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(Alliance News) - SpaceandPeople PLC on Tuesday said it swung to an annual loss as it paid an impairment relating to higher borrowing costs due to interest rate increases in the UK.
The Glasgow-based retail, promotional and brand experience specialist reported it swung to a pretax loss of GBP1.6 million in 2022 from a profit of GBP75,000 in 2021.
Revenue grew 38% to GBP5.5 million from GBP4.0 million, as the company hailed recovering business in the UK and Germany.
However, administrative expenses widened to GBP4.1 million from GBP3.5 million, while cost of sales increased to GBP1.6 million from GBP1.2 million.
Further, the company incurred a charge of GBP1.5 million in 2022, compared to none in 2021.
SpaceandPeople cited an impairment in the carrying value of the goodwill relating to the UK Retail cash generating unit. It explained that increased borrowing costs due to higher bank base rates during 2022 "caused a significant increase in the discount factor used in relation to future cash flows along with a slight decrease in the anticipated growth rate due to macro-economic factors".
Looking ahead, the company said: "We have started 2023 in a strong position with the staffing, venue opportunity and business structure in place to continue our drive to dominate the UK market and to continue to grow across Europe with our new business concepts."
SpaceandPeople shares fell 10% to 90.00 pence each in London on Tuesday morning.
By Tom Budszus, Alliance News reporter
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