes model for the share option
plans for the share options issued in the year are as follows:
Option scheme conditions for options issued in the year:
28 December 28 December 29 December
2017 2017 2016
Options Options Options
with with no with no
performance performance performance
criteria criteria criteria
Weighted average share price
at grant date (pence) 190.42 145.38 93.50
Weighted average option exercise
prices (pence) 0.10 145.38 93.50
Expected volatility 50.94% 43.64% 34.46%
Expected option life 5 years 5 years 5 years
Weighted average contractual
life of outstanding share options 10 years 10 years 10 years
Risk-free interest rate 1.2% 1.26% 1.4%
Expected dividend yield 0.0% 0.0% 0.0%
Fair value of options granted
in the year (pence) 250.87 58.57 30.42
Weighted average
exercise price per
share 28 December 29 December
2017 2016 2017 2016
Pence Pence Number Number
Options at the beginning
of the year 84.1 83.2 5,248,329 4,853,329
Options issued in
the year 125.6 85.0 997,823 440,000
Options exercised
in the year 85.3 - (206,667) -
Option forfeited
in the year 92.9 83.2 (178,333) (45,000)
------------ ------------
Options at the end
of the year 91.3 84.1 5,861,152 5,248,329
------------ ------------
No options lapsed in the year (2016: nil).
Share-based payments charged to the profit and loss
28 December 29 December
2017 2016
GBP000 GBP000
Administrative costs 301 293
------------ ------------
The charge for the Company was GBPnil (2016: GBPnil) after
recharging subsidiary undertakings with a charge of GBP301,000
(2016: GBP293,000). The relevant charge is included within
administrative costs.
There are 3,871,296 options exercisable at 28 December 2017 in
respect of the current arrangements (29 December 2016:
385,000).
206,667 options were exercised in the year (2016: nil).
Volatility for options issued was determined by reference to
movements in the share prices of comparable listed companies over
five years prior to the grant date. The weighted average exercise
price of the options and the option element inherent in the A
shares, is GBP0.91. The market value conditions, where applicable,
have been incorporated into the fair-value calculation using an
estimate of the potential achievement of the market values for the
minimum periods and timescales required.
28. Commitments
There were capital commitments for tangible assets at 28
December 2017 of GBP417,000 (29 December 2016: GBP1,161,000).
29. Events after the balance sheet date
Everyman Media Ltd (a subsidiary of the Company) acquired 100
Ordinary shares of 1pence each in ECPEE Ltd, a property management
company on 19 January 2018. The acquired company exchanged
contracts on the freehold for a property in Crystal Palace. The
Group will provide financial assistance to the newly acquired
company in order to obtain the freehold interest for GBP3.225m.
30. Acquisition of cinema leases and related assets
Acquisitions in the year
On 1 September 2017 the Group acquired a cinema site in York
from Reel Cinemas Ltd. The acquisition was accounted for as a
business combination. The acquisition was part of the Group's
expansion and development plans. Following a full refurbishment
under the Everyman brand, the site successfully re-opened on 29
December 2017.
28 December
2017
GBP000
Consideration
Cash 1,302
Fair value of recognised amounts of identifiable assets acquired
and liabilities assumed
Plant and machinery 250
Fixtures and fittings 50
Provision in respect of
unfavourable lease contracts (530)
------
Total identifiable net
liabilities (230)
------
Goodwill 1,532
------
Cash consideration paid 1,302
Acquisition expenses recognised
as an expense 86
------
Total cash outlay 1,388
------
It is the Company's policy to refurbish newly acquired sites to
conform to the quality and branding expected from the Company's
cinema chain. For this reason, the consideration paid for this
venue exceeded the fair value of assets acquired given the location
and potential uplift in trade following a rebranding befitting of
the building.
31. Related-party transactions
In the year to 28 December 2017 the Group engaged services from
entities related to the Directors and key management personnel of
GBP601,000 (2016: GBP362,000) comprising consultancy services of
GBP50,000 (2016: GBP50,000), office rental of GBP66,000 (2016:
GBP55,000) and venue rental for Bristol, Harrogate and
Stratford-Upon-Avon of GBP485,000 (2016: GBP257,000). There were no
other related-party transactions. There are no key management
personnel other than the Directors.
Everyman Media Group PLC, charged an amount of GBP301,000 (2016:
GBP293,000) to Everyman Media Ltd in respect of share-based
payments, GBP797,000 (2016: GBP766,000) in respect of the rental of
four cinema sites acquired in 2016 and GBP336,000 (2016:
GBP130,000) in respect of interest on bank loan funds provided by
the Company.
Everyman Media Holdings Ltd, charged an amount of GBP421,000
(2016: GBPnil) to Everyman Media Ltd in respect of the rental of
two cinema sites assigned to Everyman Media Holdings Ltd during the
year.
The Company's commitment to new leases is set out in the above
notes. Within the total of GBP60,346,000 is an amount of GBP75,000
relating to office rental, GBP3,583,000 relating to
Stratford-Upon-Avon GBP2,626,000 relating to Bristol and
GBP5,469,000 relating to Harrogate. The landlord of the site is an
entity related to the Directors of the Company.
32. Ultimate controlling party
The company has a diverse shareholding and is not under the
control of any one person or entity.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR KMGMFMFFGRZZ
(END) Dow Jones Newswires
March 14, 2018 03:01 ET (07:01 GMT)
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