LONDON (Alliance News) - Paragon Entertainment Ltd Wednesday reported higher gross profit and revenues and a narrowed pretax loss for 2013, lifted by the completion of the fit out for the Lausanne Olympic museum, the company's biggest project to date, as well as other design and build contracts.
The attractions design, production, fit-out and operations business reported a pretax loss of GBP1.0 million for 2013, narrower than the GBP1.9 million loss it reported in 2012, as revenues rose to GBP10.0 million, from GBP6.1 million. Its earnings before interest, tax, depreciation and amortisation were GBP601,000, up from GBP305,000.
The company has spent the past couple of years building itself from a pure design and build company to one that is now also looking to run its own attractions as well as owning intellectual property for attraction concepts.
It now has three divisions: Creative, which is the design and build consultancy, Attractions, which is the home for its own-brand attractions, and Leisure, which licenses exclusive and third-party attraction intellectual property. Its Leisure brands so far include Hasbro's Nerf product and YuKids.
The group's revenue growth in 2013 was driven by its Creative division, which saw revenues rise to GBP9.5 million, from GBP6.0 million. Its most notable projects during the year included the Me and My Body Exhibition at Eureka! Children's Museum, the Olympic Museum in Lausanne, Switzerland, Duxford Imperial War Museum, Alnwick Castle's Knight's Quest and Twickenham Rugby Museum.
"Our Creative division, the foundation of the group, has gone from strength to strength with historic growth and profits. The completion of our largest ever project, the Lausanne Olympic Museum, is testament to the strong reputation our Creative division holds within the industry, and illustrates our strong capabilities. Growth is anticipated to continue throughout the year thanks to our excellent pipeline of opportunities," Chief Executive Mark Pyrah said in a statement.
The CEO told Alliance News that the company's pipeline includes potential projects of the size of the Olympic museum project, but that growth was likely to moderate somewhat in 2014 and 2015 compared with 2013. The company is looking for "slightly more sustained growth", he said.
The company said its pipeline now stands at over GBP70 million, and it has already confirmed orders for more than GBP10 million over 2014 and 2015.
Paragon Entertainment's Attractions and Licensing divisions are still at the formative stage. Its first attraction was an adventure area in the Westfield Merry Hill shopping centre in Birmingham. It expects the Licensing division to steadily build a base of long term annuity-based licensees and to contribute positively to Ebitda in the latter part of 2014.
"It has been an important year for the group, and we have accelerated our strategy of diversifying the group's revenue streams by developing our younger divisions, Licensing and Attractions. Whilst still in early stages, we are encouraged by the progress we have made and look forward to continuing to update the market on our strategic progress," Pyrah said in the statement.
The CEO told Alliance News that the priority for the Attractions business this year would be to make the loss-making Merry Hill operation profitable and then build the business from there.
Pyrah also said the licensing business is getting "solid enquiries", but wouldn't give any more details for the time being.
He thinks there will be some interesting merger and acquisition opportunities around this year and "we're exploring".
The company isn't currently paying a dividend, instead retaining earnings to finance future growth. It said it will consider paying a dividend when it becomes "commercially prudent" to do so.
Chief Financial Officer Richard Arden, who was appointed last month, told Alliance News that the company was happy with its current financial position thanks to good revenue growth and cash flow.
Paragon Entertainment reported an operating cash inflow of GBP0.2 million for 2013, compared with a GBP0.4 million outflow in 2012.
Paragon Entertainment shares last traded at 3.875 pence.
By Steve McGrath; stevemcgrath@alliancenews.com; @SteveMcGrath1
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