Hot summer dents retail appeal
SpaceandPeople (SAL) provides property owners with ways to capitalise upon the full commercial potential of retail assets. It markets, sells and administers free space in venues including shopping malls, garden and city centres, retail parks and travel hubs (over 750 venues with a weekly footfall of 70m).The first half messages were a mix of strategic progress and the dampening impact of a hot summer on UK and German retailing. H1 revenue at £3.9m was 20% down y o y, with a £0.1m pre-tax loss (H117: £0.2m profit).
SAL’s venues experienced some of the issues reported by other retail-related operations. The appeal of shopping centres to advertisers was suppressed until other distractions i.e. the weather and England’s World Cup run eased off.
Conversely, SAL reported encouraging progress vs key strategic objectives for 2018 and a strong start to H2. It secured new clients in H118 for the venues added to its portfolio in 2017, and successfully rolled-out its PopUp concept. Momentum for both is being established and it has seen a solid pick-up in volumes since early August.
Recent trading provides a stronger base for FY19 and suggests that the performance up to July was at least in some respects an anomaly. However, current momentum won’t enable SAL to make-up all the ground lost during the first half, and we have cut our FY18e operating profit forecast to £0.2m, from £1.1m previously (FY17: £1.2m).
The group closed H118 with £0.5m net cash (H117: £0.8m). The prospective 1.5p/share dividend, equivalent to a 7.1% yield, should provide support as anticipated recovery regains visibility.
SpaceandPeople is engaged in the marketing and selling of promotional and retail licensing space on behalf of shopping centres and other venues throughout the U.K. and Germany and also in India. Co.'s segments include promotional sales and retail, and other. Through its subsidiaries, Co. is involved in licensing of intellectual property, media, and leasing of retail merchandising units.
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