18 Dec 2018 14:15
Date: | 18 December 2018 |
On behalf of: | Paragon Entertainment Limited ("Paragon" or "the Company") |
Paragon Entertainment Limited
Trading Update
Paragon Entertainment Limited (AIM: PEL), the attractions design, production and fit-out business, today provides a trading update as follows.
As anticipated, Paragon has continued to achieve significant operational progress and revenue growth in the second half of 2018 ("H2 2018"), giving the Board confidence that the turnaround of the underlying business is progressing well.
However, resolving management change and legacy issues will result in a number of adjustments to Paragon's accounts which the Board believes are one-off events and are explained below. Accordingly, although achieving a substantial improvement on H1 2018, the performance of the business will be below the guidance given to the market in the RNS dated 22 August 2018.
H2 2018 revenue is now forecast to be between £5.5m and £5.8m (against H1 2018 revenue of £4.0m). Full year 2018 revenue is now forecast to be between £9.5m and £9.8m. H2 2018 EBITDA is now forecast to be a loss of approximately £0.2m (against an H1 2018 EBITDA loss of £1.9m). The full year 2018 EBITDA is therefore now forecast to be a loss of £2.1m. The full year 2018 net loss before tax is now forecast to be £2.4m.
The following adverse adjustments are included in the above forecast:
· During H2 2018, non-recurring events included a change of Chief Executive, a further programme of structural change, and a number of legacy issues which collectively exceed £350k.
· The close-out of a further large project is forecast to result in an adverse adjustment of £299k.
In the absence of these one-offs, the forecast for H2 2018 would have shown a modest positive EBITDA which underpins the Board's confidence that the turnaround of the underlying business is progressing well. The Board believes that by taking action to deal with these one-offs now, the underlying business will show further evidence of the turnaround in the new financial year. Paragon's bankers, HSBC, remain supportive.
Paragon's current confirmed order book remains strong. We forecast that in H1 2019 our revenue will be between £6.0m and £6.5m. Based on current trading performance, with a substantial reduction in overheads following the restructuring undertaken this financial year, and an absence of legacy issues, FY 2019 should see a continued notable improvement.
Mark Pyrah, CEO, commented:
"Major structural business changes have been made, including restructuring project management, putting a new contracts and commercial team in place, and continuing to invest in our finance team. Though FY 2018 has been very tough we have taken decisive steps to improve the quality of our business and implement a revised strategy, thereby creating a stable platform for 2019 and beyond."
For further information:
Paragon Entertainment Limited Mark Taylor (Chairman)
finnCap Ltd Julian Blunt / Simon Hicks (corporate finance) Alice Lane (corporate broking) |
01904 608020
020 7220 0500
|
The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014
About Paragon
Paragon Entertainment Limited (AIM:PEL) is the holding company for Paragon Creative whch is one of the largest experiential design and build business in Europe serving museums, theme parks, retail, aquarium & zoological, FEC and science centres across the globe.
Paragon's projects have included:
· The build of Rolling Stones Exhibitionism at the Saatchi Gallery, London;
· The design and build of Kidzania, London;
· The design and build of the Olympic Museum in Lausanne, Switzerland;
· The design and build of the Dig It concepts worldwide;
· The design and build of Titanic Belfast;
· The design and build of Motiongate and Lionsgate theme parks in the UAE;
Paragon listed on AIM in 2011.
Further information can be found at: http://www.paragonent.com.