Time Out Group plc, the global media and leisure business, today announces its unaudited results for the six months ended 30 June 2020. The results reflect a period of significant disruption as a consequence of the enforced closure of leisure venues and travel restrictions in response to the COVID-19 pandemic.
Financial Highlights
· Prior to the escalation of the COVID-19 pandemic the Group was performing in line with our expectations; digital advertising and the recently expanded Time Out Market estate continued the trading momentum established in 2019
· Gross revenue(1) decline of 24% to £20.3m (2019: £26.9m) and net revenue decline of 36% to £15.8m (2019: £24.7m) due to the temporary closure of the Time Out Markets and the sharp decline in advertising revenues generated from the travel and leisure sectors
· Gross margin(2) increase of 7 percentage points to 78% (2019: 71%), despite Group gross profit decline of 19% to £12.4m, reflecting Time Out Media’s higher digital revenue mix
· Group adjusted EBITDA loss(3) of £8.8m (2019: £4.5m), includes the partial benefit of the cost reduction initiatives implemented in the period
· Group operating loss increase to £13.6m (2019: £8.6m)
· Funding: Successful equity placing raised gross proceeds of £47.1m to strengthen the Company’s balance sheet in the wake of the impact of COVID-19 and redeem £24m of loan notes
· Cash of £22.5m at 30 June 2020 and debt of £22.0m, resulted in adjusted net cash(4) of £0.5m. Reported net debt was £32.7m including £33.2m of IFRS 16 lease liabilities
· Outlook: The duration and scale of the continued impact of COVID-19 and the measures required to curb it are unknown. However, the Group has taken funding, cost and operating initiatives to ensure it emerges stronger from this period of disruption
Operational Highlights
· The Group’s global brand audience increased by 29% to a monthly average of 73.3m (2019: 57.0m), reflecting the authority and continued relevance of Time Out’s content, which seeks to champion virtual culture, food and drink, and community during periods of lockdown
· Time Out Market locations were closed by 16 March 2020 in response to COVID-19 outbreaks and the subsequent local government guidelines and remained closed for the remainder of the period
· Accelerated development and launch of the Time Out Market app has enabled contactless transactions with order & pay at table, home delivery and collection
· Lisbon, New York, Chicago, Boston and Montreal have now safely re-opened post period end, with Miami expected to re-open in Q4 2020
· Time Out Media faced significant delays to advertising spend
· Creative Solutions initiated recovery as global consumer brands launched digital campaigns
· First post-lockdown magazine published in August, with more following as advertising allows return to print in the UK and Spain
(1) See note 4 for the explanation of gross and net revenue
(2) Gross margin calculated as gross profit as a percentage of net revenue
(3) Adjusted EBITDA is stated before interest, taxation, depreciation, amortisation, share based payments, share of associate’s loss and exceptional items. It also includes property lease costs which, under IFRS 16, is replaced by depreciation and interest charges. This is a non-GAAP alternative performance measure that management uses to aid understanding of the underlying business performance.
(4) Adjusted net cash/(debt) excludes lease-related liabilities under IFRS 16
Commenting on the results, Julio Bruno, CEO of Time Out Group plc, said:
“2020 will be remembered as the year the world stood still and we stopped going out. I am proud that a company so focused on being out and about in the world’s greatest cities was able to adapt and innovate so quickly, remaining relevant with both consumers and advertisers. Our early pivot to Time-In allowed us to create new content that engaged our global audience from home and develop new business opportunities from e-commerce to digital advertising.”
“Our Time Out Markets closed in mid-March but our teams continued to innovate resulting in the launch of our Time Out Market app, which facilitates contactless transactions, order & pay at table, takeaway and delivery. We redesigned our Markets to create enjoyable, COVID-safe environments, where we still offer the best food and cultural experiences in the city that both our Chefs and consumers are keen to return to.”
“The combination of a successful fundraising, a cost-reduction programme and further strategic initiatives will support Time Out as it emerges from this period of COVID-led disruption with a stronger global brand, a larger audience, and a higher operating margin. Landlords and developers around the world are approaching us, more than ever, to explore the roll-out of more Time Out Markets, a testament to the enduring value of our brand.”
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