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Another long bricklive zoo contract, with a new customer, has been landed. Tina is clearly working hard since her return.

With costs down massively from last year and a large stock of over 28 touring sets which have already been paid for, no question IMO that the bricklive division will be in profit this year.

KPOP was profitable last year and with the news announced only two weeks ago of a better contract for lvcg and now 3 festivals on the books will be even more profitable IMO. LCSE with formula E etc will be profitable this year. StartArt is already profitable and has already announced even more activity for this year and that’s before we know exactly what Jason Lee is doing.

All the indications are that the corner has been turned and lvcg is not just a recovery play, but a growth stock too. That long awaited analysts note will show how much.

I wonder if it’s only NFTs that Jason Lee and his team are working on?

Crypto isn’t dead yet, indeed Bitcoin is recovering. The main exchanges in Korea all seem to be doing ok. NFTs are no different to any other commodity. Provided you have a viable market (there a very high take up for crypto in Korea), and you have a marketable product that will be in demand with the right volume (and the KPOP art and general memorabilia gives that) NFTs are a low friction scaleable business.

Just why is Jason Lee investing £1.4million in shares of LVCG (plus another £100k in licence fees) at an average significantly higher than todays share price that will give him a bigger holding than DC? And what exactly are he and his team working on (we know that there are quite a few that he brought to London last year at his expense)?

There’s already been quite a bit of positive news in January, with an operational update covering all 4 divisions. That update promised a quarterly update on all divisions, which is markedly more communications than they have given in the last 3 years. There’s also been new (major) bricklive events in 2023 at Aqua Zoo, Dierenpark Zoo, Planckendael Zoo, and the Odysseum. Plus there’s been a new contract announced with SBS for London O2 and a new KPOP festival in Madrid, giving a minimum of 3 KPOP festivals for 2023 with the promise of considerably more. But of course shareholders want more, and from research we know that there’s more in the pipeline that they are under-reporting.

Just some of the things that shareholders are waiting on:

Announcement of title sponsor for formula E and other sponsors of the formula e in Cape Town.
Funding of £750,000 at 3p from Jason Lee (who has already invested £650,000,) at a higher average.
Details of the StartArt performance in 2022 against the EBIT forecast of circa £0.5m for 2022 (we already know that division is in profit)
Announcement of the StartArt new partnership with Formula E for all host cities.
Announcement of KPOP festivals in Europe (x 2) that are at an advanced stage.
Announcement of further KPOP festivals in Europe
Announcement of KPOP festival in Japan.
Announcement of full line up for Frankfurt KPOP festival.
StartArt digital platform details (which we believe is going live next month).
Confirmation of CFO on the Board
New CEO announcement.
Details of exactly why Jason Lee has invested £1.4m into lvcg (plus a £100k licence fee) at an average of over 3p.
Analysts note (Early Q1/23)

Hopefully not long to wait before we get that stream of news.

Iain Banner interview this morning. Confirms that this is a 5 + 5 year contract, notes that the city of Cape Town have paid for the upgrades to the roads, and announces that Kelvin Van Der linde a South African driver who was a substitute driver with the ABT team will be driving at Cape Town.

https://www.ivoox.com/en/formula-e-is-coming-to-cape-town-audios-mp3_rf_101878173_1.html

Knigel, I would encouraged everyone to do that. I have done and I’m content that there are “numerous RNS’” being prepared as well as “further communications with shareholders” being worked on. Hopefully not too long to wait

Those 12m were @10p. Think there are 1,500,000 brokers warrants until May 23 and there were 11,428,572 that expire in Dec 23 (all @5p) but 1,478,571 @5p were exercised in April so 11,450,001 outstanding. As to the effect on the share price, they have to be exercised first (unlikely until it’s over 10p IMO) and the placing shares they were issued with have probably been flipped, so can’t be sold until they have been issued (and even that assumes that those who have them remember that have them) . Until they all expire in Dec they will likely be a drag on the price. It’s not actually that many warrants compared to many other AIM shares out there and provided the financial trajectory of the company is right, probably won’t be too much of a drag, especially as the company gains cash when they are exercised. Has to be factored into the ultimate dilution too (now less as there were over 30 million warrants outstanding this time last year) and will clearly come into play if the company is sold before Dec.

Either the clients from the Monecor and SP Angel fundraising in Dec 2020 (or the brokers themselves if they flipped them for the warrants).

That fundraising was to acquire the LCSE division, which has already brought in more revenue than the consideration paid.

12,000,000 warrants expire today. I’m sure that’s got nothing to do with them dragging their feet on news.

I corresponded with the COO on kflex making the point that they were confusing the loons with their comms about #throwbackthursday. To be fair they stopped confusing them hence why the change from the account. But I also made the point that they should stop faffing about and release all the KPOP acts at all the same time. It looks like they are lining up to do that to me.

https://www.enca.com/sport/motorsport-cape-town-ready-e-prix

JS. Research.

Which the COO confirmed this morning along with the fact that they also have a number of other sponsors secured. I expressed the view that I was surprised given the recent wording of the RNS and the COO did agree that the wording of the op update was confusing.

Hopefully they have understood that gaining sponsorship is indeed material news as like you I believe it was the disappointing statement that they hadn’t was the main cause of the drop on 5 Jan.

JS there’s definitely a reluctance for them to release news about everything going on in the business and underreporting on what are IMO significant developments. On Madrid, that only announced the venue, not the contract or details, so could be why it was only an RNS-R? My understanding is that they expect to make a minimum of mid 6 figures from each KPOP festival. StartArt revenue from this partnership is probably dependent on some kind of profit sharing of the sales, but in terms of AIM rule 11, it affects “its sphere of activity” so is definitely RNS material. Getting sponsorship from a global player (and indeed a number of others) when you have previously given the Impression you haven’t got any is also in need to at least clarification.

Question for everyone. Looking at the 5 Jan operational update for LCSE (wording below) do you think they have secured sponsorship for the forthcoming Formula E race or not?

How surprised would you therefore be to know that not only have they secured title sponsorship (with a global billion dollar company) but have also secured sponsorship from a number of other outlets?

I’ve written to the COO saying that I believe that this is material news and that they should release an RNS to clarify/announce as well as for the Formula E/StartArt partnership. Others may want to write as well.
______________________________
Extract from 5 Jan operational update
“unfortunately sponsorship for 2022 was not obtained. As already communicated to shareholders LCSE will received a percentage of all sponsorship fees delivered. The Strategy for 2023 is to source significant title sponsorships for all managed events.”

In an interview earlier in the year, Banner mentioned that he was talking to 4 host cities about exporting the efest concept. What are the chances now that it looks like they have a partnership between Formula E and StartArt in place?

Another way to look at Frankfurt 22 is to use the figures to work out what a single sold out day would have generated in profit. That’s £440,000 profit to LVCG.

Frankfurt 22 sold 65,000 tickets over 2 days at an average price of €86. It generated an overall £160,000 profit. So total revenue was €5,590,000 or £4,955,863. Cost were £4,795,863. Assuming an even distribution of costs on each day that’s £2,397,931 per day. Day 1 sold out its 43,000 seats so revenue of €3,698,000 or £3,278,494. Thus the day 1 profit would have been £880,563 overall or £440,281 profit to LVCG.

This is only an approximation as the value of the tickets may not have been evenly distributed and the same with the costs, but it gives an idea of what these events are worth to the business. If you cut the costs for the artists, renegotiate the contract to give a better share/distribution to lvcg, and sell more merchandising (say because your brand is more established/recognisable or you get a share of the artists merch), get better streaming revenue and sponsorship then you could expect that figure to increase significantly as the bulk of the costs of the event have already been taken account of. The key is a good line up that leads to a sell out, but this looks to be a highly cash generative division with 3 in the bag already and at least another 4 in the pipeline.

Maybe actually read what was written (“generated an overall £160,000”) before you make comment tintin. I’ve done the figures for the overall and then discounted by 50% at the end to show that LVCG would have made £960,000 profit if Frankfurt 22 had sold out.

If Frankfurt 22 had sold out the profit (to lvcg) would have been close to £1m IMO. Here’s my workings.

Frankfurt 22 sold 65,000 tickets over 2 days at an average price of €86. It generated an overall £160,000 profit and in addition lvcg recovered £137,000 staff costs. I understand that the initial cost contribution for last year is to be recovered too, but I’ll discount that.

I actually think that they should have stuck with just a single day for this first event, and they would have made a better profit, but it looks like they were deluged with the demand to add another day when it sold out. That 2nd day was thus a bit last minute.com, plus this was conducted just out of covid and the line up was messed around a bit because monsta x decided to stay on in the USA an extra day so only came for the 2nd day before heading to start their national service. That drove up the costs for the 2nd day, especially for the acts, and the short notice meant that the 2nd day didn’t reach capacity.

If the 2nd day had sold out the total capacity is 86,000 for 2 days, giving an additional 23,000 ticket sales at an average of €86 = €1.978m or £1.76m giving an additional profit share of £880,000 to LVCG (as the costs for both days would have stayed the same the same). Plus with more tickets sold that would have meant more merchandise sales.

Frankfurt 23 commercial construct is unchanged, plus I understand that the artists costs are under better control, so if they announce a good enough line up and sell out, that’s going to be a nice addition to the bottom line just from that one event. If they had sold out both days last year it’s likely IMO that 2022 would have been in profit, although we will have to wait for the results to see that for sure.

This year there are already 3 concerts on the books (Frankfurt, Madrid and London) and if the line ups are good enough we should start seeing the sorts of numbers to significantly turn the business around like we were all hoping for last year. They clearly already have enough evidence on how the structure of the new contract (Madrid and London) for the Nomad to sign off the statement that “expected to generate revenues of more than £1m to this division.” We know they are in advanced stages of another 2 European concerts and more, including Japan, are in the pipeline to be added for 2023 which looks like they are aiming for a minimum of 7 KPOP festivals this year. Get the numbers cross referenced in an independent analysts note, and IMO belief in the turnaround (and sentiment) will return, especially as these are all multi year agreements.

Sounds like a question you should be asking the company. Get in that hotline you have.

But the operational update is very poorly worded and has some big gaps in it IMO. No efset, golf tournament, sustainability conference or the post event concert mentioned at all, yet all of those events are clearly happening and will be generating revenue for the company will they not? The quote below on revenue generation is from the company investor presentation and also backed up with the proactive interview with Bruce Parker Forsyth. I understand that Sarah is still trying to set up a more detailed Q&A session with the LCSE team for us to clarify stuff like this, however I expect that the LCSE team is running around with their hair on fire organising both the ocean race and all of the various formula E activities which start within less than a month.

Same with the removal of non core loss making activities. My assumption is that this refers to some of the bricklive live events they ran which ended up being loss making. Nothing wrong with that, provided they are learning from them and sharpening up the business model for the future.

Season 9 kicks off in Mexico this weekend. With the gen 3 car this season looks to continue the improvement in the worldwide audience.

If you go back to the investor presentation it clearly notes that for Formula E: “Revenue being generated from sponsorship, ticket, hospitality, exhibition and merchandise sales” as well as their annual operational management fee.

https://ca.movies.yahoo.com/movies/formula-e-2023-team-changes-070000997.html