All ThingsConsidered - Final Results
RNS Number : 2089Q
All Things Considered Group PLC
27 June 2022
 

27 June 2022

All Things Considered Group Plc

("ATC", the "Company" or the "Group")

Final Results

Solid growth demonstrating strength of integrated business model

All Things Considered Group Plc (AQSE: ATC), the independent music company housing talent management, live booking, livestreaming and talent services, is pleased to announce audited results for the year ended 31 December 2021.

Financial Highlights

·      Revenue increased 28% to £9.1m (2020: £7.1m)

·      Revenue and other operating income increased 37% to £10.3m (2020: £7.5m)

·    Adjusted loss before tax* (and before non-controlling interest) of £2.7m (2020: loss of £0.3m), partly due to a non-recurring loss in H1 2021 resulting from a technical outage at the Glastonbury 'Live at Worthy Farm' livestreamed event which was disrupted by some technical issues caused by a third-party supplier. This resulted in customer refunds and a reduction in ticket sales

·    Adjusted loss before tax for H2 2021 of £0.1m, demonstrating a solid performance during the prevailing Covid-constrained environment

·      Improved cash position with net cash, after short term debt, of £4.4m as at 31 December 2021 (2020: £1.6m)

*adjusted loss is the loss before tax adjusted to exclude £0.6m of IPO and related costs

Operational Highlights

·   £2m strategic investment by Deezer into Driift, the Group's pay-per-view livestreaming service, and five-year exclusive collaboration arrangement with Dreamstage to leverage technical and commercial potential

·    Significant number of new clients added to ATC's Management and Live Agency rosters, despite market disruption from Covid-related restrictions

·    Strengthened Board and management team, including appointment of CFO post period end, providing capacity to scale

·   Further expansion into North American market with addition of new services and larger footprint, including opening of New York office post period end

·    Milestone listing on the Apex segment of the AQSE Growth Market in December 2021, providing funding for further organic and acquisitive growth

Current Trading and Outlook

·      Performance in line with management expectations, with good momentum into 2022

·      Significant upturn in live music activity following relaxation of Covid-19 restrictions, benefitting ATC's Live Agency and Management divisions

·   Strong and growing pipeline for the Group's evolving hybrid live performance formats delivered by Driift, expected to generate higher margin business going forward.  Exemplified by the Little Mix direct from the O2 livestream which generated substantial livestream ticket sales alongside a broadcast into cinemas that was number 5 in that weekend's UK cinema charts

 

Adam Driscoll, Chief Executive Officer of ATC Group plc, commented

"We are pleased to report on a year of significant advancements for the Group, which saw double digit revenue growth despite significant disruption from Covid-19 restrictions, the further establishment of our new service offerings, an expanding market footprint, and culminating in our successful IPO.

"The Group's unique business model based on an integrated service approach for artists, or 'one-stop-shop,' and deep culture of innovation, has demonstrated resilience and adaptability within the rapidly changing music industry. An example of this is the Driift produced and directed for-mobile performance for Westlife that attracted a record-breaking online audience of 28 million concurrent viewers in China alone.

"Strong momentum has continued through 2022 as market conditions return to more normalised levels with the opening up of live events and related activity. The music industry continues its path of structural change, driven by new technologies, changing music consumption behaviour, and artists' ownership over their commercial interests, leaving the Group positioned to capitalise on new growth opportunities. Supported by a healthy pipeline of opportunities, the Board looks forward to a year of growth and with confidence in achieving market expectations."

 

 

-ENDS-

 

For more information, please contact:

 

ATC Group

Via Alma PR

Adam Driscoll, CEO 


Rameses Villanueva, CFO


 

 


Canaccord Genuity

+44(0)20 7523 8000

Aquis Corporate Adviser and Broker 


Adam James / Patrick Dolaghan

 

 


Alma PR   

+44(0)20 3405 0205 

Financial PR


Hilary Buchanan / Susie Hudson / Lily Soares Smith


 

Notes to Editors

 

ATC Group is a prominent independent music company offering live rights, live agency, production, artist management and investment and a range of other music artist services. ATC Group is the only independently owned company in the industry housing talent management, live booking, livestreaming and talent services within the same group.

 

The Company has an established, long-standing client base with over 60 artists on its management roster and over 400acts on the live roster. One of its livestreaming offerings, Driift, has delivered shows with Niall Horan, Andrea Bocelli, Kylie, Johnny Marr, The Smile and others, selling over 600,000 tickets across 190 countries since being established in June 2020.

 

The Group's five key divisions, grouped under two segments, are:

·      Artist management and development

·      ATC Management - artist management

·      ATC Live- live event booking agency for artists

·      ATC Services

·      Polyphonic -an artist partnerships venture

·      Live streamed events

·      Driift, a global livestreaming business, and Flymachine, a livestreaming platform

 

 

The Group is headquartered in London, with offices in Los Angeles, New York and Copenhagen and is led by an experienced management team who have operated across multiple music industry sectors.

 

For more information see: www.atcgroupplc.com

 

 

 


Co-Chairs' Statement

We are pleased to present our first Annual Report and Accounts as a listed business, reporting on a year of significant milestones and solid growth. The results achieved reflect both the challenges and opportunities that came with 2021. Despite the impact of COVID-19 restrictions on the earnings potential for our Live Agency and Artist Management divisions, the early-mover establishment of Driift proved a strategic success, driving overall Group revenue growth of 28% compared to the prior year.

The Group ended the year in an improved cash position following two significant rounds of investment: the IPO, together with a Deezer investment of £2m into Driift. This provides the Group with greater resources and flexibility to pursue its organic and acquisitive growth strategy as trading conditions normalise through 2022.

People

It was pleasing that we were able to retain the services of nearly all of the Group's dedicated employees during the pandemic and strengthen the senior management team in readiness for the IPO.  It is a testament to everyone in the Group that we ended two tough years in a significantly better place and our thanks go out to all our people.

In particular, it would be remiss not to thank the Group's CEO, Adam Driscoll as he was instrumental in attracting investment into the business and getting the Group prepared for a public listing.

Board and Governance

In preparation for the IPO we established a new Board and implemented governance procedures appropriate for a listed business.  We welcomed Andy Glover and Shirin Foroutan to the Board as non-executive directors who bring strong experience across finance and the music industry. Post the listing of the Group on AQSE, the Board was further enhanced by the recruitment of our Chief Financial Officer, Ram Villanueva.  We have established a good working relationship across the Board and the Group is beginning to see the benefits of our collaboration.

Summary and Outlook

Despite the significant consequences to the music sector of COVID-19 lockdown strategies, the Group closed 2021 in a stronger position with a strengthened operating platform, a further diversified offering and an enhanced geographic reach.

Worthy of note is the foothold the Group has established in the important North American market.  The office in Los Angeles increased its management footprint, opened up the important promotion business through the acquisition of 100 per cent. Interest in Your Army USA (a US-based electronic promotions business) and established digital technology capability through the development of namethemachine (a software and media development company with a focus on emerging technology and transmedia solutions). The opening of an office in New York in early 2022 is an important step, not just for accessing the East Coast USA market but also for signalling the Group's intent generally.

Driift continues to mature and evolve its business model now that fans are able to return to watching live music in person. The Smile's 'Full Circle' show performed and recorded at the end of January 2022 proved to be an important watershed moment for Driift, a concept that took in ticket purchasers from both around the world to watch remotely and locally in-person.

The US and UK markets were the first to properly open up to live touring with the EU lagging a couple of months behind.  Whilst this impacted the Group's first quarter, the important summer festival season is largely untouched and we are confident that the autumn touring season will not suffer as it did in 2021.  Whilst business is returning to normal, it is worth noting that the two-year gap in touring as a result of the COVID-19 pandemic has created a short-term over-supply of talent which is allowing promoters to competitively price their offers.  Ticket sales are yet to return to their pre-COVID-19 levels for many shows, not just because of the oversupply but also because there is still some fan nervousness to purchase.

Against this backdrop, the strength of the Group's proposition, unique holistic approach and pipeline of opportunities enables the Board to be confident in continued growth for ATC Live and ATC Management in the current year. Both divisions are looking to add executive talent to strengthen their propositions and are focused on attracting established artists to their rosters, as well as growing and breaking new acts.

Importantly, the 10-person executive management team is working well together and are committed to the Group's future. As the market recovers from the last two years this will help us win new business and continue our growth.  The team is well diversified in respect of gender and race and we are committed to ensuring that balance of representation is maintained as we expand.

 

Brian Message and Craig Newman

Co-chairs




CEO Review

Overview

The Group's resilient business model and embedded culture of innovation was demonstrated throughout 2021, a year that challenged the global music industry with the effects of the COVID-19 pandemic. The Group delivered solid turnover growth, despite the substantial downturn in revenues in the industry as a whole.

The Group's performance was achieved through the continued development of our livestreaming business alongside the great work delivered by our artist management and artist services' divisions. At ATC Live, our live agency business, the gradual removal of restrictions around live events in the second half of the year is delivering growth in 2022 and beyond. The completion of our IPO in December was a substantial achievement and has positioned the Group for growth and expansion over the coming years.

Key operational highlights for 2021 included the production and delivery of the global livestream of 'Live at Worthy Farm' which was the livestream replacement of the COVID-19-cancelled 2021 edition of the Glastonbury Festival; the acquisition of the remaining 51 per cent. Stake in Your Army in North America that wasn't previously held by the Group; the investment by Deezer of £2m into the Driift business; the delivery of the ground-breaking Kid Amnesiac Radiohead project in conjunction with Epic Games (a first for the platform with the launch of a non-game application on the Epic Game Store. The application delivered access to a digital Radiohead exhibition which generated over 6 million downloads within weeks of being available); the addition of a significant number of new clients to our management and live agency rosters; and the growth of our composer division. 2022 has continued to see substantial Group-wide developments which are detailed below.

We successfully completed our IPO on December 21, 2021 with admission onto the Aquis Growth Market in London. The IPO was supported by both institutional and retail investors and the Company raised a total of £4.15 million (before expenses). The net proceeds are being used to invest into each of ATC's five business divisions and to support the Directors' growth strategy for the Group. As the fundraising was completed only 10 days before our financial year end, the results reported here were effectively delivered ahead of the Group bringing in the new financing which is set to spur future growth and development.

I am very pleased that our management team remains so well represented in the shareholder table. Our executive board directors and senior managers held 42 per cent. of the shares as at 31 December 2021.

Current Trading

The completion of the IPO in the final days of 2021 gave the Group a great opportunity to start 2022 with a huge sense of positivity and ambition. The first few months of the year have continued in the same spirit and we are seeing good developments in our existing businesses and some clear opportunities to broaden their scope and reach. Additionally, strong new partnerships are emerging for the Group that will further strengthen our position as the music industry experiences further digital transformation in the coming years.

As part of those developments, we have been quick to strengthen our management team and I was delighted to welcome Rameses Villanueva to the Board as Group CFO on 28 February 2022 to provide support for the next stage of the growth strategy.

Reassuringly, the live music industry is continuing to see a significant upturn in activity following the relaxation of COVID-19 restrictions and, as a result, ATC's Live Agency and Management divisions are benefitting.

At ATC Management, hotly tipped band The Goa Express joined the roster while 2021 additions, The Smile and Amaarae, have made a strong impact in 2022 with successful tours, music releases and sold-out shows.

At ATC Live we have seen 93 new clients join the roster since the beginning of 2021 including Nation of Language, Connie Constance and Billy Nomates and many of our existing clients have won industry plaudits. At SXSW, a leading international industry event in Texas, ATC Live clients won the prestigious Grulke prizes for both US and International artists, while at The Great Escape festival in the UK, The Times' review of the event listed '5 key artists to watch' - 4 of which were represented by ATC Live.    Business indicators are increasingly strengthening; in three consecutive weeks in January and February, three of ATC Live's clients achieved Top 3 UK album chart status in the week of release. Whilst the re-establishment of the live market is a work in progress in 2022, navigating differing international restrictions and customer caution, the longer-term view remains very positive.

The Group's livestreaming division, Driift, successfully delivered the first of its 'Full Circle' events in January with ATC Management client 'The Smile', which garnered a number of '5 star' reviews and wide audience acclaim. This new hybrid format brought together a live ticketed audience in a bespoke venue designed specifically for a global livestreaming audience and demonstrated that Driift can benefit from a diversified revenue mix, as the Directors anticipated. This format is expected to generate higher margin business for Driift, and further demonstrates that the Company remains at the forefront of the evolution of the growing livestreaming sector. More recently Driift delivered a livestream for Little Mix direct from the O2 and generated substantial numbers of livestream tickets alongside a broadcast into cinemas that saw the company take the number 5 position for that weekend's UK cinema charts.

Since its inception in mid-2020 Driift has now sold over 600,000 tickets in more than 190 countries around the world. We continue to see substantial interest from globally recognised artists who are looking to integrate a livestream into their more traditional business activities and recent partnerships with organisations like the Tate Museums continue to show that this innovative format will continue to be a growth sector for the music industry.

Our service businesses are trading in line with management expectations and are seeing growth as the global music market emerges from the challenges of the pandemic. The Group recently opened an office in New York to facilitate the continued expansion of the US management and services businesses.

We announced on 7 April 2022, that following receipt of a short-term promissory note loan of $6m, the Group had made a minority investment into a newly formed company, alongside a number of other parties. The funding group's total investment of $80m enabled the new venture to acquire Napster, with the aim of bringing blockchain and web3 to artists and fans via future developments in the Napster business. Our equity interests in the newly formed company were subject to a pledge in favour of the lender, as sole security against ATC's obligations under the loan arrangement. The recent volatility in the crypto markets has led us to reassess the Company's capacity to refinance the original loan. We have therefore taken the decision to hand back our equity interests to the original loan holder with negligible financial impact to the Group. We continue to believe that blockchain technology and non-fungible tokens (NFTs) will increasingly have an impact on the holding and distribution of copyrights in the medium and long term and we continue to have an option to invest into the new Napster venture.  It is beneficial to us to be able take a little more time to assess the landscape and determine what level of participation might be achievable whilst also taking stock of other opportunities that are being presented in this space.

In summary, 2022 business activity is delivering upon the aims we set ourselves when completing the IPO. These were to use the new capital to increase our pool of agents, managers and clients to drive profitability; to enable Driift to scale its offering and drive revenue growth and margin; to invest in our service businesses and to seek out new opportunities and participate in key music industry developments. With current trading in line with expectations, I look forward to further expanded activity and strong developments during the rest of the year.

Adam Driscoll

CEO

 


CFO Review

Overview

During the year, the Group's results were in line with management expectations and demonstrated resilience during the Covid-restrained environment, with revenue and other operating income of £10.3 million representing growth of 37% from 2020 (£7.5 million) and adjusted loss before tax and non-controlling interests ('NCI') of £2.7 million (2020: £0.34 million loss before tax and NCI).

Following the successful fundraise at the Group's IPO in December 2021, ATC retains a healthy net cash position (after current debt) of £4.2 million and net cash position (after current and long-term debt) at year end of £2.3 million.

Revenue and other operating income

The Group's consolidated revenue and other operating income was up 37% to £10.3m (2020:  £7.5m).  Core revenue (excluding other operating income) accounted for 89% (2021:  £9.1m vs 2020:  £7.1m) and posted 28% growth. 

 


2021

2020

Live streamed events



    -  Core revenue

4,642,212

4,716,692

    -  Other operating income

545,979

0


5,188,191

4,716,692

Artist management and development

    -  Core revenue

4,501,426

2,383,493

    -  Other operating income

617,517

434,762


5,118,943

2,818,255




Total

10,307,134

7,534,947

 

 

Despite the impact on the artist management and development businesses as a consequence of the COVID-19 pandemic and associated global lockdowns, the increase in revenue and other operating income was driven by the following:  

·      Livestreamed events - Driift tapped into the consumer desire to remain connected with artists and live performances by delivering shows in-home via a streaming mechanism.   Driift generated £5.2 million in 2021, a 10% increase over the previous year (2020: £4.7 million) and represented 50% of the consolidated revenue and other operating income (2020: 63%). 

·      Artist management and development - The consolidation of ATC Artist Management Inc. (formerly known as Courtyard Productions, Inc), which became a wholly owned subsidiary on 19 February 2021 also contributed to a 12% increase (£0.9 million) in consolidated revenue and other operating income in 2021.  

 

During the year, the Group also received COVID related government grants amounting to £0.52 million in 2021 (2020:  £0.42 million).

Administrative  expenses

Administrative expenses, excluding IPO listing related costs, increased from £1.4 million in 2020 to £4.8 million in 2021.   

 


2021

2020

Artist management and development

3,652,198

1,166,200

Live streamed events

1,121,944

242,187

Total

4,774,142

1,408,387

 

 

The increase is due to the additional overheads of businesses that were acquired in 2021, which increased expenses by £2.3 million (2020: nil), and because Driift traded for only 6 months in 2020 (2021: £1.1 million vs 2020: £0.2 million).    

Excluding these items, consolidated administrative expenses increased by 40% to £2.6 million in 2021 (2020: £1.2 million), principally due to the following:

·      New hirings in the UK management business with the objective of growing the artist, writer, producer and composer rosters which resulted in an increase in salary cost of approximately £0.3 million; and,

·      An increase in Polyphonic's expenses of approximately £0.2 million resulting from the release of 'Sticky', the fourth album by Frank Carter and the Rattlesnakes on 15 October 2021. This release was tied to a significant tour across the UK and Europe from November 2021 through to February 2022.

 

Following the receipt of the proceeds from the IPO in December 2021, the Group has been able to invest in further improving its internal systems, procedures and processes as a result of being publicly listed.

 

IPO and net cash/(debt)

The Group listed on the Apex segment of the Aquis Growth Market in December 2021 and raised a total of £4.1m, before costs, from both institutional investors and individual investors.   As a result of the IPO, the Group's net cash position has improved from a net debt to net cash position.   

The placing shares represented approximately 25.7% of the enlarged share capital at the time.  Alongside the funds raised, a director's loan and a loan to Beggars Group Limited was repaid

 

2021

2020

Current

 

 

Cash and cash equivalents

5,532,272

2,178,505

Funds held on behalf of clients

(1,027,793)

0

Borrowings (ST)

(124,068)

(582,230)

Right of use liabilities (ST)

(140,287)

(136,865)




Net cash/(debt) after current debt

4,240,124

1,459,410

Long term



Borrowings (LT)

(1,676,986)

(1,725,548)

Right of use liabilities (LT)

(248,238)

(388,525)


(1,925,224)

(2,114,073)




Net cash/(debt)

2,314,900

(654,663)

 

At the year end, the Group's net cash position was £2.3 million (2020: net debt £0.65 million), which will allow the Group to further grow the Live and Management businesses by hiring new agents, and managers.  It also provides additional working capital to further develop Driift, Polyphonic and the Services division and to pursue the Group's acquisition plans.

Financing costs of £0.097m (2020: £0.099m) was comprised mainly of interest expenses on loans of £0.083 million (2020: £0.082 million).

 

Adjusted loss before tax

The loss before IPO and related costs increased to £2.7 million (2020: loss £0.34 million)

 

2021

2020

Loss before tax

(3,306,518)

(340,831)

IPO and related costs

616,735

0

Loss before listing fees

(2,689,783)

(340,831)

 

 The increase in the loss was due to the substantial investment into Driift, principally to deliver the Glastonbury 'Live at Worthy Farm' event which was disrupted by some technical issues caused by a third-party supplier. This resulted in customer refunds and a reduction in ticket sales.  The loss incurred by segment was as follows:

 

2021

2020

Artist management and development

(546,538)

(469,476)

Live streamed events

(2,143,245)

128,646

Total

(2,689,783)

(340,831)

 

Earnings per share

Basic and diluted earnings per share was (34.51) pence per share (2020: (4.25) pence per share)

 

Reconciliation between the statutory consolidated income statement vs. consolidated income statement in the Prospectus for the 12 months to 31 December 2020

The FY20 comparatives differ from those in the Growth Prospectus ('Prospectus') dated 14 December 2021 due to the inclusion in the Prospectus of the results of ATC Artist Management Inc (previously Courtyard Productions, Inc) as it was under common control for that period. As required under IFRS 3 business combinations, the FY20 comparatives reported in the annual report and accounts (and preliminary announcement) include the results from the date of acquisition, 19 February 2021.  

The differences in Revenue, Administrative expenses, Loss before tax and Net assets (excluding NCI) and Earnings (loss) per share lines are shown in the table below: 

 

 

Statutory accounts

Prospectus

Differences

Revenue

7,100,185 

7,489,436 

(389,251)

Administrative expenses 

(1,408,387)

(1,778,168)

369,781 

Loss before tax

(340,831)

(412,739)

71,908 

Equity attributable to the shareholders of the parent company

(964,613)

(1,196,639)

232,026 

Earnings (loss) per share -  In pence

(4.25)

(5.29)

1.04 





 

 

 

Going Concern

The accounts have been prepared on a going concern basis. The Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future, based on projections for at least twelve months from the date of approval of the financial statements.

Rameses Villanueva

CFO


 

Consolidated statement of comprehensive income Consolidated statements of comprehensive income

For





For the year ended 31 December 2021

2021


2020

 



Notes


£


£



Revenue

3


9,143,638


7,100,185


Cost of sales



(8,297,894)


(6,207,950)








Gross profit


845,744


892,235



Other operating income



1,163,496


434,762


Administrative expenses

4


(5,390,877)


(1,408,387)

Provision for amounts owed by associates and joint ventures



-


(235,250)









Operating loss

3


(3,381,637)


(316,640)


Share of results of associates and joint ventures



167,568


40,012


Finance income



4,852


34,652


Finance costs



(96,968)


(98,855)

Provision against amounts owed by participating interests

 


(333)


-








Adjusted loss before tax


(2,689,783)


(340,831)

IPO and related costs


(616,735)


-

 





Loss before taxation


(3,306,518)


(340,831)


Income tax expense

5


(1,256)


(966)








Loss for the year



(3,307,774)


(341,797)








Other comprehensive income:



Items that will not be reclassified to profit or loss


Revaluation gain on unlisted investments

139,061


-


Currency translation differences

(5,208)


(189)









Total items that will not be reclassified to profit or loss

133,853


(189)









Total other comprehensive income for the year

133,853


(189)









Total comprehensive income for the year


(3,173,921)


(341,896)








Loss for the financial year is attributable to:


- Owners of the parent company


(2,353,468)


(291,792)

- Non-controlling interests


(954,306)


(50,005)










(3,307,774)


(341,797)








Total comprehensive income for the year is attributable to:


- Owners of the parent company


(2,219,615)


(291,891)

- Non-controlling interests


(954,306)


(50,005)










(3,173,921))


(341,986)




















Earnings per share

 

 

 



2021

 

2020



pence

 

pence









Basic and diluted

6


(34.51)


(4.25)




































 

Consolidated statement of financial position





As at 31 December 2021

2021


2020



Notes


£


£


ASSETS


Non-current assets


Goodwill

7


1,135,403


-


Property, plant and equipment



398,506


500,672


Investments



244,604


726,017










1,778,513


1,226,689









Current assets


Trade and other receivables



2,558,201


1,506,709


Cash and cash equivalents



5,532,272


2,178,505










8,090,473


3,685,214









Total assets


9,868,986


4,911,903









EQUITY


Called up share capital

8


95,840


32,649


Share premium account

8


3,983,970


2,449,703


Merger reserve



2,883,611


-

Currency translation reserve



(9,750)


(4,542)

Retained earnings



(4,898,864)


(3,442,423)








Equity attributable to the shareholders of the parent company


2,054,807


(964,613)

Non-controlling interests


197,649


10,395









Total equity


2,252,456


(954,218)








LIABILITIES


Non-current liabilities


Borrowings



1,676,986


1,725,548


Other creditors

 


53,085


9


Right of use lease liabilities



248,238


388,525










1,978,309


2,114,082









Current liabilities


Trade and other payables



5,373,866


3,032,944


Borrowings



124,068


582,230


Right of use lease liabilities



140,287


136,865










5,638,221


3,752,039









Total liabilities


7,616,530


5,866,121









Total equity and liabilities


9,868,986


4,911,903




















 

 


 

Consolidated statement of changes in equity


 




 



 

For the year ended December 2021

Share

capital

Share

premium account

Merger reserve

 

Currency translation reserve

Retained earnings

Total

Non-controlling interest

Total


 



£

£

£

£

£

£

£

£


 



 

At 1 January 2020


19,556

1,852,394

-


(4,353)

(3,240,482)

(1,372,885)

-


(1,372,885)



 


















 




 

Year ended 31 December 2020:




 

Loss for the year


-

-


-

-


(291,791)

(291,791)

(50,005)


(341,796)

Other comprehensive income:




 

Currency translation differences on overseas subsidiaries


-

-


-

(189)

-

(189)

-

(189)


 




 


















 




 

Total comprehensive income for the year


-

-


-

(189)


(291,791)

(291,980)

(50,005)


(341,985)

Issue of share capital


13,093

597,309


-

-


-

610,402

-


610,402

Acquisition of non-controlling interests


-

-


-

-


89,850

89,850

60,400


150,250




 


















 




 

At 31 December 2020


32,649

2,449,703


-


(4,542)

(3,442,423)

(964,613)

10,395


(954,218)




 


















 




 




 

Year ended 31 December 2021:




 

Loss for the year


-

-


-

-


(2,353,468)

(2,353,468)

(954,306)

(3,307,774)

 

Other comprehensive income:




 

Revaluation gain on unlisted investments







139,061

139,061

-

139,061


 

Currency translation differences on overseas subsidiaries


-

-


-

(5,208)

-

(5,208)

-

(5,208)


 




 


















 




 

Total comprehensive income for the year


-

-


-

(5,208)


(2,214,407)

(2,219,615)

(954,306)

(3,173,921)

 

Issue of share capital of previous parent

 

1,709

399,550


-

-

401,259

-

401,259


 

Issue of share capital


95,840

3,983,970


-

-

4,079,810

-

4,079,810


 

Merger reserve


(34,358)

(2,849,253)

2,883,611

-

-

-

-

-


 

Retained earnings movements due to increased investment by NCI


-

-


-

757,966

757,966

-

757,966


 

Acquisition of non-controlling interests


-

-


-

-

-

(58,796)

(58,796)


 

Other movements in non-controlling interests


-

-


-

-

-

1,200,356

1,200,356


 



 


















 




 

Balance at 31 December 2021

95,840

3,983,970


2,883,611

(9,750)


(4,898,864)

2,054,807

48

197,649


2,252,456




 


















 































 

Other movements in non-controlling interest relate to additional investments in Driift Holdings Limited in the year, a subsidiary of All Things Considered Group Plc.

 


Consolidated statement of cash flows





For the year ended 31 December 2021

2021


2020




£

£

£

£



Cash flows from operating activities



Loss for the year after tax


(3,307,774)


(341,797)



Adjustments for:


Taxation charged

1,256


966


Finance costs

96,968


98,855


Finance income


(4,852)


(34,652)


Loss on disposal of property, plant and equipment

-


6,143


Depreciation of property, plant and equipment

133,023


127,549


Share of results of associates and joint ventures


(167,568)


(40,012)


Provision against investment in associates and joint ventures

333


226,282



Movements in working capital:


Increase in trade and other receivables


(572,660)


(366,982)


Increase in trade and other payables

1,136,345


2,182,495









Cash  (absorbed by)/generated from operations



(2,684,929)


1,858,847


Interest paid


(96,968)


(98,855)

Tax paid


(1,256)


(1,246)








Net cash (outflow)/inflow from operating activities


(2,783,153)


1,758,746


Investing activities


Purchase of property, plant and equipment


(20,983)


(8,642)


Purchase of subsidiaries (net of cash acquired)


274,700


-


Investment in unlisted shares


(53,085)


-


Net amount withdrawn in associates and joint ventures


-


30,971


Interest received


4,852


34,653









Net cash generated from investing activities


205,483


56,981



Financing activities


Proceeds from issue of shares in subsidiary subscribed by non-controlling interest


-


150,250


Proceeds from issue of shares in previous parent


300,025


-


Proceeds from issue of shares


4,011,094


610,402


Proceeds from borrowings


500,000


275,000


Repayment of borrowings


(640,386)


(839,729)


Proceeds from non-controlling interest additional investment (Driift)


2,000,000


-


Repayment of bank loans


(95,414)


(29,295)


Payment of lease liabilities


(136,865)


(127,430)









Net cash generated from financing activities


5,983,453


39,198









Net increase in cash and cash equivalents


3,360,784


1,854,925



Cash and cash equivalents at beginning of year


2,178,505


309,640


Effect of foreign exchange rates


(7,017)


13,940









Cash and cash equivalents at end of year


5,532,272


2,178,505






















1

       General information



All Things Considered Group Plc ("ATC Group plc") was incorporated in England and Wales on 20 May 2021 as a public company limited by shares under the Companies Act 2006.

ATC Group plc's registered office is The Hat Factory, 168 Camden Street, London NW1 9PT.  The Group's principal activity during the year was music artist management and livestreamed events.

The Consolidated Group financial statements represents the consolidated results of ATC Group plc and its subsidiaries, (together referred to as the "Group"). The Parent Company financial statements present information about the Company as a separate entity and not about its Group.

These are the first consolidated financial statements of the Group following the reorganisation of the Group to facilitate the listing. The result of the application of the capital reorganisation is to present the consolidated financial statements (including comparatives) as if the Company has always owned the Group. The share capital structure of the Company as at the date of the Group reorganisation is pushed back to the first date of the comparative period (1 January 2020). A Merger Reserve is created as a separate component of equity, representing the difference between the share capital of the Company at the date of the Group reorganisation and that of the previous top organisation of the Group.

Except for IFRS 16, the implementation of IFRS had no impact on the consolidated financial information of the Group. The implementation of IFRS 16 led to an increase in the loss for the year by £16,886, an increase in assets by £323,758 and an increase in liabilities of £388,525. There was no effect on cash flows.

 

2

Basis of preparation and measurement

 

 

2.1

Basis of preparation



The Consolidated Group Financial Information has been prepared in accordance with International Financial Reporting Standards in conformity with the requirements of the Companies Act 2006 ("IFRS").



Unless otherwise state, the Consolidated Group Financial Information is presented in Pounds Sterling (£) which is the currency of the primary economic environment in which the Group operates. Monetary amounts in these financial statements are rounded to the nearest £.

 



The Consolidated Group Financial Information has been prepared under the historical cost convention except for certain financial instruments that have been measured at fair value. The principal accounting policies adopted are set out below.

 



 

2.2

Basis of consolidation

 



The Consolidated Group Financial Information comprises the financial statements of ATC Group plc and its subsidiaries listed in note 17 for "Subsidiaries" to the Consolidated Group Financial Information.  The financial statements of all Group companies are adjusted, where necessary, to ensure the use of consistent accounting policies.

The Group was formed after the Company, prior to its IPO and listing on AQSE, completed a share for share transaction with All Things Considered Limited. The Board has taken the view that the most appropriate way to account for this in line with IFRS is to deem the share for share exchange as a group reconstruction. This has been accounted for under the basis of merger accounting given that the ultimate ownership before and after the transaction remained the same.  There is currently no specific guidance on accounting for group reconstructions such as this transaction under IFRSs. In the absence of specific guidance, entities should select an appropriate accounting policy and IFRS permits the consideration of pronouncements of other standard-setting bodies. This group reconstruction as scoped out of IFRS 3 has therefore been accounted for using predecessor accounting principles resulting in the following practical effects;

(a) The net assets of the Company and the predecessor group, All Things Considered Limited and its subsidiary undertakings (the "Predecessor Group"), are combined using existing book values, with adjustments made as necessary to ensure that the same accounting policies are applied to the calculation of the net assets of both entities;

(b) No amount is recognised as consideration for goodwill or negative goodwill;

(c) The consolidated profit and loss account includes the profits or losses of the company and the Predecessor Group for the entire period, regardless of the date of the reconstruction, and the comparative amounts in the consolidated financial statements are restated to the figures presented by the Predecessor Group;

(d) The retained earnings reserve includes the cumulative results of the Company and the Predecessor Group, regardless of the date of the reconstruction, and the comparative amounts in the statement of financial position are restated to those presented by the Predecessor Group.




 

Acquisitions are accounted for under the acquisition method from the date control passed to the Group. On acquisition, the assets and liabilities of a subsidiary are measured at their fair values. Any excess of the cost of acquisition over the fair values of the identifiable net assets acquired is recognised as goodwill.

A subsidiary is defined as an entity over which ATC Group plc has control. ATC Group plc controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

Changes in the Group's interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. The carrying amounts of the Group's interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the Company.

Intra-group transactions, balances and unrealised gains on transactions are eliminated; unrealised losses are also eliminated unless cost cannot be recovered. Where necessary, adjustments are made to the financial statements of subsidiaries to ensure consistency of accounting policies with those of the Group.

The total comprehensive income of non-wholly owned subsidiaries is attributed to owners of the parent and to the non-controlling interests in proportion to their relative ownership interests.

 

 

3

Segmental analysis



Artist management and development

Live streamed events

Total



2021

2021

2021



£

£

£




Revenue

4,501,426

4,642,212

9,143,638



Cost of sales


(2,088,401)

(6,209,493)

(8,297,894)












Gross profit

2,413,025

(1,567,281)

845,744




Other operating income

523,896

-

523,896



Other income

93,621

545,979

639,600



Administrative expenses


(4,268,933)

(1,121,944)

(5,390,877)



Provision for amounts owed by associates and joint ventures


-

-


-












Operating profit/(loss)


(1,238,391)

(2,143,245)


(3,381,636)




Share of results of associates and joint ventures

167,568

-

167,568



Finance income

4,852

-

4,852



Finance costs


(83,833)

-

(83,833)



Interest on finance leases


(13,135)

-

(13,135)



Provision against amounts owed by participating interests


(333)

-

(333)












 








Adjusted loss before tax


(546,538)

(2,143,245)


(2,689,783)



IPO and related costs


(616,735)

-


(616,735)



 








Profit/(Loss) before taxation


(1,163,273)

(2,143,245)


(3,306,518)




Income tax expense


(1,256)

-


(1,256)












Profit/(Loss) for the year


(1,164,529)

(2,143,245)


(3,307,774)











Assets and liabilities








Total assets

6,473,124


3,395,862


9,868,986



Total liabilities

(5,432,212)


(2,184,318)


(7,616,530)



Net assets

1,040,912


1,211,544


2,252,456























 



Artist management and development

Live streamed events

Total



2020

2020

2020



£

£

£




Revenue

2,383,493

4,716,692

7,100,185



Cost of sales


(1,862,392)

(4,345,849)


(6,207,950)












Gross profit

521,392

370,843

892,235




Other operating income

434,762

-

434,762



Administrative expenses


(1,166,200)

(242,187)


(1,408,387)



Provision for amounts owed by associates and joint ventures

(235,250)

-

(235,250)












Operating loss


(445,296)

128,656


(316,640)




Share of results of associates and joint ventures

40,012

-

40,012



Finance income

34,652

-

34,652



Finance costs


(98,845)

(10)


(98,855)












Loss before taxation


(469,476)

128,646


(340,831)




Income tax expense


(966)

-


(966)












Loss for the year


(470,443)

128,646


(341,797)










Assets and liabilities








Total assets

2,317,095


2,594,808


4,911,903



Total liabilities

(3,530,360)


(2,335,761)


(5,866,121)



Net assets

(1,213,265)


259,047


(954,218)























 


Revenue


 


2021

2020

 


£

£

 


Revenue analysed by geographical market


 


United Kingdom

5,068,283

3,139,084

 


Europe

860,023

1,668,000

 


United States of America

2,631,178

1,373,101

 


Rest of the world

584,154

920,000

 


 





 


 


9,143,638

7,100,185

 


 





 

4

Administrative expenses by nature



2021

2020


£

£



Staff costs

2,364,472

782,420


Rent, rates and services costs

367,960

35,472


IPO and related costs

616,735

-


Legal and professional fees

642,641

148,105


Consultancy fees

580,895

279,528


Depreciation of property, plant and equipment

133,023

127,549


Exchange losses


61,406

(12,517)


Profit or loss on sale of tangible assets

(19,694)

6,143


Travelling expenses

120,476

19,536


Other expenses

522,963

22,151








5,390,877

1,408,387

.

 



















 

5

Earnings per share


 

 

 

2021

2020

 

 

Basic and diluted earnings/(loss) per share

(34.51) pence

(4.25) pence

 

 

Basic and diluted number of shares in issue

9,584,020

6,871,599

 

 

 



 

 

Basic earnings per share is calculated by dividing the profit/loss after tax attributable to the equity holders of All Things Considered group plc by the numbers of shares in issue after the allotment of ordinary shares on 14 December 2021. The same number of shares is used for the corresponding period in order to provide a meaningful comparison.

 

6

Income tax expense



2021

2020

 


£

£

 


Current tax

 


UK corporation tax on losses for the current period


-

(280)

 


Foreign taxes and reliefs

1,256

1,246

 





 


1,256

966

 




 



 

 

 

 

The difference between the statutory income tax rate and the effective tax rates are summarised as follows:

 

 

 

 

 2021

 2020

 

 

 

 

£

                £

 

 

 

 

 

 

 

 

Profit/(loss) before income taxes



(3,307,774)


(412,739)

 

 

Expected tax at statutory UK corporation tax rate of 19%



(628,477)


(78,420)

 

 

Increase/(decrease) in tax resulting from:

117,50

 

 

 

 

 

 

 

 

Effect of different tax rates in foreign jurisdictions


(27,081)

12,913

 

 

Tax losses utilised


181,597

-12,412

 

 

Capital allowances less depreciation


(1,894)

680

 

 

Losses carried forward


471,027

23,347

 

 

Non-deductible expenditure


101,070

55,535

 

 

Other adjustments


(94,985)

(676)

 

 

 

 

 

1,256


966

 

 

 

 

 

 

 


At 31 December 2021the Group has £5,496,781 (2020: £2,615,515) of tax losses available to be carried forward against future profits.

 

 


 

 

 


From April 2023, the corporation tax rate will increase from 19% to 25%.

 

 





















 

7

Goodwill

 

 

 

 

 

 

 

Goodwill

 

 

 

 

 

£

 

 

Cost

 

 

 


At 1 January 2021


-

 


Additions


1,135,403

 


At 31 December 2021


1,135,403

 

 

 

 

 

 

 

Impairment

 

-

 

 

At 1 January 2021


-

 

 

Charge for the year


-

 

 

At 31 December 2021


-

 

 

 

 

 

 

 

Net book value

 

 

 

 

At 31 December 2021


1,135,403

 

 

At 31 December 2020


-

 

 

 

 

On 1 January 2021, the group acquired a further 40% share in ATC Live LLP, bringing the group's interest to 90%, for £nil consideration resulting in goodwill of £517,438.

 

 

 

 

On 12 February 2021, the remaining 51% interest in Your Army LLC, previously a 49% associate, was acquired by the Group for consideration of $640,000 (equating to £474,179) resulting in goodwill of £354,188.

 

 

 

 

On 19 February 2021, 100% of ATC Artist Management Inc (formerly Courtyard Productions Inc) was acquired for £nil consideration, resulting in goodwill of £233,231.

 

 

 

 

On 12 April 2021, the group acquired a further 10% share in Familiar Music Group LLC, bringing the group's interest to 55%, for £nil consideration resulting in goodwill of £30,546.

 

 

 

 

 

 

 

 

 

 

ATC Live LLP

ATC Artist Management Inc

Your Army LLC

Familiar Music Group LLC

Total

 

 

£

£

£

£

£

 

Goodwill on acquisitions

 

 

 

 

 

 

Total consideration (see below)

-

-

474,179

-

474,179

 

Plus: Fair value of previously held equity interest

434,506

-

115,257

-

549,763

 

Less: Share of fair value of net (assets)/liabilities acquired (see below)


82,932


233,231


(235,248)


30,546


111,461

 

Total goodwill


517,438


233,231


354,188


30,546


1,135,403

 

 

 

 

 

 

 

 

 

 

 

 

 

Consideration satisfied by:

 

 

 

 

 

 

Cash


-


-


474,179


-


474,179

 

 

 

 

 

 

 

 

Share of fair value of net assets/(liabilities) acquired:

 

 

 

 

 

 

Cash and cash equivalents

566,897

10,571

166,827

4,583

748,878

 

Property, plant and equipment

8,065

946

68

-

9,079

 

Trade and other receivables

11,793

391,892

71,529

3,618

478,832

 

Trade and other payables

(628,901)

(636,640)

(3,176)

(63,740)

(1,332,457)

 

Borrowings

(50,000)


-

-

-

(50,000)

 

 

 

 

 

 

 

 

 

 

 

 

 


(92,146)


(233,231)


235,248


(55,539)


(145,668)

 

Percentage acquired


90%


100%


100%


55%



 

 

 

 

 

 

 

 

 

 

 

 

 

 


(82,932)


(233,231)


235,248


(30,546)


111,461

 

Net cash inflow/(outflow) arising on acquisition

 

 

 

 

 

 

 

 

Cash consideration

-

-

(474,179)

-

(474,179-

 

Total cash and cash equivalents acquired

566,897


10,571


166,827


4,583

 

 

748,879

 

 

 


566,897


10,571


307,352


4,583


274,700

 

 

 

On each of the acquisitions, no separate intangible assets were identified and the difference between the consideration and the fair value of assets acquired was all attributed to goodwill.

Impairment testing was undertaking using projections for three years and a terminal value. Applying an appropriate discount rate, there was adequate headroom for each element of goodwill.

8

Reserves



2021

2020

2021

2020


Ordinary share capital

Number

Number

£

£













Issued and fully paid


Ordinary shares of £0.01 (2020: £1) each

95,840,020

32,649

95,840

32,649














Number of shares

 

Share capital



No.

 

£

Issued share capital in All Things Considered Ltd at 31 December 2020


34,358


34,358

At 31 December 2020



34,358



34,358








Exchanged for shares in All Things Considered Group Plc



6,871,599



68,716

Share issued on incorporation



1



-

Shares issued 14 December 2021



2,712,420



27,124

At 31 December 2021



9,584,020



95,840







The company has one class of Ordinary shares.  The Ordinary shares have full voting, dividend and capital distribution (including on winding up) rights. They do not confer any rights of redemption or carry any right to fixed income.

 

 





During the year ended 31 December 2020, 13,093 Ordinary shares of £1 each were issued for proceeds of £610,402 to provide additional working capital for All Things Considered Limited, a subsidiary of All Things Considered Group plc.




On 11 November 2021, All Things Considered plc issued 6,871,599 Ordinary shares of £0.01 each in exchange for the entire share capital of All Things Considered Limited.




On 14 December 2021, 2,712,420 shares were issued leading to a further £27,412 of share capital and share premium of £3,983,970, net of share issue costs.




On 14 December 2021, 119,800 warrants were granted to Canaccord Genuity Limited to subscribe for Ordinary Shares of £0.01 each in All Things Considered Group Plc. The charge to the profit and loss account in respect of these is immaterial for 2021 .




Merger reserve


A merger reserve is created as a separate component of equity, representing the difference between the share capital of the Company at the date of the Group reorganisation and that of the previous parent company of the Group.




Currency translation reserve


The currency translation reserve represents cumulative foreign exchange differences arising from the translation of the financial statements of foreign subsidiaries.


 

 

 

9

 

Related party transactions

 



 



Transactions with related parties for the year ended 31 December 2021

 



During the year, the Group paid rent of £150,000 (2020: £150,000) to Pagham Investments Limited, a company which close family members of two of the directors Craig Newman and Brian Message have a significant interest in. The Group also paid rent of £178,240 (2020: £23,370) to Craig Newman during the year.

 

During the year the Group recharged overheads totalling £20,554 (2020: £79,903) to the following LLPs that the Group is a member of and has a significant interest in:

·    ATC 9 LLP: £20,554 (2020: £27,535)

·    ATC Live LLP: £nil (2020: £52,368).

 

In turn the group was recharged overheads totalling £800,468 (2020: £204,069) by the following LLPs that the Group is a member of and has a significant interest in:

·    ATC 4 LLP: £798,898 (2020: £87,482)

·    ATC 9 LLP: £1,570 (2020: £13,143)

·    ATC Live LLP: £nil (2020: £103,444).

 

During the year, the Group paid interest of £5,389 (2020: £3,363) to director Craig Newman and £5,389 (2020: £3,363) to director Brian Message.

 

The remuneration of the directors and key management personnel is set out in note 11.

 

 



 



Balances with related parties as at 31 December 2021

 



At 31 December 2021, the Group owed £1,015,027 (2020: £1,000,000) to Pagham Investments Limited, a company which close family members of two of the directors, Craig Newman and Brian Message, have a significant interest in.

 

 



 



At 31 December 2021, the following represent the amount of members capital in LLPs and LLCs attributable to the Group and shown in 'investments in associates and joint ventures':

 














































 


 

2021

2020

 


Members capital

Provision

Conversion to subsidiaries

Net

Members capital

Provision

Net


£

£

£

£

£

£

£


ATC 1 LLP

-


-

-

-

53,451

(53,451)

-


ATC 3 LLP

-


-

-

-

90,755

(90,755)

-


ATC 4 LLP

-


-

-

-

171,337

(53,109)

118,228


ATC 7 LLP

398


-

-

398

26,283

(25,251)

1,032


ATC 9 LLP

52,060

-

-

52,060

40,060

-

40,060


ATC Live LLP

434,406

-

(434,406)

-

467,478

-

467,478


One Eskimo LLC

-


-

-

-

3,716

(3,716)

-


Your Army LLC

115,272

-

(115,272)

-

132,182


132,182


 











952,290


-

(549,678)

52,458

952,290

(226,282)

726,008










10

Events after the reporting date

 


 


 

On 30 March 2022 the Group secured and received a short-term promissory note loan of $6m. On the same date the Group invested the $6m into a new company, Hypnos Capital, formed with the express intention of investing in the music digitisation, blockchain and web3 spaces. The minority investment was made alongside a number of other parties who together with the Group have invested over $80m in the new venture. On 10 May 2022, Hypnos Capital announced that it acquired Napster. The Group's equity interest in the newly formed company is subject to a pledge in favour of the lender, as sole security against the Group's obligations under the loan arrangement. Due to the recent volatility in the crypto markets, the Directors have reassessed the Company's capacity to refinance the original loan. The Directors have therefore taken the decision to transfer the equity interest back to the original loan holder with negligible financial impact to the Group. The Directors continue to believe that blockchain technology and non-fungible tokens (NFTs) will increasingly have an impact on the holding and distribution of copyrights in the medium and long term and the Group continues to have an option to invest into the new Napster venture.  It is beneficial to the Group to be able to take a little more time to assess the landscape and determine what level of participation might be achievable whilst also taking stock of other opportunities that are being presented in this space.

 

 

 

 

 

11

Notice of AGM and Posting of Annual Report

 

The Company's Annual General Meeting ("AGM") will be held virtually on 27 July 2022 at 9:30am. The Company's Annual Report and Accounts and Notice of AGM will be published on the Company's website shortly.

 

















 

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