Losses widen for Time Out as it takes stock of pandemic shutdowns

Leisure publisher and hospitality operator Time Out Group reported a decline in gross revenue to £44.9m in its final results on Friday, from £77.1m in the comparative period, while its net revenue slid to £37.8m from £63.3m.

The AIM-traded firm put the performance down to the forced closure of its Time Out Market sites, as well as the “sharp decline” in advertising revenues generated by its media arm from the travel and leisure sectors.

On top of that, the board noted that the results were for the 18 months ended 30 June, with the comparative period being for just 12 months, to 31 December 2019.

Its gross margin expanded seven percentage points to 80%, meanwhile, despite group gross profit declining 35% to £30.2m, which it said reflected Time Out Media's higher digital revenue mix.

The company recorded a group adjusted EBITDA loss of £25.1m, widening from £4.7m, which included the benefit of the cost reduction initiatives implemented in the period.

Its group loss for the period totalled £70.5m, compared to £20.9m, which the board said reflected “challenging” trading conditions over the 18-month period, additional depreciation as a result of markets that opened over the comparative period, and an exceptional goodwill impairment charge of £20.0m in respect of the media business.

Cash totalled £19.1m at period end on 30 June, and debt was £23.5m, resulting in adjusted net debt of £4.4m.

Reported net debt came in at £26.9m, which included £22.5m of IFRS 16 lease liabilities.

Equity raises of £62.4m were completed in the 18-month period, which were used to repay debt and allow “flexibility” in managing Covid-19 uncertainties.

Looking ahead, Time Out said that while there could be no certainty over the future imposition of trading and movement restrictions in response to the pandemic, it was “encouraged” by the group’s current trading and prospects.

All seven of the Time Out Market sites were open, and despite the lack of city tourism and social distancing restrictions, the growing level of footfall had underlined the strength of the proposition, and as a result the directors said they were “optimistic” about the return to pre-Covid trading levels in the months ahead.

“We are particularly encouraged by the growing pipeline of potential new Time Out Market management agreements and the recurring earnings stream they offer, without the need for further capital expenditure,” the board said in its statement.

The media division, meanwhile, was experiencing a “significant recovery” in advertising.

Time Out said that with a continued digital advertising focus and an optimised cost base, it expected operating margins to continue to grow in the current period.

Notwithstanding the requirement to refinance the existing debt facility, the equity fund raises had provided the group with lower net debt, the directors noted.

“The challenges that Time Out Group and the travel and leisure industry at large have faced over the last 18 months have been well documented,” said outgoing chief executive officer Julio Bruno.

“However, the adaptation and support of our audience, staff and shareholders have enabled Time Out to develop and grow its offering despite this environment.

“Our pivot to ‘Time In’, for example, during the worst months of Covid proved to be an effective move.”

As a result, Bruno said the company was emerging from the impact of the pandemic with higher margins, new advertising clients, and more Time Out Markets.

“After six rewarding years with the group it is time to seek new challenges.

“I'd like to thank my colleagues, the board and the shareholders of Time Out for their collaboration and commitment throughout.”

At 1428 BST, shares in Time Out Group were down 3.51% at 55p.