Everyman Media Group PLC
Registered number 08684079
Annual report and financial statements
Year ended
29 December 2022
1
Everyman Media Group PLC
Annual report and financial statements
Contents
Company information
Chairman's statement
Chief Executive’s statement
Strategic report
Finance Director’s statement
Section 172 statement
Corporate governance
Audit Committee report
Remuneration Committee report
Directors' report
Statement of Directors' responsibilities in respect of the annual report and financial statements
Independent auditor’s report to the members of Everyman Media Group PLC
Consolidated statement of profit and loss and other comprehensive income
Consolidated balance sheet
Consolidated statement of changes in equity
Consolidated cash flow statement
Company balance sheet
Company statement of changes in equity
Notes to the financial statements
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Everyman Media Group PLC
Annual report and financial statements
Company information
Directors
Adam Kaye
Alexander Scrimgeour
Charles Dorfman
Elizabeth Lake (resigned 28 March 2022)
Maggie Todd
Michael Rosehill FCA
Paul Wise (resigned 28 February 2023)
Philip Jacobson FCA
Ruby McGregor-Smith FCA (appointed 20 September 2022)
William Worsdell ACA (appointed 28 June 2022)
Function
Executive Director
Chief Executive Officer
Non-Executive Director
Chief Financial Officer
Non-Executive Director
Non-Executive Director
Executive Chairman
Non-Executive Chairman
Non-Executive Director
Finance Director
Company secretary
One Advisory Limited
Registered office address of the Company
Studio 4
2 Downshire Hill
London
NW3 1NR
Company registration number
08684079 (registered in England & Wales)
Nominated adviser and broker
Canaccord Genuity Ltd
88 Wood Street
London
EC2V 7QR
Auditor to the Company
BDO LLP
Level 12
Thames Tower
Station Road
Reading
RG1 1LX
Solicitor to the Company
Howard Kennedy
No. 1 London Bridge
London
SE1 9BG
Registrar to the Company
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol
BS13 8AE
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Everyman Media Group PLC
Annual report and financial statements
Chairman’s statement
I am pleased to report that 2022 was a positive year for the business, with financial performance ahead of management’s initial expectations.
Audiences returned to Everyman in encouraging numbers, and we delivered solid increases in revenue and adjusted EBITDA.
With an improving number of year-on-year releases, continued commitment to the theatrical window from distributors and an exciting
pipeline of new venues, we look ahead with cautious optimism.
Having served as a Non-Executive Director since 2013, I have come to know Everyman, its culture and what it stands for and I am delighted
to have taken up the mantle as Chairman in 2023.
Review of the business
The Group’s key performance indicators all saw healthy increases on 2021. Admissions saw significant improvement and we successfully
delivered increases in average ticket price and spend per head.
We were pleased to open two new cinemas in the period, taking us to a total of 130 screens across 38 venues. A further six venues are
confirmed to open in the coming months and, with landlords increasingly keen to work with Everyman, an exciting pipeline of opportunities
exists for 2024 and 2025.
During the year, we continued to innovate and optimise our operations. From a technology perspective, our app has gone from strength to
strength and, post year end, we launched a new website. Both will play important roles in helping us to grow admissions and spend per
head through taking an increasingly data-driven approach to marketing.
The teams in our venues and head office continue to be our greatest asset, again demonstrating an exemplary commitment to customer
satisfaction. Without them, this year’s performance would not have been possible, and I would like to extend my thanks to them all.
I would also like to express my gratitude to Paul Wise, who retired as Chairman in 2023, for his immense contribution to Everyman during
his time with the business.
Outlook
We look to the future with increasing confidence, bolstered by a robust pipeline of upcoming releases and ongoing admissions momentum.
Our focus for 2023 will be to continue to deliver the high standards of service, atmosphere, food and drink and of course film that Everyman
is known for, and to continue our expansion plans at a measured pace.
Philip Jacobson
Non-Executive Chairman
11 April 2023
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Everyman Media Group PLC
Annual report and financial statements
Chief Executive’s Statement
Business Model
Everyman brings together great service, atmosphere, food and drink and of course film to create an exceptional cinema experience for our
customers. In addition, Everyman delivers a more premium price point and a greater number of revenue-generating activities than the
traditional cinema model.
Emerging from the pandemic, our growth strategy has returned to the following:
−
−
−
Expanding our geographical footprint by establishing new venues in order to reach new customers.
Continually evolving the quality of experience and breadth of choice we offer at our venues.
Engaging in effective marketing activity.
As an affordable treat, cinema and Everyman specifically has historically remained resilient to economic downturn. Not only is this reflected
in Everyman’s year-on-year admissions below, but also by the fact the our customers are spending more with us than they were in 2021.
We remain convinced that appetite for film remains undiminished, and that the Everyman offer remains more relevant in a post-pandemic
environment.
Financial Overview
The Group delivered solid full year financial results, demonstrating a return to business as usual. Despite a decreased number of wide
releases due to pandemic-related production delays, revenue for the period was £78.8m, a 61% increase on the prior year (2021: £49.0m).
The Group achieved an operating profit of £402,000 (2021: £2.2m operating loss). The improvement is particularly pleasing given that the
prior year operating loss included £3.8m of Covid-related government support a £2.5m reversal of previously-recognised impairment.
As we accelerate our programme of organic expansion, the cash outflow for the year included £18.9m on the acquisition of Property, Plant
& Equipment (2021: £7.4m), driven by payments for venues opened during the year and new venues in Durham, Northallerton, Salisbury,
Plymouth and Marlow, which are currently under construction and due to be opened in 2023.
The Group was able to finance much of this expansion with £11.8m of cash generated from operating activities (2021: £12.2m) as well as
capital contributions of £5.0m from landlords (2021: £0.5m), demonstrating the ongoing appetite of landlords to work with Everyman. A
further proportion was financed through a £9.5m draw on the Group’s banking facilities (2021: £6.0m). As a result, net banking debt at the
balance sheet date was £18.5m (2021: £8.4m). The Company retains £18m headroom on its £40m debt facilities.
The Directors believe that the Group balance sheet remains well capitalised, with sufficient working capital to service ongoing requirements
and to support our growth going forward.
The Group’s financial performance is given in detail in the Finance Director’s statement below.
KPIs
The Group uses the following key performance indicators, in addition to total revenues, to monitor the progress of the Group’s activities:
Admissions
Paid for average ticket price*
Food and beverage spend per head**
Year ended
29 December
2022
(52 weeks)
Year ended
30 December
2021
(52 weeks)
3,418,599
2,023,390
£11.29
£9.34
£11.00
£9.07
Admissions were 69% ahead of last year on a non like-for-like basis. However, in 2021, the venues were closed from the beginning of the
year to 17th May as a result of pandemic-related trading restrictions.
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Everyman Media Group PLC
Annual report and financial statements
Chief Executive’s Statement (cont.)
*Paid for average ticket price has been adjusted to remove the benefit of VAT reductions in both 2022 and 2021 in order to provide a like-
for-like comparison. The directors believe that this metric, which excludes any complimentary tickets, is more representative of actual
customer spend and will be used as a KPI moving forward.
**Food and beverage spend per head has been adjusted to remove the benefit of VAT reductions in both 2022 and 2021 in order to provide
a like-for-like comparison. The prior year metric has been adjusted to include Deliveroo income, which had previously been excluded. This
is consistent with the treatment for the current year.
Expansion of our geographical footprint
During 2022 we opened two new venues, in Edinburgh in April and in Egham in September, and both venues are trading in line with
expectations.
We have a pipeline of six new openings in 2023, with new venues planned in Durham, Salisbury, Northallerton, Plymouth, Marlow and Bury
St Edmunds. The outlook is promising for 2024 with Cambridge and Stratford (London) under contract, and – with landlords increasingly
interested in working with Everyman - many further exciting opportunities to grow the estate. We expect to open a total of six new venues
in both 2024 and 2025.
The Group currently has venues in the following locations:
Location
Altrincham
Birmingham
Bristol
Cardiff
Chelmsford
Clitheroe
Edinburgh
Egham
Esher
Gerrards Cross
Glasgow
Harrogate
Horsham
Leeds
Lincoln
Liverpool
Number of
Screens
Number of Seats
4
3
4
5
6
4
5
4
4
3
3
5
3
5
4
4
247
328
476
253
411
255
407
275
336
257
201
410
239
611
291
288
London, 13 venues
37
3,136
Manchester
Newcastle
Oxted
Reigate
Stratford-Upon-Avon
Walton-On-Thames
Winchester
Wokingham
York
3
4
3
2
4
2
2
3
4
247
215
212
170
384
158
236
289
329
130
10,661
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Everyman Media Group PLC
Annual report and financial statements
Chief Executive’s Statement (cont.)
Market developments
2022 marked the first full year of trade for cinemas since the pandemic, with total box office revenue across the UK & Ireland at £979m, an
increase of 64% against 2021.
Whilst last year the market saw a reduction in blockbusters due to production delays, the signs of recovery are clear with audiences coming
back to enjoy a broader range of titles. We expect the number of larger releases to return to near pre-pandemic levels in 2023.
The diversity of content was bolstered by streamers demonstrating a further commitment to cinema, moving away from day-and-date
releases, and increasingly seeing the value in original content for theatrical release. Key examples of this were Netflix’s “Knives Out: A
Glass Onion Mystery” and Apple’s “Spirited”. We continue to benefit from working cooperatively and creatively with streaming partners.
With film production increasingly back up to full speed, the breadth and quality of the slate in 2023 places the market in a robust position,
and the year should continue an upward growth trajectory.
Technology
In 2022, our website saw 9m users, up from 6.5m in 2021. The Everyman App ended the year with 116k users, up from 76k in 2021,
representing increases of 54% and 53% respectively.
Post year end we launched a new website with improved user experience and a more flexible content management system. The technology
that underpins this will improve our customer segmentation and targeted, personalised marketing. This is a key step in our digital
transformation.
Food & Beverage
During the year we have continued to add exciting new dishes to our menu, including quarterly burger specials, most recent of which were
the Halloumi Burger and the Korean Chicken Burger. In sharing plates, our top selling dish is the new Garlic and Parsley Doughballs. Our
vegan range continues to grow, with the addition of the Vegan Hotdog, and we have also evolved the menu layout to make it clearer for the
customer. Amending the dish placement on the menus has had a demonstrable impact on sales of hot food.
Innovation in our food and beverage offering is expected to continue to drive spend per head moving forward.
Partnerships and Events
During the year, we renewed our signature partnerships with Jaguar and Green & Black’s. We added Land Rover Discovery as a new brand
partner, deepening our relationship with the Jaguar group. In conjunction with Waitrose, we launched a nationwide membership activation
with Green & Black’s. In addition, we launched a collaboration with The Times, offering Times+ subscribers two-for-one tickets on
Wednesdays as well as access to exclusive events, and our partnership with Apple goes from strength to strength.
Our open-air venues returned to the canal-side at Kings Cross and the luxurious grounds of The Grove Hotel, introducing the Everyman brand
to thousands of people over the summer period. This year, we also began a partnership with This Bright Land, a new festival with a three-
year residency at Somerset House.
2022 also saw show-stopping parties and exclusive events with our partners. Christmas came early for a November preview of the AppleTV+
film Spirited, we treated Times+ members to a sneak-peek of Steven Spielberg’s The Fabelmans, and the great and good of the film and
music business took to our stages for special events week after week, with every event exclusive to us.
People
We recognise the commitment our people have shown to Everyman, our guests and to each other. Our teams’ passion is key to delivering
our signature brand of hospitality across all our venues, both existing and new.
Our unique proposition has meant we have been able to attract and retain talented people, despite well-publicised challenges in hospitality
sector recruitment. Our new careers website has also enabled a smoother, brand-focused recruitment process.
During the year we opened two new venues, and our existing teams supported our newest managers to deliver hospitality the Everyman
way. Our commitment to development saw numerous management roles filled internally.
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Everyman Media Group PLC
Annual report and financial statements
Chief Executive’s Statement (cont.)
Outlook
We are pleased to report solid financial results despite the reduced number of blockbuster releases in 2022. However, with Top Gun:
Maverick and Avatar: The Way of Water now the 12th and 3rd highest grossing films of all time respectively, it is clear that the consumer
appetite for film remains undiminished. We remain an affordable treat for our customers, and with film production back up at pace and the
number of larger releases returning to pre-pandemic levels, we are confident that customers will return to our venues in greater numbers.
2022 has been a year of progress for Everyman, as we continued to focus on evolving the quality of experience and breadth of choice we
offer at our venues. We opened with two new cinemas opened in Edinburgh and Egham and – to ensure the conservation of high standards
and differentiation – we refurbished our venues in Hampstead, Canary Wharf, Esher, Bristol and Birmingham.
We look to 2023 with cautious optimism. We continue with our expansion programme, with new venues due to open in Durham, Salisbury,
Northallerton, Plymouth, Marlow and Bury St Edmunds, and several further exciting opportunities in the pipeline.
Alex Scrimgeour
CEO
11 April 2023
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Everyman Media Group PLC
Annual report and financial statements
Strategic Report
The Directors present their strategic report for the Group for the year ended 29 December 2022 (comparative period: 52 weeks 30
December 2021).
Review of the business
The Group made a loss after tax of £3,504,000 (2022: £5,430,000).
The Finance Director’s report contains a detailed financial review. Further details are also shown in the CEO’s statement and consolidated
statement of profit and loss and other comprehensive income, together with the related notes to the financial statements.
Principal risks and uncertainties
The Board considers risk assessment to be important in achieving its strategic objectives. There is a process of evaluation of performance
targets through regular reviews by senior management to forecasts. Project milestones and timelines are reviewed regularly.
1
Film release schedule - The level of the Group’s box office revenues fluctuates throughout the course of any given year and are
largely dependent on the timing of film releases, over which the Group has no control. The film release schedule remained adversely
impacted by the pandemic in 2022, mainly as a result of production delays during 2020 and 2021. As the impact of this reduces and
the volume of releases increases, the Board remains optimistic about the film slate going forward. The Group mitigates this risk by
widening the sources for new content to include streaming platforms, TV and theatre, as well as focusing on creating a great overall
experience at venues independent from the films themselves.
2 COVID-19 pandemic - Group revenues are entirely dependent on being open and able to show films, and to serve food and beverage.
Although there were no Covid-related closures in 2022, the beginning of the period was negatively impacted by the spread of the
Omicron variant. Whilst the situation has improved substantially, the Board remains vigilant to new developments and further impacts
which may arise. In addition, the Group has processes and policies that can be brought back if needed, and has more flexible
employment contracts allowing temporarily reduced working hours, if required. Everyman works closely with the UK Cinema
Association and the Department for Culture, Media and Sport to ensure that the interests of the business are represented in all policy
discussions.
3 Consumer environment – A reduction in consumer spending because of broader economic factors could impact the Group’s
revenues. During 2022, inflation and interest rates have increased due to the pandemic and geopolitical events. Historically, the
cinema industry has been resilient to difficult macroeconomic conditions, with it remaining an affordable treat during such times for
most consumers. Whilst the Board considers that the impact has been minimal in 2022, the Group continues to monitor long term
trends and the broader leisure market.
4
5
Alternative media channels - The proliferation of alternative media channels, including streaming, has introduced new competitive
forces for the film-going audience and this has been accelerated by the pandemic. To date this has proven to be a virtuous relationship,
both increasing the investment in film production and further fuelling an overall interest in film with customers of all ages. The Board
considers that the Everyman business model works well alongside other film channels. It remains an ever-present caution that to
maintain this position we must continue to deliver an exceptional experience in order to deliver real added value for our customers
who choose to see a film at our venues.
Inflation – Given the current economic and geopolitical situation there is a risk to the cost base from inflation. To mitigate this the
Group enters into long term contracts and works very closely with suppliers to improve efficiencies and limit costs. The Group has a
fixed rate agreement in place with one of the largest energy suppliers until the end of October 2023. Whilst the Board expects energy
costs to increase from the current rate, forward prices for Gas and Electricity continue to fall. The Group is confident that any increases
can be absorbed without material impact to unit economics. In addition, and thanks to its size, the Group can take advantage of lower
price points for higher volumes. Furthermore, payroll costs are closely monitored and managed to the level of admissions. We remain
cautious when passing on price increases to our customer base.
6 Climate change – The Group’s business could suffer because of extreme or unseasonal weather conditions. Cinema admissions are
affected by periods of abnormal, severe, or unseasonal weather conditions, such as exceptionally hot weather or heavy snowfall.
Climate change is also high on the agenda for investors and increasingly institutional investors are looking closely at the actions
being taken by business to reduce carbon emissions. The Group is working towards developing a net zero carbon emissions strategy
to mitigate this risk.
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Everyman Media Group PLC
Annual report and financial statements
Strategic Report (cont.)
7 Data and cyber security – The possibility of data breaches and system attacks would have a material impact on the business
through potentially exposing the business to a reduction in service availability for customers, potentially significant levels of fines,
and reputational damage. To mitigate this risk the IT infrastructure is upgraded to ensure the latest security patches are in place and
that ongoing security processes are regularly updated. This is supported by regular pen testing and back-ups.
8
9
Film piracy - Film piracy, aided by technological advances, continues to be a real threat to the cinema industry generally. Any theft
within our venues may result in distributors withholding content to the business. Everyman’s typically smaller, more intimate
auditoria, with much higher occupancy levels than the industry average, make our venues less appealing to film thieves. As we see
the numbers returning to cinema coming close to pre-pandemic levels, we see this risk reducing to a pre-pandemic level.
Reputation - The strong positive reputation of the Everyman brand is a key benefit, helping to ensure the successful future
performance and growth which also serves to mitigate many of the risks identified above. The Group consistently focuses on customer
experience and monitors feedback from many different sources. A culture of partnership and respect for customers and our suppliers
is fostered within the business at all levels. Since re-opening we have seen our market share increase and received positive customer
feedback.
Financial risks
The Group has direct exposure to interest rate movements in relation to interest charges on bank borrowings, with a 1% increase in rates
resulting in an increase in interest charges of £0.2m on current forecast borrowings over the next twelve months. The Board manages this
risk by minimising bank borrowings and reviewing forecast borrowing positions.
The Group takes out suitable insurance against property and operational risks where considered material to the anticipated revenue of the
Group.
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Everyman Media Group PLC
Annual report and financial statements
Finance Director’s Statement
Summary
•
•
•
•
•
Group revenue of £78.8m (2021: £49.0m)
Gross profit of £50.5m (2021: £30.9m)
Non-GAAP adjusted EBITDA of £14.5m (2021: £8.3m)
Operating profit of £0.4m (2021: £2.2m loss)
Net banking debt £18.5m (2021: £8.4m), with significant headroom in facilities
Revenue and Operating Profit
Admissions for the 52 weeks ending 29 December 2022 totalled 3.4m, an increase of 69.0% on the prior year (2021: 2.0m). In 2021, venues
were closed for the first 19 trading weeks of the year due to pandemic-related restrictions. 2022 was not impacted by any government-
imposed closures and all venues traded through the year, aside from any temporary closures for refurbishments.
Whilst the film slate was impacted in 2022 by Covid-related production delays, it was clear from a number of titles that the consumer
appetite for film remained undiminished. Chief amongst these were Top Gun: Maverick, released at the end of May, and Avatar: The Way
of Water, released in December, which are now the 12th and 3rd highest-grossing films of all time, respectively. As a result, and due also
to the new venues opened during the year, admissions were 4.5% ahead of 2019 on a non like-for-like basis.
Paid-for Average Ticket Price was £11.29, a 2.6% increase on the prior year (2021: £11.00), and Food & Beverage Spend per Head was
£9.34, a 3.0% increase on the prior year (2021: £9.07). In order to enable like-for-like comparison, both of these metrics have been
adjusted to remove the benefit from the temporarily reduced rate of VAT during 2021 and the first quarter of 2022. Given the challenging
macroenvironment, the Group has remained conservative when passing on price increases to customers.
As a result of the above, revenue for the period was £78.8m, a 61% increase on the prior year (2021: £49.0m).
Reported Gross Margin was 64.0% (2021: 63.0%). The increase was driven by a greater proportion of Venue Hire, Advertising and
Membership Income, which carries a higher margin.
Other operating income was £0.6m (2021: £3.8m). £0.2m of this related to the Omicron Hospitality and Leisure Grant, and £0.4m to other
landlord compensation. In the prior year, the Group received £2.8m of support in relation to the Job Retention Scheme and a £1.0m
Business Support Grant.
Administrative Expenses for the period were £50.7m, a 28.6% increase on the prior year (2021: £39.4m). This is commensurate with the
increased levels of trading activity and admissions. The Group’s people costs are inherently linked to changes in National Living Wage,
which increased by 6.6% in April 2022. Beyond this, and despite the macroeconomic environment, the Directors believe that the impact to
the cost base from inflation during the year has been minimal. This is, in part, due to the recruitment of a new Procurement Director and
the resultant re-negotiation of a number of key contracts.
The Group’s Utilities contracts are fixed until the end of October 2023. The Directors expect costs to rise, but note that forward prices for
Gas and Electricity continue to fall and believe that increases can be absorbed without material impact to the Group’s unit economics.
The Board carried out a full impairment review at the year end, based on a judgement of future cash flows by venue and concluded that,
due to positive ongoing trading performance, no indicators of impairment existed. Within the prior year operating loss was a £2.5m
reversal of impairment of right-of-use assets and property, plant and equipment.
The Directors are pleased to report an operating profit of £0.4m (2021: £2.2m operating loss), particularly given both the greater levels of
government support and the gain from the reversal of impairment in the prior year.
Financial Expenses
Financial expenses were £3.9m (2021: £3.3m) and relate mainly to interest charges on the Group’s banking facilities and on lease
liabilities under IFRS 16. The increase was as a result of an increased draw down the Group’s Revolving Credit Facility, increases to
underlying interest rates and new leases entered into during the year.
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Everyman Media Group PLC
Annual report and financial statements
Finance Director’s Statement (cont.)
Non-GAAP adjusted EBITDA
In addition to performance measures directly observable in the financial statements, the following additional performance measures are
used internally by management to assess performance:
•
•
•
•
Non-GAAP Adjusted EBITDA
Admissions
Paid-for Average Ticket Price
Food & Beverage Spend per Head
Management believes that these measures provide useful information to evaluate performance of the business as well as individual
venues, to analyse trends in cash-based operating expenses, and to establish operational goals and allocate resources.
In prior years, Average Ticket Price has been used as an additional performance measure. The directors believe that Paid-for Average
Ticket Price, which excludes any complimentary and unpaid tickets, is more representative of actual customer spend and will be used as
an additional performance measure moving forward.
Non-GAAP adjusted EBITDA was £14.5m, compared with £8.3m in 2021.
Non-GAAP adjusted EBITDA is defined as earnings before interest, taxes, depreciation, amortisation, profit or loss on disposal of Property,
Plant & Equipment, impairment, share based payments, pre-opening expenses and exceptional costs.
The reconciliation between operating loss and non-GAAP adjusted loss from operations is shown at the end of the consolidated statement
of profit and loss.
Cash Flows
The Directors believe that the Group balance sheet remains well capitalised, with sufficient working capital to service ongoing
requirements. Net cash generated in operating activities was £11.8m (2021: £12.2m) and the net cash outflow for the year was £0.5m
(2021: £3.9m inflow).
The cash outflow for the year included £18.9m on the acquisition of Property, Plant & Equipment (2021: £7.4m). This was driven by
payments for new venues in Edinburgh and Egham, which opened during the year, and for Borough Yards, which opened in December
2021. Additionally, payments were made towards new venues in Durham, Northallerton, Salisbury, Plymouth and Marlow, which are
currently under construction and due to be opened in 2023.
The Group was able to finance much of its expansion during the year from operating cash flows as well as landlord contributions of £5.0m
(2021: £0.5m), demonstrating the ongoing appetite of asset holders to work with Everyman. A further proportion was financed through a
£9.5m draw on the Group’s banking facilities (2021: £6.0m). As a result, net banking debt at the balance sheet date was £18.5m (2021:
£8.4m).
Cash held at the end of the year was £3.7m (2021: £4.2m).
The Group has banking facilities totalling £40m in place at the year end. £25m is in a Revolving Credit Facility (RCF) and £15m is in a
Government-backed Coronavirus Large Business Interruption Loan Scheme (“CLBILS”) RCF. At the year end the Group had drawn down
£22m (2021: £12.5m) of the available funds, and therefore £18m of the facility was undrawn (2021: £27.5m).
The Group returned to its original banking covenants, based on Adjusted Leverage and Fixed Cover Charge, in June 2022. Current forecasts
demonstrate that the Group will remain within these covenants going forward.
The Revolving Credit Facility matures in April 2024, having been extended by 3 months in March 2023. The CLBILS, which cannot be
extended, matures in January 2024, as per the previous maturity date. The Group is working with its banking partners to re-finance both
facilities and expects to complete this process in due course.
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Everyman Media Group PLC
Annual report and financial statements
Finance Director’s Statement (cont.)
Pre-opening costs
Pre-opening costs, which have been expensed within administrative expenses, were £0.2m (2021: £0.1m). These costs include expenses
which are necessarily incurred in the period prior to a new venue being opened but which are specific to the opening of that venue.
Exceptional costs
The Group incurred exceptional costs of £0.2m during the year (2021: £Nil), which related to restructuring costs within the Head Office
team.
Annual general meeting
The annual general meeting of the Company will be held at 09:30am on 15 June 2023 at Everyman Cinema Hampstead, 5 Holly Bush Vale,
London NW3 6TX.
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Everyman Media Group PLC
Annual report and financial statements
Section 172 Statement
Our Board of Directors are bound by their duties under the Companies Act 2006 (the “Act”) to promote the success of the company for the
benefit of our members as a whole taking into account the factors listed in section 172 of the Act. In doing so, however, they must have
regard for the interests of all of our stakeholders, to ensure the long-term sustainability of the Company. The Board is therefore responsible
for ensuring that it fulfils its obligations to those impacted by our business, in its stakeholder consideration and engagement.
The ongoing sustainable success of Everyman is dependent on its relationship with a wide range of stakeholders, including consumers,
employees, Governments & regulators, customers, suppliers, and investors. We are aware that each stakeholder group requires a tailored
engagement approach in order to foster effective and mutually beneficial relationships. Our understanding of stakeholders is then factored
into Board discussions, regarding the potential long-term impacts of our strategic decisions on each group, and how we might best address
their needs and concerns. The Board understands that it is not always possible to provide positive outcomes for all stakeholders and
therefore, sometimes, must make decisions based on the competing priorities of stakeholders. However, the Board acts in the best long-
term interests of the Company and its stakeholders generally.
Throughout this Annual Report, we provide examples of how we:
Take into account the likely consequences of long-term decisions;
Consider the interests of the Company’s employees;
Consider the interests of the Company’s shareholders;
Foster the Company’s business relationships with suppliers, customers and others;
Understand our impact on our local community and the environment; and
•
•
•
•
•
• Maintain a reputation for high standards of business conduct; and
This section serves as our section 172 statement and should be read in conjunction with the Strategic Report and the Company’s Corporate
Governance Statement. Section 172 of the Companies Act 2006 requires Directors to take into consideration the interests of stakeholders
in their decision making. The Directors continue to have regard to the interests of the Company’s employees and other stakeholders, including
the impact of its activities on the community, the environment and the Company’s reputation, when making decisions. Acting in good faith
and fairly between members, the Directors consider what is most likely to promote the success of the Company for its members in the long
term.
The principles underpinning section 172 are not only considered at Board level, the differing interests of stakeholders are taken into
consideration by management when making wider business decisions. The Board regularly reviews our principal stakeholders and how we
engage with them. The stakeholder voice is brought into the Boardroom throughout the annual cycle through information provided by
management and also by direct engagement with stakeholders themselves. The relevance of each stakeholder group may increase or
decrease depending on the matter or issue in question, so the Board seeks to consider the needs and priorities of each stakeholder group
during its discussions and as part of its decision making.
The table below acts as our s172(1) statement by setting out the key stakeholder groups, their interests and how Everyman has engaged
with them over the reporting period. However, given the importance of stakeholder focus, long-term strategy and reputation, these themes
are also discussed throughout this Annual Report.
Stakeholder
Their interests
How we engage
2022 highlights
Our employees
•
Training, development and
career prospects.
Health and Safety
•
• Working conditions
•
•
Diversity and Inclusion
Human Rights and modern
slavery
Fair pay, employee benefits
•
•
• Workforce posters and
communications
Ongoing training and
development opportunities
• Whistleblowing procedures
•
Publication of Modern Slavery
Statement
Employee benefits packages
Employee questionnaires
Staff intranet
•
•
•
•
•
•
Implementation of new
careers website and
applicant tracking system
Implementation of new
Employee Assistance
Programme
Implementation of new
financial wellbeing
platform
14
Everyman Media Group PLC
Annual report and financial statements
Companies Act s172 Statement (cont.)
Their interests
How we engage
2022 highlights
•
•
•
•
•
•
Comfort and hospitality.
Good quality food and drink
High quality viewing
environment
Ease of access
Safety
Data security
•
Venue staff welcome every
customer
Focus on in-theatre service
Regular review of menu quality
High specification auditoria
Customer support service
•
•
•
•
• Marketing and
Stakeholder
Our customers
Our suppliers &
landlords
Our Investors
Our banking
partners
Regulatory bodies
Community and
Environment
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
• Workers’ rights
•
Supplier engagement and
management to prevent
modern slavery
Fair trading and payment terms
Sustainability and
environmental impact
Collaboration
Long-term partnerships
Comprehensive review of
financial performance of the
business
Business sustainability
High standard of governance
Success of the business
Ethical behaviour
Awareness of long-term
strategy and direction
Business performance &
forecast accuracy
Cash management and
financial control
Compliance with laws and
regulations
High standard of governance
Ethical behaviour
Data security
Compliance with regulations
•
• Worker pay and conditions
Gender Pay
•
Health and Safety
•
Treatment of Suppliers
•
Brand reputation
•
• Waste and environment
•
Insurance
Sustainability
Human Rights
Energy usage
Recycling
•
•
•
•
• Waste Management
•
Community outreach and CSR
communications
Initial meetings and
negotiations
KPIs and Feedback
Board approval on significant
changes to suppliers
Direct engagement between
suppliers and specified
company contact
Regular reports and analysis
on investors and shareholders
Investor roadshows
Annual Report
Company website
Shareholder circulars
AGM
Stock exchange
announcements
Regular meetings & updates
Regular reports and analysis
Annual Report
Stock exchange
announcements
Company website
Stock exchange
announcements
Annual Report
Direct contact with regulators
Compliance updates at Board
Meetings
Consistent risk review
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Philanthropy
Oversight of corporate
responsibility plans
CSR initiatives
•
• Workplace recycling policies
and processes
•
•
Completed upgrades to
kitchens and bars to
provide faster, high-
quality service
Refurbishment of
several venues to
maintain high standards
• Menu development to
improve breadth of
choice
•
•
•
•
•
•
•
•
•
•
•
Completed
implementation of new
ERP system to
streamline processes
from purchase to
payment
Recruitment of a new
Procurement Director
Bi-annual investor
roadshows
Regular ad-hoc
communication with
shareholders
Regular meetings and
communication with
banking partners
Recruitment of a new
Finance Director
Full review of pay across
all roles
NOMAD attended Board
meeting to update on
compliance
Supported employees’
fundraising for various
charities
Special screenings for
local communities
Energy monitoring and
reduction initiative
15
Everyman Media Group PLC
Annual report and financial statements
Companies Act s172 Statement (cont.)
Within the Corporate Governance Report on pages 17 to 20 we describe how the Board operates and the culture of the business including
employee engagement.
Will Worsdell
Finance Director
11 April 2023
16
Everyman Media Group PLC
Annual report and financial statements
Corporate Governance
It is the responsibility of the Chairman of the Board of Directors of Everyman Media Group PLC to ensure that the Group has both sound
corporate governance and an effective Board. This is managed by ensuring that the Group and the Board are acting in the best interests of
shareholders, and by making sure that the Board discharges its responsibilities appropriately. This includes creating the right Board
dynamic and ensuring that all important matters, in particular strategic decisions, receive adequate time and attention at Board meetings.
The Board considers that the Group complies with the QCA Code so far as it is practicable having regard to the size, nature and current
stage of development of the Group.
While seeking to build a strong governance framework, the Board is mindful to ensure that the Group takes a proportionate approach and
that processes remain fit for purpose as well as embedded within the culture of the organisation. Good governance provides a framework
that allows the right decisions to be taken by the right people at the right time.
QCA principles
A description of the Group’s business model and strategy can be found in the Chairman’s report along with key challenges in their execution
and information in relation to the Group’s risk management.
Board of Directors
Philip Jacobson FCA
Independent Non-Executive Chairman
Philip is a Fellow of the Institute of Chartered Accountants in England & Wales and was previously a partner at BDO LLP, where he was
involved in a number of flotations in the leisure sector. Philip was appointed to the Board on 8 October 2013, and as Chairman on 28
February 2023. Since retiring from BDO LLP, Philip has acted as family office to a small number of families.
Alex Scrimgeour
Executive Director – Group Chief Executive Officer
Alex joined Everyman from Côte Brasserie, the UK’s largest French restaurant Group. He joined Côte as a start-up business in 2008 and was
appointed as joint Managing Director in 2011 and CEO in 2015. Alex has extensive experience in the hospitality sector, and was appointed to
the Board on 18 January 2021.
Adam Kaye
Executive Director
Adam founded ASK Central plc with his brother Sam in 1993. Adam studied catering at Westminster College, London and subsequently
worked at City Centre Restaurants, before opening the first ASK restaurant at Haverstock Hill in 1993. ASK Central plc was sold in 2004.
Adam was appointed to the Board on 8 October 2013.
William (Will) Worsdell ACA
Executive Director – Group Finance Director
Will is a member of the Institute of Chartered Accountants in England & Wales and has held senior financial roles at several leisure and
hospitality businesses, including Head of Commercial Finance at Côte Brasserie. Previously, Will worked in financial and operational
planning at Heathrow for 3 years and started his career with Smith & Williamson (now Evelyn Partners), where he qualified as a Chartered
Accountant in 2014. Will was appointed to the Board 28 June 2022.
Charles Dorfman
Non-Executive Director
Charles was co-founder of Esselco properties serviced office business (now known as The Office Group). He was involved in the financing of
the development phase of the Oscar winning ‘The King’s Speech’ with See Saw films and became the Executive Producer, following this
success by producing titles such as ‘Untouchable’ and ‘The Lost Daughter’. He is CEO of Dorfman Media Holdings, Chairman of Media
Finance Capital and Chairs the Young Patrons of the National Theatre. Charles was appointed to the Board on 8 October 2013.
17
Everyman Media Group PLC
Annual report and financial statements
Corporate Governance (cont.)
Margaret (Maggie) Todd
Independent Non-Executive Director
Maggie joined Everyman from the Walt Disney Studios Motion Pictures European marketing leadership team, where she most recently held
the role of Vice President of Communications for twelve years. Prior to Disney, Maggie worked at Twentieth Century Fox, in the music
industry and has delivered campaigns for BAFTA, AMPAS (Academy of Motion Picture Arts & Sciences) Awards and world-renowned
European film festivals.
Maggie was appointed to the Board on 14 July 2021. The Directors consider Ms Todd to be independent in line with the Quoted Companies
Alliance Corporate Governance Code for small and mid-size quoted companies.
Michael Rosehill FCA
Non-Executive Director
Michael is a Fellow of the Institute of Chartered Accountants in England & Wales and has spent most of his career at the Lewis Trust Group
(owners of the River Island group of companies) in both the finance and private equity divisions. Michael is a Director of Blue Coast Private
Equity L.P. and therefore also has an interest in the shareholding of Blue Coast Private Equity L.P in the Ordinary Shares of the Company.
Baroness Ruby McGregor-Smith CBE
Independent Non-Executive Director
Ruby brings with her a wealth of business acumen, acquired over a career spanning more than three decades. One of the few women to
have held the position of Chief Executive at a FTSE 250 company, she grew revenues at Mitie more than four-fold to £2.2 billion, establishing
it as the largest business in its sector. She is highly decorated as an industry leader, winning the 'Leader of the Year' accolade at the 2011
National Business Awards, and in 2013 being recognised by the Financial Times as one of the top 50 female business leaders in the world.
Ruby is a Fellow of the Institute of Chartered Accountants in England and Wales, and was appointed a member of the House of Lords in
2015.
Ruby was appointed to the Board on 20 September 2022. The Directors consider Ruby to be independent in line with the Quoted Companies
Alliance Corporate Governance Code for small and mid-size quoted companies.
All Directors are encouraged to challenge and to bring independent judgement to bear on all matters, both strategic and operational.
Biographical details of the Directors can be found on the Group’s website.
All Non-Executive Directors are expected to dedicate at least one day per month to the Group. The Board is satisfied that each of the
Directors are able to allocate sufficient time to the Group to discharge their responsibilities effectively. The number of meetings of the
Board and its Committees are outlined below:
Attendance by Directors
Philip Jacobson
Paul Wise*
Alex Scrimgeour
Adam Kaye
Elizabeth Lake**
Will Worsdell***
Charles Dorfman
Maggie Todd
Michael Rosehill
Ruby McGregor-Smith****
Total meetings held
* Resigned 28 February 2023
** Resigned 28 April 2022
*** Appointed 28 June 2022
**** Appointed 20 September 2022
Board
10
10
11
10
3
5
9
9
11
4
11
Audit
4
n/a
n/a
n/a
4
-
n/a
n/a
4
-
4
Remuneration
6
n/a
n/a
n/a
n/a
n/a
6
n/a
6
2
6
Nomination
2
n/a
n/a
n/a
n/a
n/a
2
n/a
2
-
2
18
Everyman Media Group PLC
Annual report and financial statements
Corporate Governance (cont.)
The Directors have both a breadth and depth of skills and experience to fulfil their roles. The Company believes that the current balance of
skills in the Board as a whole are appropriate and beneficial for all shareholders and stakeholders. Each Director has significant experience
in building a successful business and offer key expertise that are beneficial to the Group as a whole.
To enable each Director to keep their skill-set up to date, individual training needs are identified as part of the annual Board evaluation
process and training is provided as required. All Directors receive regular updates on legal, regulatory and governance issues. In addition,
there are regular ‘deep dives’ from across the business at Board level to ensure the Directors’ understanding of the operational aspects of
the business are kept up to date.
Advisors
One Advisory acts as Group Secretary and support to ensure the necessary information is supplied to Directors on a timely basis and to
enable them to discharge their duties effectively. All Directors have access to the advice of the Group’s solicitors as well as access to
independent professional advice, at the Group’s expense, as and when required.
Neither the Board nor its Committees have sought external advice on a significant matter.
Board evaluation
The Board accepts that the Group does not fully comply with this aspect of the QCA code and has not implemented a Board evaluation. In
the frequent Board meetings, Directors can discuss any areas where they feel a change would benefit the Group, and the independent Group
Secretary and other Group advisers remain on hand to provide impartial advice.
Culture
The Board recognises that its decisions regarding strategy and risk will impact the corporate culture of the Group as a whole and that this
will impact the performance of the Group. Similarly, the tone and culture set by the Board will greatly impact all aspects of the Group as a
whole and the way employees behave. The Corporate Governance arrangements that the Board has adopted are designed to ensure that
the Group delivers long term value to its shareholders and that shareholders have the opportunity to express their views and expectations
for the Group in a manner that encourages open dialogue with the Board. Therefore, the importance of sound ethical values and behaviours
is crucial to the ability of the Group to successfully achieve its corporate objectives.
A large part of the Group’s activities are centred on an open and respectful dialogue with employees, customers and other stakeholders.
The Board places great importance on this aspect of corporate life and seeks to ensure that this flows through all that the Group does. The
Directors consider that the Group has an open culture facilitating comprehensive dialogue and feedback that enables positive and
constructive challenge.
The Board also recognises that as an operator of cinemas within local communities, it has responsibility to engage openly, transparently
and effectively with community stakeholders, local planning and Government agencies.
The Group places considerable emphasis on maintaining good relations with all its employees. The Group places great importance on
managers at each venue being well trained and capable of recruiting, training and developing a strong team and equips them with the
necessary tools in order to provide a positive working environment. The Group regularly communicates important updates with employees
and seeks engagement and consultation whenever making decisions that affect them or their interests. Employees are provided with regular
on-the-job training, including a staff handbook and career development opportunities. The Group places a significant importance on
developing from within.
The Group is an equal opportunities employer and is committed to the employment of people with disabilities and guarantees an interview
for those who meet the minimum selection criteria. The Group provides training and development for people with disabilities tailored, where
appropriate, to ensure they have the opportunity to achieve their potential. If an employee becomes disabled while in our employment the
Group will do its best to retain them, including consulting with them about their requirements, making reasonable and appropriate
adjustments and providing alternative suitable employment where possible.
The Group has an anti-bribery and confidentiality policy in place to ensure the highest standards of personal and professional ethical
behaviour are adhered to. The Company has adopted a code for Directors’ and employees’ dealings in securities in relation to its Ordinary
Shares and related securities which is compliant with AIM as well as being in accordance with the requirements of the Market Abuse
Regulation which came into effect in 2016 and was transposed into British law following Brexit.
There is a system in place for financial reporting and the Board receives regular reports to enable it to carry out these functions in the most
efficient manner. These procedures include the preparation of management accounts, forecast variance analysis and other ad-hoc reports.
There are clearly defined authority limits throughout the Group, including those matters which are reserved specifically for the Board.
The Board has responsibility for the effectiveness of the internal financial control framework. Such a system can only provide reasonable
19
Everyman Media Group PLC
Annual report and financial statements
Corporate Governance (cont.)
and not absolute assurance against material misstatement. The Group does not currently have, nor considers there is currently a need
for, an internal audit function. As the number of venues operated by the Group increases, the Board intends to regularly assess the
ongoing need for strengthening internal financial controls.
The Board’s financial risk management, objectives and policies together with the Board’s policies in respect of credit risk, liquidity risk
and cash flow risk are set out in the notes to the financial statements.
20
Everyman Media Group PLC
Annual report and financial statements
Audit Committee Report
The Audit Committee is chaired by Ruby McGregor-Smith FCA. Philip Jacobson FCA stepped down as Audit Committee Chairman on 1st
January 2023. The Committee also includes Michael Rosehill FCA. Both Ruby and Michael have extensive experience as Chartered
Accountants working both within audit practice and industry. The Audit Committee met four times during the year. The external auditors
attended two of these meetings at the invitation of the Committee Chairman. The Committee also met with the external auditors without
the presence of Executive Directors or management.
Objectives and Responsibilities
The Committee, operating under its Terms of Reference, discharged its responsibilities by, amongst other things, reviewing and
monitoring:
•
the consistency of, and any changes to, accounting policies both on a year-on-year basis and across the parent Company and
the Group.
the methods used to account for significant or unusual transactions.
•
• whether the Company has followed appropriate accounting standards and made appropriate estimates and judgments, taking
•
•
•
•
into account the views of the external auditors.
the effectiveness of the external auditors and considering and making recommendations on the reappointment of the external
auditors.
the adequacy and effectiveness of the Company’s internal financial controls and internal control and risk management systems.
the clarity of disclosure in the Company’s financial reports and the context in which statements are made; and
all material information presented with the financial statements, such as the operating and financial review including the audit
and risk management statements within the corporate governance report.
Financial Reporting
The Committee concluded that the Annual Report and financial statements, taken as a whole, were fair, balanced, and
understandable and provided the information necessary for shareholders to assess the Company’s and the Group’s financial position,
performance, business model and strategy.
The Committee reviewed the 2022 full-year and half-year results announcements and considered matters raised by the external auditors
identifying certain issues requiring its attention.
The Committee has continued its monitoring of the financial reporting process and its integrity, risk management systems and assurance.
External Audit
The Committee will meet with the auditor at least twice a year, once at the planning stage, where the nature and scope of the audit will be
considered, and once post-audit at the reporting stage. The Committee is responsible for reviewing and approving the annual audit plan
with the auditor and ensuring that it is consistent with the scope of the audit engagement and the effectiveness of the audit.
In addition, the Committee is responsible for reviewing the findings of the audit with the external auditor which shall include but not be
limited to discussing any issues which arose during the audit, accounting and audit judgements, levels of errors identified and the
effectiveness of the audit.
BDO LLP were appointed as external auditors in 2020 following an audit tender process carried out in 2020. The Company will look to rotate
auditors through an external audit tender by 2029.
The Committee will engage in discussions with the auditor regarding fees, internal controls and such issues as compliance with accounting
standards and any proposals which the external auditor has made regarding the Company's internal auditing standards.
Risk Management and Internal Controls
The Committee shall keep under review the adequacy and effectiveness of the Company’s internal financial controls and risk management
systems including monitoring the proper implementation of such controls and will review and approve the statements to be included in the
annual report concerning internal controls and risk management. The Committee will also consider annually whether there is a need for an
internal audit function and make a recommendation to the Board. At present, the function is not yet considered necessary as day-to-day
control is sufficiently exercised by the Company’s Executive Directors. Further details on the Company’s risk management and internal
controls can be found on pages 9 and 10.
21
Everyman Media Group PLC
Annual report and financial statements
Audit Committee Report (cont.)
The Committee also has a responsibility to review the adequacy of the Company’s arrangements for its employees and contractors to
confidentially raise any concerns about possible wrongdoings regarding financial reporting or other matters. The Audit Committee shall
ensure that these arrangements allow proportionate and independent investigation of such matters and appropriate follow up action. In
addition, the Committee shall review the Company's procedures for detecting fraud and the Company's systems and controls for the
prevention of bribery and receive reports on non-compliance. The Committee will also monitor and ensure the Company's adherence to its
AIM Rules compliance policy.
Significant issues considered by the Audit Committee during the year
During the year the Committee, Management and the external auditor considered and concluded what the significant risks and issues were
in relation to the financial statements and how these would be addressed. In relation to the 2022 Group financial statements, significant
risks have been identified which are outlined as follows:
• Management override of controls
Fraud in revenue recognition
•
Going concern
•
Impairment of goodwill, property, plant and equipment and right of use assets
•
In addition to the above significant risks, the Committee, management and the external auditor considered the following elevated risks:
•
•
•
•
Accounting for new property leases under IFRS 16
Completeness of lease modifications and rent concessions
System and data migration from SAGE to Microsoft Dynamics 365
Revenue – Film, Food and Beverage
Auditor’s Independence
The Committee approves the external auditor’s terms of engagement, scope of work, the process for the interim review and the annual audit.
It also reviews and discusses with the auditor the written reports submitted and the findings of their work. It has primary responsibility for
making recommendations to the Board, for it to put to the shareholders for their approval at a general meeting, in relation to the appointment,
re-appointment, and removal of the external auditor.
The Committee is also responsible for reviewing and monitoring external auditor's independence and objectivity as well as their
qualifications, expertise and resources and the effectiveness of the audit process, taking into consideration relevant UK and other relevant
professional and regulatory requirements. The Group have considered the auditor's independence and continues to believe that BDO is
independent within the meaning of all UK regulatory and professional requirements and the objectivity of the audit engagement partner and
audit staff are not impaired.
Philip Jacobson
Chair
Audit Committee
11 April 2023
22
Everyman Media Group PLC
Annual report and financial statements
Remuneration Committee Report
The Remuneration Committee is chaired by Michael Rosehill (non-executive Director) and includes Charles Dorfman and Ruby McGregor-
Smith. The Committee meets as required during the year and invites recommendations as to remuneration levels, incentive arrangements
for senior executives and proposals regarding share option awards from the Chief Executive Officer.
The Remuneration Committee reviews the performance of the Executive Directors and makes recommendations to the Board on matters
relating to their remuneration and terms of service. The Remuneration Committee also makes recommendations to the Board on proposals
for the granting of share options and other equity incentives pursuant to any employee share option scheme or equity incentive plans in
operation. The Remuneration Committee meets as and when necessary and met 6 times during 2022.
Bonus plans, share option awards and the Company’s LTIP scheme are regularly reviewed by the Committee to ensure that they are
appropriately incentivising key management.
Responsibilities
The Committee’s principal responsibilities include:
•
•
•
•
•
Determining and agreeing with the Board the framework or broad policy for the remuneration of Executive Management;
Reviewing and having regard to pay and employment conditions across the Company when setting remuneration policy for
Executive Management and especially when determining salary increases;
Approving the design of and determining targets for any performance-related pay schemes operated by the Company;
Overseeing the design and application of share options and any other such reward plan in conjunction with the Board; and
Determining the policy for and scope of pension arrangements for Executive Management.
The Non-Executive Directors, whose remuneration is determined by the Board as a whole, receive fees in connection with their services
provided to the Group, to the Board and to Board Committees.
Certain senior staff and Executive Directors receive basic salaries, annual bonuses according to performance against defined targets, and
certain benefits in kind.
Basic salary
The base salary, benefits in kind and Company pension contributions are determined by the Committee with reference to the experience and
responsibilities of each individual and having regard to prevailing market conditions.
Annual Bonus
In December 2022, the Committee recommended the Board approve a bonus to the Executive Chair, Chief Executive Officer, Finance Director
and Executive Director based on performance targets that were met for the 2022 financial year.
Share Options
The Group’s policy is that in addition to their salaries and bonuses, Executive Directors and senior management should be awarded share
options in order that their interests may be more closely aligned with those of shareholders. The company operates a Long-Term Incentive
Plan (LTIP) and the Committee recommended to the Board that share options were awarded and set the performance criteria (see note 31).
The Group also operates a non-approved share incentive plan, and believes that all the venue managers, head office staff, and the Executive
and senior management team should have the opportunity to participate, alongside shareholders, in the long-term growth and success of
the Group. During the year awards were recommended by the Committee (see note 31).
23
Everyman Media Group PLC
Annual report and financial statements
Remuneration Committee Report (cont.)
Directors’ remuneration
For the year ended 29 December 2022
Director
Salary
Pension
Contributions
Alex Scrimgeour
William Worsdell ACA
Elizabeth Lake FCA
Paul Wise
Adam Kaye
Philip Jacobson FCA
Charles Dorfman
Michael Rosehill FCA
Maggie Todd
Ruby McGregor-Smith FCA
£’000
294
73
51
157
105
36
18
18
40
15
807
For the year ended 30 December 2021
£’000
10
1
3
-
-
-
-
-
-
-
14
Director
Alex Scrimgeour
Elizabeth Lake FCA
Paul Wise
Adam Kaye
Philip Jacobson FCA
Charles Dorfman
Michael Rosehill FCA
Maggie Todd
Salary
£’000
244
177
158
100
30
10
10
19
748
Pension
Contributions
£’000
9
6
-
-
-
-
-
-
15
Other
benefits
£’000
21
-
1
-
-
-
-
-
-
-
22
Other
benefits
£’000
15
3
-
-
-
-
-
-
18
Bonus
Share-based
payments
£’000
44
11
-
20
13
-
-
-
-
-
88
£’000
598
21
-
125
125
-
-
-
-
-
869
Bonus
£’000
40
43
19
13
-
-
-
-
115
Share-based
payments
£’000
750
(142)
56
56
-
-
-
-
720
Total
£’000
967
106
55
302
243
36
18
18
40
15
1,800
Total
£’000
1,058
87
233
169
30
10
10
19
1,616
Other benefits include interest in respect of an amount of uncalled share capital due in respect of the issue of performance shares in
Everyman Media Holdings Limited, a subsidiary of the Company, to Alex Scrimgeour.
Share based payments are valued using the share price at the original grant date.
Remuneration policy for 2023 and future years
The Group remuneration policy is designed to support strategy and promote long-term sustainable success. It is committed to complying
with the principles of good corporate governance in relation to the design of the Group’s remuneration policy. As such, our policy takes
account of the QCA Corporate Governance Code, against which the Company formally reports compliance. The Committee also considers
other best practice guidance such as the QCA Remuneration Committee Guide and the Investment Association’s Principles of Remuneration,
as far as is appropriate to the Group’s management structure, size and listing.
Future salary awards and increases will be set in line with relevant market levels, economic changes and to retain and attract high quality
executives. Performance elements of remuneration will have clearly defined and challenging targets that link rewards to business
performance in the short and medium-term. All variable elements of remuneration are subject to clawback or repayment in the event of
serious financial misstatement or misconduct.
24
Everyman Media Group PLC
Annual report and financial statements
Remuneration Committee Report (cont.)
Consideration of Shareholder Views
The Remuneration Committee considers feedback received from Shareholders during any meetings or otherwise from time to time, when
undertaking the Group’s annual review of its Policy. In addition, the Chairman of the Remuneration Committee will seek to engage directly
with institutional Shareholders and their representative bodies should any material changes be made to the Policy.
Consideration of employment conditions elsewhere in the Group
The Remuneration Committee considers any general basic salary increase for the broader employee population when determining the annual
salary increases for the Executive Directors. The Remuneration Committee did not consult with other employees regarding remuneration of
the Executive Directors.
Michael Rosehill
Chair
Remuneration Committee
11 April 2023
25
Everyman Media Group PLC
Annual report and financial statements
Director’s report
The Directors present their annual report and audited financial statements for the Group for the year ended 29 December 2022
(comparative period: year ended 30 December 2021).
Results and dividends
The results of the Group are included in the strategic report. Further details are shown in the consolidated statement of profit and loss and
other comprehensive income and the related notes to the financial statements. The Group generated a loss after tax for the year of £3.5m
(2021: £5.4m loss). The Directors do not recommend the payment of a dividend (2021: £nil).
Principal activity
The Group is a leading independent cinema group in the UK. Further information is contained in the strategic report. The subsidiaries of
the Group are set out in the related notes to the financial statements.
Financial risk management: objectives and policies
The financial and other risks to which the Group is exposed, together with the Group’s objectives and policies in respect of these risks, are
set out in the strategic report.
Energy and carbon
Everyman recognises that its operation has an environmental impact globally and is committed to monitoring and reducing its emissions.
The Group is also aware of the reporting obligations under The Companies and Limited Liability Partnerships Regulations 2018. The table
below summarises emissions and energy usage to increase the transparency with which the business communicates about the
environmental impact to stakeholders. The increases on last year are due to venues being closed between 1st January and 17th May 2021.
Emissions Source
Natural Gas
Electricity
Fuel for transport (employees only)
Total tCO2e
Total Energy Usage (kWh)
Energy Intensity – CO2t per ft2
2022
904
2,416
12
3,332
17,494,207
0.083
2021
875
1,493
19
2,387
11,888,938
0.062
The EMA methodology has been used to calculate the GhG emissions is in accordance with the relevant requirements of the following
standards:
•
•
•
GHG Reporting Protocol: Corporate Standard
Internal Organisation for Standardisation, ISO (ISO 14064-1:2018)
The Global Reporting Initiative Sustainability Reporting Guidelines
In the period covered by the report, the Group has undertaken the following emissions and energy reduction initiatives:
•
•
•
•
•
New systems on real-time energy usage, measured at appliance level to help pinpoint where energy is being wasted
Air conditioning controls enabling timing, temperature regulation and demand-controlled ventilation for Auditoria based on
occupancy levels
Installation of heat recovery reclaiming a portion of the energy used in heating, venting and air conditioning
Installation of LED lamps and Passive Infrared Sensors in areas of infrequent occupancy to conserve electricity usage
Use of energy saving catering electrical kitchen equipment
Capital structure
The number of Ordinary shares in issue at 29 December 2022 was 91.2m (2021: 91.2m). The Group also issued options over the share
capital of the Company to members of the Board and to certain employees which amounted to 7.0m Ordinary shares (2021: 6.9m Ordinary
shares) which, if exercised, would comprise 7.1% (2021: 7.1%) of the current issued share capital of the Company (see also Directors’
interests below and the related notes). The shares of the Company are quoted on the London AIM market.
26
Everyman Media Group PLC
Annual report and financial statements
Director’s report (cont.)
Going concern
Current trading is in line with management expectations. Given the increased number of wide releases year-on-year, commitment to the
theatrical window from distributors and new investment from streamers in content for cinema, management expect admissions to
continue to recover towards pre-pandemic levels. Paid for Average Ticket Price and Spend per Head have continued to grow steadily
despite well-publicised concerns over consumer spends.
Banking
The Group’s banking arrangements consist of a £25m Revolving Credit Facility (“RCF”) and a £15m Coronavirus Large Business Interruption
Loan Scheme (“CLBILS”). On the 14th March 2023 the RCF was extended by 3 months, to 17th April 2024. The CLBILS, which cannot be
extended, will mature on the previous maturity date of 17th January 2024. The Group’s forecasts demonstrate headroom without the
CLBILS component of the facility.
The Group is actively engaged with its banking partners on a re-finance of both the RCF and the CLBILS and expects to complete this
process in the coming months.
At the end of the year, the Group had drawn down £22.2m on its facilities and held £3.7m in cash; the undrawn facility was therefore
£18m and net banking debt £18.5m.
The facility covenants were amended temporarily to provide liquidity through the pandemic, when the facility amendments were made in
the first quarter of 2021. From June 2022, the covenants returned to the pre-pandemic tests based on leverage and fixed cover charge. The
Group has operated within these covenants all year and expects to continue to do so going forward.
Sale of Crystal Palace Freehold
On 16 January 2023, the Group completed the sale and leaseback of its freehold property at 25 Church Road, London SE19 2TE. Proceeds
from the sale, after associated fees and disbursements, were £3.8m. At the balance sheet date, the property was held for sale in ECPee
Limited, with a carrying value of £3.2m.
This additional liquidity has reduced the Group’s reliance on debt to finance its expansion programme during 2023.
Salisbury Freehold
During the year the Group acquired the freehold at Gala Clubs, Endless Street, Salisbury SP1 1DP, which will open as a new four-screen
cinema during 2023. The Group’s forecasts do not consider the sale of this freehold and subsequent leaseback within the next 12 months.
However, should the need for additional liquidity arise, management are of the view that this could be brought forward, as required.
Base case Scenario
The period forecast is up to 30 June 2024.
The business has now traded for in excess of 18 months without Government-enforced closures due to the pandemic, and the Board
approved budget and latest forecasts assume that this will continue indefinitely. The forecast assumes growth in like-for-like admissions
vs. 2022, given the fuller film release schedule as the industry recovers from pandemic-related production delays, but remain below pre-
pandemic levels. Increases in forecast costs reflect the current inflationary environment. New openings are forecast at 6 for 2023, with
corresponding capital investment.
In this scenario the Group maintains significant headroom in its banking facilities.
Stress testing
The Board considers budget assumptions on admissions to be very conservative, given that they do not demonstrate a return to pre-
pandemic levels until 2025.. A reduction in budgeted admissions of 8% each month from March 2023 has been modelled. This scenario
would cause a breach in the Fixed Cover Charge covenant in May 2023.
27
Everyman Media Group PLC
Annual report and financial statements
Director’s report (cont.)
If such a scenario were to occur, Management would be able to temporarily reduce administrative expenditure to increase EBITDA and
avoid a breach, without material impact to the Group’s operations and the quality of customer experience. In this scenario, the Group
would remain compliant with the Adjusted Leverage covenant.
The Directors believe that the Group is well-placed to manage its financing and other business risks satisfactorily and have a reasonable
expectation that the Group will have adequate resources to continue in operation for at least 12 months from the signing date of these
consolidated financial statements. The Board considers that an 8% reduction in budgeted admissions is plausible but unlikely, particularly
in light of business performance in January and February 2023 and the increase in the number of wide releases expected over the
remainder of the year. As a result, the Board does not believe this to represent a material uncertainty, and therefore consider it
appropriate to adopt the going concern basis of accounting in preparing the financial statements.
Substantial shareholdings
As at 29 December 2022 the Company was aware of the following interests in 3% or more of the Company’s Ordinary share capital as set
out below.
Shareholder
Blue Coast Private Equity LP
BlackRock
Tellworth Investments
Canaccord Genuity Wealth Management
Charles Dorfman*
Adam Kaye
Samuel Kaye
Otus Capital Management
Gresham House Asset Management
Schroder Investment Management
Shore Capital
Paul Wise**
% of issued share
capital 2022
19.58%
9.34%
8.63%
7.99%
6.44%
5.98%
5.51%
5.07%
3.96%
3.80%
3.29%
3.28%
% of issued share
capital 2021
18.98%
8.40%
9.03%
8.72%
6.44%
5.87%
5.20%
5.02%
3.97%
3.80%
3.29%
3.24%
*Of the 5,870,027 Ordinary shares Charles Dorfman is interested in 3,213,876 (2021:3,213,876) Ordinary shares are held by the Lloyd Dorfman Children’s Settlement.
Charles Dorfman is one of the potential beneficiaries of the settlement.
**Of the 2,986,752 Ordinary shares Paul Wise is interested in, 2,260,052 (2021: 2,260,052) Ordinary shares are held by the Paul Wise Family Trust. Paul Wise is one of
the potential beneficiaries of the Trust.
Directors
Biographical details of continuing Directors are set out on the Company’s website: investors.everymancinema.com.
The Directors of the Company during the year were:
Directors
Adam Kaye
Alex Scrimgeour
Charles Dorfman (R,N)
Elizabeth Lake FCA (resigned 28 March 2022)
Maggie Todd
Michael Rosehill FCA (R,N,A)
Paul Wise (resigned 28 February 2023)
Philip Jacobson FCA
Ruby McGregor-Smith (R,N,A) (appointed 20 September 2022)
William Worsdell ACA (appointed 28 June 2022)
Function
Executive Director
Chief Executive Officer
Non-Executive Director
Chief Financial Officer
Independent Non-Executive Director
Non-Executive Director
Executive Chairman
Non-Executive Chairman
Independent Non-Executive Director
Finance Director
R = Member of the remuneration committee
N = Member of the nominations committee
A = Member of the audit committee
Philip Jacobson resigned from the Remuneration, Nomination and Audit Committees on 1 January 2023.
28
Everyman Media Group PLC
Annual report and financial statements
Director’s report (cont.)
Directors’ interests in the Company
The following Directors held shares in the Company at the year-end (there were no significant changes between the shareholdings at the
year end and the date of this report):
Director
Charles Dorfman
Adam Kaye
Paul Wise
Alex Scrimgeour
Michael Rosehill FCA*
Philip Jacobson FCA
Number of
Ordinary shares
2022
5,870,027
5,449,956
2,986,752
250,974
218,710
98,336
% of issued
share capital
2022
6.44%
5.98%
3.28%
0.28%
0.24%
0.11%
Number of
Ordinary shares
2021
5,870,027
5,349,956
2,956,752
240,974
218,710
98,336
% of issued
share capital
2021
6.44%
5.87%
3.24%
0.26%
0.24%
0.11%
*Michael Rosehill is a Director of Blue Coast Private Equity and therefore has an interest in its shareholding.
As at the Balance Sheet date, the following options over Ordinary shares were held by the Directors (see also notes to the financial
statements):
Issued in
the year
Number
Lapsed in
the year
Number
Exercised
in the year
Number
Director
Grant Date
Exercise
Price
Pence
Alex Scrimgeour
8 April 21
30 July 21
24 Oct 22
Paul Wise
12 Nov 20
Adam Kaye
12 Nov 20
Philip Jacobson
29 Oct 13
Charles Dorfman
29 Oct 13
Michael Rosehill
04 Nov 13
William Worsdell
05 May 22
27 June 22
24 Oct 22
100
10
10
94
94
83
83
83
130
111
10
30
December
2021
Number
1,000,000
120,430
-
800,000
800,000
100,000
50,000
50,000
-
186,667
-
(120.430)
(186,667)
-
-
-
-
-
-
-
-
-
-
-
-
-
100,000
100,000
46,561
-
-
(46,561)
Total
2,920,430
433,228
(353,658)
29 December
2022
Number
1,000,000
-
-
800,000
800,000
100,000
50,000
50,000
100,000
100,000
-
3,000,000
-
-
-
-
-
-
-
-
-
-
-
In addition to the options in the table above, Alex Scrimgeour holds Growth Shares in Everyman Media Holdings Limited which subject to
certain performance conditions can be exchanged for new shares in Everyman Media Group PLC.
Director
Grant
Date
Vesting
Conditions
Exercise
Price
Pence
30 December
2021
Number
Issued in
the year
Number
Lapsed in
the year
Number
Exercised
in the year
Number
29
December
2022
Alex Scrimgeour
10 June 21
10 June 21
19
19
10
10
Total
1,000,000
1,000,000
2,000,000
-
-
-
-
-
-
Number
1,000,000
1,000,000
2,000,000
-
-
-
29
Everyman Media Group PLC
Annual report and financial statements
Director’s report (cont.)
Details of the option scheme vesting and performance conditions are set out at note 32 of the financial statements. No share options
(2021: Nil) were exercised by Directors during the year.
Policy and practice on the payment of creditors
The policy of the Group is to settle supplier invoices within the terms and conditions of trade agreed with individual suppliers, unless other
arrangements have been agreed.
Employees
Employee involvement
The Group places considerable emphasis on maintaining good relations with all its employees. The Group places great importance on
managers at each venue being well trained and capable of recruiting, training and developing a strong team and the Group equips them
with the necessary tools in order to provide a positive working atmosphere.
The year has again been challenging for all our employees, and the Group has maintained regularly communication throughout the year,
particularly during periods of closure and furlough. The Group has continued to seek engagement and consultation whenever making
decisions that affect them or their interests. Employees are provided with regular on-the-job training and career development
opportunities and the Group places a significant importance on developing from within.
Employment of disabled persons
The Group is an equal opportunities employer and is committed to the employment of people with disabilities and guarantees an interview
for those who meet the minimum selection criteria. The Group provides training and development for people with disabilities tailored,
where appropriate, to ensure they have the opportunity to achieve their potential. If a Group employee becomes disabled while in our
employment the Group will do its best to retain them, including consulting with them about their requirements, making reasonable and
appropriate adjustments and providing alternative suitable employment where possible.
Political and charitable donations
The Group made charitable donations in the year of £8,833 (2021: £Nil).
Post balance sheet events
Sale and leaseback of Crystal Palace venue
On 16 January 2023, the Group completed the sale and leaseback of its freehold property at 25 Church Road, London SE19 2TE. Proceeds
from the sale, after associated fees and disbursements, were £3.8m. At the balance sheet date, the property was held for sale in ECPee
Limited, with a carrying value of £3.2m.
As a result of the transaction, the Group will recognise a net profit on disposal of £0.6m in 52-week period ended 28 December 2023.
The leaseback element of the transaction is accounted for as a finance lease under IFRS 16. This will result in the recognition of a right of
use asset and a lease liability in 2023.
Under the terms of the lease agreement, the Group has leased back the property for a period of 25 years at annual rent of £240,000. The
rent is to be reviewed every five years. The first and second reviews are to be upwards only on an indexed basis by reference to increases
in the Retail Prices All Items Indexed with a collar of 1% per annum and a cap of 4% per annum. The third and fourth reviews are on an
upwards only basis to be the higher of the indexed rent (increased in accordance with the mechanism agreed for the first two reviews) and
the open market rent pursuant to an open market rent review mechanism.
Extension of banking facilities
On 14th March 2023, the Group extended its £25m revolving credit facility (“RCF”) by a period of 3 months, to 17 April 2024. The Group’s
residual £15m facility is a Coronavirus Large Business Interruption Loan Scheme (“CLBILS”) and cannot be extended beyond its original
maturity date of 17 January 2024.
The Group has begun a process to re-finance both the RCF and the CLBILS and expects to complete this in due course.
30
Everyman Media Group PLC
Annual report and financial statements
Director’s report (cont.)
Disclosure of information to auditor
In the case of each person who was a Director at the time this report was approved:
−
−
So far as that each Director was aware, there was no relevant available information of which the Company’s auditor is
unaware
Each Director has taken all steps that they ought to have taken as a Director to make himself aware of any relevant audit
information and to establish that the Company’s auditor was aware of that information.
Auditor
In accordance with s489 of the Companies Act 2006, a resolution for the re-appointment of BDO LLP as auditor of the Company is to be
proposed at the forthcoming annual general meeting.
Internal financial control
The Group operates a system of internal financial controls commensurate with its current size and activities, which is designed to ensure
that the possibility of misstatement or loss is kept to a minimum. There is a system in place for financial reporting and the Board receives
regular reports to enable it to carry out these functions in the most efficient manner. These procedures include the preparation of
management accounts, forecast variance analysis and other ad hoc reports. There are clearly defined authority limits throughout the
Group, including those matters which are reserved specifically for the Board.
The Board has responsibility for the effectiveness of the internal financial control framework. Such a system can only provide
reasonable and not absolute assurance against material misstatement. The Group does not currently have, nor considers there is
currently a need for, an internal audit function. As the number of sites operated by the Group increases the Board intends to regularly
assess the ongoing need for strengthening internal financial controls.
The Board’s financial risk management, objectives and policies together with the Board’s policies in respect of price risk, credit risk,
liquidity risk and cash flow risk are set out in the notes to the financial statements.
On behalf of the Board
Alex Scrimgeour
CEO
Everyman Media Group PLC
Studio 4, 2 Downshire Hill
London
NW3 1NR
11 April 2023
31
Everyman Media Group PLC
Annual report and financial statements
Statement of Directors’ responsibilities in respect of the annual report and financial statements
The Directors are responsible for preparing the annual report and the Group and parent Company financial statements in accordance with
applicable laws and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors are required to
prepare the Group financial statements in accordance with UK adopted International Accounting Standards and the parent Company
financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards
and applicable law).
Under company law, the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view
of the state of affairs of the Group and parent Company and of the profit or loss of the Group for that period.
In preparing each of the Group and Parent company financial statements, the Directors are required to:
Select suitable accounting policies and then apply them consistently.
•
• Make judgements and estimates that are reasonable, relevant, reliable and prudent.
•
For the Group financial statements, state whether they have been prepared in accordance with UK adopted international
accounting standards subject to any material departures disclosed and explained in the financial statements.
For the parent Company financial statements, state whether applicable UK accounting standards have been followed, subject
to any material departures disclosed and explained in the financial statements.
Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and parent
Company will continue in business.
•
•
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent Company’s
transactions and disclose with reasonable accuracy at any time the financial position of the parent Company and enable them to ensure
that its financial statements comply with the Companies Act 2006. They are responsible for such internal control as they determine is
necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and
have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and
detect fraud and other irregularities.
The Directors are responsible for ensuring the annual report and the financial statements are made available on a website. Financial
statements are published on the company's website in accordance with legislation in the United Kingdom governing the preparation and
dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the
company's website is the responsibility of the Directors. The Directors' responsibility also extends to the ongoing integrity of the financial
statements contained therein.
32
Everyman Media Group PLC
Annual report and financial statements
Independent auditor's report to the members of Everyman Media Group PLC
Opinion on the financial statements
In our opinion:
•
the financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at 29
December 2022 and of the Group’s loss for the year then ended;
the Group financial statements have been properly prepared in accordance with UK adopted international accounting
standards;
the Parent Company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted
Accounting Practice; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
•
•
•
We have audited the financial statements of Everyman Media Group PLC (the ‘Parent Company’) and its subsidiaries (the ‘Group’) for the
year ended 29 December 2022 which comprise the consolidated statement of profit and loss and other comprehensive income, the
consolidated balance sheet, the consolidated statement of changes in equity, the consolidated cash flow statement, the company balance
sheet and the company statement of changes in equity and notes to the financial statements, including a summary of significant
accounting policies.
The financial reporting framework that has been applied in the preparation of the Group financial statements is applicable law and UK
adopted international accounting standards. The financial reporting framework that has been applied in the preparation of the Parent
Company financial statements is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101
Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities
under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We remain independent of the Group and the Parent Company in accordance with the ethical requirements that are relevant to our audit of
the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the preparation
of the financial statements is appropriate. Our evaluation of the Directors’ assessment of the Group and the Parent Company’s ability to
continue to adopt the going concern basis of accounting is set out in the related key audit matter section of this report.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually
or collectively, may cast significant doubt on the Group and the Parent Company’s ability to continue as a going concern for a period of at
least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this
report.
33
Everyman Media Group PLC
Annual report and financial statements
Overview
Coverage1
100% (2021: 100%) of Group revenue
100% (2021: 100%) of Loss before tax
100% (2021: 99%) of Group total assets
Impairment of goodwill, property, plant and equipment and right-
of-use asset
Leases – Impact of rent concessions and modifications
Key audit matters
Going concern assessment and disclosure
2022
2021
✓
x
✓
✓
✓
✓
The impact of rent concessions and modifications on leases is no longer a key audit matter as few
variations to leases arrangements have arisen during the current year. Variation to lease terms was
prevalent in the prior period in response to Covid-19. For these reasons, it was not considered to be a
significant risk.
Group financial statements as a whole
Materiality
£800,000 (2021: £460,000) based on 1% (2021: 0.9%) of revenue recorded for the year ended 29 December
2022
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group and its environment, including the Group’s system of internal
control, and assessing the risks of material misstatement in the financial statements. We also addressed the risk of management override
of internal controls, including assessing whether there was evidence of bias by the Directors that may have represented a risk of material
misstatement.
We analysed the key financial metrics and risk factors of the Group’s components to determine those we consider significant to the Group.
We considered Everyman Media Group PLC, Everyman Media Holdings Limited, and Everyman Media Limited to be significant
components. As such, these companies were subject to full scope audits to their respective component materiality performed by the Group
engagement team.
In respect of non-significant components, we performed analytical procedures together with further limited procedures over certain
balance sheet and expense items where these were material. We considered each key audit matter identified below in respect of the non-
significant components to ensure that these risks were appropriately addressed through our work performed at a Group level.
The Group audit team obtained an understanding of the internal control environment related to the financial reporting process and
assessed the appropriateness, completeness and accuracy of Group journals and other adjustments performed on consolidation.
1 These are areas which have been subject to a full scope audit by the Group engagement team
34
Everyman Media Group PLC
Annual report and financial statements
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements
of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we
identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit, and
directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter
Impairment of
goodwill,
property, plant
and equipment
and right-of-use
asset
See accounting policy in
note 2, note 15 Property,
plant and equipment, note
17 Leases, note 18 Goodwill,
intangible assets and
impairment.
The Group has goodwill of
£7,352,000 (2021:
£7,352,000), property, plant
and equipment of
£90,067,000 (2021:
£81,848,000) and right-of-
use assets of £58,920,000
(2021: £58,593,000)
Goodwill and property, plant and equipment
(PPE), including the right-of-use assets (ROU
Assets) are significant balances. Cash
Generating Units (CGU) are assessed for
impairment on an individual theatre basis,
which management believes is the lowest
level for which there are identifiable cash
flows.
CGU’s containing goodwill are subject to
annual impairment reviews. The remaining
CGU’s have been subject to an impairment
trigger analysis.
Impairment reviews require use of
assumptions, including discount rates,
forecast admissions growth, average ticket
price and spend per head.
The assessment of any potential impairment
of the carrying values are subject to
management judgment and estimation
uncertainty where there is a requirement to
estimate the recoverable amount.
Due to the high degree of estimation
uncertainty included in impairment models
we consider this to be a significant risk and
key audit matter.
How the scope of our audit addressed the key audit
matter
We have obtained management’s impairment analysis
and:
•
•
•
•
checked the mathematical accuracy of the cash flow
forecasts and impairment models, checking
consistency with the requirements of the applicable
accounting standard;
agreed the budgeted performance data to board
approved forecasts and evaluated the process by
which management prepared its forecast, including
whether it appropriately factored in the potential
impacts of cost-of-living crisis, and any expected
decline in consumer spending;
challenged the appropriateness of key estimates
and assumptions used by management within the
forecast model including admissions, average ticket
price and spend per head, comparing these against
prior periods, industry peers and external sources of
data including industry outlook reports;
reviewed management’s sensitivity analysis and
considered whether a reasonable change in
assumptions could indicate a potential impairment;
and
• with the assistance of our internal valuation
experts, we assessed the appropriateness of the
discount rate and impairment model used.
We also critically reviewed completeness and accuracy of
disclosures relating to assumptions used in
management’s model.
Key observations:
We are satisfied that the judgements applied by management and disclosures within the financial statements are appropriate.
35
Everyman Media Group PLC
Annual report and financial statements
Key audit matter
Going concern
assessment and
disclosure
(Group and Parent
Company)
See accounting
policy in note 2.
The financial statements explain how the
Board has formed a judgement that it is
appropriate to adopt the going concern basis
of preparation for the Group and Parent
Company.
Trading has improved from the prior period
driven by higher admissions, opening of two
new venues, and no government-imposed
closures for the Covid pandemic. All venues
traded through the year, aside from
temporary closures for refurbishments.
Despite these improvements the macro -
economic environment is challenging with
high inflation and energy prices representing
risk to consumer confidence and availability
of discretionary income.
The Group has a banking facility that has
been partially drawn down, and has
covenants to comply with.
The risk for our audit is whether or not the
above, or related matters, are such that they
amount to a material uncertainty that may
have cast significant doubt about the ability
to continue as a going concern. Had they
been such, then that fact would have been
required to have been disclosed, and
therefore there is also a risk of the going
concern disclosures not being sufficient.
How the scope of our audit addressed the key audit
matter
We considered whether these risks could plausibly affect
the liquidity or covenant compliance in the going concern
period by assessing the Directors’ sensitivities over the
level of available financial resources and covenant
thresholds. Our procedures
included:
•
•
•
•
•
•
obtaining an understanding of how the Directors
undertook the going concern assessment process to
determine if we considered it to be appropriate for
the current economic circumstances. This included
checking that it included an assessment of the
impact of rising inflation, reduction in consumer
disposable income;
obtaining the Directors’ base case forecast and
stress test scenarios underlying the going concern
assessment and considering sensitivities over the
level of financial resources indicated by the Group’s
financial forecasts. Key estimates and assumptions
within the forecasts, included admissions, average
ticket prices and spend per head, the
reasonableness of which were considered with
reference to historical levels achieved both pre-
Covid-19 and following re-opening in May 2021;
confirming compliance with loan covenants is
expected during the forecast period based on the
above scenarios to identify the existence of
breaches.
obtain loan facilities extensions agreements, and
checking management have considered, the
likelihood of higher interest cost.
comparing post year end trading performance
against the forecasts to evaluate the achievability
of the forecasts prepared; and
considering whether the going concern disclosures
in note 2 to the financial statements gives a full and
accurate description of the Directors’ assessment of
going concern.
Key observations:
As disclosed above in the Conclusions relating to going concern section, we found the going concern disclosure in note 2 without any
material uncertainty to be acceptable (2021: acceptable).
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We
consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions of
reasonable users that are taken on the basis of the financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality
level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not
necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular
circumstances of their occurrence, when evaluating their effect on the financial statements as a whole.
36
Everyman Media Group PLC
Annual report and financial statements
Based on our professional judgement, we determined materiality for the financial statements as a whole and performance materiality as
follows:
Materiality
Basis for determining materiality
Rationale for the benchmark applied
Group financial statements
2021
2022
£460,000
£800,000
0.9% of Group
1% of Group
revenue
revenue
As the Group continues to expand through
investment in new venues, advertising and
promotion, we consider revenue to be the
most stable measure on which to base
materiality and provides users of the
financial statements with the most
appropriate benchmark to assess
performance of the Group.
Parent company financial statements
2022
£600,000
0.6% of Company
net assets
2021
£220,000
0.2% of Company
net assets
We have selected net assets as the
appropriate benchmark as it most
accurately reflects the Parent Company’s
status as a non- trading holding company.
Performance materiality
Basis for determining performance materiality
£560,000
£322,000
£420,000
£154,000
70% of Group
Materiality
70% of Parent company Materiality
Rationale for the percentage applied for
performance materiality
In setting the level of performance materiality, we have considered the level of specific
risk associated with the audit, including the potential for aggregation and sampling risk
across the Group.
Component materiality
For the purposes of our Group audit opinion, we set materiality for each significant component of the Group , apart from the Parent
Company whose materiality is set out above, based on a percentage of between 25% and 98% (2021: 31% and 98%) of Group materiality
dependent on the size and our assessment of the risk of material misstatement of that component. Component materiality ranged from
£200,000 to £780,000 (2021: £144,000 to £450,000). In the audit of each component, we further applied performance materiality levels of
70% (2021: 70%) of the component materiality to our testing to ensure that the risk of errors exceeding component materiality was
appropriately mitigated.
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual audit differences in excess of £32,000 (2021: £18,400).
We also agreed to report differences below this threshold that, in our view, warranted reporting on qualitative grounds.
Other information
The directors are responsible for the other information. The other information comprises the information included in the Annual report and
financial statements other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not
cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance
conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be
materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine
whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we
conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during the course of the audit, we are required by the Companies
Act 2006 and ISAs (UK) to report on certain opinions and matters as described below.
Strategic
Directors’ report
report
and
In our opinion, based on the work undertaken in the course of the audit:
•
the information given in the Strategic report and the Directors’ report for the financial year for which
the financial statements are prepared is consistent with the financial statements; and
37
Everyman Media Group PLC
Annual report and financial statements
•
the Strategic report and the Directors’ report have been prepared in accordance with applicable legal
requirements.
In the light of the knowledge and understanding of the Group and Parent Company and its environment
obtained in the course of the audit, we have not identified material misstatements in the Strategic report
or the Directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
•
•
adequate accounting records have not been kept by the Parent Company, or returns adequate for our
audit have not been received from branches not visited by us; or
the Parent Company financial statements are not in agreement with the accounting records and
returns; or
certain disclosures of Directors’ remuneration specified by law are not made; or
•
• we have not received all the information and explanations we require for our audit.
Matters on which we are
report by
to
required
exception
Responsibilities of Directors
As explained more fully in the Statement of Directors' responsibilities in respect of the annual report and financial statements, the
Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for
such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the Parent Company’s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
Directors either intend to liquidate the Group or the Parent Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Extent to which the audit was capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities, including fraud is detailed below:
Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and
regulations, our procedures included the following:
•
•
obtaining an understanding of the legal and regulatory frameworks that the Group operates in, focusing on those laws and
regulations that had a direct effect on the financial statements or that had a fundamental effect on the operations of the Group.
The significant laws and regulations we considered in this context included the UK Companies Act, the accounting frameworks,
Alternative Investment Market (AIM) rules and relevant tax legislation.
enquiring of management and the audit committee, including obtaining and reviewing supporting documentation, concerning
the Group’s policies and procedures relating to:
o
o
o
identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of
non-compliance;
detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged
fraud;
the internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations; and
38
Everyman Media Group PLC
Annual report and financial statements
•
discussing among the engagement team how and where fraud might occur in the financial statements and any potential
indicators of fraud. As part of this discussion, we identified the potential for fraud in the following areas:
o management override of controls and revenue recognition, specifically in relation to recording of journal postings,
and
o where significant estimation uncertainty and judgements are required, such as impairment testing of goodwill,
leases and property, plant and equipment as set out in the key audit matters section.
Audit response to risks identified
Our procedures to respond to risks identified included the following:
•
•
•
•
•
reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with relevant
laws and regulations discussed above;
enquiring of management and the audit committee concerning actual and potential litigation and claims;
performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material
misstatement due to fraud;
reading minutes of meetings of those charged with governance and reviewing correspondence with HMRC; and
in addressing the risk of fraud in revenue and through management override of controls, testing the appropriateness of journal
entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a
potential bias; and assessing if there were any significant transactions that are unusual, and if so, evaluating the business
rationale.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members who were all
deemed to have appropriate competence and capabilities and remained alert to any indications of fraud or non-compliance with laws and
regulations throughout the audit.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of
not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve
deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit
procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in
the financial statements, the less likely we are to become aware of it.
A further description of our responsibilities is available on the Financial Reporting Council’s website at:
www frc org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the Parent Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken so that we might state to the Parent Company’s members those matters we are required to
state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Parent Company and the Parent Company’s members as a body, for our audit work, for this report,
or for the opinions we have formed.
Daniel Henwood (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
Reading, UK
11 April 2023
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
39
Everyman Media Group PLC
Annual report and financial statements
Consolidated statement of profit and loss and other
comprehensive income for the year ended 29 December 2022
Revenue
Cost of sales
Gross profit
Other Operating Income
Impairment reversal
Administrative expenses
Operating profit /(loss)
Financial expenses
Loss before tax
Tax charge
Loss for the year
Other comprehensive income for the year
Total comprehensive income for the year
Basic loss per share (pence)
Diluted loss per share (pence)
All amounts relate to continuing activities.
Year ended
Year ended
29 December
30 December
2022
£000
78,817
(28,338)
2021
£000
49,027
(18,129)
50,479
30,898
622
-
(50,699)
402
(3,906)
3,800
2,504
(39,363)
(2,161)
(3,255)
(3,504)
(5,416)
-
(14)
(3,504)
-
(5,430)
69
(3,504)
(5,361)
(3.84)
(3.84)
(5.96)
(5.96)
Note
6
11
12
13
14
14
40
Everyman Media Group PLC
Annual report and financial statements
Non-GAAP measure: adjusted EBITDA
Adjusted EBITDA
Before:
Depreciation and amortisation
Disposal of Property, Plant & Equipment
Impairment reversal
Pre-opening expenses
Exceptional
Share-based payment expense
Operating profit / (loss)
Year ended
Year ended
29 December
30 December
2022
£000
14,527
(11,725)
(434)
-
(195)
(234)
(1,537)
402
2021
£000
8,281
(11,727)
-
2,504
(147)
-
(1,072)
(2,161)
15/17/18
15
31
41
Everyman Media Group PLC
Annual report and financial statements
Consolidated balance sheet at 29 December 2022
Registered in England and Wales
Company number: 08684079
Note
29 December
2022
£000
30 December
2021
£000
Assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Intangible assets
Trade and other receivables
Asset held for sale
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Total assets
Liabilities
Current liabilities
Loans and borrowings
Other provisions
Trade and other payables
Lease liabilities
Non-current liabilities
Loans and borrowings
Other provisions
Lease liabilities
Total liabilities
Net assets
Equity attributable to owners of the Company
Share capital
Share premium
Merger reserve
Other reserve
Retained earnings
Total equity
15
17
18
22
16
20
22
21
24
28
23
17
24
28
17
30
30
30
90,067
58,920
9,312
173
158,472
3,219
161,691
690
5,840
3,701
10,231
171,922
247
-
15,571
3,014
18,832
22,000
1,362
83,459
106,821
125,653
46,269
9,118
57,112
11,152
83
(31,196)
46,269
81,848
58,593
8,906
177
149,524
-
149,524
711
5,649
4,240
10,600
160, 124
119
393
15,994
2,633
19,139
12,500
1,118
79,147
92,765
111,904
48,220
9,117
57,097
11,152
83
(29,229)
48,220
These financial statements were approved by the Board of Directors and authorised for issue on 11 April 2023 and signed on its behalf by:
Will Worsdell
Finance Director
42
Everyman Media Group PLC
Annual report and financial statements
Consolidated statement of changes in equity for the year ended 29 December 2022
Share
capital
£000
Share
premium
£000
Merger
reserve
£000
Other
reserve
£000
Retained
earnings
£000
Total
Equity
£000
Note
Balance at 31 December 2020
9,110
57,038
11,152
Loss for the year
Retranslation of foreign currency
denominated subsidiaries
Total comprehensive income
Shares issued in the period
Share-based payments
Growth Shares
Total transactions with owners of the parent
30
31
-
-
-
7
-
-
7
-
-
-
59
-
-
59
-
-
-
-
-
-
-
Balance at 30 December 2021
9,117
57,097
11,152
Loss for the year
Total comprehensive income
Shares issued in the period
Share-based payments
Total transactions with owners of the parent
30
31
-
-
1
-
1
-
-
15
-
15
-
-
-
-
-
(6)
-
69
69
-
-
20
20
83
-
-
-
-
-
(24,871)
52,423
(5,430)
(5,430)
-
69
(5,430)
(5,361)
-
1,072
-
1,072
66
1,072
20
1,158
(29,229)
48,220
(3,504)
(3,504)
(3,504)
(3,504)
-
1,537
1,537
16
1,537
1,553
Balance at 29 December 2022
9,118
57,112
11,152
83
(31,196)
46,269
43
Everyman Media Group PLC
Annual report and financial statements
Consolidated cash flow statement for the year ended 29 December 2022
Note
12
13
15,17,18
31
30
25
25
17
17
17
Cash flows from operating activities
Loss for the year
Adjustments for:
Financial expenses
Income tax expense
Operating profit/(loss)
Depreciation and amortisation
Impairment reversal
Loss on disposal of property, plant and equipment
Rent concessions
Gain on lease derecognition
Share-based payment expense
Changes in working capital:
Decrease/ (Increase) in inventories
Increase in trade and other receivables
(Decrease)/Increase in trade and other payables
(Decrease)/ Increase in provisions
Net cash generated from operating activities
Cash flows from investing activities
Acquisition of property, plant and equipment
Acquisition of intangible assets
Net cash used in investing activities
Cash flows from financing activities
Proceeds from the issuance of shares
Drawdown of bank borrowings
Repayment of bank borrowings
Lease payments – interest
Lease payments – capital
Landlord capital contributions received
Interest paid
Net cash generated from/ (used in) financing activities
Net (decrease)/ increase in cash and cash equivalents
Exchange loss on cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
The Group had £18,000,000 of undrawn funds available (2021: £27,500,000) of the loan facility at the year end
29 December
2022
£000
30 December
2021
£000
(3,504)
3,906
-
402
11,725
-
434
-
(99)
1,537
13,999
21
(187)
(1,658)
(378)
11,797
(18,884)
(1,058)
(19,942)
16
9,500
-
(2,851)
(3,210)
5,005
(854)
7,606
(539)
-
4,240
3,701
(5,430)
3,255
14
(2,161)
11,727
(2,504)
488
(701)
-
1,072
7,921
(326)
(2,844)
7,067
384
12,202
(7,391)
(422)
(7,813)
86
6,000
(2,500)
(2,587)
(1,526)
500
(519)
(546)
3,843
69
328
4,240
44
Everyman Media Group PLC
Annual report and financial statements
Company balance sheet as at 29 December 2022
Registered in England and Wales
Company number: 08684079
Assets
Non-current assets
Trade and other receivables
Property, plant and equipment
Right-of-use assets
Investments
Deferred tax assets
Current assets
Trade and other receivables
Total assets
Liabilities
Current liabilities
Trade and other payables
Lease liabilities
Loans and borrowings
Non-current liabilities
Loans and borrowings
Lease liabilities
Other provisions
Total liabilities
Net assets
Equity
Equity attributable to owners of the Company
Ordinary shares
Share premium
Merger reserve
Retained earnings
Total equity
Note
22
15
17
19
29
23
17
24
24
17
28
30
30
30
29 December
30 December
2022
£000
89,767
-
8,347
31,994
188
2021
£000
76,772
43
8,867
31,994
150
130,296
117,826
-
130,296
176
118,002
524
352
247
1,123
22,000
9,459
84
31,543
32,666
97,630
9,118
57,112
20,336
11,064
97,630
48
679
119
846
12,500
9,926
84
22,510
23,356
94,646
9,117
57,097
20,336
8,096
94,646
The Company profit for the year was £2,029,000 (2021: £2,528,000).
These financial statements were approved by the Board of Directors and authorised for issue on 11 April 2023 and signed on its behalf by:
Will Worsdell
Finance Director
45
Everyman Media Group PLC
Annual report and financial statements
Company statement of changes in equity for the year ended 29 December 2022
Share
capital
£000
Share
Merger
Retained
premium
Reserve
earnings
£000
£000
£000
Total
equity
£000
Note
Balance at 31 December 2020
Profit for the year
Total comprehensive income
Shares issued in the period
Share-based payment expense
Total transactions with owners of the parent
Balance at 30 December 2021
Profit for the year
Total comprehensive income
Shares issued in the period
Share-based payment expense
Total transactions with owners of the parent
30
32
30
31
9,110
57,038
20,336
4,943
91,427
-
-
-
2,528
2,528
-
7
-
7
-
59
-
59
-
-
-
-
2,528
2,528
-
625
625
66
625
691
9,117
57,097
20,336
8,096
94,646
-
-
1
-
1
-
-
15
-
15
-
-
-
-
-
2,029
2,029
2,029
2,029
-
939
939
16
939
955
Balance at 29 December 2022
9,118
57,112
20,336
11,064
97,630
46
Everyman Media Group PLC
Annual report and financial statements
Notes to the financial statements
1 General information
Everyman Media Group PLC and its subsidiaries (together, the Group) are engaged in the ownership and management of cinemas in the
United Kingdom. Everyman Media Group PLC (the Company) is a public company limited by shares registered, domiciled and incorporated
in England and Wales, in the United Kingdom (registered number 08684079). The address of its registered office is Studio 4, 2 Downshire
Hill, London NW3 1NR. All trade takes place in the United Kingdom.
2 Basis of preparation and accounting policies
The consolidated financial statements of the Group have been prepared in accordance with UK adopted International Accounting
Standards. The Parent Company financial statements have been prepared in accordance with United Kingdom Accounting Standards,
including Financial Reporting Standard 101 Reduced Disclosure Framework.
The financial statements are prepared on the historical cost basis.
The preparation of financial statements in compliance with UK adopted International Accounting Standards requires the use of certain
critical accounting estimates, it also requires Group management to exercise judgements and estimates in preparing the financial
statements. Their effects are disclosed in the notes below.
The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in these Group
financial statements. The Group prepares its financial statements on a 52/53 week basis. The year end date is determined by the 52nd
Thursday in the year. A 53rd week is reported where the year end date is no longer aligned with 7 days either side of 31st December. The
year ended 29 December 2022 is a 52-week period as is the comparative year.
Amounts are rounded to the nearest thousand, unless otherwise stated.
Company basis of preparation
The Parent Company financial statements were prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure
Framework (FRS101).
In preparing these financial statements, the Company applies the recognition, measurement and disclosure requirements of International
Financial Reporting Standards but makes amendments where necessary in order to comply with the Companies Act 2006 and has set out
below where advantage of the FRS101 disclosure exemptions has been taken.
Under s408 of the Companies Act 2006 the Company is exempt from the requirement to present its own profit and loss account.
In these financial statements, the Company has applied the exemptions available under FRS101 in respect of the following disclosures:
•
•
•
•
•
A cash flow statement and related notes.
Disclosures in respect of transactions with wholly-owned subsidiaries.
Disclosures in respect of capital management.
Disclosures in respect of the compensation of key management personnel.
New but not yet effective IFRS.
As the consolidated financial statements include the equivalent disclosures, the Company has also taken the exemptions under FRS101
available in respect of the following disclosures:
•
•
•
IFRS2 Share Based Payments in respect of Group-settled share based payments.
Certain disclosures required by IFRS13 Fair Value Measurement.
Certain disclosures required by IFRS7 Financial Instruments.
47
Everyman Media Group PLC
Annual report and financial statements
Notes on the financial statements (continued)
Going concern
Current trading is in line with management expectations. Given the increased number of wide releases year-on-year, commitment to the
theatrical window from distributors and new investment from streamers in content for cinema, management expect admissions to
continue to recover towards pre-pandemic levels. Paid for Average Ticket Price and Spend per Head have continued to grow steadily
despite well-publicised concerns over consumer spends.
Banking
The Group’s banking arrangements consist of a £25m Revolving Credit Facility (“RCF”) and a £15m Coronavirus Large Business Interruption
Loan Scheme (“CLBILS”). On the 14th March 2023 the RCF was extended by 3 months, to 17th April 2024. The CLBILS, which cannot be
extended, will mature on the previous maturity date of 17th January 2024. The Group’s forecasts demonstrate headroom without the
CLBILS component of the facility.
The Group is actively engaged with its banking partners on a re-finance of both the RCF and the CLBILS and expects to complete this
process in the coming months.
At the end of the year, the Group had drawn down £22.2m on its facilities and held £3.7m in cash; the undrawn facility was therefore
£18m and net banking debt £18.5m.
The facility covenants were amended temporarily to provide liquidity through the pandemic, when the facility amendments were made in
the first quarter of 2021. From June 2022, the covenants returned to the pre-pandemic tests based on leverage and fixed cover charge. The
Group has operated within these covenants all year and expects to continue to do so going forward.
Sale of Crystal Palace Freehold
On 16 January 2023, the Group completed the sale and leaseback of its freehold property at 25 Church Road, London SE19 2TE. Proceeds
from the sale, after associated fees and disbursements, were £3.8m. At the balance sheet date, the property was held for sale in ECPee
Limited, with a carrying value of £3.2m.
This additional liquidity has reduced the Group’s reliance on debt to finance its expansion programme during 2023.
Salisbury Freehold
During the year the Group acquired the freehold at Gala Clubs, Endless Street, Salisbury SP1 1DP, which will open as a new four-screen
cinema during 2023. The Group’s forecasts do not consider the sale of this freehold and subsequent leaseback within the next 12 months.
However, should the need for additional liquidity arise, management are of the view that this could be brought forward, as required.
Base case Scenario
The period forecast is up to 30 June 2024.
The business has now traded for in excess of 18 months without Government-enforced closures due to the pandemic, and the Board
approved budget and latest forecasts assume that this will continue indefinitely. The forecast assumes growth in like-for-like admissions
vs. 2022, given the fuller film release schedule as the industry recovers from pandemic-related production delays, but remain below pre-
pandemic levels. Increases in forecast costs reflect the current inflationary environment. New openings are forecast at 6 for 2023, with
corresponding capital investment.
In this scenario the Group maintains significant headroom in its banking facilities and complies with covenants.
Stress testing
The Board considers budget assumptions on admissions to be very conservative, given that they do not demonstrate a return to pre-
pandemic levels until 2025. A reduction in budgeted admissions of 8% each month from March 2023 has been modelled. This scenario
would cause a breach in the Fixed Cover Charge covenant in May 2023.
If such a scenario were to occur, Management would be able to temporarily reduce administrative expenditure to increase EBITDA and
avoid a breach, without material impact to the Group’s operations and the quality of customer experience. In this scenario, the Group
would remain compliant with the Adjusted Leverage covenant.
48
Everyman Media Group PLC
Annual report and financial statements
Notes on the financial statements (continued)
The Directors believe that the Group is well-placed to manage its financing and other business risks satisfactorily and have a reasonable
expectation that the Group will have adequate resources to continue in operation for at least 12 months from the approval of the financial
statements. The Board considers that an 8% reduction in budgeted admissions is unlikely, particularly in light of business performance in
January and February 2023 and the increase in the number of wide releases expected over the remainder of the year. As a result, the
Board does not believe this to represent a material uncertainty, and therefore consider it appropriate to adopt the going concern basis of
accounting in preparing the financial statements.
Use of non-GAAP profit and loss measures
The Group believes that along with operating profit, adjusted EBITDA provides additional guidance to the statutory measures of the
performance of the business during the financial year. The reconciliation between operating profit and adjusted EBITDA is shown on page
41.
Adjusted EBITDA is calculated by adding back depreciation, amortisation, profit or loss on disposal of Property, Plant & Equipment, pre-
opening expenses and certain non-recurring or non-cash items. Adjusted EBITDA is an internal measure used by management as they
believe it better reflects the underlying performance of the Group beyond generally accepted accounting principles.
Exceptional items that have been added back when calculating adjusted EBITDA relate to restructuring costs within the Head Office team.
Basis of consolidation
Where the Group has power, either directly or indirectly so as to have the ability to affect the amount of the investor returns and has
exposure or rights to variable returns from its involvement with the investee, it is classified as a subsidiary. The balance sheet at 29
December 2022 incorporates the results of all subsidiaries of the Group for all years and periods, as set out in the basis of preparation.
Intra-Group balances and transactions, and any unrealised income and expenses arising from intra-Group transactions, are eliminated.
Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.
The consolidated financial statements include the results of the Company and all its subsidiary undertakings made up to the same
accounting date.
Merger reserve
On 29 October 2013 the Company became the new holding company for the Group. This was put into effect through a share-for-share
exchange of 1 Ordinary share of 10 pence in Everyman Media Group PLC for 1 Ordinary share of 10 pence in Everyman Media Holdings
Limited (previously, Everyman Media Group Limited), the previous holding company for the Group. The value of 1 share in the Company
was equivalent to the value of 1 share in Everyman Media Holdings Limited.
The accounting treatment for group reorganisations is presented under the scope of IFRS3. The introduction of the new holding company
was accounted for as a capital reorganisation using the principles of reverse acquisition accounting under IFRS3. Therefore, the
consolidated financial statements are presented as if Everyman Media Group PLC has always been the holding company for the Group.
The Company was incorporated on 10 September 2013.
The use of merger accounting principles has resulted in a balance in Group capital and reserves which has been classified as a merger
reserve and included in the Group’s shareholders’ funds.
The Company recognised the value of its investment in Everyman Media Holdings Limited at fair value based on the initial share placing
price on admission to AIM. As permitted by s612 of the Companies Act 2006, the amount attributable to share premium was transferred to
the merger reserve.
Revenue recognition
Revenue for the Group is measured at the fair value of the consideration received or receivable. The Group recognises revenue for services
provided when the amount of revenue can be reliably measured and it is probable that future economic benefits will flow to the entity.
Most of the Group’s revenue is derived from the sale of tickets for film admissions and the sale of food and beverage, and therefore the
amount of revenue earned is determined by reference to the prices of those items. The Group’s revenues from film and entertainment
activities are recognised on completion of the showing of the relevant film. The Group’s revenues for food and beverages are recognised
at the point of sale as this is the time the performance obligations have been met.
Bookings, gift cards and similar income which are received in advance of the related performance are classified as deferred revenue and
shown as a liability until completion of the performance obligation.
All contractual-based revenue from memberships is initially classified as deferred revenue and subsequently recognised on a straight-line
basis over the year. Advertising revenue is recognised at the point the advertisement is shown in the cinemas.
49
Everyman Media Group PLC
Annual report and financial statements
Notes on the financial statements (continued)
Fees charged for advanced bookings of tickets is recognised at the point when the tickets are purchased.
Goodwill
Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash-generating units and is not amortised but
is tested annually for impairment. Goodwill represents the excess of the costs of a business combination over the total acquisition date
fair values of the identifiable assets, liabilities and contingent liabilities acquired. Goodwill is capitalised as an intangible asset. Costs
incurred in a business combination are expensed as incurred with the exception that for business combinations completed prior to 1
January 2010, cost comprised the fair value of assets given, liabilities assumed and equity instruments issued, plus any direct costs of
acquisition.
The recoverable amount of an asset or cash-generating unit (CGU) is the greater of its value-in-use and its fair value less costs to sell. In
assessing value-in-use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets
that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use
that are largely independent of the cash inflows of other assets or groups of assets (the CGU), this is usually an individual cinema venue.
The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to CGUs. Subject to an operating
segment ceiling test, for the purposes of goodwill impairment testing, CGUs to which goodwill has been allocated are aggregated so that
the level at which impairment is tested reflects the lowest level at which goodwill is monitored for internal reporting purposes. Goodwill
acquired in a business combination is allocated to groups of CGUs that are expected to benefit from the synergies of the combination.
An impairment loss is recognised if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount. Impairment
losses are recognised in the profit and loss. Impairment losses recognised in respect of CGUs are allocated first to reduce the carrying
amount of any goodwill allocated to the units, and then to reduce the carrying amounts of the other assets in the unit/group of units on a
pro-rata basis. Once goodwill has been impaired, the impairment cannot be reversed in future periods.
Intangible assets
Software and website assets acquired by the Group are stated at cost less accumulated amortisation and impairment losses. Amortisation
is provided on all software assets so as to write off their carrying value over the expected useful economic lives. The estimated useful
lives are as follows:
Software assets
- 3 to 5 years
Amortisation on software in development does not commence until it is complete and available for use.
Property, plant and equipment
Items of property, plant and equipment are recognised at cost less accumulated depreciation and accumulated impairment losses. As well
as the purchase price, cost includes directly attributable costs.
Depreciation on assets under construction does not commence until they are complete and available for use. These assets represent fit-
outs. Depreciation is provided on all other leasehold improvements and all other items of property, plant and equipment so as to write off
their carrying value over the expected useful economic lives. The estimated useful lives are as follows:
Freehold properties
Leasehold improvements
Plant and machinery
Fixtures and fittings
- 50 years
- straight line on cost over the remaining life of the lease
- 5 years
- 8 years
Depreciation methods, useful lives and residual values are reviewed at each balance sheet date. Land is not depreciated.
50
Everyman Media Group PLC
Annual report and financial statements
Notes on the financial statements (continued)
Impairment (excluding inventories)
Impairment tests on goodwill and other intangible assets with indefinite useful economic lives are undertaken annually at the financial
year end. Other non-financial assets are subject to impairment tests whenever events or changes in circumstances indicate that their
carrying amount may not be recoverable. Where the carrying value of an asset exceeds its recoverable amount (i.e. the higher of value in
use and fair value less costs to sell), the asset is written down accordingly.
Where it is not possible to estimate the recoverable amount of an individual asset, the impairment test is carried out on the smallest
group of assets to which it belongs for which there are separately identifiable cash flows; its cash generating units ('CGUs'). Goodwill is
allocated on initial recognition to each of the Group's CGUs that are expected to benefit from a business combination that gives rise to the
goodwill.
Impairment losses (including reversals of impairment losses or impairment gains) are included in profit or loss, except to the extent they
reverse gains previously recognised in other comprehensive income. An impairment loss recognised for goodwill is not reversed.
Non-current assets held for sale
Non-current assets are classified as held for sale when:
- They are available for immediate sale
- Management is committed to a plan to sell
- It is unlikely that significant changes to the plan will be made or that the plan will be withdrawn
- An active programme to locate a buyer has been initiated
- The asset or disposal group is being marketed at a reasonable price in relation to its fair value, and
- A sale is expected to complete within 12 months from the date of classification.
Non-current assets classified as held for sale are measured at the lower of:
- Their carrying amount immediately prior to being classified as held for sale in accordance with the group's accounting policy; and
- Fair value less costs of disposal.
Following their classification as held for sale, non-current assets are not depreciated.
Inventories
Inventories are valued at the lower of cost and net realisable value. The cost incurred in bringing each product to its present location and
condition is accounted for as follows:
Food and beverages
Projection stock
- purchase cost on a first-in, first-out basis
- purchase cost on a first-in, first-out basis
Net realisable value is the estimated selling price in the ordinary course of business.
Provisions
A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a result of a past event,
that can be reliably measured and it is probable that an outflow of economic benefits will be required to settle the obligation. Lease
dilapidation provisions are recognised when entering into a lease where an obligation is created. This obligation may be to return the
leasehold property to its original state at the end of the lease in accordance with the lease terms. Leasehold dilapidations are recognised
at the net present value and discounted over the remaining lease period.
Leases
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract
conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract
conveys the right to control the use an identified asset, the Group assesses whether:
•
•
•
the contract involves the use of an identified asset (this may be specified explicitly or implicitly, and should be physically
distinct or represent substantially all of the capacity of a physically distinct asset). If the supplier has a substantive substitution
right, then the asset is not identified;
the Group has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use;
and
the Group has the right to direct the use of the asset. The Group has this right when it has the decision-making rights that are
most relevant to changing how and for what purpose the asset is used.
51
Everyman Media Group PLC
Annual report and financial statements
Notes on the financial statements (continued)
Leases (continued)
At inception or on reassessment of a contract that contains a lease component, the Group allocates the consideration in the contract to
each lease component on the basis of their relative stand-alone prices.
Leases in which the Group is a lessee
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially
measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the
commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to
restore the underlying asset or the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease
term. The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease
liability.
The lease liability is initially measured at the present value of the lease payments at the commencement date, discounted using the
interest rate implicit in the lease or, if that rate cannot be readily determined, the lessee's incremental borrowing rate.
Lease payments included in the measurement of the lease liability comprise the following:
•
•
•
fixed payments
variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement
date
amounts expected to be payable under a residual value guarantee
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future
lease payments arising from a change in an index or rate, if there is a change in the Group's estimate of the amount expected to be
payable under a residual value guarantee, or if the Group changes its assessment of whether it will exercise a purchase, extension or
termination option.
When the lease liability is remeasured, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is
recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
Short-term leases and leases of low-value assets
The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months
or less and leases of low-value assets. The Group recognises these lease payments as an expense on a straight-line basis over the lease
term.
IFRS 16: Leases – Covid-19 Related Rent concessions amendment
The Group has adopted the amendment to IFRS 16 that provides an optional practical expedient for lessees from assessing whether a rent
concession related to Covid-19 is a lease modification. Where the rent concession is a direct consequence of the Covid-19 pandemic, the
revised consideration for the lease is substantially the same or less, the reduction affects only payments originally due on or before 30
June 2021, this was subsequently extended to 30 June 2022, and there were no other substantive changes to the lease then the
concessions can be credited to the profit and loss in the period in which the event or condition that triggers the rent concession occurs,
rather than as a lease modification.
Taxation
Tax on the profit and loss for the year comprises current and deferred tax. Tax is recognised in the profit and loss except to the extent that
it relates to items recognised directly in equity, in which case it is recognised in equity. Current tax is the expected tax payable or
receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any
adjustment to tax payable in respect of previous years.
Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the consolidated balance sheet
differs from its tax base, except for differences arising on:
52
Everyman Media Group PLC
Annual report and financial statements
Notes on the financial statements (continued)
Taxation (continued)
•
•
•
The initial recognition of goodwill.
The initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the
transaction affects neither accounting nor taxable profit.
Investments in subsidiaries and jointly controlled entities where the Group is able to control the timing of the reversal of the
difference and it is probable that the difference will not reverse in the foreseeable future.
Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be available against which
the difference can be utilised.
The amount of the asset or liability is determined using tax rates that have been enacted or substantively enacted by the reporting date
and are expected to apply when the deferred tax liabilities or assets are settled or recovered. Deferred tax balances are not discounted.
Deferred tax assets and liabilities are offset when the Group has a legally enforceable right to offset current tax assets and liabilities and
the deferred tax assets and liabilities relate to taxes levied by the same tax authority on either:
•
•
The same taxable Group company; or
Different company entities which intend either to settle current tax assets and liabilities on a net basis or to realise the assets
and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax assets and liabilities
are expected to be settled or recovered.
Operating segments
The Board, the chief operating decision maker, considers that the Group’s primary activity constitutes one reporting segment, as defined
under IFRS8.
The total profit measures are operating profit and profit for the year, both disclosed on the face of the consolidated profit and loss. No
differences exist between the basis of preparation of the performance measures used by management and the figures used in the Group
financial information.
All of the revenues generated relate to cinema tickets, sale of food and beverages and ancillary income, an analysis of which appears in
the notes below. All revenues are wholly generated within the UK. Accordingly, there are no additional disclosures provided to the
financial information.
Pre-opening expenses
Overhead expenses incurred prior to a new site opening are expensed to the profit and loss in the year that they are incurred. Similarly,
the costs of training new staff during the pre-opening phase are expensed as incurred. These expenses are included within administrative
expenses, right-of-use depreciation and financing expenses.
Employee benefits
Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which the company pays fixed contributions into a separate entity
and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans
are recognised as an expense in the profit and loss in the periods during which services are rendered by employees.
Share-based payments
Certain employees (including Directors and senior executives) of the Group receive remuneration in the form of equity-settled share-based
payment transactions, whereby employees render services as consideration for equity instruments (equity-settled transactions, through
the Growth Share Scheme, Approved and Unapproved Options Schemes). The cost of share-based payments is recharged by the Company
to subsidiary undertakings in proportion to the services recognised.
Equity-settled share based schemes are measured at fair value, excluding the effect of non-market based vesting conditions, at the date
on which they are granted. The fair value is determined by using an appropriate pricing model.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the
performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the
award (the vesting date). The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date
reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of equity instruments that will
ultimately vest. The profit or loss charge or credit for a period represents the movement in cumulative expense recognised as at the
beginning and end of that period.
53
Everyman Media Group PLC
Annual report and financial statements
Notes on the financial statements (continued)
Employee benefits (continued)
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition,
which are treated as vesting irrespective of whether or not the market condition is satisfied, provided that all other performance and/or
service conditions are satisfied. The dilutive effect of outstanding options is reflected as additional share dilution in the computation of
earnings per share.
3 Financial Instruments
The Group is exposed through its operations to the following financial risks:
•
•
•
Credit risk
Interest rate risk
Liquidity Risk
In common with all other businesses, the Group is exposed to risks that arise from its use of financial instruments. This note describes the
Group's objectives, policies and processes for managing those risks and the methods used to measure them. Further quantitative
information in respect of these risks is presented throughout these financial statements.
There have been no substantive changes in the Group's exposure to financial instrument risks, it’s objectives, policies and processes for
managing those risks or the methods used to measure them from previous periods unless otherwise stated in this note.
The principal financial instruments used by the Group, from which financial instrument risk arises are as follows:
•
•
•
•
Trade receivables
Cash and cash equivalents
Trade and other payables
Floating rate bank revolving credit facilities and lease liabilities
Financial assets
All the Group’s financial assets are subsequently accounted for at amortised cost. These assets arise principally from the provision of
goods and services to customers (eg trade receivables), but also incorporate other types of financial assets where the objective is to hold
these assets in order to collect contractual cash flows and the contractual cash flows are solely payments of principal and interest. They
are initially recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue, and are subsequently
carried at amortised cost using the effective interest rate method, less provision for impairment.
Impairment provisions for trade receivables are recognised based on the simplified approach within IFRS 9 using a provision matrix in the
determination of the lifetime expected credit losses. During this process the probability of the non-payment of the trade receivables is
assessed. This probability is then multiplied by the amount of the expected loss arising from default to determine the lifetime expected
credit loss for the trade receivables. For trade receivables, which are reported net, such provisions are recorded in a separate provision
account with the loss being recognised in profit or loss. On confirmation that the trade receivable will not be collectable, the gross
carrying value of the asset is written off against the associated provision.
The Group's financial assets measured at amortised cost comprise trade and other receivables and cash and cash equivalents in the
consolidated balance sheet.
Cash and cash equivalents comprise cash balances, call deposits and cash amounts in transit due from credit cards which are settled
within seven days from the date of the reporting period. Bank overdrafts that are repayable on demand and form an integral part of the
Group’s cash management are included as a component of cash and cash equivalents for the purpose only of the Statement of Cash Flows.
Financial liabilities and equity
Financial instruments issued by the Group are treated as equity only to the extent that they meet the following conditions:
•
They include no contractual obligations upon the Group to deliver cash or other financial assets or to exchange financial assets
or financial liabilities with another party under conditions that are potentially unfavourable to the Group
• Where the instruments may be settled in the Group’s own equity instruments, they are either a non-derivative that include no
obligation to deliver a variable number of the Group’s own equity instruments or they are a derivative that will be settled by the
Group exchanging a fixed amount of cash or other financial assets for a fixed number of its own equity instruments.
54
Everyman Media Group PLC
Annual report and financial statements
Notes on the financial statements (continued)
3 Financial Instruments – Risk Management (continued)
To the extent that this definition is not met, the proceeds of issue are classified as a financial liability and initially recognised at fair value
net of any transaction costs directly attributable. Such interest-bearing liabilities are subsequently measured at amortised cost using the
effective interest rate method, which ensures that any interest expense over the period to repayment is at a constant rate on the balance
of the liability carried in the consolidated statement of financial position. For the purposes of each financial liability, interest expense
includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is
outstanding.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual
obligations. The Group is mainly exposed to credit risk from credit sales. It is Group policy, to assess the credit risk of new customers
before entering material contracts.
Credit risk also arises from cash and cash equivalents and deposits with banks and financial institutions. For banks and financial
institutions, only independently rated parties with minimum rating "A" are accepted.
Further disclosures regarding trade and other receivables, which are neither past due nor impaired, are provided in note 27.
Interest rate risk
The Group is exposed to cash flow interest rate risk from its revolving credit facility at variable rates. During 2022 and 2021, the Group's
borrowings at variable rate were denominated in GBP.
The Group analyses the interest rate exposure on a monthly basis. A sensitivity analysis is performed by applying various reasonable
expectations on rate changes to the expected facility drawdown.
Liquidity Risk
Liquidity risk arises from the Group's management of working capital and the finance charges and principal repayments on its debt
instruments. It is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due. The Group's policy is
to ensure that it will always have sufficient cash to allow it to meet its liabilities when they become due.
The Board receives rolling 12-month cash flow projections on a monthly basis as well as information regarding cash balances. At the end
of the financial year, these projections indicated that the Group expected to have sufficient liquid resources to meet its obligations under
all reasonably expected circumstances, through utilisation of its revolving credit facility.
4 Changes in accounting policies
New standards, interpretations and amendments adopted from 1 January 2022
There are a number of standards, amendments to standards, and interpretations which have been issued by the IASB that are effective in
future accounting periods that the Group has decided not to adopt early.
The following amendments are effective for the period beginning 1 January 2023:
•
•
•
Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2);
Definition of Accounting Estimates (Amendments to IAS 8); and
Deferred Tax Related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12)
The following amendments are effective for the period beginning 1 January 2024:
•
•
•
IFRS 16 Leases (Amendment – Liability in a Sale and Leaseback);
IAS 1 Presentation of Financial Statements (Amendment – Classification of Liabilities as Current or Non-Current)
IAS 1 Presentation of Financial Statements (Amendment – Non-Current Liabilities with Covenants)
The Group is currently assessing the impact of these new accounting standard and amendments.
The Group does not expect any other standards issued, but not yet effective, to have a material impact on the Group.
55
Everyman Media Group PLC
Annual report and financial statements
Notes on the financial statements (continued)
5 Critical accounting estimates and judgements
The Group makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on
historical experience and other factors, including expectations of future events that are believed to be reasonable under the
circumstances. In the future, actual experience may differ from these estimates and assumptions. The estimates and assumptions that
have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are
discussed below.
Impairment of goodwill, right-of-use assets and property, plant and equipment
The Group determines whether the above are impaired when impairment indicators exist or based on the annual impairment assessment.
The annual assessment requires an estimate of the value in use of the CGUs to which the intangible and tangible fixed assets are
allocated, which is predominantly at the individual cinema site level.
Estimating the value in use requires the Group to make an estimate of the expected future cash flows from each cinema and discount
these to their net present value at an appropriate discount rate. All venues are located in the UK and therefore a single discount rate has
been used for all CGUs. The resulting calculation is sensitive to the assumptions in respect of future cash flows and the discount rate
applied. The Directors consider that the assumptions made represent their best estimate of the future cash flows generated by the CGUs
and that the discount rates used are appropriate given the risks associated with the specific cash flows. A sensitivity analysis has been
performed over the estimates (see Note 18).
Lease dilapidations
Future costs of repair and reinstatement obligations have been estimated by management using quotes or historical costs incurred for
similar work and judgement based on experience and technical knowledge of employees with detailed knowledge of the premises and
experience managing the estate. The costs are reviewed at least annually and updated based on physical inspections performed
periodically.
6 Revenue
Film and entertainment
Food and beverages
Venue Hire, Advertising and
Membership Income
Year ended
Year ended
29 December
30 December
2022
£000
39,764
32,250
6,803
78,817
2021
£000
25,150
20,360
3,517
49,027
All trade takes place in the United Kingdom.
The following provides information about opening and closing receivables, contract assets and liabilities from contracts with customers.
Contract balances
29 December
30 December
Trade and other receivables
Deferred income
2022
£000
3,308
4,143
2021
£000
3,847
4,284
Deferred income relates to advanced consideration received from customers in respect of memberships, gift cards and advanced
screenings.
56
Everyman Media Group PLC
Annual report and financial statements
Notes on the financial statements (continued)
7 Loss before taxation
Loss before taxation is stated after charging:
Depreciation of tangible assets
Amortisation of right-of-use assets
Amortisation of intangible assets
Impairment reversal on right-of-use asset and property plant and
equipment
Loss on disposal of property, plant and equipment
Operating lease income
Share-based payment expense
Rent concession gains from practical expedient
Year ended
Year ended
29 December
30 December
2022
£000
7,721
3,342
662
-
434
(57)
1,537
-
2021
£000
8,030
3,078
619
(2,504)
533
(87)
1,072
(701)
8 Staff numbers and employment costs
The average number of employees (including Directors) during the year, analysed by category, was as follows:
Management
Operations
At the year end the number of employees (including Directors) was 1,380 (2021: 1,342)
Management staff represent all full-time employees in the Group.
29 December
30 December
2022
Number
2021
Number
222
1,032
1,254
186
731
917
Year ended
Year ended
29 December
30 December
Wages and salaries
Social security costs
Pension costs
Share-based payment expense
Other staff benefits
There were pension liabilities outstanding as at 29 December 2022 of £62,000 (30 December 2021: £66,000).
2022
£000
20,374
1,718
306
1,537
31
23,966
2021
£000
14,982
1,211
224
1,072
5
17,494
57
Everyman Media Group PLC
Annual report and financial statements
Notes on the financial statements (continued)
9 Directors' remuneration
The remuneration of the Directors, who are the key management personnel of the Group, is set out below in aggregate for each of the
categories specified in IAS24 Related Party Disclosures:
Salaries/fees
Bonuses
Other benefits
Pension contributions
Share-based payment expense
Information regarding the highest paid Director is as follows:
Salaries/fees
Bonuses
Other benefits
Pension contributions
Share-based payment expense
Year ended
Year ended
29 December
30 December
2022
£000
807
88
22
14
931
869
2021
£000
748
115
18
15
896
720
1,800
1,616
Year ended
Year ended
29 December
30 December
2022
£000
2021
£000
294
244
44
21
10
369
598
967
40
15
9
308
750
1,058
Directors remuneration for each Director is disclosed in the Remuneration Committee report. The costs relating to the Directors remuneration are
wholly incurred by Everyman Media Limited for the wider Group. No Directors exercised options over shares in the Company during the year (2021:
None).
10 Auditor's remuneration
Fees payable to the Company's auditor for:
Audit of the Company’s financial statements
Audit of the subsidiary undertakings of the Company
Taxation services to the Group
Year ended
Year ended
29 December
30 December
2022
£000
24
159
-
183
2021
£000
12
77
20
109
58
Everyman Media Group PLC
Annual report and financial statements
Notes on the financial statements (continued)
11 Other Operating Income
Coronavirus Job Retention Scheme
Business Grants
Landlord compensation
12 Financial expenses
Interest on bank loans and overdrafts
Bank loan arrangement fees
Interest on lease liabilities
Interest on dilapidations provision
Reassessment of dilapidations NPV
13 Taxation
Tax expense
Current tax
Adjustment in respect of prior years
Total current tax credit
Deferred tax expense
Origination and reversal of temporary differences
Adjustment in respect of prior years
Effect of tax rate change
Total tax (credit)/expense
Year ended
29 December
2022
£’000
Year ended
30 December
2021
£’000
-
155
467
622
2,801
999
-
3,800
Year ended
Year ended
29 December
30 December
2022
£000
983
60
2,851
12
-
3,906
2021
£000
595
85
2,587
9
(21)
3,255
Year ended
29 December
2022
Year ended
30 December
2021
£000
£000
-
-
-
-
-
-
-
-
416
(101)
(301)
14
The reasons for the difference between the actual tax charge for the period and the standard rate of corporation tax in the United Kingdom
applied to the (loss)/ profit for the year are as follows:
59
Everyman Media Group PLC
Annual report and financial statements
Notes on the financial statements (continued)
13 Taxation (continued)
Reconciliation of effective tax rate
Loss before tax
Tax at the UK corporation tax rate of 19.00%
Permanent differences (expenses not deductible for tax purposes)
Impact of difference in overseas tax rates
De-recognition of losses
Effect of change in expected future statutory rates on deferred tax
Impact of a drop in share-based payments intrinsic value
Adjustment in respect of previous periods
Other
Total tax (credit)/expense
Year ended
29 December
2022
Year ended
30 December
2021
£000
(3,504)
(666)
840
-
32
(206)
-
-
-
-
£000
(5,416)
(1,029)
750
1
605
(217)
5
(101)
-
14
A reduction to 17% (effective 1 April 2020) was substantively enacted on 6 September 2016. In March 2020, it was announced that a rate
of 19% would continue to apply with effect from 1 April 2020 and this change was substantively enacted from 17 March 2020.
An increase in the UK corporation rate from 19% to 25% (effective 1 April 2023) was substantively enacted on 24 May 2021. This will
increase the company’s future current tax charge accordingly.
14 Earnings per share
Year ended
29 December
2022
Year ended
30 December
2021
2021
£000
2020
£000
Loss used in calculating basic and diluted earnings per share
(3,504)
(5,430)
Number of shares (000's)
Weighted average number of shares for the purpose of basic earnings per share
91,178
91,129
Number of shares (000's)
Weighted average number of shares for the purpose of diluted earnings per share
91,178
91,129
Basic loss per share (pence)
Diluted loss per share (pence)
(3.84)
(3.84)
(5.96)
(5.96)
60
Everyman Media Group PLC
Annual report and financial statements
Notes on the financial statements (continued)
14 Earnings per share (continued)
Issued at beginning of the year
Share options exercised
Weighted average number of shares at end of the year
Weighted average number of shares for the purpose of diluted
earnings per share
Basic weighted average number of shares
Effect of share options in issue
Weighted average number of shares at end of the year
29 December
30 December
2022
Weighted average
no. 000's
2021
Weighted
average
no. 000's
91,163
15
91,178
91,178
-
91,178
91,095
34
91,129
91,129
-
91,129
Basic earnings per share values are calculated by dividing net profit/(loss) for the year attributable to Ordinary equity holders of the parent
by the weighted average number of Ordinary shares outstanding during the year. The shares issued in the year in the above table reflect
the weighted number of shares rather than the actual number of shares issued.
The Company has 7m potentially issuable Ordinary shares (2021: 7m) all of which relate to the potential dilution from share options issued
to the Directors and certain employees and contractors, under the Group’s incentive arrangements. In the current year these options are
anti-dilutive as they would reduce the loss per share and so haven’t been included in the diluted earnings per share.
The Company made a post-tax profit for the year of £2,028,000 (2021: £2,528,000).
61
Everyman Media Group PLC
Annual report and financial statements
Notes on the financial statements (continued)
15 Property, plant and equipment
(Group)
Cost
At 31 December 2020
Acquired in the year
Disposals
Transfer on completion
At 30 December 2021
Acquired in the year
Disposals
Transfer on completion
Re-classified to non-current
assets held for sale
At 29 December 2022
Depreciation
At 31 December 2020
Charge for the year
Impairment
On Disposals
At 30 December 2021
Charge for the year
On Disposals
Re-classified to non-current
assets held for sale
At 29 December 2022
Net book value
At 29 December 2022
Land &
Leasehold
Plant &
Fixtures &
Assets under
Buildings
improvements machinery
£000
£000
£000
Fittings
£000
6,529
-
-
-
75,623
1,648
(1,189)
96
15,998
954
(4,382)
-
6,529
76,178
12,570
1,278
-
-
(3,398)
4,409
977
(648)
7,950
-
830
(284)
3,060
-
84,457
16,176
159 14,415
48
-
-
207
42
-
(179)
70
4,104
(1,124)
(925)
16,470
3,850
(523)
-
19,797
9,173
2,574
(75)
(4,312)
7,360
2,536
(129)
-
9,767
9,940
395
(1,156)
-
9,179
406
(425)
4,433
-
13,593
4,402
1,304
(167)
(1,105)
4,434
1,293
(271)
-
5,456
construction
£000
1,624
4,394
(59)
(96)
5,863
16,102
-
(15,443)
-
6,522
-
-
-
-
-
-
-
-
-
Total
£000
109,714
7,391
(6,786)
-
110,319
19,593
(1,357)
-
(3,398)
125,157
28,149
8,030
(1,366)
(6,342)
28,471
7,721
(923)
(179)
35,090
4,339
64,660
6,409
8,137
6,522
90,067
At 30 December 2021
6,322
59,708
5,210
4,745
5,863
81,848
At 31 December 2020
6,433
61,143
6,825
5,538
1,626
81,565
62
Everyman Media Group PLC
Annual report and financial statements
Notes on the financial statements (continued)
15 Property, plant and equipment (continued)
For impairment considerations of tangible fixed assets this was considered using the value in use basis disclosed in Note 18.
(Company only)
Cost
At 31 December 2020
Acquired in the year
At 30 December 2021
Acquired in the year
At 29 December 2022
Depreciation
At 31 December 2020
Charge for the year
At 30 December 2021
Charge for the year
At 29 December 2022
Net book value
At 29 December 2022
At 30 December 2021
At 31 December 2020
16 Non-current assets held for sale
(Group)
General description:
Plant &
Fixtures &
machinery
£000
Fittings
£000
Total
£000
485
255
740
-
-
-
485
255
740
-
485
485
-
485
-
485
-
-
-
-
255
161
51
212
43
255
-
43
94
-
740
646
51
697
43
740
-
43
94
In September 2022, the board announced its intention to sell the Freehold Investment property, 25 Church Road, London SE19 2TE to a
suitable buyer. Therefore, as at 1 October 2022, the property was no longer depreciated and was re-classified as held for sale.
The property is owned by ECPEE Limited, a subsidiary of the Group.
Subject to contract, ECPEE will sell the freehold interest in the property to the buyer, and the buyer will then grant the lease back to
ECPEE. The sale was not completed as at 29 December 2022, and therefore the property has been classified as held for sale.
Disposal activities after reporting period not recognised:
The sale and leaseback of 25 Church Road, London SE19 2TE was concluded through exchange of contracts on 16 January 2023 with a
suitable buyer.
63
Everyman Media Group PLC
Annual report and financial statements
Notes on the financial statements (continued)
16 Non-current assets held for sale (continued)
Assets and liabilities held for sale:
Freehold property
Assets held for sale
29 December
2022
£’000
30 December
2021
£’000
3,219
3,219
-
-
The freehold property transferred from Property, plant and equipment to assets held for sale was valued immediately before the transfer,
using a fair market value carried out by external qualified valuers. Fair value less cost to sell was higher than net book value and
consequently no impairment charge is required.
17 Leases
Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease term, with the discount rate
determined by reference to the rate inherent in the lease unless (as is typically the case) this is not readily determinable, in which case the Group’s
incremental borrowing rate on commencement of the lease is used.
On initial recognition, the carrying value of the lease liability also includes:
•
amounts expected to be payable under any residual value guarantee;
Right of use assets are initially measured at the amount of the lease liability, reduced for any lease incentives received, and increased for:
•
•
•
lease payments made at or before commencement of the lease;
initial direct costs incurred; and
the amount of any provision recognised where the Group is contractually required to dismantle, remove or restore the leased asset
(typically leasehold dilapidations – see note 28).
Subsequent to initial measurement lease liabilities increase as a result of interest charged at a constant rate on the balance outstanding and are
reduced for lease payments made. Right-of-use assets are amortised on a straight-line basis over the remaining term of the lease or over the
remaining economic life of the asset if, rarely, this is judged to be shorter than the lease term.
If the Group revises its estimate of the term of any lease it adjusts the carrying amount of the lease liability to reflect the payments to make over
the revised term, which are discounted using a revised discount rate. An equivalent adjustment is made to the carrying value of the right-of-use
asset, with the revised carrying amount being amortised over the remaining (revised) lease term. If the carrying amount of the right-of-use asset is
adjusted to zero, any further reduction is recognised in profit or loss.
64
Everyman Media Group PLC
Annual report and financial statements
Notes on the financial statements (continued)
17 Leases (continued)
Nature of leasing activities
The Group leases a number of properties in the towns and cities from which it operates. In some locations, depending on the lease contract signed,
the lease payments may increase each year by inflation or and in others they are reset periodically to market rental rates. For some property leases
the periodic rent is fixed over the lease term.
The Group also leases certain vehicles. Leases of vehicles comprise only fixed payments over the lease terms.
The percentages in the table below reflect the current proportions of lease payments that are either fixed or variable. The sensitivity reflects the
impact on the carrying amount of lease liabilities and right-of-use assets if there was an uplift of 5% on the balance sheet date to lease payments
that are variable.
During 2022 the Group entered into two property leases for new venues for a period of 20 and 25 years. The leases had not commenced by the year
end and as a result, a lease liability and right-of-use asset has not been recognised at 29 December 2022. The aggregate future cash outflows to
which the Group is exposed in respect of these contracts is fixed payments of £222,000 per year for the next 5 years, with upward only rent reviews
every 5 years.
29 December 2022
Property leases with payments linked to inflation
Property leases with periodic uplifts to market rentals
Property leases with fixed payments
Vehicle leases
Lease
contract
No.
21
17
2
3
43
Fixed
payments
%
-
-
6%
1%
7%
Variable
payments
%
50%
43%
-
-
93%
Sensitivity
(+/-)
£’000
2,799
1,316
-
-
4,115
The percentages in the table below reflect the proportions of lease payments that are either fixed or variable for the comparative period.
30 December 2021
Property leases with payments linked to inflation
Property leases with periodic uplifts to market rentals
Property leases with fixed payments
Vehicle leases
Right-of-Use Assets
(Group)
As at 31 December 2020
Additions
Amortisation
Impairment reversal
Effect of modification to lease terms
At 30 December 2021
Additions
Amortisation
Effect of modification to lease terms
At 29 December 2022
Lease
contract
No.
19
16
2
3
40
Fixed
payments
%
-
-
7%
1%
8%
Variable
payments
%
51%
41%
-
-
92%
Sensitivity
(+/-)
£’000
2,635
1,255
-
-
3,890
Land & Buildings
£’000
Motor Vehicles
£’000
Total £’000
56,723
4,357
(3,055)
1,133
(594)
58,564
2,540
(3,325)
1,086
58,865
22
30
(23)
-
-
29
43
(17)
-
55
56,745
4,387
(3,078)
1,133
(594)
58,593
2,583
(3,342)
1,086
58,920
65
Everyman Media Group PLC
Annual report and financial statements
Notes on the financial statements (continued)
17 Leases (continued)
Right-of-Use Assets
(Company only)
At 31 December 2020
Amortisation
Effect of modification to lease terms
At 30 December 2021
Amortisation
At 29 December 2022
Lease Liabilities
(Group)
At 31 December 2020
Additions
Interest expense
Effect of modification to lease terms
Rent concession gains
Lease payments
Landlord contributions
At 30 December 2021
Additions
Interest expense
Effect of modification to lease terms
Lease payments
Landlord contributions
At 29 December 2022
Land & Buildings
£’000
9,566
(519)
(180)
8,867
(520)
8,347
Total £’000
79,068
5,033
2,587
(594)
(701)
(4,113)
500
81,780
2,508
2,851
845
(6,061)
4,550
86,473
Land &
Buildings
£’000
79,050
Motor
Vehicles
£’000
18
5,003
2,586
(594)
(701)
(4,088)
500
81,756
2,465
2,850
845
(6,045)
4,550
86,421
30
1
-
-
(25)
-
24
43
1
-
(16)
-
52
Landlord contributions received after lease commencement date are shown in the table above. A further contribution of £455,000 (2021:
£nil) was received prior to lease commencement and therefore total cash received from landlords during the year, as presented in the cash
flow statement, was £5,005,000 (2021: £500,000).
Lease liabilities
Current
Non-current
29 December 2022
£’000
30 December 2021
£’000
3,014
83,459
86,473
2,633
79,147
81,780
Rent Concessions
During 2020 and 2021, the Group received numerous forms of rent concessions from lessors due to the Group being unable to operate for
significant periods of time. These concessions included rent forgiveness and deferrals.
As discussed in note 2 in the annual financial statements for the year ended 30 December 2021, the Group has elected to apply the
practical expedient introduced by the amendments to IFRS 16 to all rent concessions that satisfy the criteria. Substantially all the rent
concessions entered into during 2021 satisfied the criteria to apply the practical expedient. For any of the modifications that did not meet
the practical expedient requirements; the lease liability was remeasured using the discount rate applicable at the date of modification,
with the right of use being adjusted by the same amount.
The application of the practical expedient in 2021 resulted in the reduction of total lease liabilities of £701,000. During the year ended 29
December 2022 no new rent concessions were agreed.
66
Everyman Media Group PLC
Annual report and financial statements
Notes on the financial statements (continued)
17 Leases (continued)
Maturity analysis of lease payments
Contractual future cash outflows
Land and buildings
Less than one year
Between one and five years
Over five years
Motor Vehicles
Less than one year
Between one and five years
Other lease disclosures
29 December
2022
£’000
30 December
2021
£’000
5,998
24,916
90,989
121,903
24
29
53
5,291
22,794
87,239
115,324
13
11
24
29 December
2022
£’000
30 December
2021
£’000
Expenses relating to variable lease payments not included in the measurement of lease
liabilities
113
38
Maturity analysis of lease receipts
(Receipts arising from the Group being a lessor)
Contractual future cash inflows
Land and buildings
Less than one year
Between one and five years
29 December
2022
£’000
30 December
2021
£’000
4
-
4
65
16
81
The reduction in future cash inflows at 29 December 2022 arises from a termination in the leasing arrangement for the property.
67
Everyman Media Group PLC
Annual report and financial statements
Notes on the financial statements (continued)
17 Leases (continued)
Lease Liabilities
(Company only)
At 31 December 2020
Effect of modification to lease terms
Rent concession gains
Interest expense
Lease payments
At 30 December 2021
Interest expense
Lease payments
At 29 December 2022
Lease liabilities
Current
Non-current
As a lessee
Contractual future cash outflows
Land and buildings
Less than one year
Between one and five years
Over five years
Land & buildings
£’000
10,976
(180)
(70)
344
(465)
10,605
329
(1,123)
9,811
29 December
2022
£’000
30 December
2021
£’000
352
9,459
9,811
679
9,926
10,605
29 December
2022
£’000
30 December
2021
£’000
780
3,120
9,281
13,181
1,009
3,120
10,061
14,190
Lease payments for land and buildings are a combination of fixed and variable payments (including any scheduled increases). Remaining
lease liabilities are reassessed following annual rent reviews based on an external index (such as the RPI). The weighted average lease
length of the remaining lease portfolio is 18 years.
68
Everyman Media Group PLC
Annual report and financial statements
Notes on the financial statements (continued)
18 Goodwill, intangible assets and impairment
The Group is required to test, on an annual basis, whether goodwill has suffered any impairment. The recoverable amount is determined
based on value in use calculations. The use of this method requires the estimation of future cash flows and the determination of a
discount rate in order to calculate the present value of the cash flows.
(Group)
Cost
At 31 December 2020
Acquired in the year
Disposed in the year
At 30 December 2021
Acquired in the year
At 29 December 2022
Amortisation and impairment
At 30 December 2020
Charge for the year
Disposed in the year
Impairment
At 30 December 2021
Charge for the year
At 29 December 2022
Net book value
At 29 December 2022
At 30 December 2021
At 2 January 2020
Impairment Review
Goodwill
£’000
Software
£’000
8,951
-
-
8,951
-
8,951
-
1,599
-
-
-
1,599
-
1,599
7,352
7,352
7,352
2,991
423
(546)
2,868
1,068
3,936
1,203
619
(503)
(5)
1,314
662
1,976
1,960
1,554
1,788
Total
£’000
11,942
423
(546)
11,819
1,068
12,887
2,802
619
(503)
(5)
2,913
662
3,575
9,312
8,906
9,140
The Group evaluates assets for impairment annually or when indicators of impairment exist. As required by IAS 36, the Group assessed
whether there was an indication that a previously recognised impairment no longer exists or may have decreased. A reversal of an
impairment is only recognised if there has been a change in the estimates used to determine the asset’s recoverable amount since the last
impairment loss was recognised.
The annual impairment assessment requires an estimate of the value in use of each cash-generating unit (CGU) to which goodwill, property
plant and equipment and right-of-use assets are allocated, which is the individual cinema level. The recoverable amount of a CGU is the
higher of value in use and fair value less cost of disposal. The Group determines the recoverable amount with reference to its value in use.
69
Everyman Media Group PLC
Annual report and financial statements
Notes on the financial statements (continued)
18 Goodwill, Intangible assets and Impairment (continued)
Goodwill is allocated to the following CGUs:
Baker Street
Barnet
Esher
Gerrards Cross
Islington
Muswell Hill
Oxted
Reigate
Walton-On-Thames
Winchester
29 December
30 December
2022
£000
103
1,309
2,804
1,309
86
1,215
102
113
94
217
7,352
2021
£000
103
1,309
2,804
1,309
86
1,215
102
113
94
217
7,352
Estimating the value in use requires estimate of the expected future cash flows from each CGU and discount these to their net present
value at a pre-tax discount rate. Forecast cash flows are derived from adjusted EBITDA generated by each CGU which is based on
management’s forecast performance. Cash flow forecasts have been prepared for each CGU by applying growth assumptions to key
drivers of cash flows, including admissions, average ticket price, spend per head, direct and overhead costs.
The key assumptions of this calculation are shown below:
Discount rate
Long term growth rate
Number of years projected
29 December
30 December
2022
2021
15.3%
2%
5 years
13.1%
2%
5 years
Adjusted EBITDA used for 2023 is based on the Board approved budget and represents managements best estimate of future cashflows, it
has been used as the base assumption within the forecast. In the remaining five-year forecast the following assumptions have been
applied:
•
Admissions increase by 5.5% in 2024 representing continued recovery from impact of the pandemic. In 2024, forecast
admissions remain 10% below pre- Covid19 levels.
•
•
EBITDA growth from 2025 -2027 includes lower admission growth rate than 2024 and expectations about increases in average
ticket prices and spend per head.
For venues opened since 2019 that are early in their maturity curve, specific assumptions have been applied to the key drivers
over the five- year forecast period.
Sensitivity analysis
Impairment reviews are sensitive to changes in key assumptions. Sensitivity analysis has been performed by considering incremental
changes in assumptions of admission levels and discount rates. Goodwill cannot be written back once impaired. As a result, impairment of
goodwill brought forward of £1,599,000 was excluded from the calculations.
70
Everyman Media Group PLC
Annual report and financial statements
Notes on the financial statements (continued)
18 Goodwill, Intangible assets and Impairment (continued)
Scenarios
The following sensitivity scenarios have been applied to the cash flow forecasts for stress testing purposes:
•
Admissions levels were increased by 1% in the upside case and decreased by 1% in the downside case; and
• WACC was decreased by 1.5% in the upside case and increased by 1.5% in the downside case. WACC has been included in
sensitivity analysis due to the increase in the cost of debt over the past financial year and relative uncertainty over the cost of
debt going forward.
Upside Case
Downside Case
Change
+1.0%
-1.5%
Reversal of
Previous
Impairment
£000
360
895
Change
-1.0%
+1.5%
Additional
Impairment
£000
(699)
(1,514)
Admissions
WACC
Reversal of previous impairment relates to two venues impaired in prior periods. Additional impairment relates to two venues impaired in
prior periods and three further venues.
The impact on the total impairment charge of applying the different scenarios explained above relates to two venues that were impaired in
previous years. An impairment charge would not be triggered on any other venues based on the changes in these assumptions.
The following cumulative impairment charges have been recognised in previous periods and have not been reversed. Bought forward
impairment of right-of-use assets and property, plant and equipment relates to two venues.
29 December
2022
£000
30 December
2021
£000
Goodwill
Right-of-use assets
Property, plant & equipment
Total
19 Investments
(Company only)
1,599
724
808
3,131
At 30 December 2021 and 29 December 2022
The Company also has intercompany receivable balances of £89.8m (2021:£76.8m). As part of the Group impairment review, the future
cash flows from each of the venues were forecast and an NPV of these flows calculated. The total value of these were £265.8m
(2021:£313.6m) which would indicate that sufficient profits and cash will be generated to repay the monies owed to the Company if
required.
1,599
724
808
3,131
Total
£000
31,994
71
Everyman Media Group PLC
Annual report and financial statements
Notes on the financial statements (continued)
19 Investments (continued)
The subsidiaries of the Company are as follows (all of which are included on consolidation and all are registered at 2 Downshire Hill,
London, NW3 INR):
Name
Principal
Activity
Country of
Class of
Proportion of
incorporation
share held
shares held
Everyman Media Holdings Limited
Cinema management and ownership
UK
Everyman Media Limited**
Cinema management and ownership
CISAC Limited**
Foxdon Limited**
ECPee Limited***
Dormant
Cinema management and ownership
Property management
Bloom Martin Limited***
Bloom Theatres Limited****
Mainline Pictures Limited****
Dormant
Dormant
Dormant
* 2m A ordinary shares series 4 and 5 are held by Alex Scrimgeour
** Shareholding is held by Everyman Media Holdings Ltd
*** Shareholding is held by Everyman Media Ltd
**** Shareholding is held by Bloom Martin Ltd
UK
UK
ROI
UK
UK
UK
UK
Ordinary
A ordinary shares
Series 1, 2, 3, 4 and
5*
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
100%
94%
100%
100%
100%
100%
100%
100%
100%
The A Ordinary shares have no rights to a dividend. Everyman Media Group PLC directly holds all the Ordinary shares (£27,015) and A
Ordinary shares (£6,557) of Everyman Media Holdings Limited.
Everyman Media Limited has 285,000 Ordinary shares of £1.00 each in issue, all of which are held by Everyman Media Holdings Limited
and therefore indirectly held by Everyman Media Group PLC. All other subsidiaries are also indirectly-held investments. Everyman Media
Holdings Limited acquired 100 Ordinary shares, being the entire issued share capital of Foxdon Limited (a limited company established and
resident in the Republic of Ireland and dormant at the date of acquisition) for €100 on 24 June 2019. With respect to the class and
proportion of shares held in existing subsidiaries, the amounts remain the same for the year ended 29 December 2022 and the year ended
30 December 2021. Bloom Martin Limited, Bloom Theatres Limited and Mainline Pictures Limited are all dormant companies and exempt
from the requirement for an audit for the year.
The class and proportion of shares held in all other subsidiaries remain the same for the year ended 29 December 2022 and the year ended
30 December 2021.
The registered office address of all investments incorporated in the UK is Studio 4, 2 Downshire Hill, London NW3 1NR. Foxdon Limited’s
registered office is 33 Sir John Rogerson’s Quay, Dublin 2, D02 XK09. All companies listed above are included in the consolidated financial
statements. All consolidated companies have the same financial year and apply the same accounting policies.
20 Inventories
Food and beverages
Projection
Finished goods recognised as cost of sales in the year amounted to £7,848,000 (2021: £5,054,000). The write-down of inventories to net
realisable value amounted to £nil (2021: £nil).
29 December
30 December
2022
£000
656
34
690
2021
£000
638
73
711
72
Everyman Media Group PLC
Annual report and financial statements
Notes on the financial statements (continued)
21 Cash and cash equivalents
Per balance sheet
Per cash flow statement
22 Trade and other receivables
(Group)
Included in current assets
Included in non-current assets
Trade receivables
Social security and other taxation
Other receivables
Prepayments and accrued income
29 December
30 December
2022
£000
3,701
3,701
2021
£000
4,240
4,240
29 December
30 December
2022
£000
5,840
173
6,013
3,308
-
241
2,464
6,013
2021
£000
5,649
177
5,826
3,847
1
210
1,768
5,826
There were no receivables that were considered to be impaired. There is no significant difference between the fair value of the other
receivables and the values stated above. Other debtors include deposits paid in respect of long-term leases and have been recognised as
non-current assets.
Trade and other receivables
(Company only)
Included in non-current assets
Amounts due from company undertakings
29 December
30 December
2022
£000
89,767
89,767
2021
£000
76,772
76,772
Interest is charged on inter-company loans at the same rate as that charged to the Group by its lenders, currently 3.3%. The loans are
repayable on 15 January 2024.
73
Everyman Media Group PLC
Annual report and financial statements
Notes on the financial statements (continued)
23 Trade and other payables
(Group)
Trade creditors
Social security and other taxation
Other creditors
Accrued expenses
Deferred income
Trade and other payables
(Company only)
Included in current liabilities
Amounts included in current liabilities relate to accrued rent.
24 Loans and borrowings
(Group and Company)
Bank borrowings
Current
Non-current
Total Bank Debt
Cash
Net Bank Debt
29 December
30 December
2022
£000
2,305
1,819
589
6,344
4,514
15,571
2021
£000
3,640
1,051
10
7,009
4,284
15,994
29 December
30 December
2022
£000
524
2021
£000
48
29 December
30 December
2022
£000
247
22,000
22,247
(3,701)
18,546
2021
£000
119
12,500
12,619
(4,240)
8,379
The Company agreed a £25 million RCF and £15m CLBILS loan facility with Barclays Bank PLC and Santander UK PLC in March 2021.
Interest is charged at LIBOR/SONIA on the drawn-down balance on a 365/ACT D-basis (the nominal interest rate ranging between 1.65%
and 2.65%). The capital sum of the RCF is repayable in full on or before 17 April 2024. The capital sum of the CLBILS is repayable in full on
or before 17 January 2024.
Commitment fees are charged quarterly on any balances not drawn at 35% of the applicable rate of drawn funds. The face value is
deemed to be the carrying value. The Group had drawn down £22 million of the £40 million debt facility as at 29 December 2022 (2021:
£12.5 million).
74
Everyman Media Group PLC
Annual report and financial statements
Notes on the financial statements (continued)
25 Changes in liabilities from financing activities
Non- current loans
and borrowings
£000
Current loans and
borrowings
£000
12,500
9,500
-
-
-
22,000
9,000
3,500
-
-
-
-
12,500
119
-
128
-
-
247
43
-
76
-
-
-
119
Lease liabilities
£000
81,780
(1,056)
2,851
3,680
(782)
86,473
79,068
(3,613)
2,587
5,033
(701)
(594)
81,780
Total
£000
94,399
8,444
2,979
3,680
(782)
108,720
88,111
(113)
2,663
5,033
(701)
(594)
94,399
At 31 December 2021
Cash flows
Non- cash flows:
Interest accruing in period
Lease additions
Effect of modifications to lease terms
At 29 December 2022
At 1 January 2021
Cash flows
Non- cash flows:
Interest accruing in period
Lease additions
Effect of modifications to lease terms
Rent concessions
At 30 December 2021
26 Financial instruments
Investments, financial assets and financial liabilities, cash and cash equivalents and other interest-bearing loans and borrowings are
measured at amortised cost and the Directors believe their present value is a reasonable approximation to their fair value.
Financial assets measured at amortised cost
Cash and cash equivalents
Trade and other receivables
Accrued income
Financial liabilities measured at amortised cost
Bank borrowings
Trade Creditors
Leases
Other Creditors
Accrued expenses
29 December
30 December
2022
£000
3,704
3,549
692
7,945
2021
£000
4,240
4,057
221
8,518
29 December
30 December
2022
£000
22,247
2,305
86,473
589
6,344
117,958
2021
£000
12,619
3,640
81,780
8
7,009
105,056
75
Everyman Media Group PLC
Annual report and financial statements
Notes on the financial statements (continued)
27 Financial risks
The Board has overall responsibility for the determination of the Group’s risk management objectives and policies. The overall objective of
the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Group’s competitiveness and flexibility.
The Group has not issued or used any financial instruments of a speculative nature and the Group does not contract derivative financial
instruments such as forward currency contracts, interest rate swaps or similar instruments.
The Group is exposed to the following financial risks:
- Credit risk
- Liquidity risk
- Interest rate risk
To the extent financial instruments are not carried at fair value in the consolidated Balance Sheet, net book value approximates to fair
value at 29 December 2022 and 30 December 2021.
Trade and other receivables are measured at amortised cost. Book values and expected cash flows are reviewed by the Board and there
have been no impairment losses recognised on these assets.
Cash and cash equivalents are held in sterling and placed on deposit in UK banks. Trade and other payables are measured at book value
and held at amortised cost.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual
obligations and arises principally from the Group’s receivables from customers and investment securities.
The Group is exposed to credit risk in respect of its receivables from its subsidiary companies. The recoverability of these balances is
dependent upon the performance of these subsidiaries in future periods. The performance of the Company’s subsidiaries is closely
monitored by the Company’s Board of Directors.
At 29 December 2022 the Group has trade receivables of £3,308,000 (2021: £4,243,000). Trade receivables arise mainly from advertising
and sponsorship revenue. The Group is exposed to credit risk in respect of these balances such that, if one or more of the customers
encounters financial difficulties, this could materially and adversely affect the Group’s financial results. The Group attempts to mitigate
credit risk by assessing the credit rating of new customers prior to entering into contracts and by entering into contracts with customers
with agreed credit terms. At 29 December 2022 the Directors have recognised expected credit losses of £Nil (2021: £109,000).
The maximum exposure to credit risk at the balance sheet date by class of financial instrument was:
Ageing of receivables
<30 days
31-60 days
61-120 days
>120 days
29 December
30 December
2022
£000
2,224
914
63
107
3,308
2021
£000
3,927
84
232
-
4,243
In determining the recoverability of trade receivables the Group considers any change in the credit quality of the trade receivable from the
date credit was initially granted up to the reporting date. Credit risk is limited due to the customer base being diverse and unrelated. There
has not been any impairment other than existing provisions in respect of trade receivables during the year (2021: £nil). There were no
material expected credit losses in the year.
Liquidity risk
Liquidity risk arises from the Group’s management of working capital. It is the risk that the Group will encounter difficulty in meeting its
financial obligations as they fall due. The Group’s policy is to ensure that it will always have sufficient cash to allow it to meet its
liabilities when they become due. To achieve this aim, it seeks to maintain cash balances to meet its expected cash requirements as
determined by regular cash flow forecasts prepared by management.
The Group’s forecasts show sufficient headroom in banking covenants for the next 12 months.
76
Everyman Media Group PLC
Annual report and financial statements
Notes on the financial statements (continued)
27 Financial risks (continued)
Exposure to liquidity risk
The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts shown are gross, not
discounted and include contractual interest payments and exclude the impact of netting agreements.
29 December 2022
Non-derivative financial
liabilities
Secured bank facility
Trade creditors
Leases
Other creditors
Accrued expenses
Carrying
amount
Less than
one year
Contractual cash flows
Between one
and two
years
Between
three and five
years
Over five
years
£000
£000
£000
£000
£000
22,247
2,305
86,473
589
6,344
247
2,305
5,998
589
6,344
22,000
-
6,230
-
-
-
-
-
18,687
90,988
121,903
-
-
-
-
589
6,344
Total
£000
22,247
2,305
117,958
15,483
28,230
18,687
90,988
153,388
30 December 2021
Carrying
Less than
Between one
Between three
Over five
Contractual cash flows
amount
one year
and two years
and five years
£000
£000
£000
£000
Secured bank facility
Trade creditors
Leases
Other creditors
Accrued expenses
12,619
3,640
81,780
8
7,009
105,056
2
3,640
5,290
8
7,009
15,949
496
-
5,990
-
-
years
£000
-
-
Total
£000
14,490
3,640
13,992
-
16,804
87,239
115,323
-
-
-
-
8
7,009
6,486
30,796
87,239
140,470
Interest rate risk
Interest rate risk arose from the Group’s holding of interest-bearing loans linked to LIBOR/SONIA. The Group is also exposed to interest
rate risk in respect of its cash balances held pending investment in the growth of the Group’s operations. The effect of interest rate
changes in the Group’s interest-bearing assets and liabilities is set out below.
77
Everyman Media Group PLC
Annual report and financial statements
Notes on the financial statements (continued)
27 Financial risks (continued)
In respect of interest-earning financial assets and interest-bearing financial liabilities, the following indicates their effective interest rates
at the end of the year and the periods in which they mature:
At 30 December 2021
Bank borrowings
Bank current and deposit balances
At 29 December 2022
Bank borrowings
Bank current and deposit balances
Effective
interest
rate
%
2.72%
0.01%
2.40%
0.01%
Maturing
Maturing
Maturing
within
1 year
£000
119
4,240
247
3,701
between 1 to
between 2 to
2 years
£000
-
-
22,000
-
5 years
£000
12,500
-
-
-
The following table demonstrates the sensitivity to a reasonably plausible change in interest rates, with all other variables held constant,
of the Group's profit and loss before tax through the impact on floating rate borrowings and bank deposits and cash flows:
Change in
29 December
30 December
Bank borrowings
Bank current and deposit balances
Capital management
rate
%
0.5%
1.0%
1.5%
0.5%
1.0%
1.5%
2022
£000
111
222
333
18
37
55
2021
£000
63
126
189
19
37
56
The Group’s capital is made up of share capital, share premium, merger reserve and retained earnings totalling £46.3m (2021 £48.2m).
The Group's objectives when maintaining capital are:
• To safeguard the entity’s ability to continue as a going concern so that it can continue to provide returns for shareholders and
benefits for other stakeholders.
• To provide an adequate return to shareholders by pricing products and services commensurately with the level of risk.
The capital structure of the Group consists of shareholders equity as set out in the consolidated statement of changes in equity. All
funding required to set-up new cinema sites and for working capital purposes are financed from existing cash resources where possible.
Management will also consider future fundraising or bank finance where appropriate.
78
Everyman Media Group PLC
Annual report and financial statements
Notes on the financial statements (continued)
28 Provisions
(Group)
As at 30 December 2021
Utilised in the year
Additions
Other increases
Unwinding of discount
As at 29 December 2022
Due within one year or less
Due within one to five years
Due after more than five years
Provisions
(Company only)
As at 30 December 2021
As at 29 December 2022
Due within one to five years
Other provisions
£,000
393
(393)
-
-
-
-
-
-
-
-
Leasehold
Dilapidations
£,000
1,118
-
97
135
12
Total
£,000
1,511
(393)
97
135
12
1,362
1,362
-
44
1,318
1,362
-
44
1,318
1,362
Leasehold Dilapidations
£,000
84
84
84
84
Leasehold dilapidations relate to the estimated cost of returning leasehold property to its original state at the end of the lease in
accordance with lease terms. The cost is recognised as depreciation of leasehold improvements over the remaining term of the lease. The
main uncertainty relates to estimating the cost that will be incurred at the end of the lease term, the average remaining lease term for
leases held at 29 December 2022 was 18 years (2021:18 years).
79
Everyman Media Group PLC
Annual report and financial statements
Notes on the financial statements (continued)
29 Deferred tax
(Group)
Deferred tax gross movements
Opening balance deferred tax liability
Recognised in profit and loss
Arising on loss carried forward
Net book value in excess of tax written down value
Movement on share option intrinsic value
Amortisation of IFRS accumulated restatement
Lease acquired
Other temporary differences
Credit/Charge to profit and loss
Deferred tax comprises:
Temporary differences on property, plant and equipment
Temporary differences on IFRS 16 accumulated restatement
Temporary differences on leases acquired
Share-option scheme intrinsic value
Available losses
Other temporary and deductible differences
29 December
30 December
2022
£000
2021
£000
-
(14)
(1,455)
1,206
245
49
(62)
17
-
5,723
(598)
-
(28)
(426)
784
(257)
(144)
(29)
86
14
4,627
(646)
62
(273)
(5,376)
(4,030)
279
-
260
-
Deferred tax is calculated in full on temporary differences under the liability method using the tax rates that have been substantively
enacted for future periods, being 25% from 1 April 2023. The deferred tax liability has arisen due to the timing difference on property,
plant and equipment, the deferral of capital gains tax arising from the sale of a property and other temporary and deductible differences.
Deferred tax assets have been recognised in respect of tax losses and other temporary differences giving rise to deferred tax assets where
the Directors believe it is probable that they will be recovered. The Group has unused tax losses of approximately £30.0m in relation to UK
losses and an unprovided deferred tax asset of £2.1m.
80
Everyman Media Group PLC
Annual report and financial statements
Notes on the financial statements (continued)
29 Deferred tax (continued)
(Company only)
Included in non-current assets
Opening balance
Recognised in profit and loss
Net book value in excess of tax written down value
Leases acquired
Amortisation of IFRS 16 accumulated restatement
Credit to profit and loss
The deferred tax asset comprises:
Temporary differences on property, plant and equipment
Temporary differences on IFRS 16 accumulated restatement
Temporary differences on leases acquired
29 December
30 December
2022
£000
(188)
(150)
16
(62)
8
(38)
2021
£000
(150)
(78)
(21)
(29)
(22)
(72)
29 December
30 December
2022
£000
(82)
(106)
-
(188)
2021
£000
(99)
(114)
63
(150)
The Company has a deferred tax liability due to the timing difference on property, plant and equipment. The Company has recognised
unutilised tax allowances of £nil (2021: £nil) at expected tax rates in future periods.
81
Everyman Media Group PLC
Annual report and financial statements
Notes on the financial statements (continued)
30 Share capital and reserves
Authorised, issued and fully paid Ordinary shares
At the start of the year
Issued in the year
At the end of the year
Number of shares
Authorised, issued and fully paid Ordinary shares
At the start of the year
Issued in the year
At the end of the year
Nominal
value
£0.10
29 December
30 December
2022
£000
9,117
1
9,118
2021
£000
9,110
7
9,117
29 December
30 December
2022
Number
2021
Number
91,162,969
15,000
91,177,969
91,095,469
67,500
91,162,969
The holders of Ordinary shares are entitled to one vote per share. During the year the Company issued 15,000 Ordinary shares at a price of
109.5p (2021 67,500 Ordinary shares at prices ranging from 93.5p to 100p)..
Merger reserve
In accordance with s612 of the Companies Act, the premium on Ordinary shares issued in relation to acquisitions is recorded as a merger
reserve.
Share premium
Share premium is stated net of share issue costs.
Dividends
No dividends were declared or paid during the period (2021: £nil)
31 Share-based payment arrangements
EMI, Non-Qualifying and LTIP Schemes
The Group operates three equity-settled share-based remuneration schemes for employees. The schemes combine a long term incentive
scheme, an EMI scheme and an unapproved scheme for certain senior management, executive Directors, non-executive Directors and
certain contractors.
82
Everyman Media Group PLC
Annual report and financial statements
Notes on the financial statements (continued)
31 Share-based payment arrangements (continued)
The terms and conditions of the grants are as follows:
Persons entitled
Grant date
Method of
Settlement
Instruments
outstanding
Vesting
Contractual
life
000's
Conditions*
of options
29.10.2013
Equity-settled
98
Management employees, Directors and
contractors
Management employees, Directors and
contractors
Directors
Management employees, Directors and
contractors
Management employees
Management employees
Directors
Management employees and
contractors
Management employees and Directors
Management employees and Directors
Management employees and
contractors
Management employees
Management employees
Management employees and Directors
Management employees and Directors
Management employees
Directors
Management employees and Directors
Directors
Management employees
Management employees
Management employees
Management employees and Directors
Management employees and Directors
Management employees and Directors
29.10.2013
04.11.2013
29.10.2015
15.12.2016
10.01.2017
13.03.2017
11.10.2017
23.11.2017
23.04.2018
02.10.2018
03.10.2018
05.11.2018
24.09.2019
30.04.2020
30.09.2020
12.11.2020
22.12.2020
08.04.2021
22.11.2021
17.03.2022
30.04.2022
05.05.2022
27.06.2022
24.10.2022
Equity-settled
150
Equity-settled
50
Equity-settled
218
Equity-settled
80
Equity-settled
30
Equity-settled
250
Equity-settled
425
Equity-settled
Equity-settled
87
30
Equity-settled
205
Equity-settled
15
Equity-settled
1
Equity-settled
Equity-settled
Equity-settled
Equity-settled
Equity-settled
Equity-settled
Equity-settled
Equity-settled
Equity-settled
Equity-settled
Equity-settled
Equity settled
698
550
250
1,600
150
1,000
8
75
585
5
175
125
123
6,974
4
4
4
4
4
9
1
2
2
3
4
4
4
4
5
6
4
7
7
4
4
4
4
4
10 years
10 years
10 years
10 years
10 years
10 years
10 years
10 years
10 years
10 years
10 years
10 years
10 years
10 years
10 years
10 years
10 years
10 years
10 years
10 years
10 years
10 years
10 years
10 years
10 years
*1 EMI options. These vest in equal tranches on the first, second and third anniversaries of the date of grant.
*2 Unapproved options. These vest in equal tranches on the first, second and third anniversaries of the date of grant.
*3 Unapproved options. These vest in equal tranches on the first, second and third anniversaries of the date of grant. Each tranche is
exercisable if the Company share price exceeds £1.30, £1.50 and £1.80 respectively for 15 consecutive trading days.
*4 Unapproved options. These vest on the third anniversary of the date of grant.
*5 Unapproved options as part of the long-term incentive plan. These vest on the fifth anniversary of the date of grant. Half of the options
are exercisable if the share price exceeds £2.10 for 2 consecutive trading days within 60 days following the announcement of the
preliminary results for 2017. The other half of the options are exercisable based on internal Adjusted EBITDA targets.
*6 Unapproved options as part of the long-term incentive plan. These vest 4 years and 7 months from the date of grant. 45% of the options
are exercisable if the share price exceeds £2.95 for 2 consecutive trading days within 60 days following the announcement of the
preliminary results for 2018. The other 55% of the options are exercisable based on internal Adjusted EBITDA targets.
83
Everyman Media Group PLC
Annual report and financial statements
Notes on the financial statements (continued)
31 Share-based payment arrangements (continued)
*7 Unapproved options as part of the long-term incentive plan. These vest 4 years and 2 months from the date of grant. 45% of the options
are exercisable if the share price exceeds £2.95 for 2 consecutive trading days within 60 days following the announcement of the preliminary
results for 2018. The other 55% of the options are exercisable based on internal Adjusted EBITDA targets.
*8 Unapproved options. These vested on the 31st December 2021 and can be exercised subject to continued employment. The exercise price
is £1.50.
*9 Unapproved options as part of the long-term incentive plan. These vest 3 years and 2 months from the date of grant. Between 40% and
100% of the options are exercisable based on internal Adjusted EBITDA targets.
All equity-settled share options are measured at fair value as determined through use of the Binomial technique, at the date of grant, aside
from those with market-based performance conditions, which are valued using the Monte Carlo model. During the year, no equity-settled
share options were issued with market-based performance conditions.
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting
period, based on the Group and Company’s estimate of shares that will eventually vest and adjusted for the effect of non-market-based
vesting conditions.
The inputs into the Binomial model for the share options issued in the year were as follows:
Option scheme conditions for options issued in the year:
Weighted average share price at grant date (pence)
Weighted average option exercise prices (pence)
Expected volatility
Expected option life
Weighted average contractual life of outstanding share
options
Risk-free interest rate
Expected dividend yield
Fair value of options granted in the year (pence)
29 December
29 December
2022
2022
Performance No performance
criteria
criteria
0.95
0.10
40.0%
4 years
120.0
120.0
40.0%
3 years
10 years
10 years
1.57%
0.0%
0.85
1.57%
0.0%
0.54
Volatility has been calculated based on historical share price movements of the Company as at each grant date. Prospective volatility
estimates have been adjusted to remove the impact of high volatility experienced in mid-March 2020, related to Covid-19.
84
Everyman Media Group PLC
Annual report and financial statements
Notes on the financial statements (continued)
31 Share-based payment arrangements (continued)
Weighted average exercise
price per share in the year ended
29 December
30 December
29 December
30 December
2022
Pence
2021
Pence
2022
2021
Number
Number
Options at the beginning of the year
142.00
109.50
Options issued in the year
Options exercised in the year
Option forfeited in the year
Options at the end of the year
0.75
1.09
0.69
104.28
0.72
0.94
0.89
142.00
6,925,003
1,518,543
(15,000)
6,559,818
1,860,888
(67,500)
(1,454,713)
(1,428,203)
6,973,833
6,925,003
No options lapsed beyond their contractual life in the year (Year ended 2021: nil).
Growth Shares
Under the A Growth Share Scheme, Alex Scrimgeour was issued with 2,000,000 A shares in Everyman Media Holdings Limited on 8 April
2021. The rights attaching to the A shares include a put option which, when exercised, enable the shareholder to convert the shares into
ordinary shares of the Company. The Growth Shares in Everyman Media Holdings Ltd will vest subject to the achievement of share price
targets. 1,000,000 Growth Shares in Everyman Media Holdings Ltd will vest if the Company has an average closing mid-market price of
£2.25 or more over any 15 consecutive trading days (“Target 1”). The remaining 1,000,000 Growth Shares in Everyman Media Holdings Ltd
will vest if the Company has an average closing mid-market price of £3.00 or more over any 15 consecutive trading days (“Target 2”).
To the extent that the performance targets have been met, the Growth Shares in Everyman Media Holdings Limited will entitle Mr Scrimgeour
to receive an amount equivalent to the market value of an ordinary share in the Company less £1. The vested Growth Shares shall be
exchanged for ordinary shares in the Company on or after 31 December 2022 if Target 1 has been achieved and on or after 31 December
2023 if Target 2 has been achieved, provided that if a change of control of the Company occurs at any time, any vested Growth Shares which
have not been exchanged by then, shall be exchanged on the change of control of the Company.
Details of the outstanding shares under the A Growth Share Scheme are as follows:
Outstanding at beginning of year
Granted in year
Exercised in year
Outstanding at end of year
29 December
30 December
2022
2,000,000
2021
-
-
2,000,000
-
2,000,000
-
2,000,000
85
Everyman Media Group PLC
Annual report and financial statements
Notes on the financial statements (continued)
31 Share-based payment arrangements (continued)
The Monte Carlo model was used for fair valuing the A Growth Share awards at the date of grant. The inputs to the model were as follows:
Number of shares
Share price target
Expected volatility
Risk free interest rate
Option life (years)
Starting share price
A Growth Share Scheme
Target 1
1,000,000
£2.25
45%
0.10%
5
£1.41
Target 2
1,000,000
£3.00
45%
0.10%
5
£1.41
Share-based payments charged to the profit and loss were as follows:
Share options charge
Growth shares charge
Administrative costs
29 December
30 December
2022
£000
939
598
1,537
2021
£000
625
447
1,072
The charge for the Company was £nil (2021: £nil) after recharging subsidiary undertakings with a charge of £1,537,000 (2021: £1,072,000).
The relevant charge is included within administrative costs.
There are 3,336,124 options exercisable at 29 December 2022 in respect of the current arrangements (2021: 1,488,103). 15,000 options
were exercised in the year (2021: 67,500).
Volatility for options issued was determined by reference to movements in the share price over 5 years prior to the grant date. The market
value conditions, where applicable, are reflected in the forfeited options following 60 days of the announcement of the annual results
since the performance conditions are met/not met prior to the vesting period and as such no estimate of potential achievement of market
values is required.
32 Commitments
There were capital commitments for tangible assets at 29 December 2022 of £15,878,000 (2021: £9,407,000). This amount is net of
landlord contributions of £7,055,000 (2021: £7,820,000).
33 Events after the balance sheet date
Sale and Leaseback of Crystal Palace Venue
On 16 January 2023, the Group completed the sale and leaseback of its freehold property at 25 Church Road, London SE19 2TE. Proceeds
from the sale, after associated fees and disbursements, were £3.8m. At the balance sheet date, the property was held for sale in ECPee
Limited, with a carrying value of £3.2m.
As a result of the transaction, the Group will recognise a net profit on disposal of £0.6m in 52-week period ended 28 December 2023.
The leaseback element of the transaction is accounted for as a finance lease under IFRS 16. This will result in the recognition of a right of
use asset and a lease liability in 2023.
Under the terms of the lease agreement, the Group has leased back the property for a period of 25 years at annual rent of £240,000. The
rent is to be reviewed every five years. The first and second reviews are to be upwards only on an indexed basis by reference to increases
in the Retail Prices All Items Indexed with a collar of 1% per annum and a cap of 4% per annum. The third and fourth reviews are on an
upwards only basis to be the higher of the indexed rent (increased in accordance with the mechanism agreed for the first two reviews) and
the open market rent pursuant to an open market rent review mechanism.
86
Everyman Media Group PLC
Annual report and financial statements
Notes on the financial statements (continued)
33 Events after the balance sheet date (continued)
Extension of Banking Facilities
On 14th March 2023, the Group extended its £25m revolving credit facility (“RCF”) by a period of 3 months, to 17 April 2024. The Group’s
residual £15m facility is a Coronavirus Large Business Interruption Loan Scheme (“CLBILS”) and cannot be extended beyond its original
maturity date of 17 January 2024.
The Group has begun a process to re-finance both the RCF and the CLBILS and expects to complete this in due course.
34 Related party transactions
In the year to 29 December 2022 the Group engaged services from entities related to the Directors and key management personnel of
£617,000 (2021: £566,000) comprising consultancy services of £31,000 (2021: £10,000), office rental of £100,000 (2021: £98,000) and
venue rental for Bristol, Harrogate and Maida Vale of £486,000 (2021: £458,000). Due to the pandemic the Group received rent discounts
on the related properties amounting to a saving in 2022 of £nil (2021: £123,000). There were no other related party transactions. There are
no key management personnel other than the Directors.
The Group's commitment to leases is set out in the above notes. Within the total of £122,000,000 (2021:£116,000,000) is an amount of
£550,000 (2021:£650,000) relating to office rental, £4,523,000 (2021:£4,800,000) relating to Stratford-Upon-Avon, £3,596,000
(2021:£2,100,000) relating to Bristol and £4,670,000 (2021:£4,900,000) relating to Harrogate. The landlords of the sites are entities related
to the Directors of the Company.
35 Ultimate controlling party
The Company has a diverse shareholding and is not under the control of any one person or entity.
87