23 May 2013 07:00
23 May 2013
reach4entertainment enterprises plc
("r4e" or "the Company" or "the Group")
Trading Update and Office Relocation
r4e, the transatlantic media and entertainment company, today provides the following trading update for the first quarter ended 31 March 2013.
Trading Update
r4e has made a very positive start to the year. The Company is trading in line with expectations and continues to make progress towards its goal of delivering long-term, sustainable profitability and growth throughout its operations. The Company has significantly improved its performance when compared to the corresponding period last year. Both Dewynters in London, and SpotCo in New York, have traded strongly and profitably during the first quarter of the year.
Dewynters continues to work with long-term clients on existing projects, together with working on new projects both for new and established clients. Thus far openings in the West End in 2013 include Book of Mormon, ONCE, Merrily We Roll Along, The Audience, Peter & Alice, The Judas Kiss and Quartermaine's Terms. Charlie and the Chocolate Factory, The Cripple of Inishmaan, Midsummer Night's Dream and From Here to Eternity will open later in the year.
In addition Dewynters continues to grow its non-West End business with projects including ULive with Universal Music, Nitro Circus, Jamie Oliver's Feastival and various theatrical tours.
SpotCo experienced similar success with pre-opening campaigns for Motown, Pippin, Vanya & Sonia & Masha & Spike and Kinky Boots, in addition to securing new mandates for Big Fish, A Gentleman's Guide.., Twelfth Night, Cotton Cluband Rocky the Musical.
In addition to its Broadway work SpotCo has a series of new projects including advertising for the 2013 Tony Awards, and the New York Spectacular - a new Rockettes show at Radio City opening in the Spring of 2014, and it has been retained as digital marketing consultant for The Museum of Sex.
The high quality client base of both businesses was powerfully demonstrated recently with Dewynters clients winning five awards at the recent 37th Olivier Awards and SpotCo clients receiving 60 nominations for the upcoming 2013 Tony Awards.
Commenting, David Stoller, Executive Chairman, said:
"We have started the year strongly and continue to trade profitably. We expect our financial performance to continue to improve through the second half of the year, as has been the case in previous years. Therefore, we look to the rest of the year with optimism and remain confident of meeting our expectations."
Office Relocation and Related Party Transaction
Dewynters and SpotCo are each relocating to new offices in each case as a result of the expiration of long-term leases. The Directors believe that the new offices will reflect the high standing and stature of each subsidiary company and their clients within their respective markets.
Under the terms of the lease agreement entered into by SpotCo, the landlord has a contractual obligation to repay a maximum of $1.25 million of refurbishment costs incurred by SpotCo, once the works have been completed. SpotCo has entered into a bridge loan facility agreement (the "Facility Agreement") with Stoller Family Partners LLC to augment internal cash-flows to finance the up-front refurbishment costs. A maximum of $600,000 can be drawn down under the Facility Agreement which falls due for repayment with 90 days of SpotCo having been reimbursed by the landlord. The Directors believe that the reimbursement will be concluded by 1 July 2013. The Facility has an arrangement fee of $5,000 and interest will be charged on funds drawn down at a rate of 8 per cent per annum.
Stoller Family Partners LLC is classified as a "related party" (as defined by the London Stock Exchange's AIM Rules for Companies (the "AIM Rules")) of the Company by virtue of being an existing substantial shareholder in the Company and also due to David Stoller, Executive Chairman of the Company, being a director and a substantial shareholder in Stoller Family Partners LLC.
The Directors of the Company, save for David Stoller, consider, having consulted with Cantor Fitzgerald Europe, the Company's Nominated Adviser for the purposes of the AIM Rules, that the terms of the Facility Agreement by the related party are fair and reasonable insofar as the shareholders of the Company are concerned.
Ends
Enquiries:
reach4entertainment +44 (0) 20 7993 0000
David Stoller, Executive Chairman
Shirley Stapleton, Finance Director
Blythe Weigh Communications +44 (0) 20 7138 3204
Paul Weigh +44 (0) 7989 129658
Cantor Fitzgerald Europe +44 (0) 20 7894 7000
Stewart Dickson/Julian Erleigh (Corporate Finance)
Katie Ratner (Corporate Broking)
First Columbus +44 (0) 20 3002 2070
Katrina Perez/Kelly Gardiner