TIDMLETS
RNS Number : 3500Y
Let's Explore Group PLC
04 May 2023
4(th) May 2023
Let's Explore Group PLC
(the "Company" or the "Group")
2022 full year results
Let's Explore Group PLC is pleased to announce its audited
results for the year ended 31 December 2022. Following the year
end, the Group's largest business, Location Based Entertainment
(LBE) was sold for approximately $25m. Furthermore, a smaller
subsidiary, Uvisan was also sold following the year end.
Accordingly, these results represent the performance of the Group
for the full year ended 31 December 2022 prior to these
disposals.
Highlights
-- Revenue from total operations up 23% to GBP11.6m (2021: GBP9.4m)
-- Adjusted EBTIDA from total operations up 51% to GBP1.4m (2021: GBP0.9m)
-- Loss after tax from total operations reduced to GBP0.7m (2021: GBP2.0m)
-- Disposal of the Location based entertainment based completed on 1 March 2023
-- Cash on hand circa GBP19m
-- Capital reduction confirmed by court on 25 April 2023,
expected to become effective 5 May 2023
-- Company expects to return approximately GBP12.5m to shareholders by way of a tender offer
Chairman's Statement
At the time of my last annual report, we had decided to focus on
our LBE business. Normal trading conditions returned through 2022
and good progress was made with further expansion of the LBE estate
and improved overall like-for-like trading. Accordingly, LBE
revenue increased by 62% to GBP10.2m (2021: GBP6.4m) [1] .
The continued growth of the LBE business clearly caught the eye
of a potential acquirer and, following some detailed conversations,
we received a serious approach for our LBE business in late 2022.
After much debate, we decided certainty, in what was quickly
becoming a very uncertain world, was the right decision for our
shareholders, and as a result we took the decision to sell the LBE
business to LBE BidCo, Inc. for approximately $25m in cash. This
transaction was concluded on 28 February 2023.
We remain committed to returning circa GBP12.5m of the net cash
from the sale to our shareholders via a tender offer which is
expected to complete in early June 2023. On 25 April 2023, the
court confirmed the capital reduction which it is anticipated will
become effective on or around 5 May 2023 when it is processed by
Companies House. The terms of the tender offer will be subject to
final shareholder approval, details of which will be announced
imminently.
Despite the fact all of our resources had been allocated to the
LBE business, we did see some encouraging progress from our Home
Based Entertainment (HBE) business, both in terms of online sales
and sales via the QVC TV channel (though there were some challenges
with returns of opened products). Given the level of demand seen,
we have therefore taken the decision in the meantime to retain this
business unit as, given the knowledge we now have in online
retailing, our new B2B relationships and the capacity to purchase
more stock, the potential of this business can be explored
further.
Going forward, with an existing AIM listing, supportive
shareholders, an experienced board and cash on hand, we expect, in
the coming months, to be able to secure an attractive opportunity
on favourable terms, particularly against the current challenging
stock market backdrop. Our focus is on acquiring ownership or
control of a growing business that needs development capital to
take it to the next stage of its development.
While the formalities of returning cash are complex, we feel
that the upcoming tender offer and the potential to pursue further
interesting transactions provides a balanced approach to risk.
In the meantime, we wish our former colleagues in the LBE
business and the new owners good fortune and look forward to seeing
the business grow for the benefit of the team and the new
owners.
I look forward to reporting further progress of our new
initiatives in the coming months.
Chief Executive's Review
The overall outcome for the year met our expectations, with
Group revenue from total operations increasing by 23% per cent to
GBP11.6m (2021: GBP9.4m). Adjusted EBITDA from total operations
(before central costs) increased by 51% to GBP1.4m (2021:
GBP0.9m).
LBE
This time last year, we took the decision to focus the Group's
resources on the LBE business and were pleased to see it grow
significantly in the year with revenue increasing 60% to GBP10.2m
(2021: GBP6.4m) [2] and segment adjusted EBITDA before central
costs increased from GBP2.3m to GBP2.9m.
The LBE business enjoyed its first full year of post-COVID
trading conditions in 2022, and whilst this was by no means a
certainty as the year started we decided to take a cautious
approach to growth. That said, we still opened a further 11 new
sites (122 seats) and increased capacity at a number of sites where
demand was very strong at peak times (adding a further 49 seats
across 9 sites).
We developed new content, most notably "Gorilla Trek" which we
were delighted to see win a prestigious Lumiere award in the 'Best
Use of VR' category at a ceremony in Los Angeles in February 2023.
The launch of Gorilla Trek, along with the containerised solution
we developed for outdoor spaces, opened up new opportunities for
roll-out into the zoo market.
We were also pleased, following period-end, to agree a new
3-year framework agreement with Merlin (running through to January
2026) covering 26 sites.
At 31 December 2022, the LBE estate had 491 headsets in
operation (439 partner and 53 ImmotionVR) across 53 sites as shown
in the table below:
USA UK ROW Total
At 1 January 2022
Headsets 204 105 55 364
Sites 26 13 9 48
Additions
Headsets 132 31 8 171
Sites 8 3 - 11
Removals
Headsets (22) (22) - (44)
Sites (3) (3) - (6)
At 31 December
2022
Headsets 314 114 63 491
Sites 31 13 9 53
HBE
HBE revenue reduced to GBP0.8m (2021: GBP2.5m) as a far more
cautious approach was taken to stock investment following the
decision during the early part of the year to prioritise the LBE
business. The division made a gross loss of GBP69k (2021: gross
profit GBP99k). Divisional adjusted EBITDA, before central costs,
resulted in an increased loss of GBP212k (2021: GBP110k loss).
The only stock investment in the year was 30,000 Vodiac units
for sale primarily through the QVC TV channel. The sale of the
Vodiac units resulted in a modest contribution, though this was
offset by a loss on the sale of Let's Explore Oceans packs held in
stock. The Let's Explore Oceans stock was fully paid for in 2021
and, as stated at the time, was subjected to extraordinary freight
costs, pushing up the cost per unit. Despite the book losses, the
sale of the units benefitted cash flow as the stock was sold.
Stock of HBE products was low coming into 2023 and, given the
majority of the division's trade takes place in late Q3 and Q4,
trading so far in 2023 has been at a much reduced level.
Uvisan
Uvisan made satisfactory progress but it was apparent that
further investment would need to be made into stock given long lead
times from China. In addition, the business remained very small in
terms of potential profit contribution to the Group.
Accordingly, the board had decided to exit the business and the
business was sold to management for cash consideration of GBP100k
post period end (completing on 1 February 2023). The Group retains
an option to acquire 15% of the equity in specific
circumstances.
Uvisan's revenue increased modestly to GBP540k (2021: GBP477k)
and profit before tax was GBP73k before central costs and
impairment of the disposal group (2021: GBP67k). This was mainly
driven by the increasing orders from the distributor and reseller
networks which the business established over the last 24 months,
including one large order from a new US distributor.
Financial review
The table below shows the results of the various business units
in the year. LBE and Uvisan are included within discontinued
operations as the directors assessed that it was highly probable at
the year-end that the transactions would complete.
Continuing Discontinued
Operations Operations
HBE Head Office LBE Uvisan Total Total
2022 2022 2022 2022 2022 2021
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 796 - 10,241 540 11,577 9,391
Adjusted
EBITDA (212) (1,370) 2,851 106 1,375 908
Profit/(loss)
after tax (370) (1,558) 1,295 (28) (661) (1,999)
Revenue from total operations for the year increased 23% to
GBP11,577k (2021: GBP9,391k).
The Group made gross profit from total operations in the period
of GBP5,016k (2021: GBP3,196k), a gross profit margin of 43% (2021:
34%).
The Group achieved a second full year positive adjusted EBITDA
([3]) from total operations of GBP1,375k and (2021: GBP908k).
The Group's total loss after tax reduced to GBP661k (2021:
GBP1,999k). The total adjusted loss ([4]) per share was 0.07p
(2021: 0.28p).
The overall cash outflow in the period was GBP770k (2021:
outflow of GBP565k) as illustrated in the table below:
2022 2021
GBP'000 GBP'000
Opening cash 1,099 1,664
Operating activities 1,604 263
Investing activities (2,283) (788)
Financing activities (91) (40)
Closing cash 329 1,099
The Group's improved total operating cash inflow of GBP1,604k
(2021: GBP263k inflow) was comprised of a GBP1,383k inflow from
operations before working capital movements (2021: GBP988k inflow)
and a GBP221k inflow from working capital movements (2021: GBP725k
outflow). This was driven predominantly by the improvement in LBE
trading.
Total investing cash outflows increased to GBP2,283k (2021:
GBP788k outflow) as a result of additional capital expenditure
incurred (primarily in the LBE business) compared with the
COVID-impacted prior period.
The Group had a net financing cash outflow of GBP91k (2020:
GBP40k outflow). During the year, the Group took out a new loan of
GBP100k and entered into a new lease valued at GBP228k in
accordance with IFRS 16. IFRS 16 lease repayments amounted to
GBP218k and loan repayments amounted to GBP204k.
Net assets at the balance sheet date were GBP5,391k (2021:
GBP5,720k).
Outlook
Following the sale of the LBE business, we now have a strong
balance sheet with circa GBP19m of cash on hand and a further
$1.25m plus interest due to be received from the buyer of the LBE
business in February 2024.
We have announced the intent to return circa GBP12.5m to our
shareholders and we believe that following completion of this
exercise we will be well placed to pursue new opportunities.
We have retained the HBE division, encompassing both the Let's
Explore and Vodiac products, and we will seek to take advantage of
the strong seasonal periods whilst not over-committing Group cash
resources into stock buying.
That said, the main focus over the coming months with the tender
offer completed, will be to find a suitable opportunity for the
Group, which we would expect to become the Group's principal
activity. We feel that our AIM listing, experienced management team
and cash resources on hand could be attractive to a growing
business in need of development capital, especially whilst the
equity markets remain challenging.
This announcement contains certain inside information for the
purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014
as it forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Company's obligations under Article 17 of MAR.
Enquiries:
For further information please visit www.letsexploregroup.com/ , or contact:
Let's Explore Group Martin Higginson investors@letsexploregroup.com
plc David Marks
Cenkos Securities Adrian Hadden Tel + 44 (0) 207 7397 8900
plc Camilla Hume
(Nomad and Sole Broker) Charlie Combe
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 31 DECEMBER 2022
Restated
Year Ended Year Ended
31 December 31 December
2022 2021
GBP'000 GBP'000
Continuing operations Note
Revenue 796 2,526
Cost of sales (865) (2,427)
--------------- ---------------
Gross profit (69) 99
Administrative expenses (1,848) (1,871)
Other operating income - 8
--------------- ---------------
Loss from operations (1,917) (1,764)
Memorandum:
Adjusted EBITDA (1,582) (1,084)
Depreciation (1) -
Amortisation (168) (4)
Share based payments (133) (676)
One-off costs (33) -
______
Loss from operations (1,917) (1,764)
--------------------------------------------------- ---------- ---------------- --------------------------
Finance costs (11) (3)
_______ _______
Loss before taxation
and attributable to equity (1,928) (1,767)
Taxation - -
_______ _______
Loss after taxation from continuing
operations (1,928) (1,767)
Profit after tax from discontinued
operations 5 1,267 (232)
______ ______
Loss after taxation from all
operations (661) (1,999)
Other comprehensive expense
Profit/(loss) on translation
of subsidiary 129 44
Loss after taxation and attributable ______ ______
to equity
holders of the parent and total
comprehensive (532) (1,955)
income for the period ======== ======= =
Year ended Year ended
31 December 31 December
2022 2021
GBP0.01 GBP0.01
Earnings/(loss) per share
Continuing operations
Basic 6 (0.46) (0.43)
Diluted 6 (0.46) (0.43)
------------ ------------
Discontinued operations
Basic 6 0.30 (0.05)
Diluted 6 0.30 (0.05)
------------ ------------
Continuing and discontinued operations
Basic 6 (0.16) (0.48)
Diluted 6 (0.16) (0.48)
------------ ------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2022
Share Share Foreign Retained Total
capital premium exchange deficit equity
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 January
2021 164 20,273 (80) (13,643) 6,714
Issue of shares 2 298 - - 300
Issue costs deducted
from equity - (15) - - (15)
Loss after tax - - - (1,999) (1,999)
Equity settled share-based
payments - - - 676 676
Currency translation
of overseas subsidiary - - 44 - 44
------------ -------------- ------------ ---------------- ------------
Balance at 31 December
2021 166 20,556 (36) (14,966) 5,720
------------ -------------- ------------ ---------------- ------------
Loss after tax - - - (661) (661)
Equity settled share-based
payments - - - 133 133
Currency translation
of overseas subsidiary - - 129 - 129
------------ -------------- ------------ ---------------- ------------
Balance at 31 December
2022 166 20,556 93 (15,494) 5,321
------------ -------------- ------------ ---------------- ------------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022
31 December 31 December
2022 2021
ASSETS Note GBP'000 GBP'000
Non-current assets
Property, plant and equipment 7 3 1,188
Intangible fixed assets 8 214 3,305
------------ ------------
Total non-current assets 217 4,493
Current assets
Inventories 67 103
Trade and other receivables 786 1,783
Contract assets 2 83
Cash and cash equivalents 51 1,099
------------ ------------
Total current assets 906 3,068
------------ ------------
Assets held for sale 5 6,362 -
------------ ------------
Total assets 7,485 7,561
====== =======
LIABILITIES
Current liabilities
Trade and other payables (786) (1,103)
Loans and borrowings (45) (130)
Lease liabilities - (171)
Contract liabilities (7) (278)
------------ --------------
Total current liabilities (838) (1,682)
------------ --------------
Non-current liabilities
Loans (28) (155)
Lease liabilities - (4)
------------ ------------
(28) (159)
Total non-current liabilities ------------ ------------
Liabilities associated with assets
held for sale 5 (1,298) -
------------ ------------
Total liabilities (2,164) (1,841)
------------ ------------
Total net assets 5,321 5,720
====== ======
Capital and reserves attributable
to owners
of the parent
Share capital 9 166 166
Share premium 20,556 20,556
Foreign exchange reserve 93 (36)
Retained deficit (15,494) (14,966)
______ ______
Total equity 5,321 5,720
======== ========
The financial statements were approved by the Board and
authorised for issue on 3 May 2023
Martin Higginson Daniel Wortley
Chief Executive Officer Finance Director
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARED 31 DECEMBER 2022
Restated
Year ended Year ended
31 December 31 December
2022 2021
GBP'000 GBP'000
Cash flows from operating activities
Loss before tax from continuing operations (1,928) (1,767)
Loss before tax from discontinued operations 1,297 (270)
Adjustments for:
Share based payments 133 676
Depreciation on property plant and equipment 1,036 1,470
Profit on disposal of fixed assets (19) (18)
Amortisation of intangible assets 601 641
Impairment of tangible and intangible assets 176 82
Finance costs 37 44
Finance income (1) (1)
Foreign exchange profit/(loss) 37 50
Foreign corporate tax payment (4) (3)
Corporation tax repayment received 18 84
_____ _____
Cash inflows/(outflows) from operating
activities before changes in working capital 1,383 988
Decrease/ (increase) in inventories (11) 49
I ncrease in trade and other receivables (46) (989)
In crease in trade & other payables and
contract liabilities 278 215
_____ _____
Cash generated/(used) in operations 1,604 263
Investing activities
Purchase of intangible assets (510) (404)
Purchase of property, plant and equipment (1,797) (425)
Proceeds from d isposals of property, plant
and equipment 24 41
_____ _____
Net cash used in investing activities (2,283) (788)
Financing activities
Finance costs (37) (44)
Finance income 1 1
New loans and finance leases 328 119
Loan and finance lease repayments (422) (405)
Foreign exchange on retranslation of financing 39 4
Issue of new share capital - 300
Costs on issue of shares - (15)
_____ _____
Net cash from financing activities (91) (40)
Net (decrease)/increase in cash and cash
equivalents (770) (565)
Cash and cash equivalents at beginning
of the period 1,099 1,664
_____ _____
Cash and cash equivalents at end of the 329 1,099
period ====== ======
Year ended Year ended
31 December 31 December
2022 2021
GBP'000 GBP'000
Reconciliation of net cashflow to movement
in net debt
Net (decrease)/increase in cash and cash
equivalents (770) (565)
New loans and finance leases (328) (119)
Repayment of loans and finance leases 422 405
Foreign exchange on retranslation of financing (39) (4)
_____ _____
Movement in net funds in the year (715) (283)
Net funds/(debt) at beginning of year 639 922
_____ _____
Net funds at end of year (76) 639
====== ======
Breakdown of net funds/(debts)
Cash and cash equivalents 51 1,099
Cash and cash equivalents attributable to 278 -
disposal groups _____ _____
329 1,099
Loans and borrowings (73) (285)
Loans and borrowings attributable to disposal (136) -
groups
Lease liabilities - (175)
Lease liabilities attributable to disposal (196) -
groups _____ _____
Net funds at end of year (76) 639
====== ======
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2022
1 GENERAL INFORMATION
Let's Explore Group plc is a public limited company incorporated
and domiciled in the United Kingdom. The address of the registered
office is Cumberland Court, 80 Mount Street, Nottingham, England,
NG1 6HH. The Group is listed on AIM.
The principal activities of the Group during the year were: (i)
the provision of virtual reality (VR) experiences to partner sites
and via its own ImmotionVR sites; (ii) the sale of the Let's
Explore virtual and augmented reality consumer product; and (iii)
the sale of UV sanitisation equipment. Activities (i) and (iii) are
treated as discontinued operations in these financial
statements.
These financial statements are presented in pounds sterling
because that is the currency of the primary economic environment in
which the Group operates. Foreign operations are included in
accordance with the policies set out in note 2.
2 ACCOUNTING POLICIES
Principal accounting policies
The Company is a public company incorporated and domiciled in
the United Kingdom. The principal accounting policies applied in
the preparation of these consolidated financial statements are set
out below. These policies have been consistently applied to all the
periods presented, unless otherwise stated.
Basis of preparation
The financial statements have been prepared in accordance with
International Financial Reporting Standards, International
Accounting Standards and Interpretations (collectively IFRS) issued
by the International Accounting Standards Board (IASB) as adopted
by the United Kingdom ("adopted IFRSs") and those parts of the
Companies Act 2006 which apply to companies preparing their
financial statements under IFRSs. The financial statements are
presented to the nearest round thousand (GBP'000) except when
otherwise indicated.
Basis of Consolidation
The Group comprises a holding company and a number of
subsidiaries and all of these have been included in the
consolidated financial statements in accordance with the principles
of acquisition accounting as laid out by IFRS 3 Business
Combinations.
Going concern
At the time of approving the financial statements, the Directors
have a reasonable expectation that the Company and the Group have
adequate resources to continue in operational existence for the
foreseeable future. The going concern basis of accounting has
therefore been adopted in preparing the financial statements.
In reaching this conclusion, the Directors have considered the
financial position of the Group following receipt of the sale
proceeds from the LBE business, together with its forecasts and
projections for the next 12 months, taking into account reasonably
possible changes in trading performance and capital expenditure
requirements.
The financial statements do not include any adjustments that
would result from the going concern basis of preparation being
inappropriate.
Business combinations and goodwill
Acquisitions of subsidiaries and business are accounted for
using the acquisition method. The assets and liabilities and
contingent liabilities of the subsidiaries are measured at their
fair value at the date of acquisition. Any excess of acquisition
over fair values of the identifiable net assets acquired is
recognised as goodwill. Goodwill arising on consolidation is
recognised as an asset and reviewed for impairment twice annually.
Any impairment is recognised immediately in profit or loss accounts
and is not subsequently reversed. Acquisition related costs are
recognised in the income statement as incurred.
R evenue recognition
Revenue is recognised to the extent that it is probable that the
economic benefits will flow to the Group and the revenue can be
reliably measured. Revenue is measured as the fair value of the
consideration received or receivable, excluding discounts, rebates,
value added tax and other sales taxes. The following criteria must
also be met before revenue is recognised:
Location Based Entertainment
Partner revenue is recognised on the date which the sale to the
customer takes place. The Group acts as the principal in the
transaction and therefore recognises the revenue charged to the end
user in full with the concession partners' shares deducted as a
cost of sale.
Home Based Entertainment
For sales to consumers, revenue is recognised on sales of the
Let's Explore and Vodiac products in the period in which the
corresponding order is placed and paid for. For sales to resellers,
revenue is recognised in the period in which delivery to the
reseller takes place.
Uvisan and other hardware sales
Revenue from the sale of goods is recognised when all of the
following conditions are satisfied:
-- the Group has transferred the significant risks and rewards of ownership to the buyer;
-- the Group retains neither continuing managerial involvement
to the degree usually associated with ownership nor effective
control over the goods sold;
-- the amount of revenue can be reliably measured;
-- it is probable that the Group will receive the consideration due under the transaction; and
-- the costs incurred or to be incurred in respect of the transaction can be reliably measured.
Content
Content licensing revenue is recognised on the date on which the
related sale of that content by the licensee takes place where
agreements do not provide for new or updated content to be
supplied. Where the Group is committed under licensing agreements
to producing new content, or material updates, revenue is
recognised over the period of the agreement. No element of
financing is deemed present as the sales are made with standard
credit terms of 30 days which is consistent with market practice.
The Group does not expect to have any contracts where the period
between the transfer of the promised services or goods to the
customer and payment by the customer exceeds one year. As a
consequence, the Group does not adjust any of the transaction
prices for the time value of money.
Leases
The Group assesses whether a contract is or contains a lease, at
inception of a contract. The Group recognises a right-of-use asset
and a corresponding lease liability with respect to all lease
agreements in which it is the lessee, except for short-term leases
(defined as leases with a lease term of 12 months or less) and
leases of low value assets. In the latter cases, the Group
recognises the lease payments as an operating expense on a
straight-line basis over the term of the lease unless another
systematic basis is more representative of the time pattern in
which economic benefits from the leased asset are consumed.
The lease liability is initially measured at the present value
of the lease payments that are not paid at the commencement date,
discounted by using the rate implicit in the lease. If this rate
cannot be readily determined, the Group uses its incremental
borrowing rate.
Lease payments included in the measurement of the lease
liability comprise fixed lease payments (including in-substance
fixed payments), less any lease incentives.
The lease liability is included in liabilities in the Statement
of Financial Position.
The lease liability is subsequently measured by increasing the
carrying amount to reflect interest on the lease liability (using
the effective interest method) and by reducing the carrying amount
to reflect the payments made.
The right-of-use assets comprise the initial measurement of the
corresponding lease liability, lease payments made at or before the
commencement day and any initial direct costs. They are
subsequently measured at cost less accumulated depreciation and
impairment losses.
Right-of-use assets are depreciated over the shorter period of
lease term and useful life of the underlying asset. If a lease
transfers ownership of the underlying asset or the cost of the
right-of-use asset reflects that the Group expects to exercise a
purchase option, the related right-of-use asset is depreciated over
the useful life of the underlying asset. The depreciation starts at
the commencement date of the lease.
The right-of-use assets are included in the property, plant and
equipment in the Statement of Financial Position.
The Group applies IAS 36 to determine whether a right-of-use
asset is impaired and accounts for any identified impairment losses
where applicable.
Foreign currency
The individual financial statements of each group company are
presented in the currency of the primary economic environment in
which it operates (its functional currency). For the purpose of the
consolidated financial statements, the results and financial
position of each group company are expressed in pound sterling,
which is the functional currency of the Group, and the
presentational currency for the consolidated financial
statements.
In preparing the financial statements of the individual
companies, transactions in currencies other than the Group
company's functional currency (foreign currencies) are recorded at
rates of exchange prevailing on the dates of the transactions. At
the reporting date, monetary assets and liabilities that are
denominated in foreign currencies are retranslated at the rates
prevailing on the reporting date. Non-monetary items carried at
fair value that are denominated in foreign currencies are
translated at the rates prevailing at the date when the fair value
was determined. Non-monetary items that are measured in terms of
historical cost in foreign currency are not retranslated. Exchange
differences arising on the settlement of monetary items, and on the
retranslation of monetary items, are included in profit or loss for
the period. Exchange differences arising on the retranslation of
non-monetary items carried at fair value are included in profit or
loss for the period except for differences arising on the
retranslation of non-monetary items in respect of which gains and
losses are recognised directly in equity. For such non-monetary
items, any exchange component of the gain or loss is also
recognised directly in equity.
For the purpose of presenting consolidated financial statements,
the assets and liabilities of the Group's foreign operations are
translated at exchange rates prevailing on the reporting date.
Income and expense items are translated at the average exchange
rates for the period, unless exchange rates fluctuate significantly
during the period, in which case the exchange rates at the date of
transactions are used. Exchange differences arising, if any, are
classified as equity and transferred to the Group's translation
reserve. Such translation differences are recognised as income and
expense in the period of the disposal of the operation. Goodwill
and fair value adjustments arising on the acquisition of a foreign
entity are treated as assets and liabilities of the foreign entity
and translated at the closing rates.
Property, plant and equipment
Property, plant and equipment are stated at cost net of
accumulated depreciation and provision for impairment. Depreciation
is provided on all property plant and equipment, at rates
calculated to write off the cost less estimated residual value, of
each asset on a straight-line basis over its expected useful
life.
The residual value is the estimated amount that would currently
be obtained from disposal of the asset if the asset were already of
the age and in the condition expected at the end of its useful
economic life.
The method of depreciation for each class of depreciable asset
is:
Leasehold property - Over term of lease
Fixtures, fittings and equipment - Between 3 and 7 years on a straight-line basis
IFRS 16 right of use assets - Over term of lease
Intangible assets
Intangible assets include goodwill arising on the acquisition of
subsidiaries and represents the difference between the fair value
of the consideration payable and the fair value of the net assets
that have been acquired. The residual element of goodwill is not
being amortised but is subject to twice-annual impairment
review.
Internally-generated intangible assets
An internally-generated intangible asset arising from the
Group's development activities is capitalised and held as an
intangible asset in the statement of financial position when the
costs relate to a clearly defined project; the costs are separately
identifiable; the outcome of such a project has been assessed with
reasonable certainty as to its technical feasibility and its
ultimate commercial viability; the aggregate of the defined costs
plus all future expected costs in bringing the product to market is
exceeded by the future expected sales revenue; and adequate
resources are expected to exist to enable the project to be
completed. Internally generated intangible assets are amortised
over their estimated useful lives, being between 3 and 7 years from
completion of development. Other development expenditure is
recognised as an expense in the income statement in the period in
which it is incurred.
Impairment of assets
Impairment tests on goodwill are undertaken twice-annually. The
recoverable value of goodwill is estimated on the basis of value in
use, defined as the present value of the cash generating units with
which the goodwill is associated. When value in use is less than
the book value, an impairment is recorded and is irreversible.
Other non-financial assets are subject to impairment tests
whenever circumstances indicate that their carrying amount may not
be recoverable. Where the carrying value of an asset exceeds its
estimated recoverable value (i.e. the higher of value in use and
fair value less costs to sell), the asset is written down
accordingly. Where it is not possible to estimate the recoverable
value of an individual asset, the impairment test is carried out on
the asset's cash-generating unit. The carrying value of property,
plant and equipment is assessed in order to determine if there is
an indication of impairment. Any impairment is charged to the
statement of comprehensive income. Impairment charges are included
under administrative expenses within the consolidated statement of
comprehensive income.
Inventories
Inventories are stated at the lower of cost and net realisable
value. Costs comprise direct materials and, where applicable,
direct labour costs and overheads that have been incurred in
bringing the inventories to their present location and condition.
Net realisable value represents the estimated selling price less
all estimated costs of completion and costs to be incurred in
marketing, selling and distribution.
Financial instruments
The Group classifies financial instruments, or their component
parts, on initial recognition as a financial asset, a financial
liability or an equity instrument.
The Group recognises lifetime expected credit losses for trade
receivables and amounts due on contracts with customers when
appropriate. The expected credit losses on these financial assets
are estimated based on the Group's historical credit loss
experience, adjusted for facts that are specific to the debtors,
general economic conditions and an assessment of both the current
as well as the forecasted conditions at the reporting date,
including time value of money where appropriate. Lifetime expected
credit losses are losses which will result from all possible
default events over the expected life of a financial
instrument.
Contract assets
Contract assets are recognised when the Group has satisfied a
performance obligation but cannot recognise a receivable until
other obligations are satisfied. Contract assets represent a right
to payment that is conditional on further performance while
receivables represent an unconditional right to payment.
Contract liabilities
Contract liabilities comprise payments in advance of revenue
recognition and revenue deferred due to contract performance
obligations not being completed. They are classified as current
liabilities if the contract performance obligations are due to be
completed within one year or less (or in the normal operating cycle
of the business if longer). If not, they are presented as
non-current liabilities. Contract liabilities are recognised
initially at fair value and subsequently at amortised cost.
Trade and other receivables
Trade and other receivables are measured at initial recognition
at fair value, and subsequently measured at amortised cost using
the effective interest method. A provision is established when
there is objective evidence that the Group will not be able to
collect all amounts due. The amount of any provision is recognised
in profit or loss.
Cash and cash equivalents
Cash and cash equivalents are recognised as financial assets.
They comprise cash held by the Group and short-term bank deposits
with an original maturity date of three months or less.
Trade payables
Trade payables are initially recognised as financial liabilities
measured at fair value, and subsequent to
initial recognition are measured at amortised cost.
Bank borrowings
Interest bearing bank loans, overdrafts and other loans are
recognised as financial liabilities and recorded at fair value, net
of direct issue costs. Finance costs are accounted for on an
amortised cost basis in the income statement using the effective
interest rate.
Equity instruments
An equity instrument is any contract that evidences a residual
interest in the assets of an entity after deduction of all its
liabilities. Equity instruments issued by the Company are recorded
at the proceeds received net of direct issue costs.
Share based payments
Where share options are awarded to employees, the fair value of
the options at the date of grant is charged to the statement of
comprehensive income on a straight-line basis over the vesting
period. Non-market vesting conditions are taken into account by
adjusting the number of options expected to vest at each statement
of financial position date so that, ultimately, the cumulative
amount recognised over the vesting period is based on the number of
options that eventually vest. Market vesting conditions are
factored into the fair value of the options granted. The cumulative
expense is not adjusted for failure to achieve a market vesting
condition.
Where share options are cancelled due to employees leaving the
Group's employment before they have vested, cumulative share based
payment expenses recognised in respect of those employees are
reversed through the statement of comprehensive income.
Where share options are replaced the fair value of the replaced
options at the date of grant continues to be recognised through the
statement of comprehensive income in addition to a charge equating
to the incremental value of the new options granted.
Fair value is calculated either using the Monte-Carlo model or
Black-Scholes model.
Pensions
The pension schemes operated by the Group are defined
contribution schemes. The pension cost charge represents the
contributions payable by the Group.
Taxation and deferred taxation
Corporation tax payable is provided on taxable profits at
prevailing rates.
Deferred tax assets and liabilities are recognised where the
carrying amount of an asset or liability in the balance sheet
differs from its tax base, except for differences arising on:
-- the initial recognition of goodwill; and
-- 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 nor taxable profit.
Recognition of deferred tax assets is restricted to those
instances where it is probable that future taxable profit will be
available against which the asset can be utilised. The amount of
the asset or liability is determined using tax rates that have been
enacted or substantively enacted by the balance sheet date and are
expected to apply when the deferred tax liabilities/(assets) are
settled/(recovered).
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 Group 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
or liabilities are expected to be settled or recovered.
Government grants
The Group recognises government grants when it has reasonable
assurance that it will comply with the relevant conditions and the
grant will be received.
Grants related to income are recognised in the profit and loss
account in line with the recognition of the expenses that the
grants are intended to compensate. Such grants are presented as
income and are not deducted from the related expenditure.
Segmental reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the Executive Directors, who are
responsible for allocating resources and assessing performance of
the operating segments.
A business segment is a group of assets and operations, engaged
in providing products or services that are subject to risks and
returns that are different from those of other operating
segments.
A geographical segment is engaged in providing products or
services within a particular economic environment that are subject
to risks and returns that are different from those of segments
operating in other economic environments. The Executive Directors
assess the performance of the operating segments based on the
measures of revenue, adjusted EBITDA, profit before taxation and
profit after taxation. Central overheads are not allocated to
business segments.
Non-current assets held for sale and discontinued operations
The Group classifies non-current assets and disposal groups as
held for sale if their carrying amounts will be recovered
principally through a sale transaction rather than through
continuing use. Non-current assets and disposal groups classified
as held for sale are measured at the lower of their carrying amount
and fair value less costs to sell. Costs to sell are the
incremental costs directly attributable to the disposal of an asset
(disposal group), excluding finance costs and income tax
expense.
The criteria for held for sale classification is regarded as met
only when the sale is highly probable, the asset or disposal group
is available for immediate sale in its present condition and the
sale is expected to complete within one year from the date of the
classification.
Assets and liabilities classified as held for sale are presented
separately as current items in the statement of financial
position.
The Location Based Entertainment (LBE) and Uvisan divisions have
been classified as discontinued operations in the consolidated
statement of comprehensive income and the prior period comparatives
have been restated for consistency.
Administrative expenses which the Group will continue to incur
following the sale of the disposal groups are included within
continuing operations and costs which will cease on disposal are
included in discontinued operations.
Discontinued operations are excluded from the results of
continuing operations and are presented as a single amount as
profit or loss after tax from discontinued operations in the
statement of profit or loss.
Details of discontinued operations are shown in note 5. All
other notes to the financial statements include amounts for
continuing operations only, unless otherwise stated.
3 CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
In the application of the Group's accounting policies, which are
described in note 2, the Directors are required to make judgments,
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 experience and
other factors considered to be relevant. Actual results may differ
from these estimates. The 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 following are the critical judgments and estimations that
the Directors have made in the process of applying the Group's
accounting policies and that have the most significant effect on
the amounts recognised in the financial statements.
Critical accounting judgments
Discontinued operations
The Directors assessed and concluded that the sale of the
Location Based Entertainment (LBE) and Uvisan businesses were
highly probable to take place within 12 months of the reporting
date. Therefore, the results of both divisions have been included
within discontinued operations in accordance with IFRS 5.
Revenue recognition
Location Based Entertainment revenue is accounted for on the
basis that the Group acts as the principal in the transactions
between partners and customers. Gross sales of services by partners
to end customers are reported to the Group regularly and are
included within the Group's turnover without any deductions.
For sales to consumers, revenue from the sale of Let's Explore
and Vodiac products is recognised on receipt of payment, which is a
condition for an order to be accepted. The price paid by the
consumer excluding sales taxes is recognised as revenue. At each
accounting date provision is made for refunds to be made for orders
received and paid for, prior to the accounting date. This provision
is based on past experience of the level of refund applications
received.
For sales to resellers, revenue from the sale of Let's Explore
and Vodiac products is recognised in the period in which delivery
to the reseller takes place. The price paid by the reseller is
recognised as revenue.
The revenue for the sale of Uvisan products and other hardware
is recognised once the benefits and control of these items are no
longer with the Group and are instead with the customer. Management
exercise judgment to consider when the risks have been transferred
to the customer. For both sales direct to customers and via
resellers, the income received by the Group is recognised as
revenue.
Recoverability criteria for capitalisation of development
expenditure
The Group recognises costs incurred on development projects as
an intangible asset which satisfies the requirements of IAS 38. The
calculation of the costs incurred includes the percentage of time
spent by certain employees on the development project. The decision
whether to capitalise and how to determine the period of economic
benefit of a development project requires an assessment of the
commercial viability of the project and the prospect of selling the
project to new or existing customers. An assessment is made as to
the future economic benefits of the project and whether an
impairment is needed.
Impairment of goodwill
Impairment of the valuation of the goodwill relating to the
acquisition of subsidiaries is considered twice annually for
indicators of impairment to ensure that the asset is not overstated
within the financial statements. The twice annual impairment
assessment in respect of goodwill requires estimates of the value
in use (or fair value less costs to sell) of subsidiaries to which
goodwill has been allocated. As a result, estimates of future cash
flows are required, together with an appropriate discount factor
for the purpose of determining the present value of those cash
flows.
Critical accounting estimates
Amortisation of intangible assets
The periods of amortisation adopted to write down capitalised
intangible assets and capitalised staff costs requires judgments to
be made in respect of estimating the useful lives of the intangible
assets to determine an appropriate amortisation rate. Capitalised
development costs are being amortised on a straight-line basis over
the period when economic benefits are expected to be received,
which has been estimated at 3 years.
Depreciation
The useful economic lives of tangible fixed assets are based on
management's judgment and experience. When management identifies
that actual useful economic lives differ materially from the
estimates used to calculate deprecation, that charge is added
retrospectively. Due to the significance of tangible fixed assets
to the Group, variances between actual and estimated useful
economic lives could impact on the operating results both
positively and negatively.
Share based payments expense
Non-market performance and service conditions are included in
the assumptions about the number of options that are expected to
vest. At the end of each reporting period the Group revises its
estimates of the number of options that are expected to vest based
on the non-market vesting conditions. It recognises the impact of
the revision to the original estimates, if any, in the consolidated
statement of comprehensive income, with a corresponding adjustment
to equity. This requires a judgment as to how many options will
meet the future vesting criteria as well as the judgments required
in estimating the fair value of the options. Where options are
cancelled, followed by the grant of new options at or close to the
time of the cancellations, a key judgment, based on the reasons for
the cancellations and the new issues, is made as to the extent to
which the new options granted are modifications of, or replacements
for, the cancelled options, or new options.
IFRS 16 discount rates
The Group estimates an appropriate discount rate based on an
incremental rate of borrowing for the calculation of the IFRS 16
right-of-use assets. This requires judgment as to an appropriate
discount rate.
4 SEGMENTAL INFORMATION
A segmental analysis of revenue and expenditure for the year
ended 31 December 2022 is below.
Total
Continuing Discontinued
HBE HO Operations Operations Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 796 - 796 10,781 11,577
Cost of sales (865) - (865) (5,696) (6,561)
Administrative expenses* (143) (1,370) (1,513) (2,167) (3,680)
Other operating income - - - 39 39
Adjusted EBITDA** (212) (1,370) (1,582) 2,957 1,375
Depreciation - (1) (1) (1,035) (1,036)
Amortisation (158) (10) (168) (433) (601)
Impairment: intangible
assets - - - (78) (78)
Impairment: assets
held for sale - - - (97) (97)
Profit on disposal - - - 19 19
One-off costs - (33) (33) (12) (45)
Share based payments - (133) (133) - (133)
Finance costs - (11) (11) (25) (36)
Finance income - - - 1 1
Taxation - - - (30) (30)
----------- ------------- ---------- ------------ ------------
(Loss) / profit for
the year (370) (1,558) (1,928) 1,267 (661)
====== ====== ====== ====== ======
HBE = Home Based Entertainment
HO = Head Office
*Administrative expenses exclude depreciation, amortisation,
impairment, profit on disposal, one-off costs and income and share
based payments.
**Adjusted EBITDA is a non-GAAP metric.
A segmental analysis of revenue and expenditure for the year
ended 31 December 2021 is below:
Total Continuing Discontinued
HBE HO Operations Operations Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 2,526 - 2,526 6,865 9,391
Cost of sales (2,427) - (2,427) (3,768) (6,195)
Administrative expenses* (212) (979) (1,191) (1,629) (2,820)
Other operating
income 3 5 8 524 532
Adjusted EBITDA** (110) (974) (1,084) 1,992 908
Depreciation - - - (1,470) (1,470)
Amortisation - (4) (4) (637) (641)
Impairment - - - (82) (82)
Profit on disposal - - - 18 18
One-off costs - - - (51) (51)
Share based payments - (676) (676) - (676)
Finance costs - (3) (3) (41) (44)
Finance income - - - 1 1
Taxation - - - 38 38
---------- ------------ -------------- --------------- ----------
Loss for the year (110) (1,657) (1,767) (232) (1,999)
======= ======= ======= ======= =======
HBE = Home Based Entertainment
HO = Head Office
*Administrative expenses exclude depreciation, amortisation,
impairment, loss on disposal, restructuring costs and share based
payments
**Adjusted EBITDA is a non-GAAP metric.
The table below splits revenue, assets and capital expenditure
by location:
External revenue by
location of customer
2022 2021
GBP'000 GBP'000
Continuing operations
USA & Canada 400 1,645
United Kingdom 396 387
Australia - 443
Other - 51
---------- ------------
796 2,526
===== ======
Total assets by location Net tangible capital
expenditure by location
2022 2021 2022 2021
GBP'000 GBP'000 GBP'000 GBP'000
United Kingdom 1,062 5,542 3 75
USA & Canada 61 1,969 - 340
Middle East - 27 - -
Rest of Europe - 10 - 7
Australia - 10 - 3
China - 3 - -
Assets held for
sale 6,433 - 1,794 -
------------ ------------ ------------- ------------
7,556 7,561 1,797 425
====== ====== ====== ======
5 DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE
The Location Based Entertainment (LBE) and Uvisan businesses and
net assets were in the process of being sold as at 31 December
2022. Both sales were subsequently completed after the reporting
date. Both divisions are deemed to be discontinued operations as
they represent separate major lines of business. The results for
these businesses have been excluded from the continuing results of
the Group for the period ended 31 December 2022. The results for
the period ended 31 December 2021 have been restated to exclude the
results of these businesses from the continuing operations of the
Group in those periods.
Summary income statement
The results for LBE and Uvisan included in the income statement
as discontinued operations are as follows:
Restated
Total Total
LBE Uvisan 2022 2021
Discontinued operations GBP'000 GBP'000 GBP'000 GBP'000
Revenue 10,241 540 10,781 6,865
Cost of sales (5,453) (244) (5,697) (3,768)
Other operating income 39 - 39 524
Administrative expenses (3,482) (320) (3,802) (3,851)
---------------- ---------------- --------------- ---------------
Operating profit/(loss) 1,345 (24) 1,321 (230)
Finance costs (25) - (25) (41)
Finance income 1 - 1 1
---------------- ---------------- ------------- ----------------
Profit/(loss) before taxation 1,321 (24) 1,297 (270)
Taxation (26) (4) (30) 38
---------------- ---------------- ------------- ----------------
Profit/(loss) from discontinued
operations 1,295 (28) 1,267 (232)
---------------- ---------------- ------------- ----------------
Adjusted EBITDA 2,851 106 2,957 1,990
Depreciation (1,028) (7) (1,035) (1,469)
Amortisation (407) (26) (433) (637)
Impairment of intangible assets (78) - (78) (83)
Impairment of assets held
for sale - (97) (97) -
Profit on disposal of fixed
assets 19 - 19 18
One-off costs (12) - (12) (51)
---------------- ---------------- ------------- ----------------
Operating profit/(loss) 1,345 (24) 1,321 (232)
---------------- ---------------- ------------- ----------------
--------------------------------- ----------------- ----------------- ---------------- -----------------
LBE - Location Based Entertainment
Uvisan - Sale of UV-C disinfection cabinets
The figures included in discontinued operations do not include
any allocation of head office costs, details of which can be found
in note 4.
Summary cash flow statement
The net cash flows for LBE and Uvisan included in the cash flow
statement are as follows:
Restated
Total Total
LBE Uvisan 2022 2021
Discontinued operations GBP'000 GBP'000 GBP'000 GBP'000
Net cash generated from operating
activities 3,155 61 3,216 1,008
Net cash used in investing activities (2,003) (67) (2,070) (805)
Net cash used in financing activities (105) - (105) (319)
---------------- ---------------- ------------- ----------------
Net cash flows generated/(used
in) discontinued operations 1,047 (6) 1,041 (116)
---------------- ---------------- ------------- ----------------
Net assets held for sale
The major classes of assets and liabilities classified as held
for sale as at 31 December 2022 were as follows:
LBE Uvisan Total
Discontinued operations GBP'000 GBP'000 GBP'000
Assets
Property, plant and equipment 1,996 23 2,019
Goodwill on consolidation 2,438 - 2,438
Other intangible assets 466 32 498
Cash and cash equivalents 187 91 278
Other assets 1,013 213 1,226
Impairment of assets held for sale - (97) (97)
------------ ------------ ------------
Assets held for sale 6,100 262 6,362
------------ ------------ ------------
Liabilities
Liabilities directly associated with
assets held for sale (1,136) (162) (1,298)
------------ ------------ -----------
Net assets held for sale 4,964 100 5,064
------------ ------------ -----------
Other assets comprise inventories, receivables, prepayments and
accrued income. Liabilities comprise payables, accruals, deferred
income and tax liabilities.
6 EARNINGS PER SHARE
2022 2021
GBP'000 GBP'000
Profit/(loss) after taxation
Continuing operations (1,928) (1,767)
Discontinued operations 1,267 (232)
-------------- -------------
Loss after taxation from all operations (661) (1,999)
Basic weighted average number of shares 415,538,083 414,140,823
Diluted weighted average number of shares 473,775,097 472,053,826
============ ============
Continuing and discontinued operations GBP0.01 GBP0.01
Basic loss per share (0.16) (0.48)
Diluted loss per share (0.16) (0.48)
======= ========
Continuing operations GBP0.01 GBP0.01
Basic loss per share (0.46) (0.43)
Diluted loss per share (0.46) (0.43)
======== ========
Discontinued operations GBP0.01 GBP0.01
Basic earnings/(loss) per share 0.30 (0.05)
Diluted earnings/(loss) per share 0.30 (0.05)
======== ========
Earnings/(loss) per ordinary share has been calculated using the
weighted average number of shares in issue during the relevant
financial periods. IAS 33 requires presentation of diluted EPS when
a company could be called upon to issue shares that would decrease
earnings per share or increase the loss per share. Per IAS 33 the
diluted EPS cannot show an improvement on the basic EPS. As that
would be the result in this case the potential ordinary shares have
been disregarded in the calculation of diluted EPS
PROPERTY, PLANT AND EQUIPMENT
7
Fixtures,
Leasehold Fittings Right-of-Use
Property & Equipment Asset Total
Cost GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2021 380 4,092 806 5,278
Additions 3 422 - 425
Disposals (4) (1,836) (169) (2,009)
Foreign exchange - 21 5 26
----------- ------------ -------------- ------------
At 31 December 2021 379 2,699 642 3,720
----------- ------------ -------------- ------------
At 1 January 2022 379 2,699 642 3,720
Additions 71 1,498 228 1,797
Disposals (154) (86) (659) (899)
Foreign exchange - 230 42 272
Redesignated as held
for sale (296) (4,338) (253) (4,887)
----------- -------------- ------------- ------------
At 31 December 2022 - 3 - 3
------------ --------------- ------------- ----- -------
Accumulated depreciation
At 1 January 2021 226 2,292 500 3,018
Depreciation on owned
assets 92 1,202 - 1,294
Depreciation on financed
assets - - 176 176
Disposals (3) (1,817) (166) (1,986)
Foreign exchange - 24 6 30
----------- --------------- -------------- ------------
At 31 December 2021 315 1,701 516 2,532
----------- --------------- --------------- ------------
At 1 January 2022 315 1,701 516 2,532
Depreciation on owned
assets 64 816 - 880
Depreciation on financed
assets - - 156 156
Disposals (153) (84) (659) (896)
Foreign exchange - 149 47 196
Redesignated as held
for sale (226) (2,582) (60) (2,868)
------------- -------------- -------------- ------------
At 31 December 2022 - - - -
------------- -------------- -------------- ------------
Net Book Value
At 31 December 2022 - 3 - 3
======= ======= ======= ======
At 31 December 2021 64 998 126 1,188
======= ====-== ======= ======
At 31 December 2020 154 1,800 306 2,260
======= ======= ======= ======
INTANGIBLE ASSETS
8 Goodwill Other
Development Arising Intangible
on
Costs Consolidation Assets Total
GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 January
2021 2,171 2,438 545 5,154
Transfers (4) - 6 2
Additions 384 - 20 404
Disposals (6) - (2) (8)
Impairment (81) - (1) (82)
Foreign exchange 3 - - 3
------------- ------------- ------------ ---------------
At 31 December
2021 2,467 2,438 568 5,473
------------- ------------ ------------ ---------------
At 1 January
2022 2,467 2,438 568 5,473
Additions 493 - 17 510
Disposals - - (66) (66)
Foreign exchange 57 - - 57
Redesignated
as held for resale (2,563) (2,438) (490) (5,491)
------------- ------------- ------------- ---------------
At 31 December
2022 454 - 29 483
------------- ------------- ------------- ---------------
Accumulated amortisation
At 1 January
2021 1,002 - 527 1,529
Amortisation 624 - 17 641
Transfers (2) - 3 1
Disposals (6) - (1) (7)
Impairment - - (1) (1)
Foreign exchange 5 - - 5
------------ ------------- ------------ --------------
At 31 December
2021 1,623 - 545 2,168
------------ -------------- ------------- ---------------
At 1 January
2022 1,623 - 545 2,168
Amortisation 582 - 19 601
Disposals - - (66) (66)
Impairment 78 - - 78
Foreign exchange 42 - - 42
Redesignated
as held for resale (2,070) - (484) (2,554)
------------ ------------- ------------ ---------------
At 31 December
2022 255 - 14 269
------------ -------------- -------------- ---------------
Net Book Value
At 31 December
2022 199 - 15 214
====== ======= ====== =======
At 31 December
2021 844 2,438 23 3,305
====== ======= ====== =======
At 31 December
2020 1,169 2,438 18 3,625
====== ======== ====== =======
Other intangible assets comprise website development and
trademark costs.
Amortisation is charged on development costs and other
intangible assets over periods ranging between 3 and 7 years.
Development costs have between two and three years' remaining
average useful lives.
Goodwill and impairment
The Group is obliged to test goodwill annually for impairment,
or more frequently if there are indications that goodwill and
indefinite life intangibles might be impaired, due to the goodwill
deemed to have an indefinite useful life. In order to perform this
test, management is required to compare the carrying value of the
relevant cash generating unit ("CGU") including the goodwill with
its recoverable amount. The recoverable amount of the CGU is
determined from a value in use calculation. It is considered that
any reasonably possible changes in the key assumptions would not
result in an impairment of the present carrying value of the
goodwill.
Immotion Studios Limited, C.2K Entertainment Inc. and Immotion
Limited were acquired and continue to operate in relation to the
Location Based Entertainment segment. The Location Based
Entertainment segment has been assessed as a single CGU when
conducting impairment reviews.
Location Based Entertainment
The recoverable amount of the Location Based Entertainment
segment has been assessed in light of the sale of the division in
February 2023. The sale proceeds received by the Company were
substantially greater than the value of the businesses assets and
goodwill and as a result no impairment charge has been recognised.
Further details on the sale of the Location Based Entertainment
business are included in note 10.
9 SHARE CAPITAL 2022 2021
GBP'000 GBP'000
Called up share capital
Allotted, called up and fully paid
415,538,083 Ordinary shares of 0.040108663
pence each 166 166
(2021: 415,538,083 ordinary shares)
====== ======
No shares were issued in the year ended 31 December 2022.
10 POST BALANCE SHEET EVENTS
On 2 February 2023, the Company announced that it has completed
the sale of Uvisan Limited for cash consideration of
GBP100,000.
On 8 February 2023, the Company announced that it had issued
632,563 new ordinary shares pursuant to the exercise of share
options under the Company's share option scheme.
On 1 March 2023, the Company announced the completion of the
sale of the Location Based Entertainment (LBE) virtual reality
division, comprising Immotion Studios Limited, Immotion VR Limited
and C.2K Entertainment Inc., to LBE BidCo, Inc. for $25,119,739.
The sale proceeds were comprised of cash paid at completion of
$23,869,739 and a loan note of $1,250,000 repayable 12 months
following completion, subject to any price adjustments under the
terms of the sale and purchase agreement.
On 1 March 2023, the Company also announced its intention to
return circa GBP12.5m of the LBE sale proceeds to shareholders via
a tender offer. The tender offer has required shareholder and Court
approvals and is expected to be completed in June 2023.
On 1 March 2023, the Company also announced that Rodney Findley
had resigned as a director of the Company and that Daniel Wortley
was appointed as a director of the Company.
On 2 March 2023, the Company announced that it had changed its
name to Let's Explore Group PLC from its previous name of Immotion
Group PLC.
[1] Includes content licensing income.
[2] Includes content licensing income.
[3] Adjusted EBITDA stated before depreciation, amortisation,
impairment, share based payments, profit on asset disposals and
other one-off costs.
[4] Adjusted loss is the loss after taxation, adjusted for share
based payments, impairment charges and one-off costs.
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END
FR NKNBQBBKBQPK
(END) Dow Jones Newswires
May 04, 2023 02:00 ET (06:00 GMT)
Immotion (LSE:IMMO)
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