Investor Presentation H1 Results to June 2018
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Investor Presentation H1 Results to June 2018
Exec Summary: Towards the Next Phase of Growth
• New management team recruited in Q4 2017, led by Marc Boyan, defined a strategy to focus on both
stabilising the traditional business and developing a pipeline of new opportunities
• £5.5 MM raised from an equity placing in December 2017 to support growth
• Strategic imperatives under the new management team to:
− Stabilise existing operations and improve underlying profitability
− Expand activities in and beyond theatrical production, both organically and via acquisition
− Focus on new geographic markets
2
Index
1. Growth Strategy Update
2. Performance Overview
3. Summary Financials
4. Appendix
3
Growth Strategy Update:
Stabilise Existing Operations and Improve
Underlying Profitability
• Streamlining of existing operations across Dewynters and
SpotCo starting to bear fruit
• Adjusted EBITDA from existing operations is up both in absolute
and margin terms on prior year
• Focus on resource-sharing between UK and US operations
• New management team installed into SpotCo in Q1 2018
• SpotCo awarded 15 shows so far this year, due to go live at
various times between Q4 2018 and 2020
4
Growth Strategy Update:
Expand Activities Into and Beyond Theatre
• Investments made in new operations, placing emphasis on non-
live theatre clients to broaden client offering
• First non-live-entertainment client serviced in Esme Loans
• Marketing and communications agency Wake the Bear
launched in H1 2018 and has successfully secured its first clients
• PR agency Story House launched since period-end with
significant cornerstone clients being supported by the existing
business
• Mark Cox recruited as Head of Corporate Development to
spearhead Group’s M&A strategy
• Management continues to assess various M&A opportunities to
complement the Group’s existing offering
5
Growth Strategy Update:
Focus on New Geographic Markets
• Dewynters Amsterdam launched in April 2018 as a joint venture
− Secured a multi-billion-dollar European media and
entertainment group as its first client at launch
− Performing in line with expectations and expected to make
a positive contribution to the bottom line next year
• New markets currently being assessed
6
Growth Strategy Update:
How We See the Media Landscape
Media Services: Live Entertainment Media Services: Other Clients
Brand Marketing Life Cycle
Data & Reach & Research & Data & Reach & Research &
Ideation Creative Ideation Creative
Consultancy Distribution Insights Consultancy Distribution Insights
UK ✓ ✓ ✓✓✓ ✓✓✓ ✓✓ ✓ ✓ ✓
Other
✓ ✓ ✓ ✓
Geographies
EU
North
America ✓ ✓ ✓✓✓ ✓✓✓ ✓✓
APAC
✓ Key areas in which r4e currently operates
7Index
1. Growth Strategy Update
2. Performance Overview
3. Summary Financials
4. Appendix
8H1 2018 Performance Overview
• Adjusted EBITDA from existing operations up 25% to £0.5 MM
• Streamlining of existing operations across Dewynters and SpotCo
starting to bear fruit
• Profits margins remained steady as a result of early and effective
rightsizing actions
• Strong Balance Sheet with net cash of £2.5 MM
• As expected, Revenue for the period reduced to £36.0 MM
− Reflects the residual effect of the closure and loss of shows at
SpotCo in 2017, pre-restructuring
• Moving forward, the Group has secured a promising pipeline of new
shows with SpotCo currently working on half of the Broadway
shows announced for the 2018/19 launch season
9Index
1. Performance Overview
2. Growth Strategy Update
3. Summary Financials
4. Appendix
10Consolidated Income Statement
6 months ended 6 months ended % Change
£’000s 30 June 2018 30 June 2017 Y-o-Y
Revenue 35,984 41,880 (14.1%)
Gross Profit 8,841 10,452 (15.4%)
Adjusted EBITDA* from
557 429 +29.8%
Existing Operations
Adjusted EBITDA* (Group) 325 429 (24.2%)
Loss for the period (446) (328) (36.0%)
Loss per share (p) 0.04 0.05 +17.4%
*Before exceptional items and share-based payment charges, adjusted to exclude the launch costs of new operations which
impacted results by £0.23 MM
11Consolidated Balance Sheet
As at As at
£’000s 30 June 2018 30 June 2017
Total Non-Current Assets 10,924 13,128
Cash and Cash Equivalents 5,696 2,073
Trade and Other Receivables 10,904 9,340
Inventories 140 140
Other Current Assets 653 570
Total Current Assets 17,393 12,123
Total Assets 28,317 25,251
Total Current Liabilities (17,515) (17,145)
Total Non-Current Liabilities (1,898) (2,926)
Total Liabilities (19,413) (20,071)
Net Assets 8,904 5,180
12Index
1. Performance Overview
2. Growth Strategy Update
3. Summary Financials
4. Appendix
13A Solid Platform for Future Growth
"The Group is now in a much stronger position following a difficult 2017.
The new management team has been successful in stabilising the
traditional business during the first half of the year, and the recent spate of
new Broadway musicals won by SpotCo is highly encouraging. Importantly,
we have also made good progress with the strategy of utilising the Group’s
skill set and deploying them into new segments, evidenced by work across
the Group with non-live entertainment clients.”
Marc Boyan, CEO
“The launch of Dewynters Amsterdam, Wake the Bear and Story House
has further broadened the Group’s client offering, creating new and more
diversified revenue streams. With r4e’s existing operations continuing to
demonstrate solid progress, combined with the Group’s strategy to expand
into further sectors and territories, the Board is confident that the Group
will make additional progress through the remainder of 2018 to establish a
solid platform for future growth.”
Lord Michael Grade, Non-Executive Chair
14New York Operations: SpotCo
• SpotCo notably remained profitable despite a Revenues (£MM)
£5.8 MM decline in revenues (on a constant
65.2
exchange rate basis) 51.8 54.8 48.5
40.8
• Outlook for the remainder of 2018 has improved
with the agency awarded 15 shows so far this
year, due to go live at various times between Q4 2014 2015 2016 2017 LTM
2018 and 2020 Jun-18
• Currently working on half of the Broadway Adjusted EBITDA (£MM)
shows announced for the 2018/19 launch
season 2.3
1.5
1.2
0.4 0.4
2014 2015 2016 2017 LTM
Jun-18
15London Operations: Dewynters
• Dewynters enjoyed a strong trading period with Revenues (£MM)
revenues up £1.4 MM (+11%)
27.6 27.5 27.5 27.6
26.2
• Also saw proportionally stronger profits, with
Adj. EBITDA up +109% to £0.6MM
• Benefited from moderate streamlining at the 2014 2015 2016 2017 LTM
end of 2017 and the continuation of efforts to Jun-18
change the way in which theatre and live
entertainment events are marketed Adjusted EBITDA (£MM)
• In H1 2018, worked on the market roll-out of
Esme Loans, the recently launched innovative 1.0 1.1
0.9 0.8
UK-based digital lending platform for SMEs 0.5
2014 2015 2016 2017 LTM
Jun-18
16London Operations: Newman Displays
• Newman Displays had a solid performance in the Revenues (£MM)
first half, with revenues steady at c.£1.5MM and
Adj. EBITDA up +24% 3.6 3.9 4.1 4.1
3.5
• Continues to benefit from bringing printing and
cutting in-house – and enjoys a good mix of
business from live events, theatre production 2014 2015 2016 2017 LTM
and film premiers Jun-18
• Recently strengthened business development Adjusted EBITDA (£MM)
team with a view to protecting and enhancing
the top line
0.35
0.30
0.22 0.22
0.16
2014 2015 2016 2017 LTM
Jun-18
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