All ThingsConsidered - Final Results

27 June 2022

All Things Considered Group Plc

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

Final Results

Solid growth demonstrating strength of integrated business model

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

Financial Highlights

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

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

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

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

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

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

Operational Highlights

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

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

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

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

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

Current Trading and Outlook

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

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

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

 

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

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

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

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

 

 

-ENDS-

 

For more information, please contact:

 

ATC Group	Via Alma PR
Adam Driscoll, CEO
Rameses Villanueva, CFO
Canaccord Genuity	+44(0)20 7523 8000
Aquis Corporate Adviser and Broker
Adam James / Patrick Dolaghan
Alma PR	+44(0)20 3405 0205
Financial PR
Hilary Buchanan / Susie Hudson / Lily Soares Smith

 

Notes to Editors

 

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

 

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

 

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

·      Artist management and development

·      ATC Management - artist management

·      ATC Live- live event booking agency for artists

·      ATC Services

·      Polyphonic -an artist partnerships venture

·      Live streamed events

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

 

 

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

 

For more information see: www.atcgroupplc.com

 

 

 

Co-Chairs' Statement

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

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

People

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

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

Board and Governance

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

Summary and Outlook

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

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

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

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

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

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

 

Brian Message and Craig Newman

Co-chairs

CEO Review

Overview

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

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

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

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

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

Current Trading

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

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

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

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

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

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

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

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

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

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

Adam Driscoll

CEO

 

CFO Review

Overview

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

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

Revenue and other operating income

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

 

	2021	2020
Live streamed events
-  Core revenue	4,642,212	4,716,692
-  Other operating income	545,979	0
	5,188,191	4,716,692
Artist management and development
-  Core revenue	4,501,426	2,383,493
-  Other operating income	617,517	434,762
	5,118,943	2,818,255
Total	10,307,134	7,534,947

 

 

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

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

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

 

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

Administrative  expenses

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

 

	2021	2020
Artist management and development	3,652,198	1,166,200
Live streamed events	1,121,944	242,187
Total	4,774,142	1,408,387

 

 

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

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

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

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

 

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

 

IPO and net cash/(debt)

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

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

	2021	2020
Current
Cash and cash equivalents	5,532,272	2,178,505
Funds held on behalf of clients	(1,027,793)	0
Borrowings (ST)	(124,068)	(582,230)
Right of use liabilities (ST)	(140,287)	(136,865)
Net cash/(debt) after current debt	4,240,124	1,459,410
Long term
Borrowings (LT)	(1,676,986)	(1,725,548)
Right of use liabilities (LT)	(248,238)	(388,525)
	(1,925,224)	(2,114,073)
Net cash/(debt)	2,314,900	(654,663)

 

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

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

 

Adjusted loss before tax

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

	2021	2020
Loss before tax	(3,306,518)	(340,831)
IPO and related costs	616,735	0
Loss before listing fees	(2,689,783)	(340,831)

 

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

	2021	2020
Artist management and development	(546,538)	(469,476)
Live streamed events	(2,143,245)	128,646
Total	(2,689,783)	(340,831)

 

Earnings per share

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

 

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

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

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

 

	Statutory accounts	Prospectus	Differences
Revenue	7,100,185	7,489,436	(389,251)
Administrative expenses	(1,408,387)	(1,778,168)	369,781
Loss before tax	(340,831)	(412,739)	71,908
Equity attributable to the shareholders of the parent company	(964,613)	(1,196,639)	232,026
Earnings (loss) per share -  In pence	(4.25)	(5.29)	1.04

 

 

 

Going Concern

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

Rameses Villanueva

CFO

 

Consolidated statement of comprehensive income Consolidated statements of comprehensive income For
For the year ended 31 December 2021			2021					2020
	Notes		£					£
Revenue	3		9,143,638					7,100,185
Cost of sales				(8,297,894)					(6,207,950)
Gross profit			845,744					892,235
Other operating income			1,163,496					434,762
Administrative expenses	4			(5,390,877)					(1,408,387)
Provision for amounts owed by associates and joint ventures				-				(235,250)
Operating loss	3			(3,381,637)					(316,640)
Share of results of associates and joint ventures			167,568					40,012
Finance income			4,852					34,652
Finance costs				(96,968)					(98,855)
Provision against amounts owed by participating interests				(333)					-
Adjusted loss before tax				(2,689,783)					(340,831)
IPO and related costs				(616,735)					-
Loss before taxation				(3,306,518)					(340,831)
Income tax expense	5			(1,256)					(966)
Loss for the year				(3,307,774)					(341,797)
Other comprehensive income:
Items that will not be reclassified to profit or loss
Revaluation gain on unlisted investments			139,061					-
Currency translation differences			(5,208)					(189)
Total items that will not be reclassified to profit or loss			133,853					(189)
Total other comprehensive income for the year			133,853					(189)
Total comprehensive income for the year				(3,173,921)					(341,896)
Loss for the financial year is attributable to:
- Owners of the parent company				(2,353,468)					(291,792)
- Non-controlling interests				(954,306)				(50,005)
				(3,307,774)					(341,797)
Total comprehensive income for the year is attributable to:
- Owners of the parent company				(2,219,615)					(291,891)
- Non-controlling interests				(954,306)				(50,005)
				(3,173,921))					(341,986)