Time Out Group narrows losses as it focuses on cost base

Media and entertainment business Time Out Group issued its unaudited half-year results for the six months ended 30 June on Tuesday, reporting 20% year-on-year growth in group revenue to £22.4m, driven by a combination of underlying growth of 8%, and prior year acquisitions.

The AIM-traded company said group gross profit saw “strong” growth of 42%, or 25% underlying growth, with material improvements in its first half gross margin to 63% from 53%.

Its Time Out Market division’s revenue growth was 50%, with Time Out Market Lisbon continuing to deliver “strong growth” in EBITDA in the period.

The digital division saw revenue growth of 15%, or 1% on an underlying basis, which was primarily driven by digital advertising growth of 56% or 22% underlying growth, offset by underlying declines in ‘Live’ of 50%, due to the strategic decision to discontinue low margin events, as well as a 5% shrinking in its print operations.

Time Out Group made an adjusted EBITDA loss of £6.4m for the period, narrowing from £9.4m, which was still expected to be “significantly lower” in the second half.

Its operating loss stood at £10.2m nwrrowing from £15.6m), with underlying overhead savings of 5% reported.

Net cash and cash equivalents were £9.4m as at 30 June, while its existing £20.0m loan facility remained unutilised on that date, with its term extended to 31 October 2020.

“Time Out is celebrating its 50th year and continues to provide incredible content to our global users across digital, print and physical platforms,” said chief executive officer Julio Bruno.

“Our first Time Out Market in Lisbon continues to exceed our expectations, with records broken again in the first half as visitors grew 12% to 1.9m.”

Over the next 12 months, the company was set to open owned-and-operated markets in New York, Miami, Boston and Chicago and its first franchise location in partnership with Ivanhoé Cambridge in Montreal.

“We are in the unique position to attract the best chefs and food offerings in a city, and to drive customers to the locations through our global digital reach.

“Following the successful integration of our franchises in Spain, Australia, Hong Kong and Singapore and the expansion of our content, we now own and operate the Time Out Digital business in 288 cities and have licence agreements in 27 others.”

Through those recent acquisitions and further improvements in its operating structure, Bruno said the company would benefit from a “much-rationalised” cost base going forward.

“Furthermore, following a review of revenue lines, Time Out Digital has removed low margin activity, leading to significantly improved gross margins which we expect to continue into the second half.

“Digital advertising continues to perform well, growing sales 56% in the period,” Bruno explained.

“Whilst this reduces our revenue outlook for the year, it ensures we will deliver significantly lower losses in the second half and remain on track to deliver the near-term priority of EBITDA profitability.”