OOUT.L Regulatory News (OOUT)

4 May 2021

Ocean Outdoor Limited  

("Ocean" or the "Company" or the "Group") 

2020 Full Year Results

Ocean Outdoor Limited (LSE: OOUT), a leading operator of premium Digital Out-of-Home ("DOOH") advertising in the United Kingdom, the Netherlands, the Nordics and Germany, today publishes its financial results for the full year ended 31 December 2020.

Reported financials - protected core business during pandemic:

· Billings1 recognised by the Group in FY20 were £104.7m (FY19: £135.1m)

· Revenue generated by the business in the year totalled £86.2m (FY19: £104.0m)

· Group gross profit was £22.5m (FY19: £44.9m)

· One off impairment charge of £142m (FY19: nil) related to impact of COVID-19

· Group loss before tax was £182.0m (FY19: £6.2m)

· Successfully agreed £35m of debt facility to assist with working capital requirements, with £5m drawn down by the year end

· Cash on balance sheet of £30.0m (FY19: £26.9m)

· Net assets balance of £197.7m (FY19: £374.0m)

· Cash generated from operations totalling £32.1m (FY19: £46.8m)

Unaudited proforma2 figures:

· Unaudited Group revenue of £86.2m on a proforma basis, down 38% (2019: £139.6m)

· Unaudited Adjusted EBITDA3 of £(0.4)m down from £32.9m 

· Reduced overheads (excluding depreciation and non-recurring items) by £4.4m to £26.8m, down 14% (2019: £31.2m)

· Continued to invest for growth - capital expenditure in new locations of £6.4 million (2019: £15.9 million)

· Strong working capital management leading to £5.5m of operating free cash flow

Ongoing strategic investment and new contract wins:

· Ocean Netherlands appointed as 10-year strategic media partner for Westfield Mall of the Netherlands, contract value of €7 million

· Launched suite of new technological innovations with Ocean Labs for wider appeal (3D forced perspective technology, mobile augmented reality (AR) technology and touchless screen technology)

· Continued roadside network expansion in UK cities including expansion of Two Towers® concept in Birmingham

· Won four new media contracts in a competitive tender process across the Nordics, leading to an additional 58 shopping malls across Sweden, Norway, Denmark and Finland 

· Renewed three and extended two roadside contracts in the Netherlands related to €1.8m of annual revenues

Momentum building in 2021:

§ Announced a sealed bid auction ahead of COP26 later this year for brands wanting to appear on Ocean's large format DOOH screens across Edinburgh and Glasgow

§ Exclusive UK digital content deal with BT Sport to broadcast next day UEFA Champions League match clips across 7 key cities as live sports return in the UK

§ Expansion of Ocean Netherlands media partnership with Dutch Olympic team ahead of Tokyo 2021

§ Launched Amsterdam's First Digital Creative Competition

§ Oslo bus station, one of Norway's busiest transport locations, launched with 28 new digital screens

1 Billings represent the advertising spend by the advertiser, including fees directly payable by the advertiser to their advertising agency, exclusive of sales tax.

2 Due to FY19 mid-year acquisitions the consolidated statement of profit and loss presented does not provide a year-on-year comparison for the underlying performance and operations. The financial highlights detailed above are on an unaudited proforma basis for Ocean Outdoor Limited and all subsidiaries in the Group as at 31 December 2020 as if the same subsidiaries had been owned from 1 January 2019.

3 Earnings before interest, tax, depreciation, amortisation, impairment on intangible assets, impairment on investments in associates, deal fees, debt raise fees, foreign exchange gains or losses, restructuring and redundancy costs, other one-off costs & earn out payments designated as post completion compensation under IFRS3. IFRS 16 has been removed, in order to provide comparison on the prior period.

Tim Bleakley, Ocean's CEO, commented: 

"Throughout the period Ocean Outdoor has continued to invest in its platforms and products to prepare for the impending recovery. With a strong balance sheet and growth opportunities in every area of our operations, our focus is now on the speed of that recovery as restrictions are lifted.

"We have never stood still. We have not only protected our core businesses across all territories, but developed or won incremental assets and contracts to accelerate growth, strengthening Ocean's network proposition in key areas such as content partnerships, new technology and brand experiences to maximise every opportunity for advertisers as they return. Momentum is building and the investments we have made means Ocean is exceptionally well placed to reach and engage with highly receptive, liberated outdoor audiences at scale. We have a strong underlying business, we are well set for the recovery and we are already engaged in the fight back."

A conference call for investors and analysts will take place on 4 May at 2021 at 13:00 BST / 08:00 ET. Dial-in details below:

UK Toll Free: 0808 109 0700

USA Toll Free: 1 866 966 5335

Standard International Access: +44 (0) 33 0551 0200

Password: Ocean Outdoor

A copy of the results presentation will be made available within the investor relations section of the Company website once the results are announced.

The Company's 2020 Annual Report & Accounts is also now available via the investor relations section: https://investors.oceanoutdoor.com 

For further information please contact:

Chairman's Statement

It is with pleasure that we present to you, the shareholders, the Report and audited consolidated financial statements of Ocean Outdoor Limited for the year ended 31 December 2020.

After such a promising start to 2020 with our ambitions set on delivering another transformational year, the task from mid-March rapidly changed with the immediate impact of COVID-19 causing advertising spend to be switched off almost overnight and national lockdowns commencing shortly after. Instantly, our priority was to protect the staff and business.

With no visibility of how long the lockdowns in our territories would last, or what the true impact of the pandemic was to be, the Group had to prepare for a longer-term scenario. As such, the Group moved quickly to negotiate with its landlords and suppliers and utilise the support from its banks as well as government in order to safeguard the core business. The entire team has done an incredible job to shield the business, and on behalf of the Board, I am truly grateful for the staff's tireless efforts during an unprecedented period, which has put a huge stress on people's lives, both physically and emotionally.

Whilst the summer months and third quarter saw a business recovery, which coincided with the lifting of social restrictions, unfortunately this was not to be sustained due to the pandemic taking hold again in October and new lockdown measures being enforced. However, what Ocean did experience in this open period was a rapid, week-on-week increase in sales and bookings as brands reactivated their campaigns. The positives here emphasised both the demand for brands to be seen in our locations and the pace at which Ocean digital's network operates, with its ability to launch high impact campaigns on a national scale at the flick of a switch. We anticipate experiencing this trend again once our markets begin to move back to normality.

After working our way through one of the most extraordinary periods in recent history, Ocean is now focused on the future and playing its role in the recovery. The Group has continued to make progress across a number of operational areas, creating a much more efficient and innovative business, which is ready to capitalise on advertising spend as brands switch on their campaigns.

One thing that has not changed is Ocean's strategy and its proposition to push the boundaries of digital Out-of-Home advertising. After completing a series of acquisitions in 2019 and accelerating the integration of the Nordics business during the first half of 2020, we have created the most dynamic, prime digital Out-of-Home player across northern Europe.

Whilst caution and uncertainty remains, the vaccination programmes underway across our territories are leading to renewed optimism alongside the initial lifting of some lockdown restrictions. In recent weeks, non-essential retail has reopened in the UK in a positive way, with Westfield reporting 1.2 million shoppers across both London malls on the first weekend after reopening, which was 68% higher than the first weekend open after the first lockdown. In the Netherlands, traffic has reach 75% of pre-COVID levels in the first two weeks of April, whilst across the Nordics region they have recorded traffic levels between 65% and 74% of those experienced pre-COVID. With urban roadside and premium retail key pillars of Ocean's network, we are in the environments people are returning to, and where brands want to be visible.

Ocean's network and offering continues to go from strength to strength and the Group is an excellent position to capitalise on the recovery. The Board and senior management team remain focused on continuing to execute the strategy and we are confident that Ocean will prosper as its markets open up fully.

Aryeh Bourkoff

Chairman

3 May 2021

Chief Executive's Review

Introduction

· Navigated pandemic by working closely with partners and landlords to manage costs and strengthened balance sheet with £35 million facility

· Committed £6.4 million in 2020 to support further expansion and upgrades to our state of the art DOOH product offering

· Seeing encouraging early signs in 2021, particularly in the UK with weekly bookings increasing in line with vaccine roll out

It has been well documented that the pandemic has brought unprecedented challenges to the Out-of-Home sector, with the public lockdowns keeping people away from city centres and the spaces where we primarily connect with our audiences. As we publish our 2020 figures, the outlook is beginning to look more promising than four months ago, due to the success of the vaccination programmes underway. Whilst they are at different stages across our territories, a number of governments expect to have a significant proportion of their populations vaccinated by summer 2021, and some restrictions are starting to be eased, including the opening of non-essential retail in the UK. Whilst it remains too early to forecast how quickly Ocean will recover in 2021, we are seeing some encouraging early signs as lockdown restrictions begin to ease, with weekly bookings in the UK increasing in line with the vaccine roll out. Whilst lockdown restrictions are being lifted at different rates across the Netherlands and Nordics, both regions are seeing good progress with their vaccination programmes

After enjoying a strong start to 2020 across all our territories, from mid-March we saw media and advertising spend quickly decline. With governments enforcing social restrictions at the same time, the focus became mitigating the impact on Ocean, with the Group immediately lowering its cost base while protecting the core business and employees. Ocean has benefited throughout from the good relationships it has with its landlords and suppliers, working closely with them to negotiate on terms, which has enabled payment deferrals and reductions to be accepted.

Whilst the Group's balance sheet was strong at the time the pandemic hit our market, with net cash of almost £20 million, the Board felt it was wise to look at options to further bolster the Group's liquidity. Ocean entered into a £35 million facility agreement, comprising of a term loan and revolving credit facility, with £25 million of the new facility issued under the UK government backed Coronavirus Large Business Interruption Loan Scheme, which increased the Group's liquidity to £67 million. At the year end the Group had drawn down £5 million from this facility.

The easing of the initial restrictions at the start of the summer period consequently saw bookings and revenues rebuild week-on-week during late Q2 and Q3. However, the reintroduction of lockdown measures across all territories in Q4, which is normally the biggest period for advertisers in the lead up to Christmas, led to brands pulling back on advertising spend and deferring campaigns, resulting in a weaker conclusion to the year.

Our decision to continue with our organic growth plans, with a total of £6.4 million invested during the year, supported the further expansion and upgrades made to our state of the art DOOH product offering. This means that the Group has put itself in the best possible position to capitalise on demand as the sector re-emerges. We believe that Ocean is the most dynamic operator in its market and our focus on premium retail and city roadside will support our ability to bounce back quickly as people return to our cities and brands recommence their Out-of-Home advertising campaigns.

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Ocean UK

· Undertook various initiatives during 2020 to remain visible and used platform to support UK small businesses, charities and the arts.

· Expanded Ocean's Two Towers® concept in Birmingham and added five more locations to XL roadside network.

· Continued to incorporate further technologies into our network to amplify brand engagement, including mid-air haptics technology and mobile augmented reality.

As highlighted in our previous updates, throughout 2020, Ocean has undertaken various initiatives to remain visible and use its platform to support UK small businesses, charities and the arts. Some of the highlights which have showcased our medium in global news have included carrying The Queen's message to the UK back in April 2020, the VE Day anniversary, the tributes to incredible fundraising feat and life of war veteran Captain Sir Tom Moore on the Piccadilly Lights, displaying the works held in the National Gallery whilst it remains closed, and helping over 250 UK SMEs through the combined £25 million advertising fund, which supported businesses in both the UK and the Netherlands.

In terms of ongoing investment, in 2020 we committed £2.3 million to the UK expansion plans. This investment includes the expansion of Ocean's Two Towers® concept in Birmingham, adding to its coverage already in Manchester, Leeds and London, and the ongoing expansion of the XL roadside network, with the implementation of Ocean's next generation in super-sized, connected DOOH roadside screens, which are 1.5 times larger than a standard 48-sheet. Five further locations were added during 2020, including two in Southampton, two in Manchester and one in Birmingham - bringing the total number of screens to 19 in four cities and planning consent for two more in Leeds and Newcastle in 2021.

We are also pleased to have announced the roll-out of our first premium large format DOOH screen in Norwich, one of the UK's top 10 fastest growing cities. It is the only large format full motion screen in the city located above the entrance of the main shopping centre, which is in close proximity to multiple premium retailers and hospitality hotspots which attract an annual footfall of 15 million.

In terms of product innovation and technology developments, Ocean partnered with the location marketing technology company Hivestack, a leader in programmatic Digital Out-of-Home advertising. Through Hivestack, marketers are now able to activate Ocean's premium digital locations across the UK, enabling them to run highly targeted campaigns that can be turned on or off instantly. This is providing advertisers with a highly effective and low risk route to market.

We have also become the first DOOH media owner in the UK to deploy the use of Ultraleap's mid-air haptics technology to facilitate touchless campaigns in key experiential spaces, enabling consumers to interact and participate in a safe way conducive to today's public environment. This technology was put into great effect by Ocean Labs and the campaign created for the LEGO Group, utilising the touchless screen technology to create the first ever DOOH immersive play experience on an Ocean Outdoor screen at London's Westfield Stratford shopping centre.

The innovation continued in December, with Ocean and Landsec teaming up to work with Darabase to scale the interactive capabilities of the Piccadilly Lights, using augmented reality technology. Delivered via Darabase's platform, the technology used a range of techniques including a virtual model to replicate the sweep and scale of the Piccadilly screen to deliver large-scale mobile AR experiences which amplify the big screen content on a viewer's mobile handset.

Ocean Netherlands

· Awarded the strategic media partnership contract for Westfield Mall of the Netherlands

· Won tender for the large screen at the Amsterdam World Trade Centre and media contract covering all buses and trams in Amsterdam

· Strengthened roadside network - winning three new contracts and renewing two

Our Dutch division made great strides during 2020 despite the lockdown measures across the Netherlands, which has put the business in an exciting position for the recovery. Since taking over the digital advertising masts portfolio previously owned and operated by Clear Channel Netherlands at the start of 2020, which includes the iconic Triple Digital in Rotterdam, Double Digital in Amsterdam, Diamond in Waddinxveen and the Box, formerly known as 'de Vis', in Amsterdam, the business has gone on to win a series of high-profile contracts, which has cemented our position as one of the leading DOOH operators in the market.

As previously announced in the second half, Ocean was awarded the strategic media partnership contract for Westfield Mall of the Netherlands, which has a contract value of €7 million. The contract extends the Group's partnership Unibail-Rodamco-Westfield, which now covers 24 European URW shopping malls. The partnership sees Ocean Netherlands have the exclusive rights on media sales on 23 double sided digital screens within the mall, one large digital outdoor screen and two large experience screens.

Other contracts secured during the period included the tender for the large screen at the Amsterdam World Trade Centre, the media contract covering all buses and trams in Amsterdam, which includes over 300 vehicles and 1,688 digital screens, and the renewal of a substantial contract with property company Kroonenberg Groep, covering three shopping malls in Amsterdam and one mall in Hilversum. The business has also won three roadside contracts covering Almere and Gorinchem, extended two Amsterdam road contracts and installed two new roadside screens in Schipol and Nieuwegein. Other developments have included the installation of a new digital screen in Helftheuvel Den Bosch shopping mall and the signing of a reseller agreement with Dutch Railways, covering the large screens within their stations.

In terms of advertising campaigns and initiatives, some of the most high-profile have included the streaming of highlights and live coverage of the Tour de France across Ocean Netherlands' network of large digital screens throughout the country, and helping 250 SMEs stay visible and connected with their audiences with the benefit of the £25 million advertising support fund.

Ocean Nordics & Germany

· Successfully accelerated integration of Visual Art and AdCity Media and rebranded entity to Ocean Nordics

· Won exclusive contract for 15 malls with Centrumkanalen in Sweden

· Expanded relationship with shopping malls operator Alti, with contract for 24 malls

· Awarded contract for 39 event areas across 16 malls in Demark

In early 2020, we accelerated the integration of Visual Art and AdCity Media, realising a number of significant synergy gains, and have since successfully rebranded the combined corporate entity as Ocean Nordics. The integration process also consisted of delivering new sales training, product structure, brand & culture, market analysis and a new salary model, and the expanded Nordics business is now offering digital advertising products across all its territories.

In Q4 2020, the subsidiary ACM Retail Tech was rebranded to Ocean MediaTech, which is part of Ocean's ongoing programme to integrate AdCityMedia's assets with existing operations. The new division delivers multiple Group-wide benefits, including economies of scale, allowing the business to become more competitive through an expanded portfolio, closer integration with Ocean media sales, combined talent and deeper market coverage. Ocean MediaTech is also aiming to drive greater synergies and opportunities for landlords, partners and suppliers right across Ocean's DOOH portfolio in Europe and beyond, and service a broad range of client categories.

In terms of new contracts and organic developments, Ocean Nordics secured a number of new shopping mall contracts across the region, including an exclusive contract for 15 malls with Centrumkanalen, which has expanded its mall network in Sweden to 115. Also in Sweden, Ocean Nordics launched a 900 sqm premium banner located in Stockholm, situated within one of the highest roadside vehicular audience locations in the country.

In Norway, Ocean Nordics expanded its relationship with shopping malls operator Alti, with a contract for 24 malls, which includes both small and large format digital screens, as well securing the tender to operate 24 screens within Oslo bus station, the largest bus terminal in the country. In Denmark, Ocean Nordics was awarded a new contract for 39 event areas across 16 malls by shopping centre owner Danske, as well as securing an additional two independent malls, whilst in Finland, it was awarded contracts for 3 further malls. It is pleasing to see the Ocean brand competing and beating its peers in these new markets for the Group.

Current trading & outlook

· Entered 2021 a stronger like-for-like business, both operationally and financially

· New content partnership with BT Sport to show UEFA's Champions League match clips

· Well poised for the fight back with solid organic pipeline of new locations and contracts

There has been further positive momentum in terms of new contracts and partnerships since the start of 2021, which only adds to our optimism for the future. In March, the UK business signed its first exclusive digital content deal with BT Sport, with Ocean now broadcasting next day match clips from UEFA's Champions League last 16 fixtures through to the Final in May 16, across screens in seven cities including London, Birmingham, Manchester, Liverpool, Newcastle, Edinburgh and Glasgow.

In the Netherlands, we have signed a strategic partnership with the data insights provider Precisely, which forms part of Ocean Netherlands' data and research strategy, with a new solution incorporating mobile trace data to measure reach and determine the profile of audiences. We have also just launched the first Digital Creative Competition Amsterdam, using the UK format as the template, which has been hugely successful in encouraging agencies and creatives to push the boundaries of what is achievable with out-of-home, whilst further raising Ocean's profile during the process.

While financial guidance continues to be withheld until we have seen an extended period of consistent trading, Ocean is certainly a stronger like-for-like business, both operationally and financially when compared to the start of 2020. Despite all the challenges COVID-19 has thrown at the Group, we have managed to develop and win a significant number of new assets and contracts across all our territories, which will help to accelerate our growth as the recovery gathers pace. We have also expanded our product offering through further technology and innovation, which has strengthened our network proposition. We have a solid organic pipeline of new locations and contracts to align with the positive business and consumer confidence that is emerging in the UK and will emerge over coming months across all Ocean territories. 

Tim Bleakley

Chief Executive

3 May 2021

Consolidated statement of profit or loss and other comprehensive income

for the year ended 31 December 2020

Consolidated statement of financial position

As at 31 December 2020

The financial statements were approved by the Board of Directors and authorised for issue on 3 May 2021

Consolidated statement of changes in equity

For the year ended 31 December 2020

Consolidated statement of cash flows

For the year ended 31 December 2020

Notes forming part of the Consolidated Financial Statements

for the year ended 31 December 2020

1. General information

The Company was incorporated with limited liability under the laws of the British Virgin Islands under the BVI Companies Act on 20 January 2017. The address of the Company's registered office is Kingston Chambers, PO Box 173, Road Town, Tortola, British Virgin Islands. The Ordinary Shares and Warrants were admitted for trading on the Main Market of the London Stock Exchange on 13 March 2017.

2. Principal accounting policies

The principal accounting policies applied in these financial statements are set out below.

2.1 Basis of preparation

These financial statements have been prepared in accordance with International Financial Reporting Standards and International Accounting Standards as adopted by the European Union (collectively IFRSs) and those parts of the BVI Business Companies Act applicable under IFRS.

The preparation of financial statements in compliance with adopted IFRS requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies. The areas where significant judgments and estimates have been made in preparing the financial statements and their effect are disclosed

in note 2.9.

The financial statements are presented in GBP.

Amounts are rounded to the nearest thousand, unless otherwise stated.

The financial statements are prepared on the historical cost basis with the exception of certain financial instruments which are stated at fair value.

Accounting policies have been consistently applied throughout the periods presented.

The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.

Non-GAAP performance measures

Billings represent the advertising spend by the advertiser, including fees directly payable by the advertiser to their advertising agency, exclusive of sales tax.

Billings is the standard metric used by the out of home advertising industry body "Outsmart" to measure the market size and industry trends. Management consider Billings to be an important metric to assess the performance of the underlying business against industry trends and therefore presents Billings as a Non-GAAP performance measure. Billings is presented for the benefit for users of the accounts but is not a substitute for other standard GAAP measures presented.

 2.2 Going concern

The Directors have, at the time of approving the financial statements, a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future.

The Directors have considered the Group's current financial position, a review of its budgets and forecasts, the principal risks and uncertainties including the impact of COVID-19 and loan facilities available to the Group, with it having secured credit facilities providing financing of up to £35m, subject to customary covenants related to minimum quarterly adjusted EBITDA and cash balances. £5m of this facility has been drawn down at year end. No breaches of the debt covenants are expected.

The audit committee continuously review forecasts and outlook, and as part of that consider the going concern basis of preparation of the accounts. The committee reviews the various downside scenarios and applies its judgement in assessing the relevant assumptions used by management and challenges where necessary.

The key assumptions that were stress tested for the going concern scenarios were quarterly revenue declines. These were applied to the most recent forecast for FY21 which included the impact of lockdown restrictions across all our markets. This was stress tested by extending the impact of these restrictions by a whole quarter. We then applied haircuts to quarterly revenue to assess headroom before a covenant breach. The gap between the forecast and the covenant breach level was deemed sufficient to maintain the going concern basis.

The group is subject to two debt covenants: last three months EBITDA covenant and minimum liquidity covenant. These were reduced significantly in Q1 2021 with our banks and the above assessments of revenue decline were tested against these new covenants. Furthermore, the term of the debt facility was extended by 12 months, providing additional comfort on the Group's operational liquidity.

On 11 March 2020, the World Health Organisation announced the pandemic status of COVID-19. Subsequent to this announcement, significant measures have been taken by Governments across Europe, restricting the movement of the people and the forced closure of non-essential business. Given the company operates in the DOOH market, this has impacted the company's performance in FY20. The effect COVID-19 will have on the global economy and the knock-on effect that it has on the long term on consumer and business behaviour cannot yet be quantified. However, the impact on the Group in FY20 has led to a decrease in revenue of 17% from £104,033k to £86,171k on FY19 (and on a proforma basis a decrease of 38% from £139,594k to £86,171k).

Following the decline in sales as a result of the pandemic, the Group addressed its cost base as a matter of urgency in order to reduce cash outflows from the business. Staff costs were reduced through a structured reduction in working hours and government reimbursement schemes were utilised where strictly necessary. These secured £1.6m of grants towards employee costs. All landlords were contacted with a view to negotiating rent holidays, deferrals and reductions wherever possible. Rent concessions of £8.3m were secured during the year. Capital expenditure has been limited and the site maintenance program has been reduced to the performance of only essential maintenance. Credit terms were optimised and extensions agreed with key suppliers. Cash inflows have been aided with sales teams chasing up any unpaid balances and ensuring any invoice queries are resolved ensuring that debtors continue to be settled in a timely fashion.

The Directors of the company recognise COVID-19 has had and will have a significant effect on the results of the business in FY21, Various scenarios assessing the impact of different sales levels including growth rates over the next 12 months from the date of approval of the financial statements and beyond, have been modelled, including additional downside stress testing, in line with the FRC guidance issued on 26th March 2020, and what the subsequent implications would be on the Group cash flow.

The modelling demonstrates that, given the existing level of cash held by the Group of £22.1m at 19 April 2021, in conjunction with the credit facilities secured in the year providing additional finance, with an extension of the debt facility and renegotiation of debt covenants agreed subsequent to the year end, and the mitigating actions available to the directors, being the option to reduce certain costs and cash outflows as follows;

- Staff costs could be reduced through a structured reduction in working hours and government reimbursement schemes could be utilised

- Further staff restructuring programmes could be entered into

- Variable overheads could be reduced as much as possible, with the operation of a zero budget policy

- Travel, subsistence and entertainment could be suspended 

- All landlords have been contacted with a view to negotiating rent holidays, deferrals and reductions wherever possible

- Capital expenditure has been frozen on all new projects where completion is not imminent, and the site maintenance program has been reduced to the performance of only essential maintenance

- Credit terms have been optimised and extensions agreed with key suppliers

The models prepared by management, demonstrate that even in the prudent downside conditions considered reasonably possible, the Group will continue to be able to meet its obligations as they fall due and will remain compliant with its debt covenants.

On this basis, whilst acknowledging there is some uncertainty regarding the future impacts of COVID-19, the Directors are satisfied the Group remains well placed to manage its business risks successfully. Therefore, they have a reasonable expectation that the Group has adequate resources to continue in operational existence for a period of 12 months from the date of approval of the financial statements. Accordingly, the financial statements continue to be prepared on a going concern basis.

2.3 Foreign currency translation

Functional and presentation currency

The Company is listed on the main market of the London Stock Exchange. The performance of the Group is measured and reported to the shareholders in GBP, which is considered the Group's main functional currency, however its foreign subsidiaries functional currency is their local currency. Subsidiaries within the Group trade in Euro's, Swedish Krona, Danish Krona and Norwegian Krone. The Directors consider GBP as the presentational currency of the Group as this is the Group's primary economic environment, and is thus considered to be the most appropriate.

Transactions and balances

Transactions entered into by Group entities in a currency other than the functional currency are recorded at the rates ruling when the transactions occur. Foreign currency monetary assets and liabilities are translated at the rates ruling at the reporting date. Exchange differences arising on the retranslation of unsettled monetary assets and liabilities are recognised immediately in profit or loss. Exchange differences arising on the retranslation of the foreign operation are recognised in other comprehensive income and accumulated in the foreign exchange reserve.

On consolidation, the results of overseas operations are translated into GBP at the average exchange rate for the year. All assets and liabilities of overseas operations, including goodwill arising on the acquisition of those operations, are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income and accumulated in the foreign exchange reserve.

2.4 Financial assets

The Group classifies its financial assets into one of the categories discussed below, depending on the business model and cash flow type under which the assets are held. The Group has not classified any of its financial assets as fair value through other comprehensive income. The Group's accounting policy for each category is as follows:

Amortised cost

These assets are non-derivative financial assets held under the 'hold to collect' business model and attracting cash flows that are solely payments of principal and interest. They comprise trade and other receivables and cash and cash equivalents. They are initially recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment.

Impairment provisions for trade and other receivables are calculated using an expected credit loss model. Under this model, impairment provisions are recognised to reflect expected credit losses based on a combination of historic and forward-looking information, the amount of such a provision being the difference between the net carrying amount and the present value of the future expected cash flows associated with the impaired receivable. For trade receivables, which are reported net; such provisions are recorded in a separate allowance account with the loss being recognised within administrative expenses in the consolidated statement of comprehensive income. On confirmation that the trade receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short term highly liquid investments with maturities of three months or less.

Fair value through profit or loss

This category comprises in-the-money derivatives and out-of-money derivatives where the time value offsets the negative intrinsic value (see "Financial liabilities" section for out-of-money derivatives classified as liabilities). They are carried in the statement of financial position at fair value with changes in fair value recognised in the consolidated statement of comprehensive income in the finance income or expense line. Other than derivative financial instruments which are not designated as hedging instruments, the Group does not have any assets held for trading nor does it voluntarily classify any financial assets as being at fair value through profit or loss.

2.5 Financial liabilities

The Group classifies its financial liabilities into one of two categories, depending on the purpose for which the liability was acquired. The Group's accounting policy for each category is as follows:

Other financial liabilities

Other financial liabilities include the following items:

- Trade payables and other short-term monetary liabilities, which are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method

- Contingent consideration is carried in the statement of financial position at fair value with changes in fair value recognised in the consolidated statement of comprehensive income in the finance income or expense line.

2.6 Share-based payments

The Founder Preferred Shares (and attached warrants) and director options represent equity-settled share-based arrangements under which the Company receives services as a consideration for the additional rights attached to these equity shares, over and above their nominal price. In addition, the Company has granted options to the non-executive directors. The management team have been incentivised via the issue of hurdle shares which aligns the long-term interest of the company to deliver shareholder wealth. The hurdle shares represent equity-settled share-based arrangements under which the Group receives services as a consideration for equity shares, over and above their nominal price. The fair value of the grant of Founder Preferred Shares (and attached warrants), and hurdle shares in excess of any purchase price received is recognised as an expense. In addition, the Company has granted options to the non-executive directors. The management team have been incentivised via the issue of hurdle shares which aligns the long-term interest of the company to deliver shareholder wealth. The fair value of the Founder Preferred Shares (and attached warrants), the options and the hurdle shares is determined using a valuation model.

2.7 Segmental reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors as it is the body that makes strategic decisions. The Board are of the opinion the company operates in three distinct markets: The United Kingdom, The Netherlands and The Nordics. Accordingly, the group has been treated as three operational segments for FY20 and the results of the group presented in the financial statements are disaggregated accordingly. Each operational segment provides DOOH services to their local market.

2.8 Share capital

Founder Preferred Shares, Ordinary Shares, and Warrants are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares are shown in equity as a deduction, net of tax, from the proceeds.

2.9 Critical accounting judgements and key sources of estimation uncertainty

The Group makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions.

Estimates and assumptions

In preparing the financial statements for the year ended 31 December 2020, management and the directors made certain estimates and judgements in the following areas:

- Impairment of goodwill and other intangible assets - Estimation of future cash flows and determination of discount rates (see note 14);

- Impairment of investment in associate - Estimation of future cash flows and determination of discount rate (see note 15)

- Depreciation of property, plant and equipment - Estimation of useful lives and residual values (see note 2.18);

- The determination of incremental borrowing rates used and expected lease lengths in the application of IFRS 16 Leases; (see note 18)

- The application of IFRS 9 when measuring expected credit losses and the assessment of expected credit loss provisions required for accounts receivable balances (see note 16);

- The valuation of contingent consideration based on the probability of earn-out targets being satisfied for entities acquired during the previous year (see note 2.20)

2.10 New accounting standards and interpretations

The Company applied all applicable standards and applicable interpretations published by the EU for the year ended 31 December 2020 for the consolidated financial statements.

a) New standards, interpretations and amendments effective from 1 January 2020

New standards impacting the Group that were adopted in the annual financial statements for the year ended 31 December 2020, and which have given rise to changes in the Group's accounting policies are:

- COVID-19-Related Rent Concessions (Amendments to IFRS 16); (see note 2.19)

- Definition of a Business (Amendments to IFRS 3);

- Interest Rate Benchmark Reform - IBOR 'phase 2' (Amendments to IFRS 9, IAS 39 and IFRS 7);

- IAS 1 Presentation of Financial Statements and IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors (Amendment - Disclosure Initiative - Definition of Material); and

- Revisions to the Conceptual Framework for Financial Reporting.

Other new and amended standards and Interpretations issued by the IASB that will apply for the first time in the next annual financial statements are not expected to impact the Group as they are either not relevant to the Group's activities or require accounting which is consistent with the Group's current accounting policies.

b) New standards, interpretations and amendments not yet effective

There are a number of standards, amendments to standards, and interpretations which have been issued by the IASB that are effective in future accounting periods that the group has decided not to adopt early. The most significant of these is are as follows, which are all effective for the period beginning 1 January 2022:

- Onerous Contracts - Cost of Fulfilling a Contract (Amendments to IAS 37);

- Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS16) 16);

- Annual Improvements to IFRS Standards 2018-2020 (Amendments to IFRS 1, IFRS 9, IFRS 16 and IAS 41); and

- References to Conceptual Framework (Amendments to IFRS 3

The Group is currently assessing the impact of these new accounting standards and amendments.

2.11 Revenue

Substantially all of the Group's contracts with customers contain a single performance obligation, being the provision of advertising space, and are subject to fixed prices. Revenue is recognised on an over time basis. This is because the customer simultaneously receives and consumes the economic benefits provided under the contract by the Group's performance.

Amounts invoiced in advance of the performance of the advertising services are recognised as performance obligations and released to revenue as the group performs the advertising space under the contract.

Payment terms extended to customers depend on the country of operation, the size of the booking and the credit risk posed by the customer. Credit terms vary from up-front payment to 60 days.

Revenue represents the amounts (excluding the value added tax) derived from the provision of advertising space to customers during the 52-week period ended 27 December 2020 (2019: 52-week period ended 29 December 2019) net of commissions and discounts. Revenue is recognised on a 52-week period to reflect the period of customer bookings, normally in 2-week blocks. The difference on this basis to recognition of revenue for a full year is immaterial.

2.12 Basis of consolidation

 Where Ocean Outdoor Limited ("the Company") has control over an investee, it is classified as a subsidiary. The Company controls an investee if all three of the following elements are present: power over the investee, exposure to variable returns from the investee, and the ability of the investor to use its power to affect those variable returns. Control is reassessed whenever facts and circumstances indicate that there may be a change in any of these elements of control.

The Consolidated Financial Statements presents the results of the Company and its subsidiaries ("the Group") as if they formed a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.

The Consolidated Financial Statements incorporates the results of business combinations using the acquisition method. In the statement of financial position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the consolidated statement of comprehensive income from the date on which control is obtained. They are derecognised from the date on which control ceases.

Where the Group has the power to participate in (but not control) the financial and operating policy decisions of another entity, it is classified as an associate. Associates are initially recognised in the consolidated statement of financial position at cost. Subsequently associates

are accounted for using the equity method, where the Group's share of post-acquisition profits

and losses and other comprehensive income is recognised in the consolidated statement of profit and loss and other comprehensive income (except for losses in excess of the Group's investment in the associate unless there is an obligation to make good those losses).

Profits and losses arising on transactions between the Group and its associates are recognised

only to the extent of unrelated investors' interests in the associate. The investor's share in the associate's profits and losses resulting from these transactions is eliminated against the carrying value of the associate.

2.13 Goodwill

Goodwill represents the excess of the cost of a business combination over the total acquisition date fair value of the identifiable assets, liabilities and contingent liabilities acquired.

Cost comprises the fair value of assets given, liabilities assumed and equity instruments issued, plus the amount of any non-controlling interests in the acquiree plus, if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree. Direct costs of acquisition are recognised immediately as an expense.

Goodwill is capitalised as an intangible asset with any impairment in carrying value being charged to the statement of comprehensive income. Where the fair value of identifiable assets, liabilities and contingent liabilities exceed the fair value of consideration paid, the excess is credited in full to the statement of comprehensive income on the acquisition date.

2.14 Other intangible assets

Intangible assets are recognised on business combinations if they are separable from the acquired entity or arise from other contractual/legal rights. The amounts ascribed to such intangibles are arrived at by using appropriate valuation techniques.

The Group has recognised acquired rights over advertising sites on business combinations as intangible assets. These are amortised over the contractual life of the advertising sites on a straight-line basis, which are typically 5 to 15 years. The amortisation charge is included within administrative expenses in the consolidated statement of profit and loss.

The Group has recognised intangible asset in relation to the Ocean brand acquired as part of the business combination. This is amortised over 10 years on a straight-line basis. The amortisation charge is included within administrative expenses in the consolidated statement of profit and loss.

2.15 Impairment of non-financial assets (excluding deferred tax assets)

Impairment tests on goodwill and other intangible assets with indefinite useful economic lives are undertaken annually at the financial year end. Other non-financial assets are subject to impairment tests whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Where the carrying value of an individual asset or cash generating units ('CGU') exceeds its recoverable amount (i.e. the higher of value in use and fair value less costs to sell), the asset is written down accordingly. Impairment charges are included in profit or loss, except to the extent they reverse gains previously recognised in other comprehensive income. An impairment loss recognised for goodwill is not reversed.

2.16 Defined contribution schemes

Contributions to defined contribution pension schemes are charged to the consolidated statement of comprehensive income in the year to which they relate.

2.17 Deferred taxation

Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the consolidated statement of financial position differs from its tax base, except for differences arising on:

- The initial recognition of goodwill

- The initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction affects neither accounting or taxable profit, and

- Investments in subsidiaries where the Group is able to control the timing of the reversal of the difference and it is probable that the difference will not reverse in the near future.

Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be available against which the difference can be utilised.

The amount of the asset or liability is determined using tax rates that have been enacted or substantively enacted by the reporting date and are expected to apply when the deferred tax liabilities/(assets) are settled/(recovered).

When there is uncertainty concerning the Group's filing position regarding the tax bases of assets or liabilities, the taxability of certain transactions or other tax-related assumptions, then

the Group:

- Considers whether uncertain tax treatments should be considered separately, or together as a group, based on which approach provides better predictions of the resolution;

- Determines if it is probable that the tax authorities will accept the uncertain tax treatment; and

- If it is not probable that the uncertain tax treatment will be accepted, measure the tax uncertainty based on the most likely amount or expected value, depending on whichever method better predicts the resolution of the uncertainty. This measurement is required to be based on the assumption that each of the tax authorities will examine amounts they have a right to examine and have full knowledge of all related information when making those examinations.

2.18 Property, plant and equipment

Items of property, plant and equipment are initially recognised at cost. As well as the purchase price, cost includes directly attributable costs.

Depreciation is provided on all items of property, plant and equipment so as to write off their carrying value over their expected useful economic lives according to the method of depreciation prevailing in the relevant countries in accordance with local regulations and economic conditions. It is provided at the following rates:

Site assets

Assets under the course of construction are only depreciated once ready for use.

Equipment

2.19 IFRS 16 "Leases"

IFRS 16 "Leases" applies to the recognition, measurement, presentation and disclosure of leases. The Group's policy is as follows:

- Right-of-use assets

The Group recognises right-of-use assets at the commencement date of the lease. Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Unless the Group is reasonably certain to obtain ownership of the leased asset at the end of the lease term, the recognised right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. Right-of-use assets are subject to impairment.

- Lease liabilities

At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating a lease, if the lease term reflects the Group exercising the option to terminate. The variable lease payments that do not depend on an index or a rate are recognised as expense in the period on which the event or condition that triggers the payment occurs.

- Recognition of right of use assets and lease liabilities on business combinations

In the case of lease assets and lease liabilities acquired in a business combination, the Group measures the lease liability at the present value of the remaining lease payments as if the acquired lease were a new lease at the acquisition date. The group measures the right-of-use asset at the same amount as the lease liability, adjusted to reflect favourable or unfavourable terms of the lease when compared with market terms.

In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the lease liability is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the in-substance fixed lease payments or a change in the assessment to purchase the underlying asset.

- Significant judgement in determining the lease term of contracts with renewal options

The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease if it is reasonably certain not to be exercised. The Group applies judgement in evaluating whether it is reasonably certain to exercise the option to renew. That is, it considers all relevant factors that create an economic incentive for it to exercise the renewal. In addition, the Group assesses the probability of renewal of a lease beyond the contractual term based on experience, and if likely, includes this period within the lease term. After the commencement date, the Group reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise (or not to exercise) the option to renew (e.g., a change in business strategy).

The Group has leases that can be modified in subsequent periods based on contractual performance. These are accounted for in the accounting period as a lease modification. When the group renegotiates the contractual terms of a lease with the lessor, the accounting depends on the nature of the modification:

- If the renegotiation results in one or more additional assets being leased for an amount

commensurate with the standalone price for the additional rights-of-use obtained, the modification is accounted for as a separate lease in accordance with the above policy.

- In all other cases where the renegotiated terms increase the scope of the lease (whether that is an extension to the lease term, or one or more additional assets being leased), the lease liability is remeasured using the discount rate applicable on the modification date, with the right-of use asset being adjusted by the same amount.

- If the renegotiation results in a decrease in the scope of the lease, both the carrying amount of the lease liability and right-of-use asset are reduced by the same proportion to reflect the partial or full termination of the lease with any difference recognised in profit or loss. The lease liability is then further adjusted to ensure its carrying amount reflects the amount of the renegotiated payments over the renegotiated term, with the modified lease payments discounted at the rate applicable on the modification date. The right-of-use asset is adjusted by the same amount.

COVID-19-Related Rent Concessions (Amendments to IFRS 16)

Effective 1 June 2020, IFRS 16 was amended to provide a practical expedient for lessees accounting for rent concessions that arise as a direct consequence of the COVID-19 pandemic and satisfy the following criteria:

a) The change in lease payments results in revised consideration for the lease that is substantially the same as, or less than, the consideration for the lease immediately preceding the change;

b) The reduction is lease payments affects only payments originally due on or before 30 June 2021; and

c) There are is no substantive change to other terms and conditions of the lease. Rent concessions that satisfy these criteria may be accounted for in accordance with the practical expedient, which means the lessee does not assess whether the rent concession meets the definition of a lease modification. Lessees apply other requirements in IFRS 16 in accounting for the concession.

The Group has elected to utilise the practical expedient for all rent concessions that meet the criteria. The practical expedient has been applied retrospectively, meaning it has been applied to all rent concessions that satisfy the criteria, which in the case of the Group, occurred from March 2020 to December 2020.

Accounting for the rent concessions as lease modifications would have resulted in the Group remeasuring the lease liability to reflect the revised consideration using a revised discount rate, with the effect of the change in the lease liability recorded against the right-of-use asset. By applying the practical expedient, the Group is not required to determine a revised discount rate and the effect of the change in the lease liability is reflected in profit or loss in the period in which the event or condition that triggers the rent concession occurs.

2.20 Contingent and deferred consideration on acquisitions

The Group recognises contingent consideration payable on satisfaction of performance targets over certain time periods, based on the probability of the targets being achieved. At inception, the balance is discounted using the acquisition internal rate of return (IRR) to present value. Interest on the unwinding of the balance is charged to the profit and loss over the period of the performance targets. The probability of targets being achieved is reviewed, and weighed average probability analysis undertaken based on latest budgets and forecasts to assess the fair value of the expected liability. Any changes in the expected liability are posted as a fair value adjustment to the profit and loss.

For contingent consideration tied to on-going employment of personnel, an accrual is made in the period in which the specified targets are achieved with the cost being recognised as a cost of employment.

The Group recognises deferred consideration at the present value at inception. The balance payable in a future period is discounted using a discount rate based on a lender borrowing rate at acquisition to present value and interest on the unwinding of the balance is charged to the profit and loss up to the point the balance is payable.

2.21 Government grants

Government grants received for revenue expenditure are netted against the cost incurred by the Group. Where retention of a government grant is dependent on the Group satisfying certain criteria, it is initially recognised as deferred income. When the criteria for retention have been satisfied, the deferred income balance is released to the consolidated statement of comprehensive income.

2.22 Finance expense

Finance expense comprises interest payable on loans, the unwind of discounted balances and interest charged on IFRS 16 lease liabilities. The expense is recognised as a cost in the profit or loss in the period in which it is incurred. In line with IAS 7, cashflows in relation to finance expenses paid are recognised in financing activities.

3. Financial instruments - Risk Management

The Group is exposed through its operations to the following financial risks:

- Credit risk;

- Liquidity risk; and

- Foreign currency risk

In common with all other businesses, the Group is exposed to risks that arise from its use of financial instruments. This note describes the Group's objectives, policies and processes for managing those risks and the methods used to measure them. Further quantitative information in respect of these risks is presented throughout these financial statements.

There have been no substantive changes in the Group's exposure to financial instrument risks, its objectives, policies and processes for managing those risks or the methods used to measure them from previous periods unless otherwise stated in this note.

(i) Principal financial instruments

The principal financial instruments used by the Group, from which financial instrument risk arises, are as follows:

- Trade and other receivables

- Cash and cash equivalents

- Trade and other payables

(ii) Financial instruments by category

Financial assets

Financial liabilities

At year end, the Group has a £441k (2019: £2,564k) liability which is measured at fair value through profit and loss. This is presented in other payables, non-current liabilities. No current trade of other payables balances are measured at fair value through profit and loss (2019: £5,070k). These balances relate to amounts payable on subsidiaries acquired in FY19. The movement in the balance is due to payments made in the year and an update in forecasted performance in acquired businesses following the impact of COVID-19. The liability has been reduced resulting in a £2,256k fair value release in the profit and loss statement.

(iii) Financial instruments not measured at fair value

Financial instruments not measured at fair value include certain cash and cash equivalents, trade and other receivables and trade and other payables.

Due to their short-term nature, the carrying value of cash and cash equivalents, trade and other receivables, trade and other payables approximates their fair value.

General objectives, policies and processes

The Board has overall responsibility for the determination of the Group's risk management objectives and policies. The Board receives monthly reports from the Group Financial Controller through which it reviews the effectiveness of the processes put in place and the appropriateness of the objectives and policies it sets.

The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Group's competitiveness and flexibility. Further details regarding these policies are set out below:

Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Group is mainly exposed to credit risk from credit sales. It is Group policy, implemented locally, to assess the credit risk of new customers before entering contracts. The Group's review includes external ratings, when available, and in some cases bank references. Purchase limits are established for each customer. Trade receivables contain receivables due from customers to which we may also owe volume rebates that are contained within our trade payables and accruals. Credit risk also arises from cash and cash equivalents and deposits with banks and financial institutions. For banks and financial institutions, only independently rated parties with minimum rating "A" are accepted. In respect of the year and period ends presented, £18.1m (2019: £20.9m) was held on current account with HSBC Bank plc, £6.1m (2019: £1.1m) was held on current account with Barclays Bank plc, €1.5m (£1.4m) (2019: €2.9m (£2.5m)) was held on current account with ABN AMRO, €1.6m (£1.5m) (2019: €1.5m (£1.2m)) was held on current account with Rabobank and SEK 30.9m (£2.9m) (2019: SEK14.7m (£1.2m)) was held on current account with Skandinaviska Enskilda Banken.

Liquidity risk

Liquidity risk arises from the Group's management of working capital and the finance charges and principal repayments on its debt instruments. It is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due.

The Group's policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities when they become due. To achieve this aim, it seeks to maintain cash balances (or agreed facilities) to meet expected requirements for a period of at least 90 days.

The Board receives rolling 12-month cash flow projections on a monthly basis as well as information regarding cash balances. At the end of the financial year, these projections indicated that the Group expected to have sufficient liquid resources to meet its obligations under all reasonably expected circumstances.

Currency risk

Following the acquisition of foreign subsidiaries in the prior year, the Group is exposed to risk from movements in foreign currency exchange rates, interest rates and market prices that affect its assets, liabilities and anticipated future transactions. The Group is exposed to foreign currency risk from transactions other than functional currency. Transaction exposure arises because affiliated companies undertake transactions in foreign currencies. The Group does not use forward foreign exchange rate contracts to hedge exchange rate risk. Its exposure is as follows:

If the GBP exchange rate was to depreciate by 10% at FY20 year end the difference in the above numbers would be as follows:

The effect of a 10% weakening of GBP at the reporting date had a net impact of £161k, all other variables held constant. The effect of fluctuations in exchange rates on the balance sheet balances is partially offset through a natural hedge. On the same basis, the Group would have reported a £6.8m increased post-tax loss.

Capital Disclosures

The Group's objectives when maintaining capital are:

- to safeguard the entity's ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders, and

- to provide an adequate return to shareholders by pricing products and services commensurately with the level of risk.

The Group sets the amount of capital it requires in proportion to risk. The Group manages its capital structure and makes adjustments to it in the light of changes in economic conditions. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.

4. Revenue

All revenue is recognised on an over time basis from advertising space provided to its customers.

Analysis of revenue by service type and region:

5. Segmental reporting

6. Expenses by nature

7. Employee benefit expenses

Payroll support

Included in the profit or loss are government grants obtained relating to supporting the payroll of the Group's employees. The Group has elected to offset the Government grants with the payroll expense. The Group was re-imbursed for payroll expenses following its compliance with the requirements of the applicable scheme.

8. Key management personnel compensation

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Group, including the directors.