2010 Full Reports are available HERE.

This Year's Interim Reports are available HERE.

PRELIMINARY CONSOLIDATED RESULTS FOR THE 14 MONTHS TO 31 DECEMBER 2010

SpaceandPeople plc (“SpaceandPeople” or the “Group” or “Company”), the international experiential marketing and media group which facilitates and manages the sale of promotional and retail merchandising space in shopping centres and other high footfall venues, announces preliminary results for the 14 months ended 31 December 2010.

On 21 May 2010, the Company announced it was changing its year end date from 31 October to 31 December. These results therefore include the results of SpaceandPeople for the 14 months to 31 December 2010 and those of Retail Profile Holdings Limited (“Retail Profile”) from the date of acquisition on 24 May 2010 to 31 December 2010. The comparative figures are for the year to 31 October 2009.

Highlights

• Consolidated group revenues up 189% to £7.77mn due to the success of the Retail Profile acquisition and excellent performance of the German business
• Consolidated operating profits before non-recurring costs up 238% to £1.67mn
• Basic earnings per share before non-recurring costs up 129% to 7.15p
• Dividend increased by 30% to 2.60p
• Now represent 374 venues in the UK and Germany with a weekly footfall of 47mn
• SpaceandPeople Germany revenues up 96% to £1.24mn and operating profits up from £3.6k to £375k, its first substantial profit
• Retail Profile Germany awarded an exclusive agreement to operate RMUs in ECE’s German shopping centres
• Recent promotional campaigns include the launch of Cycle Superhighways for Transport for London, Microsoft and the London Film Festival, EasyJet – new routes promotion, and the X-box ‘Kinect’ launch

Commenting on the results, Matthew Bending, Chief Executive Officer said:

“The Group has made huge progress over the period with the successful acquisition of Retail Profile, the first substantial profit from Germany and the first contract signed by Retail Profile in Germany, demonstrating the huge opportunity for the enlarged Group to cross sell its services.

SpaceandPeople is well positioned for the future and the Board is confident of the growth prospects in terms of both revenues and profitability in the current year.”

Contact details

SpaceandPeople plc		0845 241 8215
Matthew Bending / Gregor Dunlay
Seymour Pierce Limited		020 7107 8000
John Cowie / Stewart Dickson (nominated adviser) Richard Redmayne / Paul Jewell (corporate broker)

The financial information has been extracted from the Company's audited financial statements for the period ended 31 December 2010. The Report of the Directors and Financial Statements for the period ended 31 December 2010 will be available on the Company's website and will be posted to shareholders shortly.

Chairman’s Statement

Overview

This has been a tremendous 14 months for SpaceandPeople, with several important milestones achieved including the acquisition of Retail Profile Holdings Limited (‘Retail Profile’), the signing of an exclusive Retail Merchandising Unit (‘RMU’) agreement with ECE Projektmanagement (‘ECE’), the leading shopping centre management company in Germany, moving to a new head office in Glasgow, as well as the ten year anniversary of the Group.

Retail Profile was acquired on 24 May 2010 and its results are included in the Group’s results from that date. The Group is already seeing the commercial synergies from the acquisition through the ability to cross sell each other’s services both in the UK and now in Germany. In November 2010 Retail Profile, through its subsidiary Retail Profile Europe GmbH, signed a seven year exclusive agreement with a subsidiary of ECE to install and operate RMUs across its German portfolio of major shopping centres. Germany is a major market for SpaceandPeople and the contract win by Retail Profile demonstrates the opportunity for successful cross selling across the enlarged Group. It is expected that Retail Profile Germany will contribute significantly to profit growth in future years.

Financial Results

Trading has been strong across all operating segments and in total, Group revenues for the 14 months to 31 December 2010 were up 189% over the previous reporting period (12 months to 31st October 2009) from £2.69mn to £7.77mn. Group operating profit before non-recurring costs rose by 238% from £493k to £1.67mn and basic earnings per share before non-recurring costs by 129% from 3.12p to 7.15p. The substantial increase in revenues and profits illustrates the success of the Retail Profile acquisition, which also contributes significantly to these figures.

On an annualised basis, comparing the year to 31 December 2010 with the previous year and including Retail Profile for both years, revenues rose by 15% to £8.98mn and operating profit by 10% to £1.44mn.

Of particular note is the performance of SpaceandPeople Germany which, in only its third year of trading, produced its first substantial operating profit of £375k for the 14 months, up from £3.6k in the year to 31 October 2009. Revenues rose by 96% to £1.24mn as a result of signing a number of long term contracts with a major telecoms provider, the benefits of which will continue to be seen over the next two years.

The balance sheet remains strong with £1.40mn of cash generated from operations in the period and £1.98mn of cash at the year end.

People

During the period, as noted in the interim statement, the Board was strengthened by Maurice Helfgott and Martin Kemp (previously Chairman and MD respectively of Retail Profile), and Christopher Stainforth, who’s vast City experience helped with the Retail Profile acquisition. Subsequent to the period end Gregor Dunlay joined the Board as the Group’s first full time Chief Financial Officer.

I would also like to take this opportunity to thank our employees, mostly based in Glasgow, for their continuing efforts and commitment in driving the business over the last ten years.

Dividend

Recognising the continued progress made by the Group, your Board is proposing a dividend of 2.60p per share, an increase of 30% on last year, payable on 27 May 2011 to shareholders on the register on 31 March 2011.

Outlook

SpaceandPeople now represents 374 venues in the UK and Germany, up from 310 at the last year end, with a combined footfall of over 47mn customers per week. This is a powerful offer to both advertisers and merchandisers. As shopping centre owners suffer from vacancies as a result of the recession, the Group is well placed to help them meet their need to maximise revenue streams. As a result of this and the developments over the last year, the Group is well positioned for the future and we are confident of the future prospects for growth in both revenues and profitability in the current year.

David Henderson-Williams

Chairman

16 March 2011

Chief Executive Officer’s Review

The past financial period has been a year of firsts for SpaceandPeople, the first acquisition, the first substantial profit from Germany, the first profits from India and the first 10 years in operation. In addition, there has been excellent growth in both the UK and German businesses, the winning of an exclusive seven year deal to supply RMUs to ECE throughout Germany, and a new head office.

The recession has impacted the market, particularly in the UK where shopping centre owners have generally seen an increase in vacant units. However, this has encouraged them to seek to maximise revenues from other sources and the Group has been able to help them in this.

UK

The SpaceandPeople UK business saw respectable revenue growth of 25% from £2.06mn in the previous financial year to £2.57mn. On an annualised basis this was an increase of 6%. However, operating profit before non-recurring costs fell from £489k to £270k due to the expanded cost base of the larger group in order to capitalise on future opportunities. A significant part of this was the move away from Strathclyde University Incubator (SUI) into new offices at 100 West Regent Street in Glasgow. As a result of the move, the Group ceased using SUI’s financial services function, and has invested in the appointment of several staff members. These include Gregor Dunlay, who was recently appointed to the role of Chief Financial Officer and who has already proved himself an essential part of the senior management team.

During the period, Retail Profile UK, which is only included from 24 May 2010, contributed £3.97mn to revenues and £1.02mn to operating profit. On an annualised basis, revenues were up 11% to £5.70mn and operating profit by 9% to £896k. At the period end it operated 233 RMUs in 44 centres, including 24 in which SpaceandPeople do not operate.

The UK venue stream has been developing well with major wins at 8 major regional airports, Lasalle portfolio (16 shopping centres and 28 retail parks) and Silverburn, a major out of town shopping centre near Glasgow. In total SpaceandPeople now represents 297 venues with a footfall of 31mn customers per week. Recent promotional campaigns include the launch of Cycle Superhighways for Transport for London, Microsoft and the London Film Festival, Easyjet – new routes promotion, and the X-box ‘Kinect’ launch.

The acquisition of Retail Profile in May was a major step forward for the Group bringing new venues, new products, management skills and a strong reputation for customer service. From the outset, the Board and wider Group saw the growth potential of the combined businesses and which, I am happy to note, has already started to show benefits to the bottom line. In the current financial year both sales growth synergies and cost synergies are expected as a result of the business combination.

Germany

In Germany the Group saw many strong developments, not least a huge step forward in sales growth, and recognition must go to the team in Hamburg for this. SpaceandPeople Germany increased revenues by 96% from £632k last year to £1.24mn in the current period, and operating profits up from £3.6k to £375k. On an annualised basis, revenues were up 72% to £1.09mn and operating profit by over 88 times to £353k. The increase in revenues results from the signing of 3 year contracts for a number of centres by a major telecoms provider, the benefits of which will be further evident over the next two years. At the period end the Group managed 77 venues on behalf of ECE, up from 71 last year.

Building on this success, in November Retail Profile was awarded ECE’s first RMU contract, and the Hamburg team have adapted well to the business changes this has produced. RMUs were in place in 2 centres in Hamburg by Christmas and the roll-out across other ECE centres throughout Germany has started with an expectation that there will be 200 RMUs in place by the end of 2012. The Board anticipates strong revenue and profit growth in the RMU business this year.

Russia

Revenues received from Retail Profile Russia, the independent Russian company with which Retail Profile has a licensing agreement and operates RMUs in shopping centres owned by MEGA in Russia have risen on an annualised basis by 62% on last year.

India

Our associate business in India, SpaceandPeople (India) in which the Group has a 49% interest, saw Paresh Khivesara and his team generate over £1mn in revenues to its venue clients. SpaceandPeople (India) produced a small loss over the period but has now traded profitably for the last 8 months. It now has 26 staff in 6 cities, represents 30 malls on an exclusive basis, and the sales and business development pipeline is strong. It is well placed to produce a profit in 2011.

Prospects

The New Year has started well and current trading is in line with expectations. The many developments and changes in the Group bode well for the future and give us confidence in the future growth in both revenues and profitability.

Matthew Bending

Chief Executive Officer

16 March 2011

 

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