THE chief executive of SpaceandPeople has said the shopping centre marketing specialist is well placed to achieve growth after cutting its trading losses in the first half.
“Following the well documented challenges of 2014, the Group is now in a much more stable position,” said Matthew Bending, who highlighted the importance of recent contract wins for the Glasgow-based company.
SpaceandPeople sells space used for display stands and the like in shopping and garden centres. The company issued two profits warnings last year after sales in new UK centres were weaker than hoped and expansion in Germany slowed, but performed strongly in the final four months.
Mr Bending said yesterday that a restructuring process completed during 2014 has delivered significant cost savings and operational efficiencies.
The company launched a review of its management structure during the year and made changes to its board, leading to a slimmer leadership team.
Forth Ports’ chief executive Charles G Hammond joined as chairman in October, while STV finance director George Watt and Steve Curtis were brought in as non-executive directors.
“The restructuring of the Board and senior staff has been completed successfully and with new client contracts and product innovation we have enjoyed a good start to 2015 and look forward to achieving sustainable growth in the future,” said Mr Bending.
SpaceandPeople announced yesterday it has won a contract to conduct a pilot project in three shopping centres in France with Immochan, which will start next year.
The AIM-listed company said this will allow it to market test its new Mobile Promotions Kiosks with one of Europe's largest hypermarket and shopping centre groups.
The company has high hopes for the kiosks, which are made in China. It says these allow clients to run events without the need for them to incur significant capital outlay for what to them would be short term promotions.
SpaceandPeople achieves higher commission rates on the kiosks. It has 37 in operation.
“From a standing start MPKs have generated over £260k of income in the first half of 2015 with this expected to grow significantly in the remainder of the year, in 2016 and beyond,” said Mr Bending.
The executive noted the importance of a five year deal won recently with Network Rail, to promote brands across 18 UK stations, including Edinburgh Waverley and Glasgow Central.
The company has carried out work for luxury brands such as Hennessy in St Pancras Station, London.
Mr Bending noted that stations are being transformed into destinations in their own right with varied food and retail offerings.
SpaceandPeople is preparing for a busy few months as new contracts kick in and retailers increase activity ahead of Christmas.
In the six months to June it made an operating loss of £23,000 compared with £86,000 in the same period last year.
Revenue fell to £6 million from £7.1m.
The company noted that it benefited in the first half of last year from a very large transaction that was not repeated in the first half of this year.
UK retail and promotions revenues fell by £207,000 reflecting factors such as loss of venues that had a change of management control. However the total operating profits achieved under these headings increased by around £120,000 helped by margin improvements and cost savings.
German revenues fell by £100,000 overall but operating profits increased by £191,000. The company said it achieved significant staff cost savings resulting from the 2014 restructuring. It reduced the number of retail units managed increasing occupancy and driving higher margins.
Shares in SpaceandPeople closed down 4p at 83.5p, suggesting some investors may have taken profits on their holdings.
The shares rose 9.5p, to 86.5p, on 2 September when the company announced the Network Rail contract.
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