Full Year Results

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30 October 2024

Time Out Group plc

("Time Out," the "Company" or the "Group")

Preliminary results for the twelve months ended 30 June 2024

Continued progress driving strong EBITDA growth from both Media and Markets

Time Out Group plc (AIM: TMO), the global media and hospitality business, today announces its audited preliminary results for the twelve months ended 30 June 2024.

Group financial highlights

●     Like-for-like revenue^(1,2) increased by 7% with Media +11% and Markets +4%

●     Reported revenue of £103.1m (2023: £104.6m) decreased by 1% impacted by stronger GBP vs USD and Euro

●     Adjusted EBITDA^(1,3,6) increased by 134% to £12.4m (2023: £5.3m)

●     Media +101% to £5.3m (2023 £2.6m)

●     Markets +87% to £12.0m (2023 £6.4m)

●     Operating loss narrowed to £0.0m (2023: £17.5m loss)

●     Cash of £5.9m at 30 June 2024 (2023: £5.1m) and borrowings of £38.9m (2023: £29.9m), resulted in adjusted net debt^(1,4) of £33.0m (2023: £24.8m). Statutory net debt was £57.9m (2023: £49.7m) including £24.9m of IFRS 16 lease liabilities (2023: £24.9m)

●     Proposed Placing of new ordinary shares to raise approximately £8m growth capital for new Markets and IT announced separately today

Operational highlights

●    Growing portfolio of nine open Markets, three of which opened in the last twelve months: Cape Town in November 2023, Porto in May 2024 and Barcelona after the period end, in July 2024  

●    Seven additional Markets expected to be opened by FY27 close, with a strong pipeline of further opportunities

●    Global monthly brand reach grew by 8% to 150m⁽⁵⁾

●    New 'out of home' advertising revenue trial live in New York Market

●    Winning big-ticket campaigns from an expanding client roster including a new global media campaign and cross-platform partnership with Coca-Cola

Commenting on the results, Chris Ohlund, CEO of Time Out Group plc, said:

"The Time Out brand is a critical contributor to the success of both Media and Markets, and rather than view these businesses as two separate units, we believe there is substantial potential to increase the synergies between the two and cement Time Out as a unique proposition, both for our audience and for our commercial partners.

"Time Out continues to be trusted and relevant as we inspire and enable millions of people every month to experience the best of the city. Our turnaround programme has transformed the EBITDA profitability of the Group. We are now focused on executing our growth strategy. On behalf of the Board, I would like to thank all of the Time Out team for delivering this result."

Current Trading and Outlook 

The Group has a clear plan to drive like for like growth in existing Markets, whilst continuing to convert the strong pipeline of potential new Market sites and large media advertising deals and trading for FY25 remains in line with management expectations.

Having opened seven Markets in 10 years, we expect to open seven Markets in the period from November 2023 to November 2025 and reach a minimum of 16 Markets by 2027. When coupled with a continued pipeline of new opportunities, this growth can rapidly improve the operational gearing of our fixed cost base, meaning we have the potential to continue to grow profitability at a faster rate than sales. We continue to receive approaches from commercial parties keen to work with the Time Out brand and are increasingly confident in our global strategy.

(1)       This is a non-GAAP alternative performance measure ("APM") that management uses to aid understanding of the underlying business performance. See appendix Alternative Performance Measures for a reconciliation to the statutory numbers.

(2)       Like-for-like revenue is calculated for comparison using FY23 foreign exchange rates to convert both FY24 and FY23 foreign currency revenues, with FY23 revenues related to Miami excluded.

(3)       Adjusted EBITDA is operating loss stated before interest, taxation, depreciation, amortisation, share-based payments, exceptional items and profit/(loss) on the disposal of fixed assets.

(4)       Adjusted net debt excludes lease-related liabilities under IFRS 16.

(5)       Global monthly brand reach is the estimated monthly average in the year including all Owned & Operated cities and franchises.

(6)       Consistent with FY24, FY23 comparatives have been restated to present £1.7m of group costs, previously recorded within Media, within corporate costs and exclude £2.1m recharges between Media and Market to better represent the actual costs of the underlying segments.

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Notes to editors

About Time Out Group

Time Out Group is a global media and hospitality business that inspires and enables people to experience the best of the city across Media and Markets. Time Out launched in London in 1968 to help people discover the best of the city - today it is the only global brand dedicated to city life. Expert journalists curate and create content about the best things to Do, See and Eat across 333 cities in 59 countries and across a unique multi-platform model spanning both digital and physical channels. Time Out Market is the world's first editorially curated food and cultural market, bringing a city's best chefs, restaurateurs and unique cultural experiences together under one roof. The portfolio includes open Markets in nine cities such as Lisbon, New York and Dubai, several new locations with expected opening dates in 2024 and beyond, in addition to a pipeline of further locations in advanced discussions. Time Out Group PLC, listed on AIM, is headquartered in London (UK).

IMPORTANT NOTICES

The information contained within this announcement relating to the Proposed Placing and Retail Offer is deemed by the Company to constitute inside information as stipulated under Article 7 of the Market Abuse Regulation (EU) No. 596/2014 (as amended) as it forms part of the domestic law of the United Kingdom by virtue of the European Union (Withdrawal) Act 2018 (as amended). Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain. The person responsible for arranging the release of this announcement on behalf of the Company is Matt Pritchard, CFO.

This announcement is for information only and does not itself constitute or form part of an offer to sell or issue or the solicitation of an offer to buy or subscribe for securities referred to herein in any jurisdiction. This announcement is restricted and is not for release, publication, distribution or forwarding, in whole or in part, directly or indirectly, in or into the United States, Australia, Canada, the Republic of South Africa, Japan or any other jurisdiction in which such publication, release or distribution would be unlawful. This announcement is for information purposes only and is not an offer of securities in any jurisdiction.

This communication is not an offer for securities in the United States. The securities referred to herein have not been and will not be registered under the US Securities Act 1933, as amended (the "Securities Act") or under the securities laws of any state or other jurisdiction of the United States, and may not be offered or sold directly or indirectly in or into the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with the securities laws of any state or any other jurisdiction of the United States.

This document contains "forward-looking statements", which include all statements other than statements of historical facts, including, without limitation, any statements preceded by, followed by or that include the words "targets", "believes", "expects", "aims", "intends", "will", "may", "anticipates", "would", "could" or similar expressions or the negative thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Group's control that could cause the actual results, performance or achievements of the Group to be materially different from future results, performance or achievements expressed or implied by such forward-looking, including, among others, the achievement of anticipated levels of profitability, growth, the impact of competitive pricing, volatility in stock markets or in the price of the Group's shares, financial risk management and the impact of general business and global economic conditions. Such forward-looking statements are based on numerous assumptions regarding the Group's present and future business strategies and the environment in which the Group will operate in the future. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. These forward-looking statements speak only as at the date as of which they are made, and each of Time Out Group plc and the Group expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in Time Out Group plc's or the Group's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based. Neither the Group, nor any of its agents, employees or advisors intends or has any duty or obligation to supplement, amend, update or revise any of the forward-looking statements contained in this document. 

Chief Executive's Review

Group overview

Financial summary

(1)       This is a non-GAAP alternative performance measure ("APM") that management uses to aid understanding of the underlying business performance. See appendix Alternative Performance Measures for a reconciliation to the statutory numbers.

(2)       Like-for-like revenue is calculated for comparison using FY23 foreign exchange rates to convert both FY24 and FY23 foreign currency revenues, with FY23 revenues related to Miami excluded.

(3)       Net revenue is calculated as revenue less concessionaires' share of revenue.

(4)       Gross margin is calculated as gross profit as a percentage of net revenue.

(5)       Adjusted measures are stated before interest, taxation, depreciation, amortisation, share-based payments, exceptional items and profit/(loss) on the disposal of fixed assets.

(6)       Consistent with FY24, FY23 comparatives have been restated to present £1.7m of group costs, previously recorded within Media, within corporate costs and exclude £2.1m recharges between Media and Market to better represent the actual costs of the underlying segments.

The Group achieved strong Like-for-like revenue coupled with disciplined control of costs which resulted in adjusted EBITDA of £12.4m (2023 £5.3m), and an operating loss of £0.0m (2023: £17.5m):

·     Like-for-like revenue increased by 7% and gross margin increased by 1% to 82% (2023: 81%)

·     The Group generates the majority of its revenues and EBITDA in US dollars and Euros. A stronger pound acted as headwind against revenue growth on a statutory basis, reported revenue in GBP decreased by 1% to £103.1m

·     Divisional adjusted operating expenses decreased by 10% because of reductions in fixed costs and focus on operational efficiency, partly offset by additional variable costs as sales grew. Continued revenue growth offers the scope to further dilute fixed costs as a percentage of sales

Time Out Market trading overview

(1)       This is a non-GAAP alternative performance measure ("APM") that management uses to aid understanding of the underlying business performance. See appendix Alternative Performance Measures for a reconciliation to the statutory numbers.

(2)       Like-for-like revenue is calculated for comparison using FY23 foreign exchange rates to convert both FY24 and FY23 foreign currency revenues, with FY23 revenues related to Miami excluded.

(3)       Net revenue is calculated as revenue less concessionaires' share of revenue.

(4)       Gross margin is calculated as gross profit as a percentage of net revenue.

(5)       Adjusted measures are stated before interest, taxation, depreciation, amortisation, share-based payments, exceptional items and profit/(loss) on the disposal of fixed assets.

(6)       Consistent with FY24, FY23 comparatives have been restated to exclude £2.1m recharges between Media and Market to better represent the actual costs of the underlying segments.

Like-for-like revenue increased by 4%. Statutory revenue decreased by 6% to £67.2m (2023: £71.5m).

During the year, new Markets were opened in Cape Town in November 2023 (management agreement) and Porto May 2024 (owned and operated). The Owned and Operated Barcelona Market opened shortly after the year-end in July 2024. All three have strong chef lineups, including chefs with a combined total of nine Michelin stars.

Adjusted EBITDA increased 87% to £12.0m (2023 £6.4m).

Two new management agreements, Bahrain and Budapest, were announced in the year which, in addition to Vancouver and Osaka, are expected to open within the next 12 months. In total, our 16 Markets are expected to generate more than 20 million transactions per year. The expected opening schedule based on calendar year is as follows:

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·      2024: Bahrain

·      2025: Osaka

·      2025: Vancouver

·      2025: Budapest

·      2025: Abu Dhabi

·      2027: Prague

·      2027: Riyadh

We have a strong pipeline of management agreements in negotiation and expect to sign more in the year ahead as we continue to optimise our systematic approach to sourcing high-quality leads. As we grow our portfolio of open Markets, we continue to refine selection criteria based on proven critical success factors, with the objective of improving return on investment and reducing time to completion.

Time Out Media trading overview

(1)       This is a non-GAAP alternative performance measure ("APM") that management uses to aid understanding of the underlying business performance. See appendix Alternative Performance Measures for a reconciliation to the statutory numbers.

(2)       Like-for-like revenue is calculated for comparison using FY23 foreign exchange rates to convert both FY24 and FY23 foreign currency revenues, with FY23 revenues related to Miami excluded.

(3)       Gross margin is calculated as gross profit as a percentage of revenue.

(4)       Adjusted measures are stated before interest, taxation, depreciation, amortisation, share-based payments, exceptional items and profit/(loss) on the disposal of fixed assets.

(5)       Consistent with FY24, FY23 comparatives have been restated to present £1.7m of group costs, previously recorded within Media, within corporate costs and exclude £2.1m recharges between Media and Market to better represent the actual costs of the underlying segments.

Time Out Media trading was encouraging with Like-for-like revenue growth of 11% to £36.9m and adjusted EBITDA of £5.3m (2023: £2.6m).

Gross margin decreased by 1% to 79% (2023: 80%). We continue to tightly manage the operating expenditure which decreased by 3% whilst we invest in talent with digital expertise and expanded our sales team tasked with growing our client base and winning high-value campaign deals.

A particular highlight that illustrates the success of the strategy to focus on higher-ticket deals with global brands was the creative campaign for Coca-Cola™. During 2024 the number of deals worth more than £100k increased by 17%.

As a result of a focus to engage our audience by increasing video content, Instagram and TikTok views grew by 90% YoY.

Editorial coverage picked by publications globally drives strong PR reach and global brand awareness, which is reflected in our global monthly brand reach growth of 8% to 150 million.

Group Financial Review

(1)       This is a non-GAAP alternative performance measure ("APM") that management uses to aid understanding of the underlying business performance. See appendix Alternative Performance Measures for a reconciliation to the statutory numbers.

(2)       Like-for-like revenue is calculated for comparison using FY23 foreign exchange rates to convert both FY24 and FY23 foreign currency revenues, with FY23 revenues related to Miami excluded.

(3)       Net revenue is calculated as revenue less concessionaires' share of revenue.

(4)       Gross margin is calculated as gross profit as a percentage of net revenue.

(5)       Adjusted EBITDA is operating loss stated before interest, taxation, depreciation, amortisation, share-based payments, exceptional items and profit/(loss) on the disposal of fixed assets.

Revenue and gross profit

Like-for-like revenue increased by 7% with both Markets and Media delivering growth.

Market reported revenues fell by 6% to £67.2m due to the closure of Miami in 2023, and stronger GBP vs USD. Revenue associated with management agreements fell 4% to £4.2m (2023: £4.2m).

Media revenue increased 8% to £35.9m (2023: £33.1m) driven by digital sales growth and live events.

Gross margins increased by 1% to 82%, largely due to the 15% reduction in concessionaire share.

Administrative expenses and operating loss

Administrative expenses of £64.7m decreased by 18% (2023: £79.4m) resulting in the narrowing of operating loss to £0.0m (2023: £17.5m).

The depreciation & amortisation charge of £9.5m (2023: £11.1m) has decreased due to some assets becoming fully depreciated.

Exceptional items of £1.2m relate to restructuring costs (2023: £1.9m).

In 2023, £5.3m write-off of capitalised costs and £1.8m irrecoverable balances relating to Time Out Market Miami were recognised as exceptional cost following the decision to close the Market. Capitalised costs of £1m relating to Time Out Market Spitalfields were also recognised as exceptional following the decision to exit the process.

Adjusted EBITDA

Adjusted EBITDA of £12.4m (FY23 £5.3m) is stated before interest, taxation, depreciation and amortisation, share-based payment charges, exceptional items, and loss on disposal of fixed assets. This material improvement is a result of increased gross profits and improved operational efficiency.

Net finance costs

Net finance costs of £8.5m (2023: £7.5m) primarily relates to interest on debt of £5.0m (2023: £3.8m), amortisation of deferred financing costs of £1.0m (2023: £0.5m) and interest cost in respect of lease liabilities of £2.7m (2023: £3.0m).

Foreign exchange

The revenue and costs of Group entities reporting in USD and Euros have been consolidated in these financial statements at an average exchange rate of $1.26 (2023: $1.21) and €1.16 (2023: €1.15) respectively.

Cash and debt

(1)       This is a non-GAAP alternative performance measure ("APM") that management uses to aid understanding of the underlying business performance. See appendix Alternative Performance Measures for a reconciliation to the statutory numbers.

(2)       Adjusted net debt excludes lease-related liabilities under IFRS 16.

Proposed Placing of ordinary shares for growth capital

The Group intends to announce a proposed placing of ordinary shares, to raise approximately £8m of gross proceeds. If completed, it is intended that the proceeds of the Placing will be used to support growth, via up-front cash investments in new Market leases in London and New York and to accelerate investment in IT in order to grow audience reach. The Company expects to issue further details of the Placing shortly following the release of this announcement.

Going concern

The financial statements have been prepared under the going concern basis of accounting as the Directors have a reasonable expectation that the Group and the Company will continue in operational existence and be able to settle their liabilities as they fall due for the foreseeable future, being a period of at least 12 months from the date of approval of the financial statements ("forecast period"). In making this determination, the Directors have considered the financial position of the Group, projections of its future performance and the financing facilities that are in place.

The Board is satisfied that the Group will be able to operate within the level of its current debt and financial covenants and will have sufficient liquidity to meet its financial obligations as they fall due for a period of at least 12 months from the date of signing these financial statements. For this reason, the Group and the Company continue to adopt the going concern basis in preparing its financial statements.

Chris Ohlund

Group Chief Executive

30 October 2024

Consolidated Income statement

for the year ended 30 June 2024

Consolidated Statement of Other Comprehensive Income

for the year ended 30 June 2024

Consolidated statement of financial position

As at 30 June 2024