17 January 2020

LIVE COMPANY GROUP PLC

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

TRADING AND OPERATIONAL UPDATE

Live Company Group plc (AIM: LVCG) provides the following trading and operational update for the year ended 31 December 2019 and in respect of its outlook for 2020.  Whilst the Group has demonstrated strong growth in 2019, results for year are expected to be below market expectations.

Whilst the Group's touring and event divisions exceeded expectations, with 71 shows and events occurring in 2019 against a projected 60, results for 2019 have been adversely impacted as a result of lower than expected license and content fees from China, fewer corporate builds and lower returns from the BRICKLIVE Show at the NEC, Birmingham.  The Board of LVCG (the "Board") believes that the lower fees from China are due to the general macro-economic environment and slowdown in the region.  Through seeking to focus on the accelerated investment in the Group's touring portfolio and through securing major IP partnerships, the Group is already taking action to seek to mitigate reliance on these revenue streams going forward.  In addition, there was a delay in certain revenues that were expected by the Board to be received before the year end and that are now expected to be received in Q1 2020.

Based on the Group's unaudited management accounts, the Board of LVCG expects year end 2019 financials to be broadly as follows:

·           Revenues of £5.5 million for 2019 (2018: £4.9 million from continuing activities, of which US$1.6 million was a one off single contract for China), representing an increase of £0.6 million (12%). EBITDA £0.7 million (2018: loss £0.4 million from continuing activities) - an improvement of approximately £1.1 million.

-  Gross margin from continuing operations, increased to 63% from 46%, reflecting the higher revenues in 2019 from and the higher margin of, the Group's touring shows.

·           Net Asset growth of approximately £4.0 million, predominantly as a result of the funds raised for the BRICKLIVE Zoo programme, the £2 million Riverfort ESA funding agreement and the conversion of deferred liabilities into equity.

During 2019, the Group focussed resources to expand the BRICKLIVE brand through investing in increasing the number of touring assets and expanding the network of BRICKLIVE events in new regions, developing multi-year relationships with global IP partners and new BRICKLIVE partners, and developing the BRICKLIVE Zoo Programme.

The Board believes that the investments made in 2019 will provide the footprint for growth in future years.  Whilst the Board believes that revenue growth rates for 2020 and beyond remain in line with previous market expectations, given the lower starting point, in light of the lower 2019 revenues, the revised revenue forecasts are reduced.  Taking into account the revenue shortfall for 2019, the Board is taking steps further to increase the focus on sustainable and recurring revenues streams going forward.  Whilst the forecast gross margin in 2020 will suffer slightly, as result of the increased deprecation charge arising from the intense 2019 asset build programme, the Board believes that the growing revenue will deliver significant growth to the bottom line in future years.

Highlights for 2019

·        Delivered 71 BRICKLIVE shows and events (2018: 34) held across Europe, North America and Asia;

·        Invested in expanding our show content to meet demand and allow us to expand into new and existing territories.  As a result, the Group now has:

-  17 touring shows (2018: 10) expanding the Group's ability to host multiple shows and events simultaneously globally; and

-  882 models (March 2019: 650)

·        Created the BRICKLIVE Zoo division, exhibiting in multiple zoos across Europe and North America; and

·        Appointed Licensing Management International Limited, for a five year term, to identify partners for the licensing and merchandising of BRICKLIVE branded merchandise and products.

Furthermore during 2019, the Group negotiated and secured multi-year contracts with global IP partners:

·        Entered into agreements with Nickelodeon UK and Viacom International Media Network to produce themed tours associated with the Nickelodeon brand, including the Nick Jr. brand to cover all countries globally (excluding the United States of America, including Puerto Rico) up to December 2024;

·        Entered into an agreement with Snowman Enterprises Limited, part of Penguin Random House, to produce themed tours of The Snowman and The Snowdog in the UK, the Channel Islands, the Isle of Man and the Republic of Ireland for an initial period up to January 2022; and

·        Negotiated a multi-year license agreement with Entertainment One UK Limited, a wholly owned subsidiary of Entertainment One Ltd ("eOne"), to produce themed tours associated with properties and characters of one of the world's most famous and global children's brand, Peppa Pig that was subsequently entered into and announced on 14 January 2020.

In 2019, the Group secured multi-year contracts with new global partners, namely:

·        Imagine Exhibitions Inc., a company incorporated in Georgia, USA, for BRICKLIVE touring shows in North America (being the USA and Canada) up to August 2024;

·        AWC AG, a leading exhibition provider, to promote, manage and operate BRICKLIVE events in Germany up to February 2023;

·        PALEXPO SA, an exhibition provider, to promote, manage and operate BRICKLIVE shows in Palexpo, Geneva, Switzerland up to the end of December 2021;

·        Exhibition Hub SPRL, an exhibition provider, to promote, manage and operate BRICKLIVE shows in Belgium up to the end of November 2021; and

·        BRICKLIVE (South Africa) Limited joint venture partnership with WORLDSPORT (PTY) Limited, a company incorporated in South Africa to promote BRICKLIVE events in South Africa.

Outlook for 2020

As a result of the Group's significant investment during 2019 to expand and deliver new BRICKLIVE touring assets, the Group has already secured £3.0 million of recognised revenue for 2020, which is over 50% higher than at the same time last year.

The Group was pleased to announce on 14 January 2020, that it had entered into a multi-year license agreement with its third IP partner, Entertainment One UK Limited, to produce themed tours associated with properties and characters of one of the world's most famous and global children's brand, Peppa Pig.

In addition to the multi-year contracts already in place, the Group has also entered into the following agreements in 2020, which will continue the expansion of the BRICKLIVE brand into new and existing territories:

·        BRICKLIVE, Italy.  The Group has signed a five year representation agreement with Milano Talent Factory SRL ("MTF"), a company registered in Milan, Italy.  Under the agreement, MTF will seek to expand the Group's presence in Italy, including identify suitable venues to stage BRICKLIVE shows in Italy.

Mr Stefano Bethlen, the owner of MTF, has spent over 16 years working with The Walt Disney Company.  His roles included Head of Business Affairs and Operations of The Walt Disney Company in Italy, Head of Theatrical Distribution & Marketing and more recently, Chief Marketing Officer across Italy.  Mr Bethlen was involved in the franchise plans for major Disney brands including the Marvel, Star Wars, Mickey, Princess, Cars, and Frozen brands in Italy.

·        BRICKLIVE, Australia and New Zealand.  The Group has signed a three year representation agreement with The Costa Advisory PTY LTD ("TCA"), a company registered in Victoria, Australia.  Under the terms of the agreement, TCA will seek to assist the Group in expanding its presence in Australia and New Zealand, to identify suitable venues to stage BRICKLIVE shows and tours and, if requested, to deliver the BRICKLIVE shows.

Mr Con Apostolopoulos of TCA has over 20 years' experience in the entertainment industry and his roles have included President of Partnerships for Fox International Channels before becoming Senior Vice President of National Geographic.

·        BRICKLIVE Show, Dallas, North America.  Following the success of the BRICKLIVE Show in Dallas in January 2019, the BRICKLIVE Show will be returning to The Star in Frisco, Dallas on 18 and 19 July 2020.  This will be the Group's second BRICKLIVE Show in Texas, North America.

·        BRICKLIVE Show, Franklin Institute, Philadelphia, North America.  The Company reports that through its US joint venture Company, Parallel Three Six Zero Inc. ("PTSZ") has signed a license agreement with the Franklin Institute in Philadelphia, North America to deliver a BRICKLIVE show that will be held between 2 May and 5 June 2020.

·        BRICKLIVE Tour and Show, Israel.  Building on the agreement in 2019, the Group has signed an agreement with HADRAN 2006 D.S Marketing and Tickets Distribution Ltd to lease the BRICKLIVE Brickosaurs Tour between 10 July and 31 August 2020.  In addition, the Group has agreed to provide content for a BRICKLIVE show, to held in Israel between 7 March and 20 April 2020.

As highlighted by the agreements entered into in  2019 and those set out above, the Group, over the last 12 months, has sought to shift its focus to the expansion of its touring business compared to 2018 where the focus was predominantly on license and content fees.

To facilitate this, the Group expanded its touring asset base in 2019 and, to continue this growth, the Group secured funding through the restructuring of and increase in, the previous loan agreement with YA II PN, Ltd. and RiverFort Global Opportunities PCC Limited (formerly Cuart Investments PCC Limited) (together the ("Investors") as announced on 16 December 2019.

As a result of the new facility, the Group has accelerated its build programme for 2020, with the aim to build up to 16 BRICKLIVE themed tours by the end of 2020.  The Group has the ability to draw down a further £0.7 million under the new facility subject to the Investors' approval in 2020, should this be required by the Group.  In addition, the Group continues to work with finnCap Group plc to assess the appetite of a number of financial institutions to provide debt financing.

Non-executive Director Fees

In support of the Group's continued focus on investing in the development of further show content, Mr Murugason and Mr Freebairn have agreed to be issued new ordinary shares of 1 pence each in the capital of the Company ("Ordinary Shares") (the "Fee Shares") at a price of 30 pence per share, being equal to the closing share price on 16 January 2020, in respect of fees due to them as Non-executive Directors.  Mr Murugason will be issued 100,000 Fee Shares in respect of fees due to him of £30,000 in respect of his Non-executive Director duties from 1 April to 31 December 2019 and Mr Freebairn will be issued 16,667 Fee Shares in respect of fees due to him of £5,000 in respect of his Non-executive Director duties from 1 October to 31 December 2019.

The Fee Shares will rank pari passu with the existing Ordinary Shares and application will be made for 116,667 Shares to be admitted to trading on AIM ("Admission").  It is expected that Admission will become effective at 8.00 a.m. on 24 January 2020.

Following Admission, the Company's issued share capital will consist of 79,617,086 Ordinary Shares with voting rights.  There are no Ordinary Shares held in treasury.  The figure of 79,617,086 may be used by shareholders, following Admission, as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the Financial Conduct Authority's Disclosure Guidance and Transparency Rules.

Following the issue of the Fee Shares, Mr Murugason and Mr Freebairn will be interested in 1,320,317 and 471,919 Ordinary Shares respectively, representing approximately 1.66% and 0.59% respectively of the Company's then issued share capital.

EIS Status

The Company is pleased to announce that it has now received confirmation from HM Revenue & Customs ("HMRC") that certain of the Ordinary Shares issued pursuant to the placing in February 2019 are eligible for EIS tax reliefs.  As a result, the Company confirms it will issue the authorised EIS3 Form to the five applicable investors, in accordance with HMRC legislation.

Based on the receipt of the HMRC confirmation, the Company expects that, dependent on the individual investor's tax position going forward, any new Ordinary Shares issued by the Company pursuant to an equity fundraise are likely also to be eligible for EIS relief, subject to meeting HMRC requirements.  However, the fact that a previous investment in the Company meets the EIS requirements is no guarantee that a future investment will also qualify for EIS tax reliefs.

Shareholder event

As announced on 16 December 2019, the Company is today hosting a shareholder event at 9.30 a.m. at Wembley Stadium, Wembley Park, London.  Shareholders and non-shareholders wishing to attend the event should have registered their interest by email (info@livecompanygroup.com) and will need to bring ID to attend the event. 

The presentation to be provided at the event will shortly be available on the Company's website, along with the Group's Year Book, which provides images from some of the Group's shows and events held during 2019.

David Ciclitira, Chairman LVCG commented: "2019 has been a year of growth for the business. It has been a year of significant investment in all areas of the business, which included increasing the number of BRICKLIVE shows and events, launching the BRICKLIVE Zoo programme and BRICKLIVE's IP programme.  There have been 71 BRICKLIVE events globally and we are now working with three international IP partners and have access to 12 IP properties.  We recently announced our partnership with eOne, part of Hasbro Inc., and today we announce that we have increased our BRICKLIVE partner base to include Italy, Australia, New Zealand and Israel.  We will continue to develop the BRICKLIVE brand and I look forward to keeping shareholders updated going forward".

Enquiries:

Live Company Group Plc                                                                Tel: 020 7225 2000

David Ciclitira, Chairman Live Company Group

Ruth Cunningham, Chief Operating Officer

Strand Hanson Limited (Nominated Adviser)                               Tel: 020 7409 3494

Stuart Faulkner / Richard Tulloch      

Shard Capital Partners LLP (Broker)                                            Tel: 020 7186 9952

Damon Heath

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No 596/2014.

LIVE COMPANY GROUP

Live Company Group plc ("LVCG", the "Company" or the "Group") is a live events and entertainment Company, founded by David Ciclitira in December 2017.  The Company was admitted to trading on AIM in December 2017, following the reverse acquisition of Brick Live Group and Parallel Live Group by LVCG.

The Group is a network of partner-driven fan-based shows using BRICKLIVE created content worldwide.  The Company owns the rights to BRICKLIVE - an interactive experience built around the creative ethos of the world's most popular construction toy bricks.  BRICKLIVE, which is fast becoming a leading children's education and entertainment brand, actively encourages all to learn, build and play, and provides inspirational events and shows where like-minded fans can push the boundaries of their creativity.  Bright Bricks is the Group's production centre for building brick based models.  The Group is an independent producer of BRICKLIVE and is not associated with the LEGO Group.

Website: www.livecompanygroup.com.