Half-year Results

Company well positioned for sustained growth

Time Out Group plc (AIM: TMO), the global media and hospitality business, today announces its unaudited results for the six months ended 31 December 2023.

Financial highlights

• Group gross revenues increased by 7% on a 'like for like'(1) basis in constant currency
• Reported gross revenue of £52.5m (2022: £53.8m) decreased by 2% due to stronger GBP vs USD
• Gross margins increased by 300 basis points
• Group adjusted EBITDA(2) increased 151% to £6.0m (2022: £2.4m)
• Group operating loss narrowed to £0.1m (2022: £6.8m loss)
• Cash of £7.1m at 31 December 2023 (2022: £5.3m) and borrowings of £34.8m (2022: £31.4m), resulted in adjusted net debt(3) of £27.7m (2022: £26.0m). Reported net debt was £49.0m (2022: £52.7m) including £21.3m of IFRS 16 lease liabilities (2022: £26.7m)

Operational highlights

• Time Out Market: strong profitability and expanding global footprint

o Following Cape Town's successful opening in November 2023, the Group has seven Markets open with a further two under construction (Porto and Barcelona, both scheduled to open in 2024)

o Bahrain Market signed in the period, expected to open towards the end of 2024, in addition to five further sites contracted to open FY25-FY27

o Market 'like for like' gross revenue(1) grew 11% in constant currency to £36.5m (2022: £33.0m)

o Adjusted EBITDA increased significantly to £6.1m (2022: £2.5m) with improved gross margin and operational productivity gains(4)

• Time Out Media: growing audience and high value campaigns driving profitability

o Global monthly brand audience grew by 12% to 136m(5)

o Media gross revenue was unchanged year-on-year in constant currency

o Winning big-ticket campaigns from an expanding client roster including a new global media campaign and cross-platform partnership with Coca-Cola spanning H2 FY24 and FY25 signed post period-end

o Adjusted EBITDA increased 43% to £2.5m (2022: £1.8m) with gross margin up by 200 basis points to 80% (2022: 78%)(4)

Commenting on the results, Chris Ohlund, CEO of Time Out Group plc, said:

"We are making continuing progress in delivering our growth plan. Our trusted brand and 'best of the city' content continues to attract more traffic to our Media and more footfall to our Markets as we expand our global presence. By leveraging the growing synergies between Media and Markets, we keep our brand and proposition fresh, unique and suited to customer preferences alongside increasing our profitability. On behalf of the Board I would like to thank everyone at Time Out for their continued commitment and hard work, resulting in the delivery of these strong results.

"Whilst we made progress on many fronts, I am particularly pleased with two specific milestones: the successful opening and continued popularity of Time Out Market Cape Town - which expands the footprint of our food and cultural markets to four continents - and the launch of our partnership with Coca-Cola which is our first global advertising campaign for a client of its scale.

"Looking ahead, we will continue to focus on growing our creative campaign solutions for advertisers. We offer access to our global audience through both digital (Time Out Media) and In-Real-Life (Time Out Markets). We believe the synergies created by further increasing our digital audience in combination with the physical audience in our Time Out Markets are unique on a global scale. It is these synergies which make Time Out a differentiated and increasingly attractive partner for international brands and will help us to grow profits further in the future."

Outlook

The business has made significant further progress in driving profitability and operational cash generation and has a number of potential growth avenues including:

• Continuing to sign and open further Time Out Markets both Owned and Operated and Management Agreements through collaboration with leading landlords and developers
• The nine Management Agreements signed to date, once all operational are expected to generate a minimum of £14m EBITDA per annum
• Improving our Time Out digital technology proposition, growing our Media audience with engaging content with an increased focus on video, and offering creative solutions to global blue-chip clients
• Further integration of Media and Markets to drive additional revenues and improve the audience experience

Our recent progress gives us confidence in our scaling proven models and we are well positioned for sustained growth.

• 'Like for like' revenue is calculated in reference to reported Gross revenues by using a constant currency (FY23 rates) and removing the prior year period sales from Miami Market, since closed.
• Adjusted EBITDA is operating loss stated before interest, taxation, depreciation, amortisation, share-based payments, exceptional items and profit/(loss) on the disposal of fixed assets. This is a non-GAAP alternative performance measure ("APM") that management uses to aid understanding of the underlying business performance. See appendix Alternative Performance Measures for a reconciliation to the statutory numbers.
• Adjusted net debt excludes lease-related liabilities under IFRS 16. This is an APM. See appendix: Alternative Performance Measures for a reconciliation to the statutory numbers.
• The prior period profit comparatives for Media and Markets have been restated to report corporate central cost recharges on a consistent basis.
• Global brand audience is the estimated monthly average in the year including all Owned & Operated cities and franchises. It includes print circulation and unique website visitors, unique social users (as reported by Facebook and Instagram with social followers on other platforms used as a proxy for unique users), social followers for other social media platforms, opted-in members, and Market visitors.

Chief Executive's Review

Group overview

Financial summary

• 'Like for like' revenue is change in Gross Revenues at constant currency, excluding Miami Market (closed since HY23).
• Net revenue is calculated as gross revenue less concessionaires' share of revenue. See appendix Alternative Performance Measures for a reconciliation to statutory numbers.
• Gross margin is calculated as gross profit as a percentage of net revenue.
• Adjusted measures are stated before interest, taxation, depreciation, amortisation, share-based payments, exceptional items and profit/(loss) on the disposal of fixed assets. These are APMs that management uses to aid understanding of the underlying business performance. See appendix Alternative Performance Measures for a reconciliation to statutory numbers.

Group revenue increased by 7% in constant currency on a 'like for like' basis and Group Adjusted EBITDA increased significantly to £6.0m (2022: £2.4m).

• Reported net revenue unchanged year on year at £39.5m
• Divisional operating expenses decreased by 12%, as a result of reductions in fixed costs and focus on operational efficiency; continued growth offers the scope to further dilute fixed costs as a % of sales
• Improved divisional adjusted EBITDA of £8.6m (2022: £4.3m)

Time Out Market trading overview

• 'Like for like' revenue is change in Gross Revenues at constant currency, excluding Miami Market (closed since HY23).
• Net revenue is calculated as gross revenue less concessionaires' share of revenue. See appendix Alternative Performance Measures for a reconciliation to statutory numbers.
• Gross margin calculated as gross profit as a percentage of net revenue.
• Adjusted measures are stated before interest, taxation, depreciation, amortisation, share-based payments, exceptional items and profit/(loss) on the disposal of fixed assets. These are APMs that management uses to aid understanding of the underlying business performance. See appendix Alternative Performance Measures for a reconciliation to statutory numbers.
• The prior period profit comparatives for Media and Markets have been restated to report corporate central cost recharges on a consistent basis.

Market 'like for like' gross revenues increased 11% in constant currency, with adjusted EBITDA of £6.1m, 143% higher than the comparative period (2022: £2.5m).

• Successful opening of Time Out Market Cape Town, with strong local media coverage and footfall, resulting in high transaction volumes
• Following the successful trial of new customer ordering technology in Cape Town, a roll out to US Markets will be completed in H2 FY24, alongside an increase in Media presence in-market
• Optimising operations in existing Markets driving increased sales and higher EBITDA margins
• The capex cost per square foot for upcoming openings in Barcelona and Porto is on track to be 40% lower than previous Owned and Operated Market openings, due to improvements in design process
• Around 1,000 cultural activations a year, leveraging Media authority to drive awareness and footfall

The pipeline of eight new sites in development and scheduled to open over the next three years is as follows:

• 2024: Porto (Owned & Operated)
• 2024: Barcelona (Owned & Operated)
• 2024: Bahrain (Management Agreement)
• 2025: Vancouver (Management Agreement)
• 2025: Abu Dhabi (Management Agreement)
• 2025: Osaka (Management Agreement)
• 2027: Prague (Management Agreement)
• 2027: Riyadh (Management Agreement)

Time Out Media trading overview

• Gross revenues using a constant currency (FY23 rates)
• Gross margin calculated as gross profit as a percentage of gross revenue.
• Adjusted measures are stated before interest, taxation, depreciation, amortisation, share-based payments, exceptional items and profit/(loss) on the disposal of fixed assets. These are APMs that management use to aid understanding of the underlying business performance. See appendix Alternative Performance Measures for a reconciliation to statutory numbers.
• The prior period profit comparatives for Media and Markets have been restated to report corporate central cost recharges on a consistent basis.

On a constant currency basis, Media like for like revenue remained flat at £18.4m whilst gross margin increased by two percentage points to 80% and adjusted EBITDA grew by 43% to £2.5m.

Successful content strategy is driving Time Out's global monthly brand audience(1) which grew by 12% to 136m. A focus on increasing short-form video content and Gen Z engagement has resulted in overall reach on social media rising by 12 percentage points, along with continued growth in website traffic to TimeOut.com with visits up 12%:

• 200% increase in video views YoY
• 115% growth in Instagram audience and 100% on TikTok YoY
• 79% growth in audience aged 18-24 in London

Engaging and authoritative content including "Time Out world's best cities" and "World's coolest neighbourhoods" continues to drive global PR reach and brand awareness with coverage across broadcast and over 1,000 press articles worldwide.

Post period end, a new partnership was announced with Coca-Cola, to create a global travel guide inspired by cultural moments; "Foodmarks by Coca-Cola, powered by Time Out" which launched in February 2024. The campaign has global reach and will span H2 FY24 and FY25, leveraging Time Out's brand heritage and authenticity, grounded in dining, places, people and moments.

Repeat business continues to be significant, with creative campaigns undertaken for brands including British Airways, Uber, Pernod, Hilton and Disney.

Whilst we are using generative AI to support operational efficiency and insights, all of our content creation and editorial curation is performed by expert local writers and editors.

• Global brand audience is the estimated monthly average in the year including all Owned & Operated cities and franchises. It includes print circulation and unique website visitors (Owned & Operated), unique social users (as reported by Facebook and Instagram with social followers on other platforms used as a proxy for unique users), social followers (for other social media platforms), opted-in members and Market visitors.

Group Financial Review

• 'Like for like' revenue is change in Gross Revenues at constant currency, excluding Miami Market (closed since HY23).
• Gross margin calculated as gross profit as a percentage of net revenue.
• Adjusted measures are stated before interest, taxation, depreciation, amortisation, share-based payments, exceptional items and profit/(loss) on the disposal of fixed assets. These are APMs that management uses to aid understanding of the underlying business performance. See appendix Alternative Performance Measures for a reconciliation to statutory numbers.

Revenue and gross profit

'Like for like' revenue in constant currency increased by 7% to £54.9m (2022: £51.4m).

Reported net revenue for the year unchanged at £39.5m, with gross margins increased by three percentage points to 83%.

Operating expenses

Administrative expenses across the group reduced by 15% to £32.9m (2022: £38.6m).

Adjusted EBITDA

Group adjusted EBITDA of £6.0m (FY22 £2.4m) is stated before interest, taxation, depreciation and amortisation, share-based payment charges, exceptional items, and loss on disposal of fixed assets. The material improvement is a result of increased profitability and improved operational efficiency. Group adjusted EBITDA is a non-GAAP Alternative Performance Measure, which is used by the Board to manage business performance and to allocate resources across the Group.

Operating loss

The reported operating loss was £0.1m (2022: £6.8m loss), a £6.7m improvement comprising +£3.6m improvement in EBITDA, £(1.5)m lower exceptional cost, £(1.2)m lower depreciation and amortisation and £(0.5)m lower share based payment expense

The exceptional costs of £0.8m (2022: £2.3m) includes redundancy costs of staff who left the Group following restructuring.

Net finance costs

Net finance costs of £4.5m (2022: £5.7m) primarily relates to interest on the Group's debt of £3.2m (2022: £2.5m) and interest cost in respect of lease liabilities of £1.3m (2022: £1.6m).

Foreign exchange

The revenue and costs of Group entities reporting in dollars and euros have been consolidated in these financial statements at an average exchange rate of $1.25 (2022 $1.18) and €1.16 (2022: €1.16) respectively.

Cash and debt

Cash and cash equivalents increased by £2.0m to £7.1m (30 June 2023: £5.1m). This was driven by the Group Adjusted EBITDA of £5.8m (2022: £2.4m), exceptional costs of £(0.8)m, tax paid of £(0.8)m, net working capital inflows of £1.6m, capital expenditure of £(3.4)m, net proceeds of financing of £2.2m and the repayment of lease liabilities of £(2.3)m.

At 31 December 2023 borrowings principally comprised a loan facility with Crestline of €33.3m (€29.2m plus capitalised interest).

On 7 November 2023 the Group agreed to an amendment of an existing £5m unsecured Loan Note with Oakley Capital investments ("OCI") to extend the repayment date to 30 June 2025. This is a related party transaction under AIM Rule 13. Please see further disclosure in relation to this in note 10.

Going concern

The financial statements have been prepared under the going concern basis of accounting as the Directors have a reasonable expectation that the Group and Company will continue in operational existence and be able to settle their liabilities as they fall due for the foreseeable future, being a period of at least 12 months from the date of approval of the financial statements ("forecast period").

In making this determination, the Directors have considered the financial position of the Group, projections of its future performance and the financing facilities that are in place.

The Board is satisfied that the Group will be able to operate within the level of its current debt and financial covenants and will have sufficient liquidity to meet its financial obligations as they fall due for a period of at least 12 months from the date of signing these financial statements. For this reason, the Group and Company continue to adopt the going concern basis in preparing its financial statements.

Chris Ohlund

Group Chief Executive

Consolidated Income statement

6 Months ended 31 December 2023

Other comprehensive income:

Items that may be subsequently reclassified to the profit or loss:

Notes to the condensed consolidated statements

Interim Information

The financial information ("condensed consolidated statements") set out in this announcement represents the results of the Group and its subsidiaries for the six months ended 31 December 2023. While the financial information included in these condensed consolidated statements has been prepared in accordance with the recognition and measurement criteria of International Accounting Standards ("IAS") in conformity with the requirements of the Companies Act 2006, this announcement does not itself contain sufficient information to comply with lASs and IFRSs.

The condensed financial information is unaudited and has not been reviewed by the Group's auditor. The financial information for the year ended 30 June 2023 is derived from the audited financial statements for the year ended 30 June 2023, which have been delivered to the Registrar of Companies. The external auditor has reported on the accounts and their report did not contain any statements under Section 498 of the Companies Act 2006.

• Accounting policies
• Exchange rates

The significant exchange rates to UK Sterling for the Group are as follows:

Borrowings principally comprise the Crestline Europe LLP facility, which was used to repay the Incus Capital Finance loan facility, which was fully repaid on 30 November 2022.

Notes to the cash flow statement

Reconciliation of loss before income tax to cash used in operations

Post balance sheet events

There have been no post balance sheet date events.

• Principal risks and uncertainties
• Extension of unsecured Loan Note with related party

On 7 November 2023, the Group agreed to an amendment of the unsecured Loan Note with Oakley Capital investments ("OCI") to extend the repayment date to 30 June 2025. The loan note, listed on The International Stock Exchange ("TISE") will increase from £5.1m to £5.2m (representing interest accrued on the initial Loan Note). The terms remain the same, with interest charged at a 90-day average SONIA rate plus 10% per annum, with an exit premium.

OCI is interested in 67,436,385 ordinary shares of 0.001 pence each in the Company ("Ordinary Shares"), representing approximately 19.97 per cent. of the Company's issued share capital. OCI and Oakley Capital Private Equity L.P. together hold 147,897,400 Ordinary Shares, representing approximately 43.79 per cent. of the Company's issued share capital. As a substantial shareholder in Time Out, OCI is a related party of the Company and the extension of the OCI Loan Note is, for the purposes of AIM Rule 13, considered a related party transaction. The Directors of the Company (excluding Peter Dubens, Non-Executive Chairman of the Company, David Till, Non-Executive Director of the Company and Alexander Collins, Non-Executive Director of the Company, who are not considered independent for the purposes of this transaction as a consequence of being partners of Oakley Capital Private Equity L.P. and Oakley Capital Limited, and Peter Dubens being a non-executive director of OCI) consider that, having consulted with the Company's nominated adviser, Liberum Capital, the terms of the extension of the OCI Loan Note are fair and reasonable insofar as shareholders in the Company are concerned.

Appendices: Alternative Performance Measures

Appendix 1 Adjusted net debt

*The prior period comparatives have been restated to reclassify corporate cost recharges from Time Out Market and Time Out Media to Corporate costs to better reflect the underlying performance of the divisions.

Appendix 3 - Explanation of alternative performance measures (APMs)

The Group has considered the European Securities and Markets Authority (ESMA) 'Guidelines on Alternative Performance Measures' in these annual results.

Global monthly brand audience is the estimated monthly average in the period including all Owned & Operated cities and franchises. It includes print circulation and unique website visitors (Owned & Operated), unique social users (as reported by Facebook and Instagram with social followers on other platforms used as a proxy for unique users), social followers (for other social media platforms), opted-in members and Market visitors.