Last Years Full Reports are available HERE.

RESULTS FOR THE YEAR ENDING 31 OCTOBER 2009

SpaceandPeople PLC ("SpaceandPeople"), which facilitates and manages the sale of promotional space in shopping centres and other high footfall venues, announces interim results for the six months ended 30 April 2009.

Highlights:

Total billings up 7.3% to £13.35m (2008 - £12.44m).
Now represent 310 venues with a footfall of over 40m customers a week.
Revenue up 5.6% to £2.6m (2008 - £2.55m)
UK operating costs down by 2.3%
Operating profits before license fees up by 7.6% to £493.3k (2008 - £458.4k).
Profit before tax down 18.4% to £506.2k (2008 - £620.5k) as a result of one off profits last year. Strong balance sheet with £1.34m of cash at year end.
Recommending maintaining dividend at 2.00p per share.

Chairman's Statement

For the vear ended 31 October 2009

Dear shareholder

Your management is to be commended for delivering another excellent set of results, generating a 5.6% increase in revenues to £2.69m on the back of a 7.3% uplift in billings to £13.35m in some of the most difficult trading conditions in memory and in the face of widespread cuts in advertising and media spending. They have identified new areas of growth for the business generating an increase in operating profit before one-off licence fee income over last year of 7.6% to £493.2k (2008: £458.4k). This is testament to the commitment of the executive directors and a motivated sales team.

Spaceandpeople now represent 310 venues in the UK and Germany, up from 282 last year, and the combined footfall has now increased to over 40 million customers per week, which is a powerful offer to advertisers. Shopping centre owners continue to seek to maximise revenue from alternative sources, playing to SpaceandPeople's strengths, and advertisers looking to maximise the returns from their advertising and marketing budgets truly recognise the value of SpaceandPeople's service.

The German business has had a good year and is operating out of an increasing number of venues using an expanded telesales team. This, together with more flexibility about the type and timing of promotions in the ECE malls, should lead to increased revenue in future years.

Last year, the company made one-off sales of licences to two new territories totalling £107,000. As a result, the profit before tax for 2008 included income from which we did not benefit this year. The reduction in interest rates also reduced interest earned on cash balances. As a result, profit before tax fell by 18.4% to £506.2k (2008: £620.5k), however both turnover and ongoing profits have grown this year.

The balance sheet remains strong with £352.lk of pre-tax cash flow from operating activities and £1.34m of cash at the year end. We continue to have no debt on the balance sheet.

The new year has started well and the order books are strong. During the year, the Company is seeking to consolidate its position in the UK market and to expand the overseas business, particularly in Germany.

Dividend The business is well positioned for the future. The Board is confident about the prospects for improved revenues and profitability in the current year, and so is proposing to maintain the dividend at 2.00~ per share, payable on 26 March 2010 to all shareholders on the share register as at 29 January 2010.

David Henderson-Williams
Chairman
15 January 2010

Group Chief Executive Officer’s Review

For the year ended 31 October 2009

Despite the global recession impacting operations in both the UK and Germany, SpaceandPeople has performed well, increasing revenues by 5.6% to £2.69m and operating profits (prior to the licence fees) by 7.6% to £493.3k. Profit before tax, however, is down 18.4% to £506.2k due to lower interest rates and the lack of one off profits from the sale of licences.

UK

The backdrop of the national economy posed a great difficulty in forecasting and identifying areas of growth to exploit but our diverse income streams have delivered a strong result with an increase in gross billings of 10.7%. There was a significant refocus of the sales teams bringing in more management support in Glasgow; this has enabled a much greater emphasis on sales staff productivity and a reduction in costs (for the year down 2.3%). This, plus the growth in sales, contributed to the 7.6% increase in UK operating profit before licence fees.

Many shopping centre owners are proactively looking to us to increase their income streams, and this has enabled us to achieve growth in our venue relationships. Over the year we grew the number of venues represented in the UK from 227 to 239. Significant wins included Whitgift in Croydon, High Wycombe and the St. Enoch Centre in Glasgow. Of particular note is our ability to generate money from outdoor spaces, which has yielded significant income gains for property owners over the last 12 months.

The UK business has started very strongly in the first two months of this financial year and we are confident of increased sales and profitability for the next 10 months.

Germany

Germany was hit extremely hard in the first 6 months of the year as most of its business was mainstream experiential road shows, and these types of promotions were significantly affected by the recession. At the half year we were concerned about profitability from the German operation, but increased productivity and an improved economy for the last six months resulting in some significant contract wins, has delivered an increase in revenues of 30.2% to £631.8k.

Operating profits improved marginally to £3.6k and we have introduced a similar telesales management structure to the UK, which is already proving beneficial. Relationships with ECE Projektmanagement G.m.b.H. & Co. KG, for whom we now manage 71 venues (up from 55 last year), remain excellent. Germany has started strongly in the first two months of the current financial year and we expect it to make a significant contribution to the overall results this year

India

SpaceandPeople (India) Ltd, in which we retain a 47.1% share, has progressed well in the past 12 months and is only three months behind forecast for income against their original business plan; they currently represent 31 malls in India of which 8 are exclusive. To satisfy business users in other parts of India we have opened a sales office in Delhi with three staff, and sales agents have been appointed in Hyderabad and Kolkata, in addition to the head office in Mumbai

Whilst it made a small operating loss of £84.9k in 2009, the growth of the Indian economy will sustain the business but it will require an additional shareholder funding in early 2010 of circa £160k to expand operations and fund the purchase of more RMU’s (retail merchandising units). An open offer to invest will be prepared.

Hong Kong

SpaceandPeople (Hong Kong) Ltd, where we have a 35.3% share, has had a more difficult year and has struggled to attract key experiential marketers. There has been a change in Managing Director and reorganisation of operations, resulting in a big decrease in monthly overheads. The current team has revised the business plan and offer, and are starting to gain traction in the market. The board of Hong Kong will provide a detailed update to shareholders later this quarter.

Prospects

The strength of SpaceandPeople is its diversity with no one venue or advertiser representing more than 10% of the business in the UK. This allows other sales departments to take up the slack another may experience at any point. When this is spread out across other countries, we have a robust, expanding and exciting business.

We now represent 310 venues in the UK and Germany (up from 282 last year), with a combined footfall of over 40 million people per week. Interest in Germany from large scale experiential marketers and retail sales is looking very positive and the UK has started the current financial year with record sales over the first two months as advertisers recognise the value of high footfall venues. We are well placed to continue this growth and will also be looking to expand the business significantly over the next year.

Matthew Bending
Group Chief Executive Officer
15 January, 2010

The full results are available on request, anyone interested should write to:

SpacenadPeople
141 St James Road
Glasgow
G4 0LT

David Henderson-Williams	Chairman	Tel: 0207 182 1840
Matthew Bending	Chief Executive Officer	Tel: 07872 666418
Catherine Leftley		Tel: 0207 1078061
AIM Dealing Code	Stock Exchange Code:	SAL

 

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