(Alliance News) - SpaceandPeople PLC on Monday reported a narrowed first half loss but warned full-year profit will be lower than forecast due to UK market uncertainty and slower contract approvals in Germany.
In the six months to June 30, revenue fell by 2.4% year-on-year to GBP3.8 million from GBP3.9 million.
SpaceandPeople - which markets and sells retail licencing space - reported a pretax loss of GBP40,000 narrowed from GBP88,000. Administrative expenses were trimmed by 9.2% to GBP2.5 million from GBP2.7 million, slightly offset by sales costs which rose by 11% to GBP1.4 million from GBP1.3 million.
In the company's Retail Germany unit, revenue shrunk by 35% year-on-year to GBP471,000 from GBP722,000 with Promotions revenue in the country falling 25% to GBP150,000 from GBP199,000.
In the UK, Promotions revenue grew by 20% to GBP1.8 million from GBP1.5 million but Retail revenue stayed broadly flat at GBP1.4 million.
The average number of retail merchandising units in the UK fell year-on-year to 56 from 60. German retail merchandising units fell to 48 from 74 although the division has since experienced a "resurgence".
Looking ahead, SpaceandPeople anticipates a full-year pretax profit of GBP100,000, below previous expectations but improved from 2018 where it delivered a GBP200,000 loss before one-off costs.
The company said: "The slower than expected contract approvals for German retail merchandising units expansion coupled with the drag in the UK in the third quarter as budgets are held back due to market uncertainty will lead to lower than planned revenue in the second half of the year."
More positively however, SpaceandPeople said its German retail merchandising unit has been presold to retailers for the Christmas period. The fourth quarter of the year is "traditionally the most important quarter for bookings".
Though in the UK, "Brexit headwinds are delaying our sales pipeline especially in the experiential market".
The company eyes 2020 has a year for "substantial revenue improvement".
The firm explained: "Although the resurgence of German retail merchandising units has come too late to have a significant impact on 2019, the new venues joining our service this year and the pipeline of additional venues in development for 2020 is the most positive it has been for many years."
Shares in SpaceandPeople were untraded in London on Monday morning, last quoted at 13.20 pence each.
By Eric Cunha; ericcunha@alliancenews.com
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SpaceandPeople (SAL)