TEN ENTERTAINMENT GR

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Ten Entertainment : Interim results announcement 23 September 2020

09/23/2020 | 02:10am

Half-Year Results

23 September 2020

Results for the 26 weeks to 28 June 2020

23 September 2020

Ten Entertainment Group plc

Half-Year Results 26 weeks ended 28 June 2020

"In excellent shape with a proven strategy to maximise our future opportunity."

Ten Entertainment Group plc ("Ten Entertainment" or "The Group"), a leading UK operator of 46 family entertainment centres, today announces its half-year results for the 26 weeks to 28 June 2020. The results reflect a period of very significant disruption as a result of the enforced Government closure of all leisure and hospitality venues ("Lockdown") from 20 March 2020 as a result of the Covid-19 pandemic.

26 weeks to

26 weeks to

28 June 2020

30 June 2019

(H1 20)

(H1 19)

Total sales

£22.5m

£41.4m

Like-for-like sales growth first 11 weeks

9.6%

5.1%

Group adjusted EBITDA1

(£1.5m)

£11.2m

Group adjusted profit before tax1

(£5.7m)

£7.3m

Reported profit after tax

(£5.1m)

£4.7m

Cash / (Bank net debt)1

(£6.7m)

(£3.2m)

Available debt headroom

£18.3m

£11.8m

Cash (out-flow)/in-flow after investments

(£2.6m)

£1.0m

  • A strong start in the first quarter with accelerating like-for-like sales growth of 9.6% before Lockdown
  • Robust financial position showing the resilience of the underlying business model
    • Cost control, supplier support and Government support reduced cash burn by over 70%
    • Liquidity secured through low net debt, £25m of undrawn RCF and equity raise of £4.9m and covenant waiver
    • Significant remaining headroom with Bank net debt only increasing to (£6.7m) (H1 19: (£3.2m))
  • Recovered quickly from Lockdown as restrictions were eased. All centres are now fully open
  • Trading has begun well at 83% of previous levels:
    • All 46 centres now open
    • Initial customer feedback has been good, with customers understanding the measures in place
    • Spend per head (SPH) has been maintained at last year's levels
  • Returned to profit and cash generation despite only 50% lane capacity at this stage
  • Discrete bowling lane areas well suited to Government's "Rule of Six" guidelines
  • Strategically well positioned to benefit from ongoing consumer demand and future opportunities
  • Seamless transition to new leadership

Nick Basing, Executive Chairman said:

I am pleased that even in extreme adversity the team have taken decisive action that has enabled the Group to emerge from Lockdown so strongly, putting in place sufficient cash liquidity to protect it through a continued period of uncertainty.

We have made a very good start, showing that we have a safe and attractive business for customers and staff. I fully expect our strategy for growth, proven over the years, to return us to profitable growth in the near future once circumstances permit."

Graham Blackwell, Chief Executive Officer, commented:

"I am pleased to have been given the opportunity to lead the Group at this crucial time and I am grateful for the fantastic support from my colleagues as we have secured our long-term position. My 30 years in the business have shown me that the strength and stability of our teams, the quality of our estate and our great service can stand the test of time.

We are really encouraged by our reopening performance. Our primary focus is to return the business to the trend of the first quarter through our strengths in operational improvements and commercial innovation. Our proven strategy remains relevant, and with a track record of eight consecutive years of like-for-like sales progression, I am confident that we will return the business to growth."

pg. 1

Enquiries:

Ten Entertainment Group plc

via Instinctif Partners

Graham Blackwell

Chief Executive Officer

Antony Smith

Chief Financial Officer

Instinctif Partners

Tel: 020 7457 2020

Matthew Smallwood

Jack Devoy

There will be a presentation today at 9.00 am to analysts via a Webcast. The supporting slides and audio will also be available on the Group's website, www.tegplc.co.uk, later in the day.

Forward-looking statements

This announcement contains forward-looking statements regarding the Group. These forward-looking statements are based on current information and expectations and are subject to risks and uncertainties, including market conditions and other factors outside of the Group's control. Readers are cautioned not to place undue reliance on the forward-looking statements contained herein, which speak only as of the date hereof. The Group undertakes no obligations to publicly update any forward-looking statement contained in this release, whether as a result of new information, future developments or otherwise, except as may be required by law and regulation.

1 These are non-IFRS measures used by the Group in understanding its underlying earnings. Group adjusted EBITDA consists of earnings before interest, taxation, depreciation, amortisation costs, exceptional items, profit or loss on disposal of assets and adjustments to onerous lease and impairment provisions. Group adjusted profit before tax is defined as profit before exceptional items, profit or loss on disposal of assets, amortisation of acquisition intangibles and adjustments to onerous lease and impairment provisions. Adjusted basic earnings per share represents earnings per share based on adjusted profit after tax. Like-for-like sales are a measure of growth of sales adjusted for new or divested centres over a comparable trading period.

pg. 2

Executive Chairman's Introduction

We entered 2020 with a strong sense of optimism after an excellent 2019. Our strategy continued to deliver excellent returns and good growth and we had an exciting number of new centres in the pipeline. At the time that the Covid-19 pandemic caused a dramatic halt to operations, we had been trading well, were growing and were confident for the future. Our response to the pandemic has been equally strong. Within a week of closure, we had raised £4.9m through an equity placing. We acted swiftly with our business partners and dramatically reduced our cash outflow and we welcomed the unprecedented levels of Government support. All these actions have helped us to minimise the cash outflow, and we ended the half-year with more liquidity headroom than we had in 2019.

The business is a strong one. We operate in a market that has seen long-term structural growth, and customers still want to enjoy competitive socialising activities as part of their leisure activities with families and friends. We have a highly cash generative business that operates on high margins. This will allow us to rebuild quickly so that we can refocus on our proven strategy. It is for these reasons that I remain confident for the future. Five months of Lockdown has enforced a pause in our investment programme, but our cash position remains strong, and once we have certainty of the landscape, we will be able to return to and resume our successful growth model.

We now enter a new phase as we open the business post Lockdown. I am delighted to have Graham Blackwell at the helm as our new CEO. He is ideally placed to lead the business back to its previous levels and beyond, having been instrumental in getting the business there once already.

Chief Executive's Statement and Operating Review

I am pleased to take on the leadership of the Group to guide it through this crucial phase of development and regrowth. With over 30 years' experience in the industry I remain confident of the enduring appeal of our family entertainment centres. That appeal remains, and with our operational experience and strong customer proposition, we are well placed to stabilise our position and return to growth.

The Group had an excellent start to the year, with the first 11 weeks delivering double-digit sales growth and good progress on developing the customer experience. On 20 March the Covid-19 pandemic resulted in widespread Lockdown across the UK and our entire estate was closed and remained so until the majority of centres opened again on 15 August.

Our strong Q1 sales and our prudent approach to cost and cash management meant that we began the closure period in robust financial health. Swift action from management and strong support from shareholders and many other stakeholders gave the business a good level of liquidity headroom.

In response to the Government's Lockdown measures and the growing crisis, the Board set out clear priorities: to protect our people and their jobs; to preserve the long-term future; and to prepare for reopening. I am pleased to report that we delivered against those objectives and our business is now fully open with some encouraging early results.

Protecting our people

On 20 March the Government announced the enforced closure of hospitality and leisure businesses throughout the UK. The Board responded immediately, and within a week had safely secured all centres in the estate in preparation for a period of closure. During this period, the Government also announced the Coronavirus Job Retention Scheme (CJRS), a mechanism through which staff could be furloughed with their costs covered by a Government rebate.

95% of the 1,170 people in the Group were furloughed by early April, with a small core of support staff remaining in place throughout the closure period. The Government supported 80% of wages up to a maximum of £2,500 per month for people who had been in place since the end of February.

Preserving financial security during closure meant that our employees were able to look after their families, develop their skills or help out in their local community. Many volunteered for charities or the NHS or simply supported their neighbours and friends. Our commitment to doing the right thing together with the support from the Government ensured that we could reopen our centres with well over 90% of our people able to return to work. None of our site-based people were made redundant.

pg. 3

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Ten Entertainment Group plc published this content on 23 September 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 23 September 2020 06:09:05 UTC

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