SpaceandPeople : 2023 Full Report is available HERE.

Report of the Directors and

Financial Statements for year ended

31 December 2023

SpaceandPeople plc

SpaceandPeople plc

Highlights

Financial Highlights

Revenue of £5.8 million (2022 restated: £4.7 million)

Operating profit of £239k (2022: loss of £9k before non-recurring charges)

Basic Earnings per Share of 7.8p (2022: loss of 11.0p before non-recurring charges)

Cash at the year-end of £1.9 million (2022: £1.9 million). Cash available (including undrawn facilities) at the

year-end of £2.6 million (2022: £2.6 million) and net cash at the year-end of £0.7 million (2022: £0.4 million)

EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) of £548k (2022: £323k before non- recurring charges)

Operational Highlights

Strong growth in both the UK and Germany

Rock Up and Pop Up ("RUPU") kiosk programme continues to grow

ECE Germany contract renewed post year end for a further 5 years

SpaceandPeople plc
Contents
	Page
Strategic Report
Chair's Statement	3
Chief Executive Officer's Review	4
Operating and Financial Review	6
Strategic Report	8
Governance
Report of the Directors	12
Corporate Governance Report	15
Remuneration Report	21
Report of the Independent Auditors	23
Financial Statements
Consolidated Group Statement of Comprehensive Income	29
Consolidated Group Statement of Financial Position	30
Consolidated Group Statement of Cash Flows	31
Consolidated Group Statement of Changes in Equity	32
Notes to the Group Financial Statements	33
Company Statement of Financial Position	52
Company Statement of Cash Flows	53
Company Statement of Changes in Equity	54
Notes to the Company Financial Statements	55
Other information
Company Information	62

SpaceandPeople plc

Chair's Statement

For the 12 months ended 31 December 2023

It is very pleasing to write this report to you focusing on a year where SpaceandPeople has returned to profit after the difficult Covid impact period of the last three years. While there were still economic headwinds to overcome in 2023, the business has seen the continuation of the growth trends from 2022 of strong top line revenue growth in the UK and Germany. Importantly, this has now positively impacted into both operating profit and profit before tax and the Board believes that there is further sustainable profit growth to come in future years as we execute on the strategic growth goals for the Group. Key business developments and the 2023 financial performance of the Group are covered in more detail in Nancy Cullen's CEO Report and Gregor Dunlay's Operating and Financial Review so I will not duplicate these here.

Management is clear on the strategic growth opportunities in the UK and Europe and there is the necessary capital, resource, skills and ambition within the business to achieve these. As you would expect, a major focus during 2024 will be on retaining the Group's contract to provide services to Network Rail, where a tendering process has now commenced.

The business remains strongly cash generative which has limited capital expenditure needs and, as I have noted previously, we will look to return to paying dividends at a suitably prudent time when distributable reserves permit.

I would again like to thank all colleagues across the business for their hard work, support and input throughout the year and look forward to building on the profitable growth seen in 2023 in the year ahead.

George Watt

Chair

26 April 2024

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SpaceandPeople plc

Chief Executive Officer's Review

For the 12 months ended 31 December 2023

It has been a good year for SpaceandPeople and one in which we have regained momentum and confidence across the UK and Germany. We are also delighted to be reporting a return to profitability, without Government support, for the first time since 2019. These results have been achieved through the incredible hard work, resilience and determination shown by all our staff and by the introductions of new products into our mix of services. The business, which recorded very little revenue in 2020 is now achieving revenue and profitability above 2019 pre-pandemic levels on a like for like basis and confidence has returned across all sectors.

Overall Group revenue was £5.8 million, an increase of 24% from 2022, with the UK recording revenue growth of 16% in promotions and 27% in retail and German retail recording revenue growth of 43%.

UK Brand Experience

There was again a relatively slow start to 2023 for experiential business, however, sales picked up quickly after Q1 and although it was a rain affected summer, we booked multiple outdoor activations over Q2 and Q3. By September, business was very busy in this sector and we finished the year strongly, recording our highest ever sales for the experiential division in Q4. Experiential business is important to our success as a business, so the upswing in interest in activations is hugely encouraging.

During the year we hosted an event with many of the major agencies at which we obtained more clarity on their key priorities in terms of information and services that they require from SpaceandPeople. This has led to a number of planned service launches aimed at meeting their needs during 2024.

We understand that our buyers are looking for 24/7 information about the venues that they book and our experiential website www.experientialspace.co.uknow plays an important role in enabling agencies and brands to access details of venues, promotional sites, prices, demographics and footfall. This is proving to be a successful planning tool for agency clients and during the year we added a significant number of venues to the site and also added real time availability.

We also extended the reach of our brand and agency relationships by successfully sourcing brand sponsors for several Christmas trees at Network Rail stations, the most spectacular of which was a Kate Spade installation at Waterloo. This achieved huge interest on the concourse as well as significant publicity and PR for Kate Spade.

UK Retail

The UK mall retail business continued strongly and it was encouraging to see the volume and quality of pop up retailers increase in the run up to Christmas. Perhaps, more importantly, we have continued to develop our unique RUPU service which offers an end-to-end retail solution including a fully designed and installed kiosk, space at some of the top UK shopping centres, merchandising and business planning and, if required, retail staff. We are targeting this product at new businesses that are looking to take their first steps in omnichannel retailing and successful retailers that are looking to expand their network of stores without long term commitment.

At the end of 2023, we had 19 RUPU kiosks trading in many of the biggest and most high profile venues in the UK including Westfield London, The Trafford Centre, Metrocentre, Braehead, Meadowhall and Lakeside. Retailers using the service ranged from notable names such as Kate Spade through to ex department store concessionaires and online retailers.

The RUPU service allows us to appeal to a whole new generation of retailers with the ultimate aim of creating new long-term retail unit tenants at our clients' centres. The service also brings in a whole new generation of retailers into our client venues adding interest, diversity and vitality onto the malls. This service would be

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impossible without the support that our Operations team offer to retailers; working through the night to deliver, install, merchandise and then remove units back to our warehouse in Barking.

German Retail

Our German business showed good growth in 2023 with overall revenue of £1.8 million (2022: £1.3 million), which was at the top end of our expectations.

As in the UK, the inhouse development and manufacture of retail kiosks attracts new and different retailers, which in turn has enabled us to gain access to larger malls owned by different property groups across Germany, including URW and Sonae Sierra and has also enabled us to work on the delivery of a pop up shop for Owies, a German Oat Milk brand in Centro Oberhausen.

We delivered revenues from our new Austrian venues in 2023 and we are continuing to work on European expansion with several property companies.

In early 2024 we negotiated and signed a new long-term contract with ECE, the largest owner / shopping centre management company in Germany which enables us to trade more efficiently and flexibly in their managed shopping centres going forward which will have a positive impact on our German business.

Outlook

It is great to be reporting our return to profitability and even better to be showing growth across all the sectors in which we operate. It is particularly encouraging to see our experiential division recording its best ever Q4 results in the 24 year history of the Company.

Our ability to grow and develop the business is dependent on us understanding the needs of both our property groups and our space buyers and we are heavily invested in listening to our clients and responding to their evolving demands. We have ambitious plans over the next 12 months to continue to grow our retail services, increase the information available to brand agencies to increase the site specific data and insights available to our brand and marketing agency clients to better inform their purchasing and planning decisions around the venues we represent., We also continue to develop in Europe and ensure that we are in tune with all our property clients in terms of delivering the revenues, products, and services that add value to their venues.

I am as ever, indebted to everyone at SpaceandPeople for their continued commitment and enthusiasm which enables us to move forward at pace and to develop the business further.

Nancy Cullen

Chief Executive Officer

26 April 2024

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SpaceandPeople plc

Operating and Financial Review

For the 12 months ended 31 December 2023

2023 was a positive year for SpaceandPeople with all areas of the business delivering significant growth in revenue which has resulted in a return to overall profitability without Government support for the first time since 2019. This growth in revenue was primarily as a result of substantial increases in H2 trading in both our UK promotions and German retail businesses compared with the prior year with an overall increase of 28%. The UK promotions division delivered very strong levels of experiential activity in the final quarter of the year and the German retail division benefited from having 40% more kiosks trading in H2 2023 compared with H2 2022.

Overall, this has led to the Group delivering a profit before tax of £0.10 million (2022: loss of £0.13 million before non-recurring charges) and finishing the year with a strong cash position while continuing to repay debt.

Revenue

Net revenue* generated in 2023 was £4.77 million, which was £0.88 million (23%) higher than in the previous year. This was made up as follows:

	2023	2022
	£ million	£ million	Movement
UK promotions	3.49	3.01	+16%
UK retail	0.52	0.41	+27%
German retail (net of cost of sales)*	0.76	0.47	+62%
Total	4.77	3.89	+23%

*Note: In line with IFRS 15, UK revenue is recognised on a net basis, with German revenue recognised gross, due to its performance conditions. For the purpose of the table above, German revenue has been presented on a net basis to provide a direct comparison between divisions. German revenue on a gross basis amounted to £1.8m for FY23, as detailed in note 4 to the financial statements.

Net UK promotional revenue was up 16% to £3.49 million compared with the previous year following a very strong performance in the final quarter of the year, particularly in our experiential business where revenue was 34% higher than in 2022. It was encouraging to see both the number of individual bookings and the average value per booking being higher than in 2022.

In the UK retail division, the further expansion of our RUPU business has significantly increased the average revenue we make from each booking. Overall, we transacted fewer bookings, with the number of marginal mobile promotional kiosk bookings decreasing significantly, however, overall revenue increased by 27% as the average booking value increased by over 50%.

The German retail business grew significantly during 2023 with net revenue increasing by 62% to £0.76 million. There was an increase of 42% in the number of retail kiosks in operation during 2023 to 111 kiosks (2022: 78 kiosks) following the expansion of our agreements with major clients.

Administrative Expenses

Administrative costs increased by £0.67 million (16%) from the previous year to £4.77 million. This was as a result of increased staff costs in both the UK and Germany, with further new staff recruitment and commission and bonus targets being met as revenue exceeded targets as well as ongoing wage inflation.

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Other Operating Income

Other operating income in relation to fees generated by the business increased by 60% to £0.24 million (2022: £0.15 million excluding Government support of £0.06 million). This was as a result of the level of ancillary charges in the German retail division as trade continued to grow.

Operating Results

During 2023, the Group made an operating profit of £0.2 million, compared with an operating loss before non- recurring costs of £0.01 million achieved in 2022. This was a welcome return to profitability without Government support after the Covid affected years of 2020 to 2022.

Earnings Per Share

In 2023, Basic Earnings per Share was 7.8p (2022: negative 11.0p before non-recurring costs) and Diluted

Earnings per Share was 7.1p (2022: negative 11.0p before non-recurring costs).

Cash Flow

The Group cash inflow from operations was £0.7 million (2022: inflow of £1.1 million). This was as a result of positive EBITDA of £0.5 million with the remainder being due to movements in working capital. As at the end of 2023, the Group had outstanding term loans of £1.16 million (2022: £1.48 million). With the gross cash position at the end of 2023 being £1.87 million (2022: £1.88 million), net cash was £0.71 million (2022: net cash of £0.40 million).

Gregor Dunlay

Chief Financial Officer

26 April 2024

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Strategic Report

For the 12 months ended 31 December 2023

Review of Business and Future Developments

The results for the period and the financial position of the Group are shown in the financial statements on pages 29 to 32. The review of the business and a summary of future developments are included in the Chair's Statement, the Chief Executive Officer's Review and the Operating and Financial Review on page 3, pages 4 to 5 and pages 6 to 7.

Key Performance Indicators

The main financial key performance indicators are profit before taxation, EBITDA and available cash. During the year, the profit before taxation was £0.1 million (2022: loss of £0.1 million before non-recurring costs) and available cash at 31 December 2023 was £2.6 million (2022: £2.6 million). This is comprised of gross cash of £1.9 million and overdraft facilities of £0.7 million. Basic EPS was 7.8p (2022: loss of 11.0p before non-recurring costs).

The Group continually monitors several key areas:

• revenue against target and prior period;
• profitability against target and prior period;
• venue acquisition, performance and attrition;
• promoter and operator types compared with historic bookings; and
• commission and occupancy rates.

	2023	2022
		restated
Revenue (£ million)	5.8	4.7
Operating profit / (loss) before non-recurring costs (£ million)	0.2	(0.0)
Basic earnings / (loss) per share before non-recurring costs (p)	7.8	(11.0)

Principal Risks and Uncertainties

The principal risks identified in the business are:

Loss of client(s) - Each year a number of the Group's contracts with clients come to an end. At this point, some are renewed, some are not renewed and others are renegotiated. When the amount of business that we transact with an established client reduces, it can take time to replace this income with business from new clients. The Group is not overly reliant on any single client and the loss of a significant client, although unwelcome, would not put the viability of the business at risk.

Macro-economicand environmental factors - Inflation and the resulting cost of living pressure has continued to have an impact on the level of discretionary expenditure in the UK and Germany, both in relation to promoter and retailer spending with the Group and consumer expenditure in the retail environment although this is now easing. The business model of the Group is to provide short term opportunities to promoters and retailers and to refresh our offer to clients on a regular basis. As a result, we continue to replace poorly performing operators and find new promoters to augment our business.

Loss of key personnel - The unexpected loss of a member of our senior management team could have a negative effect on the business in the short term, however, we have a senior management team who meet regularly and are encouraged to engage with and assist their colleagues in other areas of the business to ensure that understanding and exchange of ideas is a core element of their roles. This ensures that the risk to the business is mitigated significantly while we seek to replace the member or conduct a reorganisation of the team.

Ability to attract high quality staff - The ability to continue to attract and retain employees with the appropriate expertise and skills cannot be guaranteed. Identifying and hiring any additional personnel and replacements could be costly and timely. If the Group is unable to hire, train and retain such personnel in a timely manner, this could adversely impact the Group's strategy. The Group mitigate this risk by continuing to monitor their staffing requirements on a regular basis.

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Financial instruments - Our financial risk management objectives are to ensure sufficient working capital and cash flow for the Group and to ensure there is sufficient support for its strategy. This is achieved through careful management of our cash resources and by utilising overdraft and loan finance where necessary. No treasury transactions or derivatives are entered into. Further information can be found below and in note 20 to the financial statements.

Interest rate risk - The Group's banking facilitates are secured by a floating charge over the Group's assets and are subject to interest between 3.25% to 3.80% plus the current base rate. There is a risk that base rates increase and adversely impact the Group's operating cash flows. The Group mitigates this risk by allocating funds to pay down the underlying loan every month and placing cash balances into interest bearing accounts, hence reducing the Group's exposure to fluctuating interest rates.

Credit risk - The Group is exposed to credit risk from its operating activities, namely its trade receivables. This risk is managed by undertaking regular credit evaluations of its customers. The Group is aware that customers' financial strength may have been adversely affected by factors such as pressures in the retail environment, cost of living concern, inflation and increased cost of borrowing. We endeavour to work with our customers and venue partners to provide appropriate discounts and payment plans to enable them to continue to trade and repay any amounts owed in an agreed manner. The Group does not routinely offer credit terms to the majority of customers.

The Group applies the IFRS 9 simplified approach to measuring expected credit losses on trade receivables. To measure the expected credit losses, trade receivables were considered on a days past due basis. The expected loss rates are based on the Group's historical default rates adjusted for forward looking estimates.

Trade receivables are written off where there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include the failure of a debtor to enter into and abide by a repayment plan with the Group and a failure to make agreed contractual payments. Impairment losses on trade receivables are presented as net impairment losses within operating profit. Subsequent recoveries of any amounts are credited against the same line item.

System failure - Whilst no guarantees can be given that all possible eventualities are covered, the Group has comprehensive and strict policies and contingency plans concerning power outages, telecommunications failure, virus protection, hardware and software failure, frequent and full offsite backup of all data and disaster recovery.

Contracts and service level agreements are in place with reputable suppliers to ensure that any disruption and risk to the business is kept to an absolute minimum.

The adequacy and appropriateness of these policies and plans are reviewed on a regular basis. Hardware and systems upgrades and improvements are performed regularly. Our disaster recovery process is tested regularly. Our IT systems are undergoing significant updates again during 2024.

Legal claims - The Group constantly reviews its exposure to possible legal claims and takes appropriate advice and action to protect both itself and its clients where any avoidable risk is identified, for example, by amending terms and conditions, service agreements, licences and/or risk assessments.

Health and safety - The health and safety of our employees and any visitors to any of our sites is of utmost importance. We are fully committed to complying with all relevant laws and regulations in order to provide a safe and healthy environment. The UK business is ISO 45001 certified which proactively improves our occupational health and safety systems.

Cyber security - The Group has robust systems in place to protect all data held on its IT systems. All corporate and personal data relating to clients, licensees and staff is held on secure servers, in encrypted files and behind robust firewalls that are subject to penetration testing and are upgraded regularly. The appropriateness and effectiveness of our cyber security is tested by external advisors on a regular basis.

Financial reporting - A comprehensive budgeting process is completed once a year and is reviewed and approved by the Board. This budget is revised twice throughout the year and performance against the budget and forecasts is reviewed by the management team on a monthly basis and by the Board at each Board meeting.

If the Board believes that as a result of the performance to date during the year, or as a result of any changes to the forecasts for the remainder of the year, the results of the Group are likely to differ materially from the

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