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Reach4entertainment performs in line in 2017
Transatlantic media and entertainment marketing company reach4entertainment updated the market on its trading for the year to 31 December on Wednesday - a year in which the company appointed a new senior management team and raised £5.5m for future investment.
The AIM-traded company said it expected to achieve adjusted EBITDA broadly in line with market expectations for the 12 month period, and in line with current market expectations for 2018.
In the second half of 2017, Marc Boyan was appointed as the company's new chief executive, with Michael Grade becoming non-executive chairman.
After a period of review, reach4entertainmetn said it had now set out its strategy to expand upon existing activities and beyond into promoting non-theatre productions, both organically and through strategic acquisitions, as well as focusing on new geographic markets.
To support those objectives and to provide working capital to aid cost saving initiatives, the company successfully raised £5.5m via a placing of new ordinary shares in December.
"Trading has been broadly in line with management expectations, with the financial performance reflecting reduced activity compared to the prior year," the company's board said in its statement.
"As previously announced, in the UK the terror incidents in London and Manchester resulted in some live events being cancelled and generally, in both the company's main markets of London and New York, there have been fewer new theatre productions, a key driver of group profitability.
"The year also saw exceptional restructuring costs incurred of approximately £1 million, primarily employment related."
Further to the company's announcement on 18 October regarding its debt facility with PNC Business Credit, reach4entertainment said it could advise that it stayed within its full year banking covenants for 2017, as anticipated, and r4e and PNC were working towards a formal waiver of the covenant breach that occurred in the third quarter of 2017.
"Under the new senior management team, the current year is expected to be an active period for the business.
"The pipeline of prospective work across all three geographic markets is positive, and the company is targeting expansion into promoting live entertainment events outside of the company's traditional theatre market as well as further growth from Newman Displays and Dewynters Germany."
Overall, the directors said they anticipated an increase in activity levels over 2017.
At the end of 2017, reach4entertainment made a number of changes to the business, including a staff restructure, benefiting the underlying ongoing cost base.
Those factors were expected to contribute to improved group profitability in 2018, in line with current market expectations of adjusted EBITDA.
"I believe we have made a good start. r4e occupies strong market positions in the leading theatre markets of London and New York," said CEO Marc Boyan.
"Our objective is to build upon these positions and expand beyond them."
Boyan said the company had a "clear plan" of how to do that, and it had started well by successfully raising new capital to support its objectives.
"Together with some reorganisation and re-alignment of the divisions to improve the way we work as a single international business.
"Our focus is now on pursuing all elements of our strategy."