RNS Number : 7234Q
Live Company Group PLC
30 June 2022
 

30 June 2022

 

LIVE COMPANY GROUP PLC

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

 

2021 Full Year Results

 

Live Company Group PLC (AIM: LVCG) is pleased to announce its audited results for the year ended 31 December 2021, extracts from which are set out below - will be made available on the Company's web-site www.livecompanygroup.com shortly.

 

Chairman's Review

2021 was a tough year for everyone on a personal level. From a business perspective many industries were hard hit - events being one of them - with several companies closing their doors forever. Restrictions in place continued to impact LVCG's opportunity for growth. In fact, as an events based company we were fortunate to still be operational during the second half of 2021. In spite of this LVCG was able to announce in December 2021 a new revenue stream for 2022 onwards - KPOP.Flex.

KPOP.Flex 

In December 2021 after a year of negotiations I was delighted to finally be able to launch KPOP.Flex - Europe's largest KPOP multi-artist festival which took place in May 2022 in the iconic DB Frankfurt Stadium and two artists were announced prior to the year end.

In February 2022 we announced that the tickets for 14 May 2022 were completely sold out and we announced the second day adding two additional artists to the roster. The final artists included: ENHyphen, NCT-dream and Kai.

We then partnered with KTO-Korean Tourism Office to host a Korean culture festival as a part of the fan festival.

Revenue from KPOP.Flex is derived from several sources: ticket sales, merchandising, sponsorship and streaming. We await the final reconciliation, however it is expected that there will be a positive contribution to our 2022 Group results.

LVCG's strategy going forward is to extend the KPOP.Flex concept into other cities in Europe and globally. The Frankfurt festival is a five-year contract, and all future contracts are envisaged to be long term with multiple revenue streams in place. Frankfurt 2023 and London 2023 dates have been announced.

BRICKLIVE 

In 2021, our business in Q1 and Q2 was still impacted by continued COVID-19 restrictions. The majority of the previously postponed events from 2020 largely took place in 2021 with a handful occurring in 2022. Several new events with first time customers also went ahead. 

In Q1 we signed a contract within our corporate build division representing a Climate Change Environment with a branch of the UK Environment Agency.

 

In March 2021 a contract for BRICKLIVE Supersized with John Ball Zoo (USA) was signed and ran from May 2021 until September 2021. 

BRICKLIVE Supersized popularity was confirmed with a further booking for Naples Zoo that was secured in April 2021 and followed on from John Ball Zoo in October 2021. The sunshine strategy (using assets all year round in 'summer' states) continued to bear fruit for the Group in 2021.

Q3 saw bookings with Wolverhampton Art Gallery (BRICKLIVE Fantasy Kingdom), McArthur Glen Italy (Nick Jr) and an additional USA booking with Capron Zoo in Massachusetts for BRICKLIVE Animal Paradise.

Q4 saw a variety of Christmas bookings and further USA and European events, including Les Grands Prés Shopping de Wallonie, Mons, Belgium; Les Automnales, Geneva, Switzerland; and Naples Zoo, Florida, USA.

One event we are extremely proud of is the inaugural BRICKLIVE Brickosaurs Tour at Singapore Zoo which ran from November 2021 until May 2022. It represented a return to business in Asia despite extremely challenging COVID-19 restrictions which continue to hamper further growth in the region. Singapore Zoo is one of the most iconic zoos in the world and it was a privilege to work with the team there. BRICKLIVE received a lot of positive social media exposure thanks to Singapore Zoo.

During 2021 BRICKLIVE continued its building program which culminated in Brickosaurs Evolution, which launched at Marwell Zoo at the end of March 2022. We also saw an increased demand in consumer sets and corporate builds including a bespoke kit for Ineos. 

Trading has remained extremely difficult for much of 2021 with COVID-19 restrictions limiting the number and size of events and as a result the Division has continued to make losses in the trading period.  However, I am encouraged by the return to close to full operational capacity with 42 events taking place in 2021 (down from a high of 71 in 2019) and 40 already scheduled for 2022. 

LCSE 

In December 2020 we announced the creation of a new Sports and Entertainment division - Live Company Sports and Entertainment ('LCSE'). The division focuses on live sports, entertainment, and music events. 

Due to the ongoing effects of COVID-19 there were no events for most of 2021 however The Cape Town Cycle Tour finally took place on 10 October 2021, which was a great success.

A number of events have been confirmed for 2022 and 2023 including, the 2022 and 2023 editions of The Cape Town Cycle Tour, Pick n Pay Wine Festivals and the Cape Town stopover of the Global Ocean Race (confirmed for February 2023).

Formula E 

With the acquisition of E Movement Holdings Limited. ('EMHL') in December 2020 LVCG acquired the right to sell sponsorship and the management for the upcoming Formula E race in Cape Town planned for the February 2023, (postponed from February 2022 due to ongoing COVID-19 restrictions in South Africa). 

E Movement (Pty) Limited ('EMPL'), the South African based promoter of Formula E, Cape Town, has signed a contract with Formula E Holdings for the rights to promote the Cape Town Formula E race for a 10-year period beginning 2023.

In March 2021 I met with Formula E and its major sponsors for the Cape Town track reveal.  There will be several additional related events in 2022 as we prepare for the inaugural Cape Town race. 

 

StART Art Global Limited Investment 

In May 2021 we announced the subscription for a minority interest of 18.6% of issued share capital in Start Art Global Limited  ('StART.Art'). StART.Art is building an online sales platform (with several potential revenue streams including potential for non-fungible tokens ('NFT's). 

The StART.Art platform was soft launched on 22 June 2021 and went live in October 2021. In November StART.Art acquired Start 2013 Limited, the promoter of the physical Start Art Fairs. In May 2022 StART.Art launched StART Art Fair Seoul which is due to take place in September 2022.

At the end of 2021 the LVCG shareholding in StART.Art increased to 19.9% following a reorganisation of the capital structure of StART.Art.

Corporate

In May 2021 and December 2021, we raised a total of £1.9m via two separate placings to facilitate the investment into StART.Art and to fund the initial capital requirements for the launch of KPOP.Flex (prior to ticket revenue being generated) and to provide working capital for the Group. Post balance sheet in March 2022 we raised £0.8 million (gross) via a placing - introducing a new institutional client into the share register.  

Following the resignation of three Directors in February 2021 and as referred to in the announcement on 4 May 2021 the Company appointed a new independent Non-Executive Director Stephen Birrell. The Company still intends to conduct a full board review with the intention of making further changes during the latter half of 2022.

Financial Review

The Group continued to makes use of the Coronavirus Job Retention Scheme receiving a total of £185,000 (2020: £425,000) during the year.

 


2021

2020


£'000

£'000

Revenue

2,674

1,857

Gross profit/(loss)

36

(699)

Gross profit/(loss) %

1%

(38%)

Administrative expenses

(2,880)

(3,213)

Share of results of associate

-

-

Operating loss before exceptional items

(2,844)

(3,912)

Addback: Depreciation and amortisation

1,149

824

Pre-exceptional items EBITDA

(1,695)

(3,088)

Exceptional items:


 

Share option and warrant charge

(285)

(278)

Other exceptional costs

(79)

(4,077)

Total exceptional costs

(364)

(4,355)

Depreciation and amortisation

(1,149)

(824)

Finance costs

(108)

(110)

Taxation

(61)

144

Loss after tax

(3,377)

(8,233)

 

Pre-exceptional items EBITDA (PXEBITDA)

The Group uses the alternative performance measures PXEBITDA to allow the users of the consolidated financial statements to gain a clearer understanding of the underlying performance of the business without the impact of one off non-recurring costs of an exceptional nature.

 

Revenue

Revenues from operations increased 44% from £1,857,000 in 2020 to £2,674,000 in 2021; with the new LCSE division contributing £849,000 (2020: £nil) and BRICKLIVE contributing £1,825,000 (2020: £1,857,000) a fall of 3% resulting from a fall in fees paid by international licence partners due to the ongoing effects of COVID-19.

 

Regional analysis

The impact of COVID-19 continued to be felt in all markets and sectors in which the Group operates however it was felt most acutely in Asia where revenues fell 66%, from a very low base in 2020 Europe has increased 555% and the launch of LCSE has significantly increased revenues from the Middle East and Africa region.

 


2021

2020

 


£'000

£'000

% change

United Kingdom

999

1,013

(1%)

Europe

321

49

555%

USA

314

265

18%

Asia

147

434

(66%)

Middle East & Africa

893

96

830%


2,674

1,857

44%

 

Gross profit

Due to the higher operating costs of remaining COVID-19 compliant and reduced revenues associated with lower visitor numbers and restricted opening during the pandemic gross profit per event was significantly reduced, additionally a material component of cost of sales comprises depreciation on content assets which are not dependent on the number of events or revenue. Thus Gross profit for the year was £36,000 (2020: gross loss £699,000).

 

Exceptional items

Exceptional items as detailed in Note 6 to the consolidated financial statements totalled £364,000 (2020: £4,355,000), These  relate to IFRS 2 share option and warrant charges and transactional and reorganisational costs, and the impairment of associate and intangible assets.

 

Finance costs

Finance costs comprise loan interest charges, interest on lease liabilities in accordance with IFRS 16, and other interest charges.

 

Tax

The tax charge relates to deferred tax arising on timing differences and an adjustment to the prior year relating to Research and Development Tax Credits.

 

Loss per share

The loss per share decreased to 2.6p (2020: loss 9.8p) as set out in Note 12 to the consolidated financial statements.

 

Cash flows

The Consolidated Statement of Cash Flows is set out below.

 

Statement of Financial Position

The Consolidated Statement of Financial Position as at 31 December 2021 shows the Group's total net assets having decreased to £5,422,000 (2020: £5,769,000).

 

Capital expenditure

The Group maintained a reduced build programme throughout the year, completing three new tours Animal Wonders, Caledonia and a second Paw Patrol set as well as augmenting the existing Christmas , this equated to content additions during the year of £586,000 (2020: £921,000).

 

Investments and impairment

In May 2021 the Company subscribed to 389 ordinary shares in Start Art Global Limited. ('StART.Art'), representing a non-controlling stake of 18.6% of the total issued share capital of the company, for a total consideration of £1,000,000. Prior to the transaction StART.Art was 100% owned by David Ciclitira and Ranjit Murugason as detailed in Note 32.

 

In November 2021 StART.Art acquired the entire issued share capital of Start (2013) Limited, the promoter of the StART Art Fair, in an all share transaction, resulting in a decrease in the Company's interest in the enlarged group from 18.6% to 14.4% with no diminution of value. Prior to the acquisition Start (2013) Limited was 100% owned by David Ciclitira and Ranjit Murugason.

 

In December 2021, following a reorganisation of the capital structure of StART.Art, StART.Art issued a further 180 ordinary shares to LVCG for nominal consideration increasing LVCG's holding to 19.9%.

 

In November 2021 the Company purchased 271 ordinary shares, representing 20% of the total issued share capital, in E Movement (PTY) Limited ('EMPL') from David Ciclitira for a total consideration of £113,460. These shares were originally purchased by David Ciclitira (acting in his personal capacity) for the same amount in anticipation of them being transferred to the Company. EMPL is the South African based promoter of the Cape Town E Prix which has been confirmed for Series 9 of the ABB FIA Formula E World Championship and due to take place in February 2023.

 

As detailed in Notes 15, 16, 17 and 18 to the consolidated financial statements the Directors considered the carrying value of investments, goodwill and intangible assets including in the in light of the continued impact of COVID-19, together with the effects of the measures taken to contain it, in the markets in which the Group operates and have determined the changes, as described in the following table, were required at 31 December 2021.

 

Change in carrying value

Group

Company


£'000

£'000

Brick Live Far East Limited

-

-

Brick Live Group (incorporating Bright Bricks Limited)

-

3,816

Parallel Live Group

(12)

(116)

Total (decrease)/increase

(12)

3,699

Net goodwill/investments 1 January 2021

896

6,025

Additions

-

1,113

Net goodwill/investments 31 December 2021

884

10,838

 

This partially reverses the 2020 impairment in the carrying value of the Company's investment in Brick Live Group.

 

Cash and debt position

At the year end, the Group had total cash balances of £211,000 (2020: £168,000) and total borrowings of £1,678,000 (2020: £2,045,000) giving a net debt figure of £1,467,000 (2020: £1,877,000). During the year, the Group raised new equity in May 2021 and December 2021 as detailed in Note 27.

 

As at 31 May 2022 the Group had total cash balances of £114,000 and total borrowings of £1,434,000.

 

Share options and warrants

During the year 1,500,000 (2020: 75,000) warrants were issued to investors and service providers resulting in an exceptional charge as detailed in Notes 6 and 30 to the consolidated financial statements.

 

In addition 11,428,572 (2020: 16,810,000) warrants were issued to investors as part of an equity raise and are therefore outside the scope of IFRS 2 and consequently there is no share-based payment charge in respect of these warrants.

 

Going concern

Based on the Group's balance sheet and a review of its forecast future operating budgets and forecasts, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for at least twelve months from the date of signing of these consolidated financial statements. This review of future operating budgets and forecasts included certain reasonable downside scenarios and confirmed that even in the case of such downside scenarios the Group could continue to operate and comply with all covenants in our banking facilities. Accordingly, the Directors have adopted the going concern basis in preparing the Annual Report and consolidated financial statements.

 

The Directors have assessed the viability of the Group over a five-year period, taking account of the Group's current position and prospects, its strategic plan and the principal risks and how these are managed. Based on this assessment, the Directors have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over this period.

 

In making this assessment, the Directors have considered the resilience of the Group in severe but plausible scenarios, taking into account the principal risks and uncertainties facing the Group and the effectiveness of any mitigating actions. The Directors' assessment considered the potential impacts of these scenarios, both individually and in combination, on the Group's business model, future performance, solvency and liquidity over the period. Sensitivity analysis was also used to stress test the Group's strategic plan and to confirm that sufficient headroom would remain available under the Group's credit facilities. The Directors consider that under each of these scenarios, the mitigating actions would be effective and sufficient to ensure the continued viability of the Group. The Directors believe that five years is an appropriate period for this assessment, reflecting the average length of the Group's contract base; key markets; and the nature of its businesses and products.

 

 

Enquiries:

 

Live Company Group Plc

David Ciclitira, Executive Chairman

Sarah Dees, Chief Operating Officer

Tel: 020 7225 2000



Beaumont Cornish Limited (Nominated Adviser)

Roland Cornish/Rosalind Hill Abrahams

Tel: 020 7628 3396



Monecor (London) Limited (Broker)

Thomas Smith

Tel: 020 7392 1436



 

LIVE COMPANY GROUP

Live Company Group Plc ("LVCG", the "Company" or the "Group") is a live events, entertainment and sports events company, that has been trading on AIM since 2017.

The Group is divided into four divisions;  BRICKLIVE, consisting of a network of partner-driven fan-based and touring 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. The Group is an independent producer of BRICKLIVE and is not associated with the LEGO Group.  The second is Kpop Europa (KPE), which owns the kpop.flex brand.  KPE is a joint venture between LVCG and the Explorado Group.  Kpop.flex is Europe's first ever Mega KPOP music festival.  The third is Live Company Sports and Entertainment, which manages a number of global sports, entertainment and lifestyle events. LCSEs main focus for 2022 will be Cape Town Cycle Tour and the successful  one year out launch of the Formula E Cape Town race for series 9 in 2023.  The fourth division is StART Art Global, in which LVCG holds a minority stake. StART Art Global is a combination of both physical art shows and a digital art platform.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME for the year ended 31 December 2021



Year to 31 December



2021

2020

 

 

Note

£'000

£'000

 

Continuing operations




 

Revenue

4

2,674

1,857

 

Cost of sales


(2,638)

(2,556)

 

Gross profit/(loss)


36

(699)

 



 


 

Administrative expenses


 


 

Foreign exchange


-

(17)

 

Depreciation and amortisation of non-financial assets


(393)

(119)

 

Other administrative expenses


(2,487)

(3,077)

 

Total administrative expenses


(2,880)

(3,213)

 



 


 

Share of result of associate

18

-

-

 



 


 

Operating loss before exceptional items

5

(2,844)

(3,912)

 



 


 

Exceptional items

6

(364)

(4,355)

 

Operating loss after exceptional items


(3,208)

(8,267)

 



 


 

Finance costs

10

(108)

(110)

 

Loss for the year before tax


(3,316)

(8,377)

 



 


 

Taxation

11

(61)

144

 



 


 

Loss for the year


(3,377)

(8,233)

 



 


 

Other comprehensive income


-

-

 



 


 

Total comprehensive income for the year attributable to the equity holders of the parent Company


(3,377)

(8,233)

 





 

Loss per share - continuing and total operations


 


 

-basic and diluted

12

(2.6p)

(9.8p)

 



 


 

 



 

CONSOLIDATED AND COMPANY STATEMENTS OF FINANCIAL POSITION as at 31 December 2021


Note

Consolidated

Company



2021

2020

2021

2020

 



£'000

£'000

£'000

£'000

 

Non-current assets






 

Property, plant and equipment

13

3,932

4,144

-

-

 

Intangible assets

15

1,231

1,516

1,173

1,450

 

Right of use assets

14

169

231

-

-

 

Investments

16

1,113

-

10,838

6,025

 

Goodwill

17

884

896

-

-

 

Investments in associates and joint ventures

18

-

-

-

-

 

Total non-current assets


7,329

6,787

12,011

7,475

 

 






 

Current assets






 

Inventories

19

3,805

4,831

-

-

 

Trade and other receivables

20

512

404

1,330

1,460

 

Cash and cash equivalents

21

211

168

-

191

 

Total current assets


4,528

5,403

1,330

1,651

 

 






 

Total assets

 

11,857

12,190

13,341

9,126

 

 






 

Current liabilities






 

Borrowings

22

477

615

56

167

 

Trade and other payables

23

2,636

2,364

970

1,037

 

Lease liabilities

25

66

60

-

-

 

Accruals and deferred income

23

1,172

1,120

336

343

 

Total current liabilities


4,351

4,159

1,362

1,547

 

 






 

Net current assets


177

1,244

(32)

104

 

 






 

Non-current liabilities






 

Deferred tax

26

761

644

359

288

 

Borrowings

22

1,201

1,430

185

83

 

Lease liabilities

25

122

188

-

 

Total non-current liabilities

 

2,084

2,262

544

371

 

 



 

 

 

 

Net assets


5,422

5,769

11,435

7,208

 

 






 

Equity






 

Share capital

27

5,682

5,165

5,682

5,165

 

Share premium

28

27,024

25,004

27,024

25,004

 

Other reserves


(23,698)

(23,697)

557

557

 

Own shares reserve


(2,111)

(2,151)

-

-

 

Merger reserve


14,472

14,472

14,472

14,472

 

Capital redemption reserve


5,034

5,034

5,034

5,034

 

Share option reserve

30

515

496

515

496

 

Retained earnings


(21,496)

(18,554)

(41,849)

(43,520)

 

Equity attributable to equity holders of the parent

 

5,422

5,769

11,435

7,208

 

 

CONSOLIDATED AND COMPANY STATEMENTS OF CHANGES IN EQUITY for the year ended 31 December 2021

 

 

Ordinary Share Capital

Share Premium

Reverse acquisition reserve

Forex reserve

Own shares reserve

Merger reserve

Capital Redemption

reserve

Share option reserve

Retained Earnings

Total


£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

Consolidated








 



As at 31 December 2020

5,165

25,004

(24,268)

571

(2,151)

14,472

5,034

496

(18,554)

5,769

Loss for the period

-

-

-

-

-

-

-

-

(3,377)

(3,377)

Shares issued for cash

414

1,486

-

-

-

-

-

-

-

1,900

Debt to share conversion

103

644

-

-

-

-

-

-

-

747

Forex differences arising on conversion

-

-

-

(1)

-

-

-

-

-

(1)

Own share reserves

-

-

-

-

40

-

-

-

-

40

Gain on sale of own shares

-

-

-

-

-

-

-

-

168

168

Warrant charge

-

-

-

-

-

-

-

63

-

63

Options charge

-

-

-

-

-

-

-

223

-

223

Options charge transfer

-

-

-

-

-

-

-

(267)

267

-

Share issue costs

-

(110)

-

-

-

-

-

-

-

(110)

At 31 December 2021

5,682

27,024

(24,268)

570

(2,111)

14,472

5,034

515

(21,496)

5,422

 

 

 

 

 

 

 

 

 

 

 

Company








 



As at 31 December 2020

5,165

25,004

-

557

-

14,472

5,034

496

(43,520)

7,208

Profit for the period

-

-

-

-

-

-

-

-

1,404

1,404

Shares issued for cash

414

1,486

-

-

-

-

-

-

-

1,900

Debt to share conversion

103

644

-

-

-

-

-

-

-

747

Warrant charge

-

-

-

-

-

-

-

63

-

63

Options charge

-

-

-

-

-

-

-

223

-

223

Options charge transfer

-

-

-

-

-

-

-

(267)

267

-

Share issue costs

-

(110)

-

-

-

-

-

-

-

(110)

At 31 December 2021

5,682

27,024

-

557

-

14,472

5,034

515

(41,849)

11,435

 



 

CONSOLIDATED AND COMPANY STATEMENTS OF CASHFLOW for the year ended 31 December 2021

 

 

Consolidated

Company

 

2021

2020

2021

2020


£'000

£'000

£'000

£'000

Cash flows from operating activities





Operating loss

(2,844)

(3,912)

(1,504)

(1,122)

Share of result of associate

-

-

-

-

Depreciation

801

751

-

-

Amortisation of intangible assets

286

11

277

-

Depreciation of right of use assets

62

61

-

-

Loss on disposal of property, plant and equipment

-

192

-

-

Corporation tax refund

55

209

-

-

Net cash flow from exceptional items

(66)

(819)

(66)

(626)

Decrease in inventories

1,026

1,421

-

-

(Increase)/decrease in receivables

(108)

404

(231)

1,061

Increase in payables

1,070

732

673

631

Cash used in operations

282

(950)

(856)

(56)

 





Cash flow from investing activities





Acquisition of intangible fixed assets

(1)

(51)

-

(50)

Acquisition of investments

(1,113)

-

(1,113)

-

Acquisition of property, plant and equipment

(589)

(935)

-

-

Disposal of property, plant and equipment

-

-

-

-

Net cash used in investing activities

(1,703)

(986)

(1,113)

(50)


 




Cash flow from financing activities





Issue of equity

1,900

1,000

1,900

1,000

Repayment of lease liabilities

(60)

(55)

-

-

Gain on sale of own shares

209

-

-

-

Proceeds from borrowings

-

2,250

-

250

Loans repaid

(367)

(995)

(9)

(995)

Interest paid

(108)

(110)

(3)

7

Share issue costs

(110)

(84)

(110)

(84)

Net cash generated from financing activities

1,464

2,006

1,778

178






Net cash inflow/(outflow)

43

70

(191)

72






Cash and cash equivalents at beginning of the year

168

98

191

119

Net increase/(decrease) in cash and cash equivalents

43

70

(191)

72

Cash and cash equivalents at end of the year

211

168

-

191

The  impairment of £116,000 and reversal of impairment of £3,816,000 in the company is a non-cash transaction. The settlement of deferred consideration of £747,000 by the issue of equity is also a non-cash transaction.


1.       NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 31 December 2021 Basis of preparation

 

These financial statements have been prepared on the historical cost basis as modified by use of the fair-value basis where required and in accordance with UK adopted International Accounting Standards (IFRS), and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS as at 31 December 2021.

 

The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts in the financial statements which are disclosed in Note 3 to these consolidated financial statements.

 

The consolidated financial statements of the Group are presented in UK Pounds Sterling ("GBP"), rounded to the nearest thousand.

 

1.1     Going concern

These financial statements have been prepared on a going concern basis. The Consolidated Statement of Comprehensive Income shows a loss of £3,377,000 for the year ended 31 December 2021 (2020: £8,233,000 loss). The Consolidated Statement of Financial Position shows net current assets of £177,000 (2020: £1,244,000 net current assets). In assessing going concern the Directors have considered the Group's cash flows, solvency and liquidity positions.

 

Based on the Group's balance sheet and a review of its forecast future operating budgets and forecasts, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for at least twelve months from the date of signing of these consolidated financial statements. This review of future operating budgets and forecasts included certain reasonable downside scenarios and confirmed that even in the case of such downside scenarios the Group could continue to operate and comply with all covenants in our banking facilities. Accordingly, the Directors have adopted the going concern basis in preparing the Annual Report and consolidated financial statements.

 

The Directors have assessed the viability of the Group over a five-year period, taking account of the Group's current position and prospects, its strategic plan and the principal risks and how these are managed. Based on this assessment, the Directors have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over this period.

 

In making this assessment, the Directors have considered the resilience of the Group in severe but plausible scenarios, taking into account the principal risks and uncertainties facing the Group and the effectiveness of any mitigating actions. The Directors' assessment considered the potential impacts of these scenarios, both individually and in combination, on the Group's business model, future performance, solvency and liquidity over the period. Sensitivity analysis was also used to stress test the Group's strategic plan and to confirm that sufficient headroom would remain available under the Group's credit facilities. The Directors consider that under each of these scenarios, the mitigating actions would be effective and sufficient to ensure the continued viability of the Group. The Directors believe that five years is an appropriate period for this assessment, reflecting the average length of the Group's contract base; key markets; and the nature of its businesses and products.

                                                    

Consequently, the Directors have prepared these consolidated financial statements on the going concern basis, which assumes that the Group will continue in operational existence for the foreseeable future.

 

1.2     Adoption of standards effective in 2021

The following new and revised Standards and Interpretations have been issued and are effective for the current financial period of the Company:

 

·    Interest Rate Benchmark Reform Phase 2 - amendments to IFRS 9, IAS 39, IFRS 7,
IFRS 4 and IFRS 16; and

·    COVID-19 Related Rent Concessions (Amendment to IFRS 16).

 

1.3     IFRS in issue but not applied in the current financial statements

The following IFRS and IFRIC Interpretations have been issued but have not been applied by the Company in preparing these financial statements as they are not as yet effective. The Company intends to adopt these Standards and Interpretations when they become effective, rather than adopt them early:

 

·    Amendments to IAS 1 - Classification of Liabilities as Current or Non-current;

·    Amendments to IAS 16 - Property, Plant and Equipment: Proceeds before intended use;

·    Amendments to IFRS 3 - Reference to the Conceptual Framework;

·    Amendments to IAS 37 - Onerous Contracts - Cost of Fulfilling a Contract; and

·    Annual Improvements to IFRS Standards 2018-2020.

 

The directors do not expect that the adoption the Standards listed above will have a material impact on the Company in future periods.

 

A number of IFRS and IFRIC Interpretations are also currently in issue which are not relevant for the Company's activities and which have not therefore been adopted in preparing these financial statements.

 

Other new and amended Standards and Interpretations issued by the IASB that will apply for the first time in the next annual financial statements are not expected to impact the Company as they are either not relevant to the Company's activities or require accounting which is consistent with the Company's current accounting policies.

 

2.       Accounting policies

 

2.1.    Basis of consolidation

The consolidated financial statements incorporate:

·       the results of LVCG, Brick Live Group Limited ('Brick Live Group'), Parallel Live Group Limited ('Parallel Live Group'), Bright Bricks Limited ('Bright Bricks Group'), Live Company Sports and Entertainment Limited ('LCSE'), E Movement Holdings Ltd ('EMHL'), Live Company Group EBT Limited ('EBT') and their subsidiary companies for the year ended 31 December 2021.

·       the assets and liabilities of LVCG, Brick Live Group, Parallel Live Group, Bright Bricks Group, LCSE, EMHL, EBT and their subsidiary companies at 31 December 2021.

 

Business combinations

The information contained in this note sets out how the Group typically accounts for Business Combinations, which is effectively using the purchase method explained in IFRS 3, 'Business Combinations'.

 

Subsidiary undertakings are all entities over which the Group has the power to govern the financial and operating policies of the subsidiary and therefore exercises control. The existence and effect of both current voting rights and potential voting rights that are currently exercisable or convertible are considered when assessing whether control of an entity is exercised. Subsidiaries are consolidated from the date at which the Group obtains the relevant level of control and are de-consolidated from the date at which control ceases.

Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

 

The amendments to IFRS 3, 'Business Combinations' have clarified the definition of a business and have permitted a simplified assessment of whether an acquired set of activities and assets is a group of assets rather than a business. The Group has assessed it's acquisitions on the basis of this amendment.

 

The cost of an acquisition is measured as an aggregate of the consideration transferred, measured at the acquisition date fair-value and the amount of any non-controlling interest in the acquiree. For each business combination, the Group measures the non-controlling interest in the acquiree at the proportionate share of the acquiree's identifiable net assets. Subsequent changes in the proportion of the non-controlling interests, which do not result in de-recognition of the subsidiary, are accounted for in equity. Costs incurred in connection with acquisitions are recognised as exceptional costs in the income statement, as incurred.

 

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions at the acquisition date.

 

If the business combination is achieved in stages, the acquisition date fair-value of the Group's previously held equity interest in the acquiree is re-measured to fair-value at the acquisition date through profit or loss. Goodwill is initially measured at cost being the excess of the consideration transferred over the Group's share of net identifiable assets acquired and liabilities assumed.

 

If this consideration is lower than the fair-value of net assets of the subsidiary acquired, the difference is recognised in profit or loss.

 

After initial recognition, goodwill is measured at cost less any recognised impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to either the acquired business or to each of the Group's cash generating units that are expected to benefit from the combination irrespective of whether other assets or liabilities of the acquiree are assigned to those units.

 

Where goodwill forms a part of a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in these circumstances is measured based on the relative values of the operation disposed of and the portion of the cash-generating unit until retained.

 

Formal impairment reviews were completed at 30 June 2021 and 31 December 2021 given the indicators of impairment existing at both dates.

 

Brick Live Group

In 2017 the reverse acquisition of LVCG by the Brick Live Group resulted in goodwill arising of £4,581,000. This goodwill was fully impaired in the year ended 31 December 2017.

 

Bright Bricks Group

In October 2018, the Group acquired Bright Bricks Group, resulting in goodwill arising of £86,000. This goodwill was fully impaired in the year ended 31 December 2020.

 

Parallel Live Group

In December 2017, the Group acquired Parallel Live Group, resulting in goodwill arising of £1,271,000. The carrying value of the goodwill was reduced from £896,000 to £884,000 in the year ended 31 December 2021.

 

Brick Live Far East Limited ('BLFE')

In December 2017, the Company became the 100% owner of BLFE. Goodwill of £2,950,000 arose on the acquisition. BLFE is a company registered in Hong Kong which owns a 49% stake in the Brick Live Group's China associate company, Brick Live Centre Education Development (Beijing) Company Limited. This goodwill was fully impaired in the year ended 31 December 2020.

 

Live Company Sports and Entertainment ('LCSE')

In December 2020 the Group established its new LCSE division, through an all share acquisition of Live Company Sports and Entertainment Limited, including its 50% interest in K-Pop Europa Limited; the novation of a number of contracts from World Sport South Africa (Pty) Limited and the acquisition of the entire issued capital of E Movement Holdings Ltd.

 

The substance of these transactions was the acquisition of a series of contracts rather than a business combination as defined in IFRS 3, 'Business Combinations'. The transactions were therefore accounted for as additions to intangible fixed assets of £1,450,000 with no goodwill arising.

 

Intercompany balances

All intercompany balances are eliminated on consolidation.

 

Subsidiary companies audit exemption

The company's active subsidiaries Bright Bricks Limited, Brick Live Group Limited, Brick Live International Limited, Live Company Group EBT Limited, and Parallel Live Group Limited are exempt from the requirements of the Companies Act 2006 relating to the audit of their individual accounts by virtue of section 479A of the Companies Act 2006.

 

2.2.    Intangible fixed assets

Trademarks are registered in each of the geographical territories for the BRICKLIVE brand. Trademarks are amortised on a straight line basis over their estimated useful lives, which is on average 10 years.

 

Acquired contracts are amortised over the period of the rights acquired, where contracts are renewable and are likely to be renewed for a further period such further period, but no subsequent periods, is considered to be part of the period of the rights acquired.

 

2.3.    Investment in associates and joint ventures

An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but does not have control or joint control over those policies. The Group uses the equity method of accounting for its associate.

 

A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control. The Group uses the equity method of accounting for its joint ventures.

 

Start Art Global Ltd. ('StART.ART')

In May 2021 the Company subscribed to 389 ordinary shares in Start Art Global Limited. ('StART.Art'), representing a non-controlling stake of 18.6% of the total issued share capital of the company, for a total cash consideration of £1,000,000. Prior to the transaction StART.Art was 100% owned by David Ciclitira and Ranjit Murugason as detailed in Note 32.

 

In November 2021 StART.Art acquired the entire issued share capital of Start (2013) Limited, the promoter of the StART Art Fair, in an all share transaction, resulting in a decrease in the Company's interest in the enlarged group from 18.6% to 14.6% with no diminution of value. Prior to the acquisition Start (2013) Limited was 100% owned by David Ciclitira and Ranjit Murugason as detailed in Note 32.

 

In December 2021 StART.Art issued a further 180 ordinary shares to LVCG for nominal consideration increasing LVCG's holding to 19.9%.

 

The Directors reviewed the investment and concluded LVCG did not exercise significant influence over StART.Art due to its holding being less than the 20% threshold at which significant influence is presumed to exist and there being no contrary indicators of significant influence:

·    Although David Ciclitira and Ranjit Murugason are Directors of both LVCG and StART.Art, LVCG does not have the power to appoint or remove directors of StART.Art;

·    LVCG is not a party to the StART.Art shareholder agreement and has no reserved powers; and

·    LVCG does not participate in the key strategic and operational decisions of StART.Art.

 

E-Movement (PTY) Limited. ('EMPL')

In November 2021 the Company purchased 271 ordinary shares, representing 20% of the total issued share capital, in E Movement (PTY) Limited ('EMPL') from David Ciclitira for a total consideration of £113,460. These shares were originally purchased by David Ciclitira (acting in his personal capacity) for the same amount in anticipation of them being transferred to the Company. EMPL is the South African based promoter of the Cape Town E Prix which has been confirmed for Series 9 of the ABB FIA Formula E World Championship and due to take place in February 2023.

 

The Directors reviewed the investment and concluded LVCG did not exercise significant influence over EMPL despite a shareholding of 20%, being the threshold at which significant influence is presumed to exist. The presumption was rebutted on the basis that EMPL was actively seeking an additional investor which would reduce LVCG's holding below the threshold and that other indicators of significant influence were not met as follows:

·    Although David Ciclitira is a Director of both LVCG and EMPL the board of directors is controlled by EMPL's largest shareholder which is an unrelated third party;

·    LVCG has no reserved powers in the Shareholder Agreement and such powers that are exercisable are exercised jointly with the other shareholders; and

·    LVCG does not participate in the key strategic and operational decisions of EMPL.

 

2.4.    Property, plant and equipment

All property, plant and equipment assets are stated at cost less accumulated depreciation. Content is capitalised in the periods in which they are purchased or completed and valued at the lower of cost and net realisable value.

 

Depreciation is provided on content assets over eight years on a straight-line basis to reflect their useful life. Residual values, remaining useful lives and depreciation methods are reviewed annually and adjusted if appropriate.

 

Depreciation is provided on other fixtures, fittings and office equipment over five years on a straight-line basis. Residual values, remaining useful lives and depreciation methods are reviewed annually and adjusted if appropriate.

 

2.5.    Leases

In accordance with IFRS 16, 'Leases' a right of use asset, being the present value of the operating lease payments over the remaining life of the lease, has been recognised within non-current assets. The right to use assets and corresponding lease liability were calculated using a discount rate of 9% which the Directors consider to be appropriate, based on the Group's current borrowing structure. The depreciation of the assets and interest charge are recognised in the Statement of Comprehensive Income in the year and the buildings maturity analysis of lease liabilities at 31 December 2021 is detailed in Note 25.

 

2.6.    Impairment of assets

The carrying amounts of the Group's assets, other than inventories, are reviewed at each reporting date to determine whether there is any indication of impairment. An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in the Statement of Comprehensive Income.

 

Where there is an indication that previously recognised impairment losses may no longer exist or may have decreased the previously recognised impairment loss is reversed. The reversal is limited so that the carrying value  of the asset or its cash-generating unit does not exceed either its recoverable amount, or the carrying amount that would have been determined, net of depreciation/amortisation, had no impairment loss been recognised in prior years. Such a reversal is recognised in the Statement of Comprehensive Income.

 

2.7.    Inventories

Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and, where applicable, direct labour costs that have been incurred in bringing the inventories to their present location and condition. Cost is calculated using a weighted average cost method. Net realisable value represents the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution. The majority of inventories are measured at fair value following the acquisition of the Bright Bricks Group in October 2018 as detailed in Note 19.

 

2.8.    Financial instruments

Financial assets and financial liabilities are recognised in the Group's statement of financial position when the Group becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.

 

Financial assets

The Group classifies its financial assets as either financial assets measured at amortised cost, fair value through profit and loss or fair value through Other Comprehensive Income (OCI).

 

Financial assets at fair value through OCI consist of equity investments in other companies or limited partnerships where the Group does not exercise either control or significant influence.

 

Financial assets at fair value through OCI are shown at fair value at each reporting date with changes in fair value being shown in OCI. In cases where the Group can reliably estimate fair value, fair value will be determined in reference to practical completion of each development project.

 

All assets for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

 

•     Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities;

•     Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable; and

•     Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

Financial instruments are derecognised on the trade date when the Group is no longer a party to the contractual provisions of the instrument.

 

 

2.9.    Share based payments

The Company issues equity settled share-based payment transactions to certain employees and service providers. Equity settled share-based payment transactions with employees are measured at the fair value at the date of grant. The calculation of fair value at the date of grant requires the use of management's best estimate of volatility, risk free rate and expected time to exercise the options.

 

Equity settled share based payment transactions with service providers are measured at the fair value of the goods or services received, except where the fair value cannot be reliably estimated, in which case they are measured at the fair value of the equity instrument granted, measured at the date the entity obtains the goods or the counterparty renders the service.

 

2.10.  Trade and other receivables

Trade and other receivables are stated at their amortised cost. Trade receivables are reduced by appropriate allowances for estimated irrecoverable amounts.

 

A loss allowance is recognised on initial recognition of financial assets held at amortised cost, based on expected credit losses, and is re-measured annually with changes appearing in profit or loss. Where there has been a significant increase in credit risk of the financial instrument since initial recognition, the loss allowance is measured based on lifetime expected losses. In all other cases, the loss allowance is measured based on 12-month expected losses. For assets with a maturity of 12 months or less, including trade receivables, the 12-month expected loss allowance is equal to the lifetime expected loss allowance.

 

2.11.  Cash and cash equivalents

Cash equivalents comprise short-term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.

 

2.12.  Trade and other payables

Trade and other payables are stated at their amortised cost.

 

2.13.  Interest-bearing borrowings (other than compound financial instruments)

Interest-bearing borrowings are stated at amortised cost using the effective interest method. The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability.

 

2.14.  Revenue recognition

Revenue is the value of goods and services provided by the Group to customers, net of VAT and discounts. Revenue includes licence fees, revenue from the sale of products, rental fees, sale of content (brick-based statues), brick lease fees and ticket sales from self-promoted events.

 

Revenue from contracts is recognised in accordance with IFRS 15 as follows:

i.    Identify the contract with the customer;

ii.    Identify separate performance obligations in the contract;

iii.   Determine the transaction price;

iv.  Allocate the transaction price to separate performance obligations; and

v.   Recognise revenue when the entity satisfies a performance obligation.

Revenue recognised as above is measured on the following basis:

i.    Annual licence fees - on a straight-line basis in accordance with the terms of the agreement, unless it is non-refundable in which case fees are recognised on the contractual invoice date;

ii.    Event licence fees and revenue shares - in accordance with the terms of the agreement;

iii.   Content fees - on delivery of the specific content to the client in accordance with the terms of the agreement;

iv.  Tour and show rental fees - in accordance with the terms of the agreement;

v.   Brick lease fees - on a straight-line basis in accordance with the terms of the agreement;

vi.  Ticket sales from self-promoted events - on the date of the event; and

vii.  Sales of products - in accordance with contract.

 

2.15.  Deferred taxation

Deferred tax is provided in full using the balance sheet liability method. Deferred tax is the future tax consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities shown on the Statement of Financial Position.

 

The amount of deferred tax provided is based on the expected manner of recovery or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the reporting date.

 

The Group does not recognise deferred tax liabilities, or deferred tax assets, on temporary differences associated with investments in subsidiaries, as it is not considered probable that the temporary differences will reverse in the foreseeable future.

 

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. The carrying amounts of the deferred tax assets are reviewed at each statement of financial position date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the assets to be recovered.

 

2.16.  Segmental reporting

The Group has three operating segments, namely: Models and Sets, Tours and Trails and Sports and Entertainment. In identifying these operating segments, management generally follows the Group's service lines representing its main products and services (see Note 4).

 

For management purposes, the Group uses the same measurement policies as those used in its consolidated financial statements, except for certain items not included in determining the operating profit of the operating segments, such as exceptional costs.

 

In addition, corporate assets and expenses which are not directly attributable to the business activities of any operating segment are not allocated to a segment. This primarily applies to the Group's headquarters.

 

2.17.  Foreign currencies

Monetary assets and liabilities expressed in foreign currencies are translated at the rates of exchange ruling at the reporting date. Transactions in foreign currencies are translated at the rate ruling at the date of the transaction. Differences on exchange arising on translation of subsidiaries are charged directly to other comprehensive income. All other exchange differences have been charged to the profit or loss in the period under review.

 

2.18.  Exceptional items

Exceptional items are those costs incurred by the Group which are considered by the Directors to be material in size and are unusual and infrequent in occurrence which require separate disclosure within the financial statements. See Note 6 for details of exceptional items in the year.

 

2.19.  Government grants and assistance

Government grants and assistance are recognised in the related expense line in the consolidated statement of comprehensive income on a systematic basis over the period in which the entity recognises the expense, for which the grant is intended to compensate.

 

Therefore, grants in recognition  of specific expenses are recognised in the related expense line in the same period.

 

The Group continued to makes use of the Coronavirus Job Retention Scheme receiving a total of £185,000 (2020: £425,000) during the year.

 

2.20.  Reserves

 

Reverse acquisition reserve

The reverse acquisition reserve of (£24,268,000) arose in December 2017 with the acquisition of 100% of the issued share capital of Brick Live Group, 100% of the issued share capital of Parallel Live Group and the remaining 61.1% of Brick Live Far East Limited not already owned indirectly by the Group via Brick Live International Limited, The transaction was treated as a reverse acquisition on a consolidated bases with Brick Live Group Limited considered to be the acquirer for the purposes of the consolidated financial statements with the cumulative acquisition adjustment to adjust comparatives to a consistent basis in the consolidated financial statements treated as a reverse acquisition reserve.

 

Forex reserve

The forex reserve of £570,000 comprises all foreign currency differences arising from translation of the financial position and performance of  certain subsidiaries, which have a functional currency different to the Group's presentation currency of GBP.

 

Own shares reserve

The own share reserve of (£2,111,000) arose in August 2020 on the creation of the Employee Benefit Trust ('EBT'), following the termination of the ESA described in Note 33, and the EBT's acquisition into trust of 5,726,480 ordinary shares in the Company previously held by YA II and RiverFort (representing 6.51%. of the Company's issued share capital at the time). Movement on the reserve reflects changes in the number of shares held by the EBT during the year.

 

Merger reserve

The merger reserve of £14,472,000 comprises:

·    £4,833,333, being the premium recognised on the issue of 16,666,666 new ordinary shares with a nominal value of 1p and a price of 30p in consideration for the entire issued share capital of Brick Live Group Limited in December 2017;

·    £966,666, being the premium recognised on the issue of 3,333,3334 new ordinary shares with a nominal value of 1p and a price of 30p in consideration for the entire issued share capital of Parallel Live Group Limited in December 2017;

·    £2,851,297, being the premium recognised on the issue of 9,832,060 new ordinary shares with a nominal value of 1p and a price of 30p in consideration for the remaining 61.1% of the issued share capital of Brick Live Far East Limited not already owned indirectly by the Company through Brick Live International Limited in December 2017;

·    £5,415,385, being the premium recognised on the issue of 8,461,536 new ordinary shares with a nominal value of 1p and a price of 65p in partial consideration for the entire issued share capital of Bright Bricks Holdings Limited in October 2018; and

·    £405,000, being the premium recognised on the issue of 941.860 new ordinary shares with a nominal value of 1p and a price of 44p in partial consideration for the entire issued share capital of Bright Bricks Holdings Limited in November 2019.

 

Capital Redemption Reserve

The capital redemption reserve of £5,034,000 comprises the cumulative effect of previous reorganisations in the capital of the Company and represents the value of shares redeemed from retained earnings.

 

Share option reserve

The share option and warrant reserve of £515,000 is attributable to the accumulated charge relating to share options and warrants issued by the Company which is recognised over the vesting period of the share option or warrant. This is partially offset by the accumulated charge relating to lapsed share options and warrants, which is transferred to retained earnings.

 

3.       Accounting estimates and judgements

 

The preparation of these consolidated financial statements in accordance with generally accepted accounting practice, being  UK adopted International Accounting Standards, requires the Directors to make estimates and judgements that affect the reported amount of assets, liabilities, income and expenditure and the disclosures made in these consolidated financial statements. Such estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events.

 

The significant judgements made by management in applying the Group's accounting policies as set out above, and the key sources of estimation which management consider may have a significant risk of causing a material adjustment to the reported amounts in the year, were:

 

Impairment of investments and goodwill

The Directors have carried out impairment reviews of the Group's intangible assets, goodwill, investments and the share of net assets of associates as detailed in Notes 15, 16, 17 and 18.

 

Depreciation and amortisation

Depreciation rates have been set to accurately reflect the reduction in value of property, plant and equipment assets over their economic life, less their expected residual value. This requires judgement by the Directors, who have set the depreciation rates as detailed in Note 2.4 to these consolidated financial statements based on their knowledge of the industry and typically how long each asset type retains its value.

 

Amortisation rates have been set to reflect the reduction in value of intangible assets over their economic life, less their expected residual value. This requires judgement by the Directors, who have set the amortisation rates as detailed in Note 2.2 to these consolidated financial statements based on their knowledge of the industry and typically how long each asset type retains its value.

 

Revenue recognition with customers

Revenue from contracts with customers is recognised in accordance with IFRS 15. This requires judgement as revenue transactions are subject to a variety of contract terms, albeit under the general guidelines of the accounting policies for revenue recognition as explained in Note 2.14 to these consolidated financial statements.

 

Share option and warrants

The Black-Scholes model is used to calculate the appropriate charge of the share options and warrants. The use of this model to calculate the charge involves a number of estimates and judgements to establish the appropriate inputs to be entered into the model, covering areas such as the use of an appropriate interest rate and dividend rate, exercise restrictions and behavioural considerations. A significant element of judgement is therefore involved in the calculation of the charge.

 

Carrying value of inventory

The Directors have carried out impairment reviews of the Group's inventory as detailed in Note 19. Inventory is not readily replaceable and has a long economic life, a significant element of judgement is therefore involved in assessing it for impairment.

 

Carrying value of content assets

The Directors have carried out impairment reviews of the Group's content assets as detailed in Note 13. Content assets are unique and have a long economic life, a significant element of judgement is therefore involved in assessing them for impairment.

 

 

Accounting treatment of investments, and acquisition

The Company has an interest, both directly and indirectly, in a number of entities over which it exerts a varying degree of control or influence. The accounting treatment of business combinations in accordance with IFRS 3, and also consolidation of subsidiaries under IFRS 10 and treatment of associates under IAS 28 requires a significant element of judgement in assessing the extent to which the acquired entity represents a business combination or acquisition of assets and the extent to which it is controlled or influenced by the Group.

 

 

4.       Segment reporting

 

The Directors have identified the Group's business segments by reference to the principal product and service lines offered and geographical organisation of the business as reported to the Executive Chairman, identified by the Directors as the chief operating decision-maker (CODM).

 

Reportable segments

The reportable segment results for the year ended 31 December 2021 are as follows:

 

 

BRICKLIVE

Sports and Entertainment

Unallocated

Total

 

Models and Sets

Tours and Trails

 

£'000

£'000

£'000

£'000

£'000

Revenue

578

1,247

849

-

2,674

Cost of sales*

437

941

506

-

1,884

Administrative expenses

291

629

309

1,256

2,485

Amortisation and depreciation

53

867

1

228

1,149

Finance costs

-

-

-

108

108

Exceptional items

-

-

-

364

364

Taxation

-

-

-

61

61

Segment (loss)/profit for the year

(203)

(1,190)

33

(2,017)

(3,377)

 

The reportable segment results for the year ended 31 December 2020 were as follows:

 

 

BRICKLIVE

Sports and Entertainment

Unallocated

Total

 

Models and Sets

Tours and Trails

 

£'000

£'000

£'000

£'000

£'000

Revenue

497

1,360

-

-

1,857

Cost of sales*

684

1,166

-

-

1,850

Administrative expenses

540

1,479

-

1,075

3,094

Amortisation and depreciation

21

762

-

42

825

Finance costs

-

-

-

110

110

Exceptional items

-

-

-

4,355

4,355

Taxation

-

-

-

(144)

(144)

Segment (loss)/profit for the year

(748)

(2,047)

-

(5,438)

(8,233)

 

Content depreciation is included with amortisation and depreciation in this note 4 but in cost of sales in the Consolidated Statement of Comprehensive Income on page 38.

 

Administrative expenses are apportioned to each trading segment in proportion to the revenue earned.

 

Segment assets consist primarily of property, plant and equipment, intangible assets, investments, goodwill, trade and other receivables and cash and cash equivalents.

 

Unallocated assets comprise deferred taxation and financial assets held at fair value through profit or loss. Segment liabilities comprise operating liabilities; liabilities such as deferred taxation are not allocated to individual business segments.

 

Segment assets and liabilities as at 31 December 2021 are as follows:

 

 

BRICKLIVE

Sports and Entertainment

Unallocated

Total

 

Models and Sets

Tours and Trails

 

£'000

£'000

£'000

£'000

£'000

Assets

-

10,399

343

1,115

11,857

Labilities

-

5,828

-

607

6,435

 

Segment assets and liabilities as at 31 December 2020 were as follows:

 

 

BRICKLIVE

Sports and Entertainment

Unallocated

Total

 

Models and Sets

Tours and Trails

 

£'000

£'000

£'000

£'000

£'000

Assets

-

10,868

-

1,322

12,190

Labilities

-

5,776

-

645

6,421

 

Geographical information

The Group's business segments operated in five principal geographical areas in the year, although they are managed on a worldwide basis from the Group's head office in the United Kingdom.

 

A geographical analysis of the Group's continuing revenue and non-current assets is given below. Revenue is allocated based on the location of the customer; non-current assets are allocated based on the physical location of the asset.

 


2021

2020


£'000

£'000

Revenue



United Kingdom

999

1,013

Europe

321

49

USA

314

265

Asia

147

434

Middle East and Africa

893

96

 

2,674

1,857




 


2021

2020

 

£'000

£'000

Non-current assets

 

 

United Kingdom

4,721

4,445

Europe

270

-

USA

668

394

South America

-

31

Asia

786

711

Middle East and Africa

-

310

Unallocated

884

896

 

7,329

6,787

 

Major customers

Included within BRICKLIVE Tours and Trails are revenues of £128,000 (2020: £225,000) which arose from sales to the Groups largest customer.

 

5.       Operating loss before exceptional items

 

2021

2020

 

£'000

£'000

This is stated after charging:



Content depreciation (included within cost of sales)

754

705

Loss on disposal of content assets (included within cost of sales)

-

192

Other depreciation and amortisation (included within administrative expenses)

333

57

Inventories recognised as an expense

637

1,036

Depreciation on right of use assets

62

61

Net foreign exchange losses

-

17

 

6.       Exceptional items

 

The exceptional items consist of the following:


2021

2020

 

£'000

£'000

Share options and warrants charge

286

278

Transactional and reorganisational costs

66

2,676

Impairment of associate and intangible assets

12

1,401

 

364

4,355

 

 

2021 Exceptional items

 

Share option and warrant charge

Ongoing charges related to options and warrants issued in connection to previous transactional and reorganisational events, the costs of which were treated as exceptional items at the time, continue to be classified as exceptional items in the year they are recognised.

 

The Group uses the Black-Scholes model to value its share option and warrants. Certain judgement is required in terms of selecting the risk-free interest rate and standard deviation rate used. The charge for the current year is £286,000 which may increase or decrease with changes to these rates.

 

Transactional and reorganisational costs

Transactional costs relate to equity raises completed during the year as detailed in Note 27 and the ongoing guarantee fees relating to the HP Agreement entered into with Close Leasing Ltd. in August 2020 as detailed in Note 22.

 

Impairment of associate and intangible assets

The Directors considered the carrying value of goodwill as at 31 December 2021 and determined the impairment, as detailed in Note 17 was required.

 

2020 Exceptional items

 

Share option and warrant charge

Ongoing charges related to options and warrants issued in connection to previous transactional and reorganisational events, the costs of which were treated as exceptional items at the time, continue to be classified as exceptional items in the year they are recognised. The Group uses the Black-Scholes model to value its share option and warrants, the charge for 2020 was £278,000.

 

Transactional and reorganisational costs

Transactional costs relate to various debt and equity raises completed during 2020 as well as costs associated with terminating the ESA as detailed in note 33.

 

Impairment of associate and intangible assets

The Directors considered the carrying value of goodwill, investments and the share of net assets of associates as at 31 December 2020 and determined the impairment, as detailed in Notes 16, 17 and 18 were required.

 

 

7.       Auditor's remuneration

 

 

2021

2020


£'000

£'000

Fees payable to the auditor, Moore Kingston Smith LLP, for the audit of the annual accounts of the Group and the Company

81

76

Taxation compliance

8

8

 

89

84

 

8.       Employees

 

The average number of employees (including Directors not under employment contracts) during the year was:

 

2021

2020

 

No.

No.

Administration

5

5

Production

28

44

Sales

2

3


35

52

 

The aggregate payroll costs (including Directors not under employment contracts) were:


2021

2020


£'000

£'000

Wages, salaries and fees

1,448

2,250

Social security costs

77

133

Pension costs

13

22

 

1,538

2,405

 

Wages, salaries and fees are stated in this note 8 gross of £185,000 (2020: £425,000) received in accordance with the  Coronavirus Job Retention Scheme which is netted off in the Consolidated Statement of Comprehensive Income on page 40.

 

9.       Remuneration of Directors and key management personnel

 

In the opinion of the Board, only the Directors of the Company and the other members of the Executive Team, as detailed in the Corporate Governance Report, are regarded as key management personnel. The remuneration of key management personnel during 2021 was, in aggregate, £451,000 (2020: £508,000).

 

Directors' remuneration and fees, including Non-Executive Directors, during the year were as follows, (no pension contributions were made in either 2021 or 2020):


2021

2020

 

£'000

£'000

David Ciclitira

261

330

Bryan Lawrie

17

76

Serenella Ciclitira*

20

10

Ranjit Murugason*

107

20

Trudy Norris-Grey (resigned 14 February 2021)

15

52

Simon Horgan (resigned 17 February 2021)*

2

10

Mark Freebairn (resigned 14 February 2021)*

2

10

Stephan Birrell (appointed 27 July 2021)

27

-

 

451

508

*In 2020 the Non-Executive Directors waived their fees for Q2 and Q3.

 

 

 

David Ciclitira

2021

2020


£'000

£'000

UK Chairman's fees*

-

25

International consultancy fees

250

250

Additional contracted work during the year

11

55

 

261

330

*In 2021 David Ciclitira voluntarily waived his Chairman's fees.

 

In the prior year David Ciclitira invoiced a further £178,000 for further additional contracted work which was subsequently paid but then waived by credit note. The balance is included in unpaid balances due to related parties at 31 December 2020. This was subsequently offset against the outstanding loan balance due to David Ciclitira in the current year.

 

Bryan Lawrie

 

2021

2020

 

£'000

£'000

Fees as Chief Financial Officer

-

71

Non-Executive fees

17

5


17

76

Fees for the services of Bryan Lawrie as Chief Financial Officer were paid to CFO Partners Limited.

 

Ranjit Murugason

 

2021

2020

 

£'000

£'000

Temporary increase agreed in February 2021

67

-

Non-Executive fees

40

20


107

20

 

Stephen Birrell

 

2021

2020

 

£'000

£'000

Consultancy fees

15

-

Non-Executive fees

12

-


27

-

Fees for consultancy services provided by Stephen Birrell were paid to Ossian Energy Limited.

 

In April 2019 the Group adopted a share option scheme on 2 April 2019 for certain Directors and senior management. Options are generally exercisable at a price equal to the market price of the Plc shares on the day immediately prior to the date of the grant. Options are forfeited if the employee leaves the Group before the options vest.

 

As at 31 December 2021 the following outstanding share options were held by Directors and key management personnel. No options were issued to directors in 2020 or 2021.

 


2021

2020

David Ciclitira

1,341,891

1,341,891

Bryan Lawrie

335,472

335,472

Serenella Ciclitira

-

-

Ranjit Murugason

-

-

Stephan Birrell (appointed 27 July 2021)

-

-

 

1,677,363

1,677,363

 

Further information on share options are set out in Note 30.

 

Further information on related party transactions are set out in Note 32.

 

10.     Finance costs

 

 

2021

2020


£'000

£'000

Loan interest

65

59

Interest expense on lease liabilities

19

24

Other interest

24

27

 

108

110

 

Included in loan interest is £22,000 (2020: £51,000) paid to David Ciclitira in accordance with the loan facility described in Note 22, see also Note 32.

 

11.     Taxation

 

2021

2020

Current tax

£'000

£'000

UK Corporation tax in respect of current year:



Current taxation

-

-

Adjustments in respect of prior years

(56)

(238)

Total tax (credit) charge for the year

(56)

(238)

 

 

 

Deferred taxation

 

 

Original and reversal of timing differences

(87)

28

Effect of change in tax rates

204

66

Total deferred taxation charge

117

94

 



Tax charge on loss on ordinary activities

61

(144)

 


2021

2020


£'000

£'000

Loss on ordinary activities before tax

(3,316)

(8,377)

Loss on ordinary activities at the standard rate of corporation tax of 19% (2020: 19%)

(630)

(1,592)

Effect of disallowable expenditure

234

960

Tax losses (utilised)/carried forward

299

660

Effect of change in tax rates

204

66

Adjustment in respect of prior years

(56)

(238)

Effect of different tax rates applied in overseas jurisdictions

10

-

Total tax charge/(credit) for the year

61

(144)

 

12.     Earnings per share

 

The basic earnings per share is calculated by dividing the (loss)/profit attributable to equity shareholders by the weighted average number of shares in issue during the year. In calculating the diluted earnings per share, any outstanding share options, warrants and convertible loans are taken into account where the impact of these is dilutive.

 


2021

2020

Loss for the year after tax (£'000)

(3,377)

(8,233)

Weighted average number of shares in issue

131,155,672

83,678,936

Basic and diluted earnings per share

(2.6p)

(9.8p)

 

Diluted earnings per share in both 2021 and 2020 are the same as basic earnings per share, as there are no dilutive options or warrants in issue during these years, the number of outstanding share options and warrants are detailed in Note 30.

 

 

13.     Property, plant and equipment

 

Group

Content

Other

Total

 

2021

2020

2021

2020

2021

2020

 

£'000

£'000

£'000

£'000

£'000

£'000

Cost

 






Cost at start of year

5,556

5,015

175

176

5,731

5,191

Additions for year

586

921

3

14

589

935

Disposals

(380)

(15)

(395)

Cost at end of year

6,142

5,556

178

175

6,320

5,731

 







Depreciation

 






Cumulative depreciation at start of year

1,487

970

100

69

1,587

1,039

Charge for year

754

705

47

46

801

751

Eliminated on disposal

(188)

(15)

(203)

Cumulative depreciation at end of year

2,241

1,487

147

100

2,388

1,587

 







Net book value at end of year

3,901

4,069

31

75

3,932

4,144

 

 

 

 

 

 

 

Net book value at start of year

4,069

4,045

75

107

4,144

4,152

 

The Company had no property, plant and equipment assets in either 2021 or 2020.

 

The Directors considered the carrying value at 31 December 2021 for each asset and it was determined that no impairment was required.

 

 

14.     Right of use Assets

 

Buildings

Group


2021

2020

 

£'000

£'000

Cost

 


Cost at start of year

308

308

Additions for year

-

-

Cost at end of year

308

308

 



Depreciation

 


Cumulative depreciation at start of year

77

16

Charge for year

62

61

Cumulative depreciation at end of year

139

77

 



Net book value at end of year

169

231

Net book value at start of year

231

292

The Company had no right of use assets in either 2021 or 2020.

 

15.     Intangible assets

 

 

Group

Company


2021

2020

2021

2020

 

£'000

£'000

£'000

£'000

Cost

 




Cost at start of year

1,539

88

1,450

-

Additions for year

1

1,451

-

1,450

Cost at end of year

1,540

1,539

1,450

1,450

 





Amortisation

 




Cumulative amortisation at start of year

23

12

-

-

Charge for year

286

11

277

-

Cumulative amortisation at end of year

309

23

277

-

 





Net book value at end of year

1,231

1,516

1,173

1,450

Net book value at start of year

1,516

76

1,450

-

 

Trademarks

Trademarks are obtained for each show in each jurisdiction around the world. Trademarks are amortised over their estimated useful lives, which is on average 10 years. The carrying value of trademarks at 31 December 2021 is £59,000 (2020; £66,000).

 

LCSE

In December 2020 the Company formed a new Sports and Entertainment division ('LCSE') through the acquisition of the entire issued share capital of Live Company Sports and Entertainment Limited together with its wholly owned subsidiary Live Company Sports and Entertainment (Pty) Limited and 50% interest in K-Pop Europa Limited for £650,000. Prior to the acquisition  Live Company Sports and Entertainment Limited was 100% owned by David Ciclitira.

 

The Company also purchased certain contracts from World Sport South Africa (Pty) Limited for £500,000 and acquired the entire issued share capital of E Movement Holdings Ltd for £300,000. Prior to the acquisition E Movement Holdings Ltd was 33.34% owned by David Ciclitira.

 

The substance of these transactions being the acquisition of a series of contracts rather than a business combination as defined in IFRS 3 'Business Combinations'. The acquired contracts are amortised over the period of the rights acquired, where contracts are renewable and are likely to be renewed for a further period such further period, but no subsequent periods, is considered to be part of the period of the rights acquired. The carrying value of these contracts at 31 December 2021 is £1,172,000 (2020; £1,450,000).

 

2020 Acquisitions

 

 

Purchase price

 

 

 

£'000

Live Company Sports and Entertainment Limited



650

   Live Company Sports and Entertainment Pty Limited


-

   K-Pop Europa Limited (50%)


-

Novation of contracts



500

E Movement Holdings Ltd



300


 

 

1,450

 




Satisfied by:




Cash



50

Deferred consideration



800

Equity instruments (6,000,000 Ordinary shares of parent Company)

600




1,450

 

As detailed in Note 27 5,500,000 Ordinary shares of the Company representing £550,000 of the deferred consideration were issued in May 2021; a further 1,142,858 Ordinary shares of the Company representing a further £40,000 of the deferred consideration were issued in December 2021, which together with cash payments of £25,000 in March 2021 and £25,000 in April 2021 left £160,000 of deferred consideration outstanding at 31 December 2021.

 

In March 2022 £45,000 of the outstanding deferred consideration due to David Ciclitira was settled in cash, leaving £105,000 of deferred consideration outstanding of which £55,000 is due to David Ciclitira.

 

The Directors considered the carrying value at 31 December 2021 for each intangible asset and it was determined that no impairment was required.

 

 

16.     Investments

 


Group

Company


2021

2020

2021

2020


£'000

£'000

£'000

£'000

Cost





Cost at start of the year

-

-

17,450

17,450

Additions for the year

1,113

-

1,113

-

Cost at end of year

1,113

-

18,563

17,450






Impairment





At start of the year

-

-

11,425

-

Impairment in the year

-

-

116

11,425

Reversal of prior year impairment

-

-

(3,816)

-

Cumulative impairment at end of year

-

-

7,725

11,425

 

 

 

 

 

Net book value at end of the year

1,113

-

10,838

6,025

Net book value at start of year

-

-

7,725

17,450

 

 

 

 

Cash generating units

The Directors considered the carrying value at 31 December 2021 for each cash generating unit, identified below, based on a detailed budget and forecast, discounted over five years at the Groups current cost of capital, considered by the Directors to be 9%, and it was determined the impairment, and reversal of prior impairment, as described in the table below, was required.

 


At start of year

Additions

(Impairment)
/reversal of

At end of year


£'000

£'000

£'000

£'000

Brick Live Far East Limited

-

-

-

-

Brick Live Group (incorporating Bright Bricks Limited)

5,025

-

3,816

8,841

Parallel Live Group

1,000

-

(116)

884

 

6,025

-

3,700

9,725

 

Financial assets

The Directors considered the carrying value at 31 December 2021 for each investment, identified below, and it was determined that no further impairment was required.


At start of year

Additions

Impairment

At end of year


£'000

£'000

£'000

£'000

Start Art Global Ltd

-

1,000

-

1,000

E-Movement (PTY) Ltd

-

113

-

113


-

1,113

-

1,113

 

In May 2021 the Company subscribed to 389 ordinary shares in Start Art Global Limited. ('StART.Art'), representing a non-controlling stake of 18.6% of the total issued share capital of the company, for a total consideration of £1,000,000. Prior to the transaction StART.Art was 100% owned by David Ciclitira and Ranjit Murugason as detailed in Note 32.

 

In November 2021 StART.Art acquired the entire issued share capital of Start (2013) Limited, the promoter of the StART Art Fair, in an all share transaction, resulting in a decrease in the Company's interest in the enlarged group from 18.6% to 14.6% with no diminution of value. Prior to the acquisition Start (2013) Limited was 100% owned by David Ciclitira and Ranjit Murugason as detailed in Note 32. In December 2021 StART.Art issued a further 180 ordinary shares to LVCG for nominal consideration increasing LVCG's holding to 19.9%.

 

There being no active market for shares in StART.Art the carrying value has been assessed with reference to a DCF model prepared by the management of StART.Art and reviewed by the directors of LVCG. The valuation has also been reviewed by a third party independent valuer.

 

In November 2021 the Company purchased 271 ordinary shares, representing 20% of the total issued share capital, in E-Movement (PTY) Limited ('EMPL') from David Ciclitira for a total consideration of £113,460. These shares were originally purchased by David Ciclitira (acting in his personal capacity) for the same amount in anticipation of them being transferred to the Company. EMPL is the South African based promoter of the Cape Town E Prix which has been confirmed for Series 9 of the ABB FIA Formula E World Championship and due to take place in February 2023.

 

These transactions have been treated as the acquisition of investments as detailed in Note 2.8.

 

 

 

 

Purchase price

 

 

 

£'000

Start Art Global Limited



1,000

E-Movement (PTY) Limited



113


 

 

1,113

 




Satisfied by:




Cash



1,113




1,113

 

 

17.     Goodwill

 


Group

Company


2021

2020

2021

2020


£'000

£'000

£'000

£'000

Cost at start and end of year

8,888

8,888

-

-






Impairment





At start of the year

7,992

4,581

-

-

Impairment in the year

12

3,411

-

-

Cumulative impairment at end of year

8,004

7,992

-

-

 

 

 

 

 

Net book value at end of year

884

896

-

-

Net book value at start of year

896

4,307

-

-

 

 

Cash generating units

The Directors considered the carrying value at 31 December 2021 for each cash generating unit, identified below, based on a detailed budget and forecast, discounted over five years at the Groups current cost of capital, considered by the Directors to be 9%, and it was determined the impairment, as described in the table below, was required.

 


At start of year

Additions

(Impairment)

At end of year


£'000

£'000

£'000

£'000

Brick Live Far East Limited

-

-

-

-

Brick Live Group (incorporating Bright Bricks Limited)

-

-

-

-

Parallel Live Group

896

-

(12)

884

 

896

-

(12)

884

 

18.     Investments in Associates and Joint Ventures

 


Group

Company


2021

2020

2021

2020

 


£'000

£'000

£'000

£'000

 

Cost





 

Cost at start of year

197

197

-

-

 

Additions in the year

-

-

-

-

 

Cost at end of year

197

197

-

-

 






 

Impairment





 

At start of year

197

111

-

-

 

Impairment in the year

-

86

-

-

 

At end of year

197

197

-

-

 






 

Net book value at end of year

-

-

-

-

 

Net book value at start of year

-

86

-

-

 

 

Brick Live Centre Education Development (Beijing) Company Ltd ('BLCED')

In July 2017, BLFE entered into a long-term agreement with Fortune Access, to create a limited liability foreign enterprise company in China called Brick Live Centre Education Development (Beijing) Company Limited. BLFE agreed to invest 980,000 RMB (approximately £111,000) for a 49% shareholding. Based on the performance in the year ended 31 December 2020 the investment in the associate was impaired to £nil.

 

The Group accounts for the associate under the equity method of accounting.

 

The results of BLCED in the year are:

2021

2020

 

£'000

£'000

 



Revenue

473

128

Loss before tax

(468)

(500)

Taxation

Loss after tax

(468)

(500)




Current assets

380

287

Non-current assets

490

693

Current liabilities

(1,205)

(912)

Non-current liabilities

(64) 


(400)

68

In August 2021 Fortune Access injected a further 516,000 RMB (approximately £65,000).

 

BLCED losses have been recognised through the Consolidated Statement of Comprehensive Income to the extent that they do not exceed the Group's initial investment in BLCED together with the Group's share of its accumulated profits. The Group's unrecognised share of BLCED's loss for the year to 31 December 2021 is £168,000. The Groups unrecognised share of BLCED's cumulative loss is £118,000.

 

Parallel Three Six Zero Inc ('PTSZ')

In September 2018, Parallel Live Group signed a joint venture agreement with US-based company Three Six Zero, forming the new company Parallel Three Six Zero Inc. It has been granted exclusive rights by Parallel Live Group to promote BRICKLIVE events in North America and Canada with Brick Live International Limited as its content provider.

 

There were no BRICKLIVE events in North America operated by PTSZ in 2021 or 2020.

 

The Group accounts for the joint venture under the equity method of accounting.

 

The results of the PTSZ in the year are:

 



2021

2020

 

£'000

£'000

 



Revenue

-

Loss before tax

-

(1)

Taxation

-

Loss after tax

-

(1)

 



Current assets

Non-current assets

Current liabilities

(27)

(27)

Non-current liabilities


(27)

(27)

 

19.     Inventories

 


Group

Company


2021

2020

2021

2020


£'000

£'000

£'000

£'000

 





Inventories of bricks

3,742

4,633

-

-

Work in progress

63

198

-

-


3,805

4,831

-

-

 

 

Included in inventories is £3,097,000 (2020: £3,983,000) of stock acquired on acquisition of Bright Bricks Group and included at fair value at that date.

 

Included in inventories is £1,500,000 (2020: £1,500,000) subject to a sale and HP Agreement entered into with Close Leasing Limited, (see Note 22).

 

The Directors considered the carrying value at 31 December 2021 for inventories and it was determined that no impairment was required.

 

20.     Trade and other receivables

 


Group

Company


2021

2020

2021

2020


£'000

£'000

£'000

£'000






Trade receivables

231

123

2

-

Amounts owed by subsidiaries (note 34)

41

-

1,155

1,226

Other receivables

57

64

50

78

Prepayments and accrued income

183

217

123

156

 

512

404

1,330

1,460

 

Amounts owed by subsidiaries are unsecured, interest free and repayable on demand.

 

21.     Cash and cash equivalents

 


Group

Company


2021

2020

2021

2020


£'000

£'000

£'000

£'000






Cash at bank

211

168

-

191

 

22.     Borrowings

 


Group

Company


2021

2020

2021

2020


£'000

£'000

£'000

£'000






Loan due within one year

477

615

56

167

Loan due after one year

1,201

1,430

185

83

 

1,678

2,045

241

250

 

In April 2020 the Company entered into a £250,000 CBILS loan agreement with NatWest Bank Plc of which £240,740 remained outstanding at the balance sheet date. The loan is unsecured, for a term of six years with an effective interest rate of 4.08%.

 

In April 2020 the Group entered into a £500,000 loan agreement with David Ciclitira of which £90,823 remained outstanding at the balance sheet date. The loan from David Ciclitira bears interest at 16.2% and is secured by a second fixed and floating charge over the Groups assets with priority given to the security held by Close Leasing Limited as detailed below. In March 2022 the outstanding balance was repaid in full.

 

In August 2020 the Group entered into an agreement with Close Leasing Limited whereby stock totalling £1,500,000 included under Inventories in the Statement of Financial Position in these condensed consolidated financial statements was sold to Close Leasing Limited and purchased back under the terms of a £1,500,000 Hire Purchase Facility (HP Agreement) provided in conjunction with the CBILS, of which £1,346,504 remained outstanding at the balance sheet date. The HP Agreement was for a term of five years at an effective interest rate of 5.14% secured against the £1,500,000 of stock subject to the agreement and a fixed and floating charge over the Groups other assets.

 

23.     Trade and other payables

 


Group

Company


2021

2020

2021

2020


£'000

£'000

£'000

£'000






Trade payables

1,098

574

533

112

Amounts owed to subsidiaries

-

-

217

66

Other payables

275

866

188

835

Other taxation and social security

1,265

924

32

24

Accruals and deferred income

1,170

1,120

336

343


3,808

3,484

1,306

1,380

 

Amounts owed to subsidiaries are unsecured, interest free and repayable on demand.

 

Other payables include £160,000 (2020: £800,000) of deferred consideration as detailed in Note 15.

 

24.     Financial risks

 

The Group and Company operations expose them to a number of financial risks. The Directors aim to protect the Group and Company against the potential adverse effects of these financial risks.

 

Financial assets

Financial assets include cash and trade and other receivables, excluding prepayments.

 

These amounts, where appropriate, have been shown separately on the face of the Statement of Financial Position. Funds not immediately required for the Group and Company's operations are invested in bank deposits. It is the Directors' opinion that the carrying values of cash, trade receivables and investments approximate to their fair values.

 

Financial liabilities

Financial liabilities include current and non-current borrowings and trade and other payables (excluding taxation and social security and deferred income).

 

All amounts are carried at amortised cost. These amounts have been disclosed in the notes to the financial statements. It is the Directors' opinion that the carrying values of financial liabilities approximate to their fair-value.

 

Liquidity risk

The Group and Company's surplus liquid resources are maintained on short-term interest-bearing deposits. The Group and Company plans to continue to meet operating and other loan commitments as they fall due. Liquidity risk is managed through cash flow forecasts and regular planning.

 

Set out below are liquidity risk comparative tables as at 31 December 2021 and 31 December 2020.

 

Remaining contractual maturities year ended 31 December 2021

 

Group

Within

3 months

> 3 months

< 1 year

> one year

< 5 years

Total carrying amount

 

 

£'000

£'000

£'000

£'000

 

 

 

 

 

 

 

Bank loans and borrowings

185

292

1,201

1,678

 

Trade and other payables

1,373

-

-

1,373

 

Lease liabilities

50

122

188

 

 

342

1,323

3,239

 

 


 

 

 

 

Company

Within

3 months

> 3 months

< 1 year

> one year

< 5 years

Total carrying amount

 

£'000

£'000

£'000

£'000

 

 

 

 

 

Bank loans and borrowings

14

42

185

241

Trade and other payables

938

-

-

938

 

952

42

185

1,179

 


 

 

 

Remaining contractual maturities year ended 31 December 2020

 

Group

Within

3 months

> 3 months

< 1 year

> one year

< 5 years

Total carrying amount

 

 

£'000

£'000

£'000

£'000

 

 

 

 

 

 

 

Bank loans and borrowings

8

607

1,430

2,045

 

Trade and other payables

1,440

-

-

1,440

 

Lease liabilities

45

188

248

 

 

652

1,618

3,733

 

 


 

 

 

 

Company

Within

3 months

> 3 months

< 1 year

> one year

< 5 years

Total carrying amount

 

£'000

£'000

£'000

£'000

 

 

 

 

 

Bank loans and borrowings

167

83

250

Trade and other payables

1,013

-

-

1,013

 

1,013

167

83

1,263

 

Trade and other payables above exclude taxation and accruals and deferred income.

 

Credit risk

Financial assets past due but not impaired as at 31 December 2021:

 

 

Not impaired and not past due

Not impaired but past due

by the following amounts

 

 

>30 days

>60 days

>90 days

>120 days

 

£'000

£'000

£'000

£'000

£'000

Group: Trade and other receivables

269

14

8

16

22

Company: Trade and other receivables

1,207

-

-

-

-

 

Financial assets past due but not impaired as at 31 December 2020:

 

 

Not impaired and not past due

Not impaired but past due

by the following amounts

 

 

>30 days

>60 days

>90 days

>120 days

 

£'000

£'000

£'000

£'000

£'000

Group: Trade and other receivables

113

25

-

-

49

Company: Trade and other receivables

1,304

-

-

-

-

 

Trade and other receivables above exclude prepayments and accrued income.

 

The Group is exposed to credit risk on its cash and cash equivalents, trade and other receivables. The maximum exposure to credit risk is represented by the carrying value of each financial asset.

 

Credit risk with respect to cash is reduced through maintaining banking relationships with established financial intermediaries with acceptable credit ratings. Bank deposits as at 31 December 2021 were £211,000 (2020: £168,000), all of which are considered of low credit risk.

 

Credit risk with respect trade and other receivables Is reduced through assessing all material new clients for credit risk prior to entering into a contractual relationship. All trade and other receivables are assessed regularly for credit risk and those which are past due by 90 days or more and where there has been a breakdown of communication with the client such that there is no longer confidence that the sum will be collectable are impaired to the extend they are no longer expected to be colectable.

 

Group trade and other receivables excluding prepayments and accrued income as at 31 December 2021 were £287,000 (2020: £187,000), all of which are collected and/or collectable and are considered of low credit risk.

 

 

 

 

Market risk

a.   Interest rate risk

The Group had two outstanding interest bearing loans (one with NatWest Bank PLC and one with David Ciclitira) and the HP Agreement with Close Leasing Limited at the year end.The interest rates in respect of the HP Agreement and loan from David Ciclitira are fixed and in respect of the loan from NatWest Bank PLC is calculated in relation to bank Base Rate, there are no early redemption penalties associated with the NatWest Bank PLC loan and the risk is therefore considered to be insignificant.

 

b.   Foreign currency risk

Although the Company is based in the United Kingdom, a significant part of the Group's and Company's operations are overseas, and the operating or functional currency of a large part of the global business is in US Dollars, Euros and South African Rand. As a result, the Group's sterling accounts can be affected by movements in the US Dollar/Sterling, the Euro/Sterling and the South African Rand/Sterling exchange rates.

 

The foreign assets and liabilities of the Group and Company are closely matched as at 31 December 2021. The table below sets out the carrying amounts of assets and liabilities for the Group in their presentational currency (i.e. Sterling) and a total impact for each 10% fluctuation in exchange rates. Based on the carrying amounts of foreign assets and liabilities as at 31 December 2021, for each 10% fluctuation in exchange rates, net assets are expected to be impacted by £11,000 (2020: £16,000).

 

Year ended 31 December 2021

Carrying amount (sterling equivalent)

Forex Risk


£

$

R

Total

(-10%)

10%


£'000

£'000

£'000

£'000

£'000

£'000

£'000

Financial assets








Cash

(36)

1

-

246

211

25

(25)

Trade and other receivables

390

14

12

96

512

12

(12)


354

15

12

342

723

37

(37)









Financial liabilities








Borrowings

1,678

-

-

-

1,678

-

-

Trade payables

836

88

101

73

1,098

26

(26)

Other payables

275

-

-

-

275

-

-

Lease liabilities

188

-

-

-

188

-

-

Other taxation and social security

1,265

-

-

-

1,265

-

-

Accruals and deferred income

1,170

-

-

-

1,170

-

-


5,412

88

101

73

5,674

26

(26)


 

 

 

 

 

 

 

Net Impact






(11)

11

 

 

Year ended 31 December 2020

Carrying amount (sterling equivalent)

Forex Risk


£

$

R

Total

(-10%)

10%


£'000

£'000

£'000

£'000

£'000

£'000

£'000

Financial assets








Cash

164

3

1

-

168

-

-

Trade and other receivables

331

27

46

-

404

7

(7)


495

30

47

-

572

7

(7)









Financial liabilities








Borrowings

2,045

-

-

-

2,045

-

-

Trade payables

349

67

158

-

574

23

(23)

Other payables

866

-

-

-

866

-

-

Lease liabilities

248

-

-

-

248

-

-

Other taxation and social security

924

-

-

-

924

-

-

Accruals and deferred income

1,120

-

-

-

1,120

-

-


5,552

67

158

-

5,777

23

(23)


 

 

 

 

 

 

 

Net Impact






16

(16)

 

25.     Lease liabilities

 


Group

Company


2021

2020

2021

2020


£'000

£'000

£'000

£'000






Current

66

60

-

-

Non-current

122

188

-

-

 

188

248

-

-

 

In 2019, a right of use asset, being the present value of the operating lease payments over the remaining life of the lease, was recognised. The right of use assets and corresponding lease liability have been calculated using a discount rate of 9%. The depreciation of the assets and interest charge are recognised in the Statement of Comprehensive Income in the year and the buildings maturity analysis of lease commitments at 31 December 2021 is detailed below.

 

Lease payments relate to leases of property. The Group does not have an option to purchase the leased property at the expiry of the lease period.

 

Payments recognised as an expense

2021

2020


£'000

£'000

Minimum lease payments

 -

 -

Lease depreciation

62

61

Interest

19

24

 

Non-cancellable lease commitments

2021

2020


£'000

£'000

Not later than 1 year

66

79

Later than 1 year and not later than 5 years

122

219

Later than 5 years


188

298

 

 

26.     Deferred tax

 

 

2021

2020


£'000

£'000

At start of year

644

550

Charged to profit or loss

117

94

At end of year

761

644

 

Due to the availability of UK tax losses, subject to agreement with the HMRC, there is an estimated deferred tax asset of £2,944,000 (2020: £2,648,000). This is not recognised due to the uncertainty of the timing of future taxable profits against which these losses could be utilised.

 

27.     Share capital

 

The issued share capital is set out in the table below:

 

 
2021
2020
 
No. of shares
£'000
No. of shares
£'000
Issued and fully paid
 
 
 
 
Ordinary shares of 1p
159,802,147
1,598
108,138,544
1,081
Deferred shares of 51.8p
2,047,523
1,061
2,047,523
1,061
Deferred Ordinary shares of 0.5p
  199,831,545
999
  199,831,545
999
Deferred B shares of £19.60
103,260
2,024
103,260
2,024
Total
 

5,682

 

5,165

 

The changes in the year to 1p Ordinary shares, relating to the various capital transactions during the year were as follows:

 

 
2021

 

Ordinary shares of 1p
No. of shares
£'000
At start of year
108,138,544
1,081
Settlement of supplier and contractor fees (RNS Number : 4882P 17 February 2021)
1,863,219
19
Share placing, settlement of deferred consideration and contractor fees (RNS Number : 3348X 04 May 2021)
36,000,000
360
Loan conversion and settlement of contractor fees (RNS Number : 1210F 14 July 2021)
1,114,668
11
Share placing, settlement of deferred consideration and contractor fees (RNS Number : 9667V 17 December 2021)
12,685,716
127
At end of year
159,802,147
1,598

 

 

 
2020

 

Ordinary shares of 1p
No. of shares
£'000
At start of year
79,500,419
794
Settlement of director fees (RNS Number : 1029A 17 January 2020)
116,667
1
Settlement of advisor fees (RNS Number : 6990J 15 April 2020)
233,333
2
Settlement of salary and contractor fees (RNS Number : 9396L 05 May 2020)
1,196,866
12
Share Placing (RNS Number : 1520R 26 June 2020)
4,000,000
40
Loan conversion (RNS Number : 1520R 26 June 2020)
2,050,000
21
Settlement of salary and contractor fees (RNS Number : 5485T 21 July 2020)
835,182
8
Settlement of salary and contractor fees (RNS Number : 9339Z 24 September 2020)
1,396,077
14
Share placing and subscription (RNS Number : 3562H 03 December 2020)
18,810,000
189
At end of year
108,138,544
1,081

 

 

The number of additional shares authorised for issue is 60,314,284 (2020: 30,104,523).

 

Deferred shares

The Company has 2,047,523 Deferred shares of 51.8p each and 199,831,545 Deferred Ordinary shares of 0.5p each (together the 'Deferred shares') in issue. The Company also has 103,260 Deferred B shares in issue.

 

The Deferred shares have the following rights and restrictions. They shall:

a.   Not entitle their holders to receive any dividend or other distribution;

b.   Not entitle their holders to receive notice of or to attend, speak or vote at any General Meeting of the Company by virtue of or in respect of their holding of such Deferred shares; and

c.   Entitle their holders on a return of assets on a winding-up of the Company or otherwise only to the repayment of the capital paid up on such Deferred shares and only after repayment of the capital paid up on each Ordinary share in the capital of the Company and the payment of a further £100,000 on each such Ordinary share.

 

The holders of the Deferred shares shall not be entitled to any further participation in the assets or profits of the Company. Notwithstanding any other provision of these Articles and unless specifically required by the provisions of the Act, the Company shall not be required to issue any certificates in respect of the Deferred shares. The Company shall have irrevocable authority at any time:

a.   to appoint a person on behalf of any holder of Deferred shares to enter into an agreement to transfer, and to execute a transfer of, the Deferred shares, for no consideration, to such person (whether or not an officer of the Company) as the Directors may determine as the custodian thereof;

b.   to purchase all the Deferred shares then in issue in consideration of an aggregate payment of one penny for all of such shares then redeemed and upon giving 28 days' prior notice to the holders of Deferred shares as to be redeemed fixing a time and place for redemption; and

c.   in the event of any transfer, purchase or redemption to retain any share certificate relating to such shares. If any Deferred shares are purchased or redeemed as aforesaid, the relevant amount of authorised but unissued share capital arising may be redesignated by the Directors as Ordinary share capital.

 

Neither the passing by the Company of any special resolution for the cancellation of the Deferred shares for no consideration by means of a reduction of capital requiring the confirmation of the Court nor the obtaining by the Company nor the making by the Court of any Order confirming any such 103 reduction of capital nor the becoming effective of any such Order shall constitute a variation, modification or abrogation of the rights attaching to the Deferred shares and accordingly the Deferred shares may at any time be cancelled for no consideration by means of a reduction of capital effected in accordance with the Act without sanction or consent on the part of the holders of the Deferred shares.

 

28.     Share premium

 

 
2021
2020
 
£'000
£'000
At start of year
25,004
23,480
Premium arising on issue of equity shares
1,486
840
Shares issued on acquisition of subsidiary and novation of contracts
-
135
Debt to share conversion
644
634
Share issue costs
(110)
(85)
At end of year
27,024
25,004

 

29.     Acquisitions

 

There were no acquisitions in 2021.

 

30.     Share options and warrants

 

Share option reserve

 
2021
2020
 
£'000
£'000
At start of year
496
218
Share option charge
223
222
Share options forfeited
(267)
-
Warrant charge
63
56
At end of year
515
496

 

Share options

The Group adopted a share option scheme on 2 April 2019 for certain directors and senior management. Options are generally exercisable at a price equal to the market price of the Plc shares on the day immediately prior to the date of the grant. Options are forfeited if the employee leaves the Group before the options vest.

 

The Share Option Plan provides for the grant of both tax-approved Enterprise Management Incentives (EMI) Options and unapproved options.

 

No options were issued in 2020 or 2021.

 

The charge for the year ended 31 December 2021 for the options issued in April 2019 totals £223,000 (2020: £222,000).

 

Details of the share options outstanding during the year are as follows.

 


2021

2020

 

 

Number

Weighted average exercise price (p)

Number

Weighted average exercise price (p)

 

Outstanding at the beginning of the year

3,086,346

65

3,086,346

65

Granted during the year

-

-

-

-

Forfeited during the year

(1,341,889)

65

-

-

Exercised during the year

-

-

-

-

Outstanding at the end of the year

1,744,457

65

3,086,346

65

 

Options become exercisable on the third anniversary of the grant date and lapse on the tenth anniversary of the grant date. All options currently outstanding were granted on 2 April 2019.

 

Advisor and creditor warrants

1,500,000 (2020: 75,000) advisor warrants were issued during the year at a weighted average exercise price of 5p (2020: 15p).

 

The inputs into the warrant pricing model for the warrants issued in the year are:

Weighted average exercise price           5p

Expected volatility                                  77%

Expected life                                           2 years

Risk free interest rate                             1.1%

Expected dividends                                0.00

 

The charge for the year ended 31 December 2021 for the advisor and creditor warrants in issue totals £63,000 (2020: £56,000).

 

A total of 2,213,941 advisor and creditor warrants were outstanding at 31 December 2021 (2020: 713,941).

 

Investor warrants

11,428,572 (2020: 16,810,000) investor warrants were issued to investors as part of an equity raise and are therefore outside the scope of IFRS 2 'Share-based payment' and consequently there is no share-based payment charge in respect of these warrants.

 

During the year 3,903,840 (2020: nil) investor warrants expired leaving a total of 28,238,572 investor warrants outstanding at 31 December 2021 (2020: 20,713,840).

 

Details of all warrants outstanding during the year are as follows.

 

 


31 December 2021

31 December 2020

 

Number

Price (p)

Number

Price (p)

Investor (exercisable up to 25 February 2021)

-

-

3,903,840

80.00

Adviser (exercisable up to 25 February 2022)*

50,000

15.00

50,000

80.00

Investor (exercisable up to 25 June 2022)**

4,000,000

10.00

4,000,000

15.00

Adviser (exercisable up to 25 June 2022)**

75,000

10.00

75,000

15.00

Creditor (exercisable up to 17 October 2022)

356,923

38.79

356,923

38.79

Investor (exercisable up to 3 December 2022)

12,810,000

10.00

12,810,000

10.00

Creditor (exercisable up to 16 December 2022)

232,018

38.79

232,018

38.79

Adviser (exercisable up to 24 May 2023)

1,500,000

5.00

-

-

Investor (exercisable up to 23 December 2023)

11,428,572

5.00

-

-

 

 30,452,513

 8.44

 21,427,781

 24.66

 

*repriced from 80p to 15p in May 2021.

**repriced from 15p to 10p in May 2021.

 

 

 


2021

2020

 

Warrants

Number

Weighted average exercise price (p)

Number

Weighted average exercise price (p)

 

Outstanding at the beginning of the year

21,427,781

24.66

4,542,781

74.66

Issued during the year

12,928,572

5.00

16,885,000

11.21

Expired during the year

(3,903,840)

15.00

-

-

Exercised during the year

-

-

-

-

Outstanding at the end of the year

30,452,513

8.44

21,427,781

24.66

 

 

31.     Capital management

 

The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern, so that it can continue to provide returns to shareholders and benefits for other stakeholders. The Group had net assets of £5.4m at 31 December 2021 (2020: £5.8m). The Group's capital management strategy is to retain sufficient working capital for day to day operating requirements and to ensure sufficient funding is available to meet commitments as they fall due and to support growth. There are no externally imposed capital requirements.

 

 

2021

2020

 

£'000

£'000

Loan facility

(1,678)

(2,045)

Total debt

(1,678)

(2,045)

Cash

211

168

Net debt

(1,467)

(1,877)

 

In order to maintain or adjust the capital structure the Group may issue new shares or sell assets to reduce debt.

 

32.     Related party transactions

 

Details of the Directors' remuneration and consultancy fees are disclosed in Note 9.

 

David Ciclitira

 

David Ciclitira injected funds into the Company during the year as follows:
2021
2020
£'000
£'000
Fees settled in shares
-
28
Loan converted to equity
30
205
Acquisition of LCSE settled in shares
200
450
 
230
683
Loan advanced
 
 
Loan facility
-
500
 
 
 
Total funds injected
230
1,183

 

David Ciclitira received payments during the year as set out below:
2021
2020
£'000
£'000
Business expenses and healthcare costs.
14
13
Rental arrangements for use of Venturi Formula E Car as described in Note 33 to the annual report for the year ended 31 December 2019
-
17
Fees and interest at 16.2% in relation to the provision of loan facility detailed in Note 22.
22
101
Fees in relation to HP Agreement guarantee
21
28
Consideration for the purchase of share in EMPL
113
-
Consideration for the purchase of LCSE, settled in shares
200
450
Fee in relation to the assumption of historic liabilities
-
29
 
370
638
Loan repaid
 
 
Loan converted to equity
30
205
Loan repaid
174
-
 
204
205
 
 
 
Total payments received
574
843

 

Unpaid balances due to related parties at 31 December
2021
2020
 
£'000
£'000
David Ciclitira*
205
318
Serenella Ciclitira
28
8
Ranjit Murugason**
127
20
Bryan Lawrie**
24
11
Trudy Norris-Grey
-
(15)
Mark Freebairn
-
10
Simon Horgan
-
10
Stephen Birrell**
16
-
 
400
362

 

*Includes total deferred consideration of £100,000 (2020: £300,000) in relation to the acquisition of David Ciclitira's interest in EMHL, and the outstanding loan balance of £90,823 (2020: £295,000) as detailed in Note 22. In March 2022 the outstanding loan balance was repaid in full together with £45,000 of the outstanding deferred consideration relating to the acquisition of EMHL leaving £55,000 outstanding.

 

**In February 2022 6,223,859 new Ordinary shares in the Company were issued  in settlement of outstanding Director's fees. Senior Director Ranjit Murugason received 5,047,620 Ordinary shares at 3.5p, Bryan Lawrie received 747,667 Ordinary shares at 3.5p and Stephen Birrell received 428,572 shares at 3.5p price.

 

Subsidiary undertakings and associates

 

During the year the Company provided and received services to other Group companies totalling:

 

Services provided by the Company to:
2021
2020
 
£'000
£'000
Brick Live International Limited
90
-
 
90
-
 
 
 
Services received by the Company from:
 
 
Brick Live International Limited
102
-
 
102
-

 

Unpaid balances due to subsidiary undertakings and associates
2021
2020
£'000
£'000
Brick Live Group Limited
65
66
Bright Bricks Limited
(521)
(943)
Brick Live International Limited
(593)
(283)
K-Pop Europa Limited
(41)
-
Live Company Group EBT Limited
152
-
 
(938)
(1,160)

 

Investments

 

In May 2021 the Company subscribed to 389 ordinary shares in Start Art Global Limited. ('StART.Art'), representing a non-controlling stake of 18.6% of the total issued share capital of the company, for a total consideration of £1,000,000. Prior to the transaction StART.Art was 100% owned by David Ciclitira and Ranjit Murugason who are both directors of the Company.

 

In November 2021 StART.Art acquired the entire issued share capital of Start (2013) Limited, the promoter of the StART Art Fair, in an all share transaction, resulting in a decrease in the Company's interest in the enlarged group from 18.6% to 14.6% with no diminution of value. Prior to the acquisition Start (2013) Limited was 100% owned by David Ciclitira and Ranjit Murugason who are both directors of the Company.

 

In December 2021, following a reorganisation of the capital structure of StART.Art, StART.Art issued a further 180 ordinary shares to LVCG for nominal consideration increasing LVCG's holding to 19.9%.

 

In November 2021 the Company purchased 271 ordinary shares, representing 20% of the total issued share capital, in E-Movement (PTY) Limited ('EMPL') from David Ciclitira for a total consideration of £113,460. These shares were originally purchased by David Ciclitira (acting in his personal capacity) for the same amount in anticipation of them being transferred to the Company.

 

33.     Equity Share Arrangement

 

In December 2019, the Company entered into a subscription agreement with YA II PN, Limited. ('YA II') and RiverFort Global Opportunities PCC Limited ('RiverFort') together the 'Investors' whereby the Investors agreed to make an equity investment of £2m, before expenses ,through the subscription for, and issue of 6,666,667 new Ordinary shares of 1 pence each in the capital of the Company at a price of 30p per share. Under an equity sharing agreement also entered into by the Company with the Investors (the 'ESA'), an amount equal to the gross proceeds of the Subscription following its completion, will then be returned by the Company to the Investors (the 'ESA Payment'), with the Company to receive back the ESA Payment, subject to certain pricing adjustments on a pro rata monthly basis.

 

In August 2020 the Group entered into a £1,500,000 CBILS borrowing agreement with Close Leasing Limited, the proceeds from the facility were used to repay the outstanding YA II and RiverFort borrowing and to terminate the ESA agreement.

 

In addition to an early termination fee of £143,000 payable by the Group, Live Company Group EBT Limited purchased 5,726,480 shares previously held by YA II and RiverFort (representing 6.51%. of the Company's issued share capital at the time) into trust, at a cost of £57,000.

 

These payments together with the Group's expected share of the ESA Payment (£2,000,000 at the time of the agreement and included in non-current receivables in the Groups consolidated statement of financial position at 31 December 2019) which following the termination will no longer be receivable will be considered part of the consideration for the share purchase at a group level and is included in the Group retained earnings in the Consolidated Statement of Financial Position.

 

34.     Subsidiaries

 

At 31 December 2021, the Company had the following (direct and indirect) subsidiaries:

 

Held directly
Company number
Place of incorporation
% owned
Principal activities
Brick Live Group Limited
10151705
UK
100%
Holding Company
Bright Bricks Limited
07227540
UK
100%
Specialist production company
Bright Bricks 2020 Limited
12333294
UK
100%
Dormant
Live Company Group EBT Limited
12792192
UK
100%
Employee Benefit Trust Company
Parallel Live Group Limited
09932658
UK
100%
Holding Company
Live Company Sports and Entertainment Limited
12328268
UK
100%
Holding Company
E Movement Holdings Limited
12502990
UK
100%
Holding Company
Championship (Singapore) Pte Limited
201427355K
Singapore
95%
Dormant
 
 
 
 
 
Held indirectly
 
 
 
 
Brick Live International Limited
10257756
UK
100%
BRICKLIVE events
Brick Live Far East Limited
10308158
UK
100%
Dormant
Brick Live Far East Limited
2460460
Hong Kong
100%
Owner of Associate investment in China
Parallel Live (NY) LLC
6339763
USA
100%
Dormant
Live Company Sports and Entertainment (Pty) Limited
2020/765082/07
South Africa
100%
Sports and entertainment events
K-Pop Europa Limited
12924203
UK
50%
KPOP events
E Movement Holdings (Pty) Limited
     2021/354354/07
South Africa
100%
Formula E events

 

In December 2020, the Company acquired the entire issued share capital of Live Company Sports and Entertainment Limited including its 50% interest in K-Pop Europa Limited (KPE).

 

At the time of acquisition the Directors concluded, by virtue of David Ciclitira being the sole director of KPE and was thus able to direct its activities, that KPE should be consolidated as a subsidiary in accordance with IFRS 10. The directors continued to assess signifiers of control during the year ended 31 December 2021 and concluded that the criteria for consolidation continued throughout the year.

 

During the year KPE made a pre tax loss of £8,000; and at 31 December KPE had net liabilities of £8,000. The results of KPE have not been consolidated in these financial statements on the basis of immateriality.

 

 The following subsidiaries were dissolved in the year:

 

Held directly
Company number
Place of incorporation
% owned
Principal activities
Brick Live Touring Limited
11253539
UK
100%
Dissolved
 
 
 
 
 
Held indirectly
 
 
 
 
Bright Bricks Consumer Limited
10653625
UK
100%
Dissolved

 

Brick Live Far East Limited is in the process of being dissolved.

 

The registered office of the subsidiaries incorporated is England and Wales is 3 Park Court Pyrford Road, West Byfleet, Surrey, KT14 6SD.

 

The registered office of the overseas subsidiaries are as follows:-

 

Championship (Singapore) Pte Limited, 62 Neil Road, Singapore (088833).

 

Brick Live Far East Limited, RM 1307A 13/F, Two Harbourfront, 22 Tak Fung Street, Hughom, Hong Kong.

 

Parallel Live ((NY) LLC, 800 N King St, Suite 303, Wilmington, DE 19801, USA

 

E Movement Holdings (Pty) Limited, 9 Viscount Crescent, Baronetcy Estate, Plattekloof, Western Cape, 7500, South Africa.

 

Live Company Sports and Entertainment (Pty) Limited, Noland House, River Park, Mowbray, Western Cape, South Africa.

 

The company's subsidiaries Brick Live Group Limited, Parallel Live Group Limited, Brick Live International Limited, and Live Company Group EBT Limited are exempt from the requirements of the Companies Act 2006 relating to the audit of their individual accounts by virtue of section 479A of the Companies Act 2006.

 

35.     Post balance sheet events

 

In February 2022 6,223,859 new Ordinary shares in the Company were issued  in settlement of outstanding Director's fees. Senior Director Ranjit Murugason received 5,047,620 Ordinary shares at 3.5p, Bryan Lawrie received 747,667 Ordinary shares at 3.5p and Stephen Birrell received 428,572 shares at 3.5p price.

 

In March 2022 the outstanding balance of £90,823 due under the loan arrangement with David Ciclitira as detailed in Note 22 was repaid in full. Also in March 2022 £45,000 of the outstanding deferred consideration due to David Ciclitira in relation to the acquisition of EMHL as detailed in Note 29 was settled in cash.

 

In March 2022 16,500,000 new Ordinary shares of 1 pence each in the capital of the Company were issued at a price of 5p, raising £784,000 net of fundraising costs.

 

In April 2022 1,428,571 Investor warrants were exercised at a price of 5p raising £57,000.

 

 

Note to the announcement

The financial information set out above does not constitute the Company's statutory accounts for the year ended 31 December 2021 or year ended 31 December 2020, but is derived from those accounts. Statutory accounts for 2020 have been delivered to the Registrar of Companies and those for 2021 on which the auditors have provided an unqualified report will be delivered following the AGM.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
 
END
 
 
FR UKUKRUBUNUAR ]]>