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Industry News

R4E results hit by theatre slowdown

Dewynters owner Reach4entertainment (R4E) said a drop in the number of theatre launches was behind a significant dip in revenue and profit during the first half of 2017.

The media and entertainment company announced that revenue was down 14.5 per cent year-on-year to £41.9m, while adjusted EBITDA slipped 73% to £400,000.

Gross profit was also down almost nine per cent to £10.5m in the six months to June 30, with the company suggesting its downturn was impacted by fewer launches of new theatre productions, particularly in the US. It said there is already “a solid base of 2018 business expected”.

The company said PNC borrowing reduced by a further £1.6m since June 2016 with the outstanding term debt balance of £0.6m repaid in July 2017.

Despite the discouraging numbers, R4E said London-based advertising, marketing and design agency for the arts, sports and live entertainment Dewynters has produced a stronger adjusted EBITDA performance on a reduced turnover, with a 2.2 per cent increase versus 1.8 per cent in the prior period.

R4E also said that new start up agency, Dewynters Germany, set up using proceeds from the fund raise in 2016, has had “a very strong start” with some “positive contract wins”.

David Stoller, the executive chairman who is set to stand down at the end of this month, said: “The launch of new theatre productions is a key driver of profitability for the group and historically has varied year to year. Whilst we are seeing fewer such launches this year, which has impacted upon our trading performance, there is a good pipeline of new shows for 2018.

“We have significantly reduced group borrowings further enhancing the group’s financial base, and have seen our new venture Dewynters Germany complete a better than expected first year, aided by important new client wins.

“Our strategy remains focused on providing unmatched service to the world’s leading entertainment companies from our operations in London, New Yok and Hamburg, the three largest live entertainment centres globally, and advancing our core strategies focussed on increasing digitalisation of our services, development of our data and analytics business, and expansion into new geographies and non-theatre live entertainment business.”

The company said the second half of the current financial year is expected to be satisfactory, but 2018 forecasts already looking like a return to form from the key companies with support from the new initiatives of Dewynters Germany and Jampot.

Stoller added that R4E expects to make an announcement regarding the appointment of a new chief executive shortly.

IMAGE: Maltingsberwick