SpaceandPeople (LSE:SAL) — Interim Results for the six months ended 30 June 2026

0:01 Good afternoon, and welcome to the SPACEANDPEOPLE PLC Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and could be submitted at any time via the Q and A tab situated on the right hand corner of your screen. Please just simply type in your questions and press send. Before we begin, I'd like to submit the following poll. And then I'll hand you over to the management team, Nancy. Good afternoon. Good afternoon, and welcome to our 2026 interim results presentation. Just to show you the first page of our presentation, you should be seeing a lovely picture of Dutton Ranch, which is one of our big activations that took place on Waterloo Station earlier this year. And as you can see, a massive experiential activation also linked up with the the screens on behalf of Paramount Films.

0:53 Us. So many of you on this presentation will know us. We provide space and services to promote brands, sell products, and acquire customers in high footfall venues. Why is this attractive to you as an investor? Well, as traditional advertising becomes more fragmented and digital acquisition becomes more expensive, pop up face to face activity is evolving from a sales channel into a customer acquisition and brand building medium. We are the only player in this market with operational capabilities. So we can take brands on a complete omni channel journey from being fully digital to being a physical retailer, in a in any venue.

1:41 The photo here is an example of that. This is Vive Cosmetics, a Scottish digital cosmetics brand, which has, carried out a rock up and pop up with us. It did a one off rock up and pop up with us last year and has now turned that into a road show and is running that at the moment throughout venues up and down the country, using, our system to engage with customers, sell products, and, collect customer data. And so I'll hand over to Gregor to talk about the core financials. Good afternoon, everyone. Just to begin with some of the highlight points. Revenue, first off in the graph, you can see that our revenue for the first half of twenty twenty six, was at similar level to the first half of twenty twenty five.

2:34 We are very pleased with that overall because we felt that 2025 was particularly a high watermark for us because we had a number of brand experience events in h one that we didn't think were going to be replicated in 2026. We highlighted that last year and also in our year end 2025 outlook. Those events didn't reoccur but we managed to make up the revenue to a great extent with other promotional activity in The UK and also with an increased level of turnover in our German business. That said, our operating profit, which we had last year, which was quite anomalous for us in H1, came back to being a slight operating loss this year, which is probably in line with what we expected.

3:31 We would have done slightly better, but there were some particular things in the German business that we were cognizant of that we'll talk about slightly further on in the presentation, which meant that, that slight operating profit became a slight operating loss, although that doesn't really affect what we think we're going to do for the full year. Our cash position continued to grow, which was very encouraging. Compared to this time last year, our net cash was up over £200,000 despite having spent about $7,575,000 on our new digital platform in the interim.

4:17 We will talk a bit more about that as we go on. And then just the final key metric that we normally disclose is our basic earnings per share, which again has just gone down into being slightly negative this year. But as you can see, apart from the anomaly of last year, it's pretty good compared to where we would normally be at this time of year. The main financial highlights for us were, again, that we maintained group revenue where we didn't necessarily think that was going to be where we were before the half year started. Although The UK promo division showed revenue down about 6% due to big events such as tobacco replacement product advertising not being replicated in 2026, Other areas of our business such as customer acquisition side of things where we were putting mainly utility companies and pet food brands being the bigger spenders compared to last year, that drove significant increases in that that side of our income stream in 2026.

5:37 Our kiosk revenues in The UK were also up in the first half year as our rock up and pop up offering continued to grow. H1 has historically been the lower side of the year for that, and we're anticipating that growth to be replicated in H2 as well. In Germany, the revenue was up 10%, which was very encouraging because we had a number of new retail clients and a number of new venues in Germany compared to last year. However, that was affected by some one offs where we had, in particular, one retailer who'd been brought over to Germany from The UK, went into administration, both owing us some rent, but also leaving us with rent that we had to pay on some venues that we still had to commit to even though they were no longer trading.

6:38 And we we provided for that in H1 because that was a cost we had there. That's a it's a one off. We don't see that being replicated in H2 and we called to that early enough. Overall, our gross profit was down, as you will see in our results, by 5%, but still in line with what we were expecting as a management team, although we don't give half year guidance to investors at that point. And the loss before taxation just effectively followed that as well. Our our cost control in The UK and in Germany has been good. We have managed to bring in new staff that will help drive the business forward, especially staff that are customer facing, and we've done that without really increasing our overall overheads.

7:39 As I said, net cash inflow was good, and our cash inflow from operating activities of 80,000 in the first half year, despite making a trading loss in that period, is really just because of movements in working capital, just timing differences there. Our net cash position was up from last year. We don't have any borrowings in the group at half year end nor since the half year, although we do have an overdraft facility of a million pounds that we aren't utilizing just for the headroom that that provides us. Nancy, if I can hand back to you. Yep.

8:24 So two things really to point out on three things, actually, on this slide. First of all, most of you want to know this, full year '26 trading remains in line with management expectations and with market expectations. We are investing heavily at the moment as Greg alluded to and going through a complete digital transformation in the business. And we've been doing that during this year, which involves a new customer facing website. Technology enhancements die designed to automate a lot of the processes that we do manually at the moment and for data enrichment purposes and new systems aligned to support the evolving habits of space buyers.

9:12 Aligned with that, we're also investing in additional client facing staff to drive future revenue growth. So they're the main operational highlights. If we can move on to The UK, we did say at both the interims and the end of year last year that, we'd had a anomalous h one in 2025, and that has proved to be the case. So we've returned to a more normalized pattern of bookings in BrandX, although I will say it is up on 2024. The 2025 result was heavily influenced by tobacco replacement products taking huge amounts of space, particularly at Network Rail before they decided that they didn't want to have those promotions in their stations anymore.

10:01 But there has been quite a clamp down anyway on tobacco replacement products doing any advertising or marketing. Where we've seen the growth in brand experience is in the beauty sector. This has now become a core a face to face acquisition has become a core way of the beauty sector reaching out to their audience. Beauty is obviously a a touchy feely kind of activity, and therefore, digital, isn't working as well for them. So they're very much using experiential as an approach to this. We've seen big brands like Chanel and Dior down to little high street brands or or more low cost brands taking space. And we've also seen a huge growth in Chinese automotive brands taking temporary space from us. I think over the last year, we've had Cherry, JQ, BYD, Amodo and LePat all taking space in centers to do short term activations.

10:59 As Gregor also alluded to, we've seen strong growth in both acquisition and subscription. As you would expect, the power companies are all out, doing a lot of activity, wanting to sign new customers up to, direct debit. We've also done a lot of work with subscription brands, and obviously, sign up for subscriptions because of the convenience factor. An awful lot of activity in the pet food sector, but general food box sectors as well. Good growth shown across the board in that. And then our our star product, Rock Up, continues to develop with bookings emanating from beauty. I talked about the growth in experiential beauty. We're also seeing it in Rock Up beauty with a number of sort of k beauty brands taking space with us.

11:47 We're also seeing permanent jewelers. That's when you have your jewelry welded to you taking space. And we've also now got TikTok trending brands, specifically in the f and b area, taking space. This product seems to have real, seems to really resonate with brands wanting to go on omnichannel but not knowing how to do it. They can definitely take their first steps with space and people. And in line to that, we're investing in business development staff to go out and work with brands to get them to take the omnichannel approach. So we've we've invested in a number of new business development staff designed specifically to target major brands for rock up and pop up and for general space bookings.

12:35 Germany's been relatively positive in h one. We we attracted new retailers. We we set ourselves a target of of expanding the retailer base from the the kind of small independents that is the vast majority of the the business to to better known retailers. Unfortunately, one of the ones that we brought out from The UK then went bust, which we then had to increase our bad debt provision to cover. The the focus still remains on on getting bigger and better retailers. And on we've hired a marketing manager to drive that that ambition. The credit control we focused on, we've got an additional resource in credit control now, and that's working well going into a h two.

13:28 As I said, it was a blow to to write off the bad debt to the extent that we had to in Germany, but that's now behind us. We continue to work with all of the major owners in Germany. BCE, we've worked with for many years, we've got a long term contract still in place with them. And other newcomers to the market are using us to exclusively manage their venues, which is very pleasing, and we expect to add to those venues next year. So the outlook. So the performance has been in line with what we thought it was gonna be for the half year. We anticipate meeting market expectations for the full year and that would put us on track to have our best year since 2017, which we're absolutely delighted about.

14:22 The launch of our new systems systems will will obviously obviously revolutionize revolutionize the business, and we're also looking to the future. And during the year, we've got a pipeline of AI tools designed to support buyers in their quest for the right space and focusing very much in on the data insights database that we've got to assist buyers make the right choice of venue for their product. And we've also got a strong UK venue pipeline for exclusivity, and, we're looking as well at further new venue wins in Germany. Okay. We finished the the presentation part of of this with just the the key financial highlights.

15:11 Here, you can see the the revenue and the operating profit for each of the divisions that we had. So you can see that UK promotions managed to maintain the operating profit that I had despite a slight reduction in revenue, where we were very happy with that. We're a more efficient business than we were previously, and we hope to be able to continue that going forward. The UK retail shows its slight increase in revenue and profitability since H1 last year, which was in line with our expectation. And then Germany, as we talk about, despite the increase in revenue, we did have these one off hits, which meant that profitability in Germany was lower in H1, although we do expect Germany to return to its normal levels of profitability for two.

16:06 Head office costs remained stable compared to to last year despite having additional resource in some areas and our investment in marketing, in particular, in The UK. And finance costs were reduced down to zero as we no longer had any borrowings during the first half of twenty twenty six. On the cash flow side of the business, you can see that our our cash flow in h one was was pretty much even across the the period with the exception of the investing that we had in our new website, which will go live soon, which meant that at the the year end, we pretty much or the half year end, we we had a a cash balance of just over £1,000,000 with no bank debt time as well, which puts us in a very strong position going into traditionally the much more cash generative second half of the year.

17:12 I think that pretty much finishes the formal part of the meeting. We've had a few questions coming in and I can read those out and ask Nancy, Andrew or I will to answer them or I'll answer them myself. The first question that has come in is, can we say a little bit more about how the web booking platform will work and how it will match buyers and sellers or how we can use AI tools as part of that to help our business. Nancy, would you like to to cover that off? Yeah. So, no, the the web booking platform doesn't directly match buyers and sellers, but it obviously does include search.

18:00 The AI elements of that will be that it will be a much more intuitive search string that you can put into the query. And you can also ask, it will also deliver you the right venue based on insights, space, and location. So it'll be a very sophisticated model that it will be able to deliver. So the AI search will be for consumers. Yeah. I think that that says about as much as I can about the booking platform. Okay. Thank you. The next question that came in was in relation to revenue where we've been asked what percentage of our revenue is recurring or repeatable, and how much visibility do we have over revenue entering each half of the year?

18:49 Do you want me to take that? Yes, please. Well, obviously, our business is pop up in short term, so there is an element of lack of visibility. However, most of our business at the beginning of the half year, we can map very accurately. The only sector which is difficult for us to see is the brand experience sector. That is very much booked with a sort of four week from pitch to activation window. So at this stage of the year, we can see our end of year in all of the divisions except the brand experience division. And as an example, we had a very high percentage of our business, over 50% in September, booked in the month for the month. So, yeah, that that is the only bit that we can't see. You ask about recurring revenue, not that much is recurring.

19:44 Repeatable is very much the case. Thank you. The next question, probably for Andrew, is regarding the write down in Germany, is it normal practice for the company to be liable for rent when a client goes into liquidation? If so, shouldn't terms and conditions be changed so that the company doesn't end up having to deal with these liabilities? And that's exactly what's happened. So we now don't sign long term venue contracts. We sign shorter term or longer term with a break clause in it. So, yes, we have addressed that and mitigated against it going forward. Okay. And then there was another question that we got which was asking us how much the bad debt write off was in Germany.

20:37 Germany runs because of just the the profile of the individual traders that we have in Germany, it runs at a slightly higher bad debt rate than than The UK does, although both of them are, in normal circumstances, pretty low compared to what you would expect in a normal business. In the first half year, we wrote off in total a £196,000 of bad debt, which is probably about a £160,000 more than we would normally expect in that kind of period. The the trader that we talked about specifically represented the the the biggest amount of that availability, but it wasn't just one trader. There were a couple of others, although not British ones, that we had to provide against as well. We're still pursuing them for the money, but it was just felt that it would be prudent in those circumstances to provide as well.

21:44 Next question that's come in is in relation to our UK operations department, which is how is the distribution center and facility at Daventry working out? Has this added efficiencies? And are we needing to add more capacity to that? It's improved efficiencies greatly. It's a much better, more central space than our previous one in in East London. So, yes, it's it's definitely made the the operations team much more efficient, and we also outsource a lot more. So we we provide services for for brand agencies and others, which we never did previously, couldn't have done previously.

22:32 K. Thank you. And then the last question that we've got so far is, and I'm not sure whether Nancy or Andrew would like to answer it, but it's what does a typical new client look like economically from initial acquisition through to repeat business, and how does customer lifetime value compare with the cost of winning that customer? That's quite a big question, but I'll attempt to answer it. Obviously, lifetime value is a really important metric. The cost of acquiring a new customer is high. The most important thing across all divisions is keeping that customer. And that's down to them being successful when they're on-site. And that's a that's why we've invested heavily in a data insights platform so we can start to understand the sort of business, the price, the value that any customer assigns to space.

23:29 And that is how we're trying to move that lifetime value, and trying to get business to move forward with us by understanding how they're looking at it economically. I hope that kind of answers that. Yeah. I the I guess the other bit to add is it depends what the the what Sam is referring to as the client, whether it's the venue client or the the the buyer of the space. If it's a venue client, certainly with public sector, there's significant pitches, tenders, etcetera, ITTs, whatever, to go through to win a public sector client. Shopping centers can be arduous, and they can also be very easy.

24:17 Okay. We've had another question in while we've been chatting there, which is what new projects and products have we got planned to drive revenues faster and harder? That all comes down to the digital transformation. That is what will drive our business harder, faster, and more efficiently. That's been our big investment for this year, and that is what will move us forward in 2027. Okay. We have had some other questions at which are looking for forward forecasts from us, which I don't think we want to go into at this point, not the appropriate place. That's everything in the question front. Perfect. Thank you to the team for updating those investors today. Before we ask investors to share their feedback, which I know is particularly important to the company, Nancy, could I please just ask you for some closing comments?

25:08 Yep. Thank you very much for listening today. We do appreciate your interest in SPACEANDPEOPLE. We're very much looking forward to the year ahead. We've got a strong pipeline of new venues. We've got new systems launching for both customers and for our staff, and we've got some great new business development staff in our pipeline. Thank you very much once again. Thank you. Can I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback? On behalf of the management team of SPACEANDPEOPLE PLC, we'd like to thank you for attending today's presentation, and good afternoon to