Spaceandpeople warns on profits

Retail ‘experiential’ marketing group Spaceandpeople (SAL) warned on profits as it published interim results early, after a challenging period where trading was slower than anticipated.The AIM company was also hit by several one-off costs and delays as well as seeing its UK promotions business continue to decline on the ending of a contract with Intu Properties and protracted negotiations with new business counterparties.As such, management now forecast 2014 profit before tax and non-recurring items to be £0.8m, with an upside of potentially a further £0.2m on potential contracts. Profit before tax but after non-recurring costs should be between £0.5m and £0.7m depending on how Christmas trading negotiations go.UK retail fell 32% to £1.5m due to a decline in demand for kiosks, while German retail grew revenues 8% to £1.4m on increased business with main partner ECE, part of Europe's largest property group, but this could not keep pace with capacity growth and falling occupancy hit profit.SAL did cut an annualised £0.7m of costs and said new revenue lines established this year “will deliver a better performance in 2015” as it announced a new three-year contract with ECE, as well as a deal with the Grand Central Birmingham shopping centre due to open in September 2015.“Despite the challenging sales environment this year, SpaceandPeople remains a robust business,” chief executive Matthew Bending said. “Our rapid growth in recent years has made us Europe's largest provider of commercialisation revenue to our client shopping centres and we strive to continue to offer them the best service available.”However, analysts at Cantor Fitzgerald said the profit warning “will once again heighten doubts over the business model and management's ability to deliver”.After plunging initially, shares in SAL closed a penny up at 52p on Thursday. SpaceandPeople