ATC All Things Considered Group Plc

27 September 2024

All Things Considered Group Plc

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

Interim Results for the six months ended 30 June 2024

Significant double-digit growth in line with strategy and enhanced service offering

All Things Considered Group Plc (AQSE: ATC), an independent music company housing talent management, live booking, livestreaming and talent services,  announces its unaudited interim results for the six months ended 30 June 2024 ("H1 2024").

Financial highlights

Operational highlights

Post period end, current trading and outlook

¹ Mckeown Asset Limited was renamed Joy Entertainment Group Ltd in August 2024. ATC acquired a 50% controlling interest in this company in February 2024.

²Operating EBITDA is a non-statutory performance measure, as displayed in the consolidated statement of comprehensive income, and is defined as the operating result before interest, tax, depreciation, amortisation and impairment and before the share of results of associates and joint ventures. Adjusted for business combination costs and share-based payments (note 8).

³ATC acquired a 55% controlling interest in Raw Power Management in May 2024.

⁴ATC acquired a 60% controlling interest in Sandbag Limited in July 2023.

Adam Driscoll, Chief Executive Officer of ATC, commented: "The first half of the year has been a period of material growth for the Group as we have continued to capitalise on the opportunities that are available to us in a transforming industry. The acquisitions of Joy Entertainment Group and Raw Power Management, along with the growth seen in all our segments, are key steps in delivering on our ambition to build a business with global reach that fosters closer connections between artists and fans.

"We have entered the second half of the year energised by the opportunities that lie ahead of us. With a strong pipeline of projects and an exceptional team in place, we are confident that we will build on this momentum and deliver sustained, long term growth."

This Announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014 as retained as part of UK law by virtue of the European Union (Withdrawal) Act 2018 as amended. Upon the publication of this Announcement, this inside information is now considered to be in the public domain. The person responsible for arranging for the release of this announcement on behalf of the Company is Adam Driscoll, CEO.

For more information, please contact:

Notes to Editors

ATC Group is an independent music business company operating internationally with strong business focus in the key commercial areas of music artist's business. The Group encompasses direct artist representation in the form of management and live representation, merchandising, music promotion, livestreaming and a range of other music services. The Group is headquartered in London, with offices in the key industry hubs of Los Angeles and New York and also in Europe.

The Group's key businesses are structured into segments that reflect the growing range of the Group's activities:

For more information see: www.atcgroupplc.com

CEO Review

Overview

The six-month period to 30 June 2024 has, once again, seen significant Group-wide developments and activity as we continue to deliver upon our ambitions to build a fully integrated music services business with global reach.

Over the last three years we have cemented the Group's considerable representation in the artist management and live agency space, whilst simultaneously broadening our operations into a range of services that are key components to assist in the delivery of artists' creative and commercial ambitions. We have also expanded into the conception and production of live events - a crucial part of the music value chain given that almost half of all industry revenues are associated with live events.

At the time of our IPO in December 2021 we noted that our focus was going to be on providing an infrastructure that would enable a more direct relationship between the artist and the fan. The underlying economics of the music industry, and the exchange of value therein, can be reductively stated as 'an artist creates and a fan consumes' and we have sought to put together businesses that address that fundamental principle. A notable change in the industry is the rise of discussions about the value of the 'superfan', a trend we identified early on. We believe that ATC will continue to be a beneficiary of the changing economics of the music industry where all fans, not just 'superfans', will have a more direct economic relationship with artists.

Our Group is now organised into three distinct verticals: i) Artist Representation (management and agency); ii) Services; and iii) Live Events and Experiences. All three areas have seen material growth over the course of 2024 and we expect that to continue and accelerate. These three verticals are the pillars that support the longer-term ambition of the Group which is to provide an 'Integrated Artist Service' offering which enables the engagement with an artist on the end-to-end delivery of all their creative and commercial needs. We believe that this is the model of the industry going forward.

The acquisition of Sandbag in 2023 was a key moment in delivering on that strategic ambition and the first half of this year has seen a further underpinning of that with two further key Group investments.

In February 2024, we acquired a 50% interest in Mckeown Asset Limited, a UK holding company for a collection of businesses across the live entertainment and music sector. Mckeown Asset Limited has recently been renamed Joy Entertainment Group ("Joy Entertainment") - 'Joy' being the longstanding name of its public facing promotions arm. Joy Entertainment holds a 50% interest in JTR Productions Ltd ("JTR") a festival management operation (trading principally in servicing 'On The Beach Festival', Brighton's annual flagship music festival); a 40% interest in Something Recordings Ltd, a small indie record label; and a 10% interest in Concorde 2 Ltd ("Concorde 2"), an iconic live music venue in Brighton. We have an option to increase our holding in the venue to 80% and will seek to exercise that option in due course. The team at Joy Entertainment has a wealth of experience organising events around the UK for over 18 years, managing c.300 concerts and festivals across a broad spectrum of genres including rock, country, folk, electronica, americana, hip hop, neo classical, spoken word, and metal. Across the group, Joy Entertainment is responsible for facilitating approximately 250,000 tickets per annum across events, venues and festivals. This has been a substantial development for our Live Events and Experiences division.

In May 2024, we announced the acquisition of 55% of the issued share capital of Raw Power Management Limited ("Raw Power"), a UK music management business. Raw Power's client base includes Bring me the Horizon (a hugely successful global touring band with over a billion streams on Spotify), Bullet for my Valentine, The Mars Volta, The Damned, You Me At Six, Don Broco, Heartworms, Kid Kapichi and Refused. Since the acquisition, Raw Power has had further substantial success with Jordan Adetunji, with his track 'Kehlani' charting in the top 10 in the UK and in the top 30 US Billboard chart and delivering 200m Spotify streams resulting in new recording and publishing deals. The Raw Power acquisition significantly bolstered our Artist Representation segment and the co-location of the Raw Power team in our offices in London and Los Angeles has been a great success with collaboration between managers resulting in a range of exciting new opportunities.

May 2024 also saw the announcement of our new co-operation agreement with Modern Sky, one of China's longest established and leading independent music companies. The work that has been done in four months since the start of the arrangement has been very productive and we expect to see commercial activity in 2025 and beyond. Several of our management artists are now getting exposure in the Greater China market as a result of this alliance.

In March 2024, we raised £2.3m of new capital which strengthened our balance sheet. We used some of the proceeds to effect the Raw Power acquisition and the balance has enabled us to further invest in Group operations and business growth. Once again, we would like to thank the support shown from a number of our key existing shareholders and we have been delighted to welcome new shareholders to the register who share the Directors' optimism about the Group's prospects.

The Group now has contractual relationships with over 800 artists. A huge amount of work has been delivered in the first half of 2024 to put in place digital and data systems to enable us to better serve those clients and to ensure that we are able to offer them opportunities to engage with additional Group services. Our offer to artists is 'a la carte' but we are seeing an increasing number of artists engaging with more than just one component of our business and we believe that this drives better commercial outcome for us and the artist.

The music industry continues to see rapid transformation brought about by technology innovation, empowered artist expectations and changing consumer behaviours, disrupting traditional business models in a multi-billion dollar industry. The Directors believe the Group's diversified business model and established track record means it remains well positioned to build on future organic and acquisitive growth opportunities in an evolving and fragmented music industry.

Performance Review

Artist Representation

In the key areas of Artist Representation, we have seen revenue increase by 42.3%, from £2.61 million in H1 2023 to £3.71 million in H1 2024.

ATC Management

The ATC Management business in the UK achieved double digit revenue growth of 39% to £1.06 million in 2024 (H1 2023: £0.76 million) with key clients Nick Cave, PJ Harvey and The Smile all active in the market. As noted above, the addition of Raw Power has further strengthened this division although, as the acquisition was late in the H1 period, only £0.56m is reflected in the half year results.  We continue to see the addition of new managers and clients in both the UK and in the US and expect to deliver a good full year result.

ATC Live

ATC Live continued to see growth in live music activities, as evidenced by the impressive 49% uplift in revenue from £0.75 million in H1 2023 to £1.11 million in H1 2024. The uplift has been as a consequence of activity across a huge range of our clients but, in this period, the successful tours and performances from PJ Harvey, Jungle, Black Pumas and Fontaines DC have been particularly noteworthy. Jungle also won the 2024 BRIT Award for Group of the Year and Fontaines DC recently announced their biggest headline show to date, taking place on Saturday 5 July 2025 at Finsbury Park, London. Joining them for the huge outdoor gig will be Australian rock band Amyl and the Sniffers, another ATC Live client. Elsewhere, Good Neighbours, a new band represented by ATC Live, had a huge hit with their track 'Home' delivering more than a quarter of a billion streams on Spotify, seeing them move up the billing of festivals and playing ever larger venues, and Leeds based act English Teacher were recent winners of the prestigious Mercury Music Prize.

The first half of the year is a quieter period for ATC Live, with a substantial ramp up of revenues being seen during the summer festival season and second half touring activity. This is certainly the case for 2024 and we are confident that growth will continue in the remainder of the financial year.

ATC Live's trading arrangements with North American agency, Arrival Artists, continue to serve both us and our clients well and is proving to be an attractive global solution for a number of independent agents who are expressing an interest in joining our business.

Services

In our Services segment, we have seen significant revenue growth from £0.78m in H1 2023 to £15.44m in H1 2024, driven principally by the acquisition of Sandbag in July 2023 which contributed £14.4m to H1 2024. As noted above, this acquisition is foundational to our 'Direct to Fan' strategy and we are now beginning to see an increase in clients from other parts of our business using Sandbag for their touring and e-commerce merchandising services. Opportunities for growth in the UK, US and Europe for the business remain strong and we are continuing to strengthen our sales team at Sandbag alongside focussing on where we can better service our existing Group-wide client roster.

Elsewhere in this segment we saw excellent results from our US based music promotions business, Your Army America, with 18% revenue growth in the period to £0.65m (H1 2023: £0.55m). In September we rebranded this business as Circa and extended its operational footprint into Europe so that we can now grow a transatlantic music promotions company.

Our Services segment also now incorporates our interest in Driift, which since 1 October 2022 has been an associated company for the Group, which continues to provide end-to-end livestreaming capability - across show development, production, ticketing, streaming and distribution.

The livestreaming market remains subdued following the post-Covid resumption of live touring, but opportunities do arise and Driift, as one of the leading brands in the field, is well positioned to benefit from the industry's anticipated growth in this sector. The business remains well funded and, in recent months, has taken action to substantially reduce its costs by restructuring and refocusing its operations.

Live Events and Experiences

As detailed above, Joy Entertainment was acquired in February 2024 and contributed £0.42 million in revenue in H1 2024. In July 2024, Joy Entertainment generated revenue of approximately £1.83 million, largely due to the successful 'On the Beach' music festival in Brighton. We expect to see further growth in the business over the coming months and years with a number of key initiatives and events for 2025 already being scheduled and in the early stages of delivery.

At ATC Experience, the team has been busy working on the delivery of the first major project in which we have been involved and which was announced on 26th September 2024, generating material coverage across national radio and press.  Tickets will go on sale to the general public on 2nd October 2024.

The show, Hamlet Hail To The Thief, is a co-production between ATC, Factory International in Manchester and The Royal Shakespeare Company (RSC). In this new production Shakespeare's great tragedy and Radiohead's seminal album, Hail To The Thief, collide in the world premiere of a feverish new live experience, fusing theatre, music and movement.

ATC Experience has been instrumental in putting together a cast of theatrical luminaries to bring this new show to the stage. The key creative team includes Radiohead frontman Thom Yorke, Olivier and Tony award-winning designer and director Christine Jones (Theatre for One, Queen of the Night) and Olivier award-winning choreographer Steven Hoggett (Black Watch, The Curious Incident of The Dog In The Night-Time). 

We are excited that this show is the first major project delivered by ATC Experience and we anticipate that the show will become a critical and commercial success generating long term benefits for the Group and shareholders.

Current Trading and FY24 outlook

The Group's divisional businesses in Artist Representation have performed ahead of management expectations in the first half of 2024 and we expect that to continue for the full year. The integration of Sandbag into Group operations is progressing and whilst its performance has been a little short of management expectations in H1 2024, we are seeing substantial opportunities for growth as that integration fully beds in. We have recently recruited a substantial figure from the merchandising world to join Sandbag as a consultant and are confident of a positive impact of that appointment. The acquisition of a majority stake in Raw Power has already generated new opportunities and Raw Power is performing ahead of the targets that we set at the time of our investment.  In the Live Events and Experiences sector, we are seeing good results from Joy Entertainment and expect to see a boost to the Experiences business following the recent launch of Hamlet Hail to the Thief.

The Group remains well capitalised to pursue our clear growth opportunities. We anticipate adding additional managers in the US and UK in the coming weeks and are looking to expand our business in the US into a production arm delivering composer-led events. This will complement our ATC Composers representation arm, which has continued to operate successfully this year.

The growth of our business and artist client base is helping to deliver improved pipeline visibility. We have artists already booked to headline substantial festivals in 2025 and some of our larger clients are already discussing significant activity in 2026.

We are confident that our comprehensive service offering will continue to demonstrate ongoing organic growth whilst we continue to evaluate complementary acquisition opportunities. We believe that the rapid growth of the Group during the last two or three years can be more than replicated in the coming months.

All of this is being delivered by a growing team of talented and hard-working staff. Creative energy permeates our business and the desire of individuals to reach across the Group divisions to engage with their colleagues is impressive. Younger members of our team are being awarded accolades from industry bodies noting them as 'the bosses of the future'. It is important that we continue to nurture our internal talent alongside the talent that we represent. To that end, we launched our CSOP scheme in 2024 - enabling our staff to share in the future commercial success that they will help to generate.

Adam Driscoll

26 September 2024

CFO Review

The first half of 2024 showed a substantial improvement at Operating EBITDA level when compared to H1 2023 in most of the Group's areas of activity. Our business does exhibit a seasonal pattern with substantial elements of our revenue being driven by artist live performances and touring where there is typically much more activity in H2. This pattern is in evidence once again in 2024. Overall, we recorded a loss for the first half of the year. Nevertheless, when measured against our 2023 performance, revenue has grown substantially due to the acquisition of Sandbag in July 2023 and improved performances at ATC Management and ATC Live. Operating EBITDA, our key performance measure, has improved due to organic growth in ATC Live and ATC Management (Europe), as well as in Circa. Additionally, our acquisitions of McKeown Asset Limited  in February 2024 (renamed Joy Entertainment ("Joy Entertainment") in August 2024) and Raw Power Management Limited ("Raw Power") in May 2024 have made positive contributions, in line with our expectations.

The integration of Sandbag, Joy Entertainment and Raw Power is well underway and we are seeing significant synergies, enhancing our operational efficiency and expanding our market reach. These acquisitions have allowed us to leverage combined resources, expertise, and networks, which we expect to result in cost savings and increased revenue opportunities.

The Group's focus continues to be on driving revenue growth, enhancing profitability, and streamlining business processes and operations. These efforts are integral to supporting ATC's Integrated Artist Services business model and vision.

Performance comparisons between the two periods is shown below:

Revenue

The Group's consolidated revenue saw a substantial increase, increasing to £19.59 million in H1 2024 from £3.39 million in H1 2023. This significant growth is primarily due to the following factors:

Artist Representation

Revenue rose by 42.3%, from £2.61 million in H1 2023 to £3.71 million in H1 2024. Key contributors were:

Services

Services revenue grew from £0.78 million in H1 2023 to £15.44 million in H1 2024, driven by the following factors:

·    The acquisition of Sandbag in July 2023 contributed £14.44 million to H1 2024 revenue (H1 2023: nil). This strategic acquisition has not only boosted our revenue but also expanded our capabilities in the 'Direct to Fan' commerce sector, opening new avenues for integrated services within the Group.

·    Our US-based entity, Circa, which provides DJ promotion services to clubs and radio stations, achieved 18% growth in revenue, up to £0.65 million in H1 2024 from £0.55 million in H1 2023. Circa operates from offices in Los Angeles, New York, and London. Circa will continue to deliver unique, fully integrated marketing and promotion campaigns, leveraging an extended team and international reach to some of the world's most influential music markets.

Live Events and Experiences

Joy Entertainment was acquired in February 2024 and contributed £0.42 million in revenue in H1 2024. In July 2024, so post the period reported here, Joy Entertainment generated revenue of approximately £1.83 million, largely due to the successful On the Beach Music Festival in Brighton. As Joy Entertainment operates within the live entertainment and music sector, we intend to expand this business through strategic and accretive acquisitions and developments.

Operating EBITDA Loss and Loss Before Tax

Despite the traditionally slower H1 season, our Operating EBITDA loss for 2024 has improved, amounting to £0.43 million compared to £0.62 million in H1 2023. This improvement is primarily due to the robust performance of ATC Live, ATC Management (Europe) and the acquisition of Raw Power within our Artist Representation business. Artist Representation has experienced strong revenue and profitability growth, driven by live touring activities, with several major acts contributing to higher revenue in the period. Additionally, the acquisition of the profitable operations of Joy Entertainment has helped reduce the operating losses in the newly developed Live Events and Experiences segment.

The Operating EBITDA loss in H1 2024 has been impacted by a first time share based payments charge of £118k for the share options granted in January 2024 under our new CSOP plan. These costs are higher than we will expect to see going forward as the launch of the CSOP scheme gave rise to awards to a number of members of staff relating to their existing long service. Acquisition expenses of £100k relating to Joy Entertainment and Raw Power were also booked in this period.

The loss before tax for the period was £1.26 million, compared to £1.14 million in H1 2023. The result is significantly impacted by the amortisation of customer relationships, amounting to £0.32 million (H1 2023: nil), and the depreciation of right-of-use assets under IFRS 16, amounting to £0.20 million. This accounting treatment is as a result of our acquisition of Sandbag and they are non-cash items. Our share of the net losses of associates and joint ventures, particularly our share in the losses of Driift, has decreased substantially from £0.42 million in H1 2023 to £0.17 million in H1 2024, following restructuring and refocusing of Driift's operations.

One of our major areas of focus is to enhance profitability through margin enhancements in Sandbag. We believe that substantial synergies can be realised through its integration and the streamlining of processes and operations to achieve efficiencies and savings.

Cash balances (including client funds) were £11.3m at 30 June 2024, down from £12.9m at 31 December 2023

Cash balances (excluding client funds) were £6.3m at 30 June 2024, down from £10.7m at 31 December 2023. Detailed movements are shown in the cashflow statement. In summary, the share placing in March 2024 raising £2.3m was broadly matched by the purchases of Joy Entertainment and Raw Power (net of their cash acquired) and the deferred consideration and dividends paid to Sandbag shareholders plus the repayment of borrowings and lease payments. The loss before tax of £1.26m resulted in a net cash outflow of £0.3m, after adding back non cash items, and working capital increases resulted in a net outflow of £3.6m due to increases in accrued revenue, payments to suppliers and the build up of inventory in Sandbag.

Short term borrowings increased largely due to a loan payable by Raw Power which at 30 June 2024 amounted to £0.8m.

Earnings Per Share

Basic and diluted earnings per share from all activities was a loss of 8.01 pence per share (H1 2023: loss of 11.38 pence per share).

Basic earnings per share is calculated by dividing the profit/loss after tax attributable to the equity holders of All Things Considered Group Plc by the weighted numbers of shares in issue during the year.

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 the projections for at least twelve months from the date of approval of the interim accounts.

Rameses G. Villanueva
CFO
26 September 2024

Consolidated statement of comprehensive income

Consolidated statement of financial position

Consolidated statement of changes in equity - June 2024

Consolidated statement of changes in equity - June 2023

Consolidated statement of changes in equity - December 2023