reach4entertainment enterprises plc (AIM: R4E), the entertainment marketing communications group, announces its results for the year ended 31 December 2018.
2018 financial highlights:
- Revenues of £77.7 million (2017: £80.2 million)
- Net revenue* £31.8 million (2017: £6.8 million)
- Gross Profit margin of 25.0% (2017: 25.1%)
- Gross Profit on Net Revenues* of 61.2% (2017: 54.7%)
- Adjusted EBITDA** of £1.4 million (2017: £1.0 million)
- Operating Profit of £0.1 million (2017: £2.4 million loss)
- Loss before tax of £0.2 million (2017: £2.7 million loss)
- Adjusted profit before tax*** £0.7 million (2017: £0.2 million)
- Reported loss after tax of £0.2 million (2017: £1.9 million loss)
*Net revenues being revenues net of media costs
** Adjusted EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation) is before exceptional items, goodwill impairment and share based payment charges.
***Adjusted Profit before Tax is before exceptional items, amortisation and impairment of goodwill and intangibles and share based payments charges
2018 operational highlights:
- Strategic overhaul of core operations has led to an improvement in performance and profitability
- Successfully launched a series of new ventures including Wake the Bear, a strategy led marketing communications agency, and Story House, the theatre and live entertainment PR agency
- Dewynters has grown its revenues and underlying margins, benefiting from restructuring that took place at the end of 2017, an improved sales mix and strong trading the second half of the year
- SpotCo’s new management team, achieved cost savings leading to improved margins and absolute levels of profitability
- Story House broke even during its first five months of operation, ahead of schedule, whilst Wake the Bear made good early progress in attracting marquee clients
2019 Q1 highlights:
- Acquisition of 50% interest in Buzz 16 Productions, an independent production company led by ex-Sky producer Scott Melvin and media personality Gary Neville, providing diversification opportunity into sport marketing
- Acquisition of Sold Out, an independent full-service advertising agency for the concert and live entertainment space with turnover of £30 million, unlocking significant opportunities to cross-sell services across the Group
- Successfully raised gross proceeds of £3 million in placing to fund acquisition of Sold Out
- Strong revenue growth at SpotCo following highly successful series of new business wins in H2 2018, with new clients in the quarter including Tootsie, Magic Mike, Beetlejuice and Almost Famous
- Subsequent to year end, additional projects won at Dewynters including Joseph and the Amazing Technicolour Dreamcoat, BIG, White Christmas and The Light in the Piazza
- Media Trading Agreements signed and extended between Miroma and r4e subsidiaries
- First project underway where Sold Out and Dewynters have collaboratively serviced clients with their respective capabilities
Chairman of r4e, Lord Michael Grade, said: “It has been a pivotal year for the Group, in which the new management team, led by Marc Boyan, strategically overhauled the Company’s core operations. I am delighted to report that the turnaround has significantly improved how the Group’s agencies are operating, which is reflected in the increase in profitability.
“Whilst operational changes to the core business have been instrumental in returning the business to profitability, the launch of new agencies, alongside the recent acquisitions involving Sold Out and Buzz 16 Productions, are broadening the Group’s offering in line with the strategy to diversify its service capabilities beyond stage and theatre.”
31 December 2018 Full Report and Accounts
The Company will shortly post its report and accounts for the year ended 31 December 2018 to shareholders, along with notice of the annual general meeting, and both documents will soon be available on its website, www.r4e.com. The annual general meeting will be held at the offices of the Company at Wellington House, 125 Strand, London, WC2R 0AP.