Interim Results

SNOOZEBOX HOLDINGS PLC

Interim results for the six months ended 30 June 2015

Snoozebox Holdings plc (AIM: ZZZ), ("the Company") today announces its interim results for the six months ended 30 June 2015.

Financial Highlights 

· Revenues increase by over 300% to £2.4m, compared to £0.7m in the same period last year

· Growth in gross profit to £1.5m (H1 2014: £0.5m), driving the increase in contribution to overheads of £0.7m

· EBITDA pre-exceptional loss of £1.6m in-line with last year, reflecting a higher contribution in the period offset by investment in systems, processes, resources and brand development as the business prepares for scale

· Net assets of £17.6m, with cash at the period-end of £10.7m

 H1 Milestones

· Market opportunity and investment case validated

· 25% increase in room stock to over 800 hotel rooms, mix of room inventory under review with current plans to roll out a further 150 new event hotel rooms for 2016 season

· 15 deployments, a fourfold increase year-on-year, with Snoozebox featuring at key music and motorsport events in UK and Europe

· Launch of Event Village and four new innovative offerings: new event hotel room, the new 'Snoozy' pop-up room, new Snoozebox Social Hub and portable housing model

· 300 rooms deployed on a semi-permanent basis, in line with strategy; projects identified for deployment of a further 500 rooms post 2015 events season subject to relevant planning consents

· Successful entry into new markets and sectors, including film sector and sports performance

· Global recognition in 2015 from multiple prestigious global awards as an emerging brand, leading in innovation and design

Lorcán Ó Murchú, Chief Executive, commented,

"Snoozebox continues to make solid progress, growing revenues, gross profit and contribution to overhead. We have broadened our product offering and strengthened our operating model, in line with our strategy to position the business for sustainable long-term growth. 

Demand for our unique, high quality offering remains high, both from the UK and overseas. With greater visibility, clear growth prospects and an executable event model, our focus in the second half of the year will be to build on the strong foundations we now have in place, investing in further improving and growing the core business, as well as expanding into new sectors and markets."

1 September 2015

Enquiries

www.snoozebox.com

CHIEF EXECUTIVE'S REPORT

In the first half of 2015 the Company grew revenue for the third successive reporting period, with gross profit and contribution to overheads both ahead of expectations. The Company continues to make progress executing its new strategy, adopted in 2014, delivering further milestones and laying the foundations for sustained growth.

Revenues for the first six months of the year grew by over 300% to £2.4m compared with £0.7m for the same period last year. Gross profit of £1.4m, or 61%, generated a positive contribution to overheads of £0.7m, compared to a contribution of £0.1m, in the same period last year.

The higher contribution in the period has been offset by increased overheads, reflecting investment in systems, processes, resources and brand development as the business prepares for scale. The resulting EBITDA lossis similar to last year. Exceptional items of £0.1m related primarily to the completion of a reorganisation that commenced at the end of last year. Cash at the period end was £10.7m and the Company had net assets of £17.6m.

Room stock increased 25% in the first half of 2015. At present the Company has just over 800 rooms under management compared to 578 in the same period last year. The increase was composed of 210 new 'Snoozy' pop-up rooms, in addition to the first new Snoozebox event hotel rooms. The Company is reviewing its mix of room inventory, and is currently intending to build a further 150 new Snoozebox event hotel rooms for the 2016 season, which would take the total room inventory to over 950 rooms.

Occupancy rates have exceeded 90% at most events, with a number sold out. The ARR in the period for the Snoozebox hotel rooms was £156, compared with £147 in FY2014. The ARR for the new non-ensuite Snoozy rooms was £76 in its first two months of operation, giving an overall blended ARR of £140.

Progress against strategic objectives

In 2014 the Company set out a new strategy to position the business for long term growth. This has focused on three key objectives:

- Re-deployment of the original 578 Snoozebox hotel rooms on a long term or semi-permanent basis

- Identification of other sectors to apply the portable Snoozebox model on a semi-permanent basis

- Design and development of a new event model capable of generating financial returns

Semi-Permanent

While the original Snoozebox hotel model created the market and proved both demand and pricing, returns from short term events were offset by high deployment costs. The strategy to re-deploy this room stock has focused on finding longer term or semi-permanent opportunities. Just under 300 of the original rooms are currently deployed on a long term basis, the remainder being retained for the 2015 events season to satisfy demand in the events schedule.

The Company has hotels deployed at Silverstone Race Track and at the Eden Project. In H1 2015 Snoozebox successfully opened an 80 bedroom fully serviced workforce hotel for Premier Oil to support its overseas exploration activities. The pipeline of semi-permanent opportunities is strong and the Company is progressing with projects where a further 500 hotel rooms could be deployed on a long term basis, subject to receiving the relevant planning consents.

Although the original Snoozebox room stock was not designed to service the semi-permanent market, based on deployments to date, there is an increasing level of confidence that, when fully deployed, this room stock is capable of generating a contribution that would cover the core central overhead.

The Company is in the process of developing a portable hotel model that is specifically designed for the semi- permanent market.

New sectors for semi-permanent model

The Company created and exhibited a new portable housing model in H1 which has attracted interest from local authorities and the wider market. It has recently been selected by Ealing Council to provide a temporary social housing solution, in partnership with the Mears Group plc, to deliver modular serviced accommodation of c.70 units to meet a requirement for interim and immediate social housing. This project has entered the pre-construction phase, during which the scheme design will be finalised and the planning process commenced. Snoozebox has also designed a portable medical hotel model, in partnership with Compass plc, and is now looking to pilot this model.

New event models

The Company has introduced a flexible operating model and designed new portable hotel rooms capable of being deployed at a lower cost than the original Snoozebox model. In H1 2015, the Company has deployed two new hotel room designs at events: 'Snoozy', a pop-up non-ensuite room, and the new Snoozebox event hotel room. These deployments have enabled the Company to validate the market opportunity and investment case and grow the event footprint. The Company's experience to date in developing the core UK circuit is that it takes around three years to optimise an event deployment. The new room designs have enabled the Company to adopt a strategy of 'trailblazing' in the first year of an event, i.e. using a small number of rooms to showcase, engage with event organisers and appraise the opportunity. The size of the deployment can then be increased with the service offering established and integrated into the event. The third year allows the offering to be refined and the deployment, guest experience and financial return optimised.

There are now three different sleeping accommodation models and a new portable social hub being deployed, compared to one room-type last year. The business has made improvements in service delivery, however the broadening of the event offering, combined with an ambitious scaling of the event footprint has highlighted some aspects of the operating model that require refinement to enable consistent execution of guest experience.

The second half of the year will see further investment in operations and service delivery.

The Snoozebox Event Village was successfully launched at the Isle of Man TT races and has since been deployed for the first time in the film sector and at other events including Glastonbury and the British Grand Prix. The village includes social areas and multiple tiers of sleeping accommodation.

The Company has experienced a considerable increase in engagement and interest in the Snoozebox brand. It is at an early stage in the implementation of a digital media strategy and H1 has already seen substantial growth in its online community and an increasing share of our bookings coming via social media channels. The first six months has also seen the Company recognised by multiple prestigious global awards as an emerging brand and leading in innovation and design in the sector.

Outlook

The growth prospects remain exciting and the Board considers that the development and execution of the Company's strategy will result in a successful and profitable business. The H1 results demonstrate that Snoozebox continues to make solid progress. We have transformed the event offering and strengthened our operating model, in line with our strategy to position the business for sustainable long-term growth.

Semi-Permanent

The Company is currently engaged in planning and contractual negotiations for further workforce accommodation  deployments and its first social housing deployment. These projects require investment in tendering, planning and deployment costs in advance of revenue which may be reflected in the Company's costs in the second half.

Events

The first six months have demonstrated the considerable opportunity in events with an expansion of the event footprint in UK, an entry into Europe and growing interest in its event offering from major international events including Olympic Games, World Cups and other sporting events. The Company anticipates incurring bid and tendering costs in the second half of the year associated with the current international events pipeline. The second half of the year will also see further expansion of the event footprint.

Events in the second half include new events such as Rugby World Cup, Italian F1 Grand Prix, Hockenheim and Oktoberfest.

Unfortunately the Company's site at the Edinburgh Festivals was relocated after the discovery of unsafe material at the original site, prior to deployment. The hotel was deployed at the new site however occupancy and event costs were adversely affected by the relocation.

Looking ahead, the new 'trailblazing' strategy and broader event offering are providing greater visibility and will allow the Company to complete over 30 deployments this year compared to 11 last year.

Summary

With greater visibility, clear growth prospects and an executable event model, the focus in the second half of the year is to establish a robust platform on which to build the brand and scale the business. As a consequence, there will be further expenditure in operations, service delivery and on the blueprint for execution of the brand experience. In the short term, while revenues continue to grow strongly, the Company does not expect to be EBITDA positive in the second half of the year.

1 September 2015

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CONSOLIDATED BALANCE SHEET

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONSOLIDATED CASH FLOW STATEMENT

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. GENERAL INFORMATION

Snoozebox Holdings plc (the 'Company') was incorporated in England and Wales on 30 March 2012 under the Companies Act 2006 (registration number 8013887) and its registered address is 60 Trafalgar Square, London WC2N 5DS.On 1 May 2012, the Company was admitted to the alternative investment market of the London Stock Exchange (AIM) where itsordinary shares are traded. Copies of this Interim Report may be obtained from the registered address or on the investor relationssection of the Company's website at www.snoozebox.com.

2. ACCOUNTING POLICIES

a) Statement of compliance and basis of preparation.

The financial information presented in this Interim Report has been prepared in accordance with the recognition and measurement requirements of International Financial Reporting Standards issued by the International Accounting Standards Board, as adopted by the European Union. The principal accounting policies adopted in the preparation of the financial information in this Interim Report are unchanged from those used in the company's financial statements for the year ended 31 December 2014 and are consistent with those that the company expects to apply in its financial statements for the year ended 31 December 2015.

The financial information for the year ended 31 December 2014 presented in this Interim Report does not constitute the company's statutory accounts for that period but has been derived from them. The Annual Report and Accounts for the year ended 31 December 2014 were audited and have been filed with the Registrar of Companies.

The Independent Auditors' Report on the Annual Report and Accounts for the year ended 31 December 2014 was unqualified and did not draw attention to any matters by way of emphasis and did not contain statements under s498(2) or (3) of the Companies Act 2006. The financial information for the six month periods ended 30 June 2015 and 2014 are unaudited and have not been reviewed by the company's auditors.

The condensed financial statements are presented in sterling and all values are rounded to the nearest thousand pounds (£'000) except where otherwise indicated.

(b) Going concern

The condensed consolidated financial statements have been prepared on a going concern basis, which assumes that the Group will be able to meet its liabilities as they fall due for the foreseeable future. The Group is dependent for its working capital requirements on cash generated from operations and cash holdings.

The cash holdings of the Group at 30 June 2015 were £10,674,000.

The Directors have prepared cash flow projections which are based on certain assumptions. These show that the Group is capableof operating within the financing arrangements referred to above and of meeting its liabilities as they fall due for a period of not lessthan 12 months from the date of these condensed financial statements.

The Directors have therefore continued to adopt the going concern basis in preparing these financial statements. The financial statements do not include any adjustments that would result if the going concern basis was not appropriate.

(c) Presentation of Accounts

The following amendments have been made to the consolidated balance sheet and the consolidated statement of changes in equity for the period ended 30 June 2014, to reflect the treatment adopted in the financial statement of the Company for the year ended 31 December 2014:

The Share premium arising on the issue of new equity shares in the period has been reduced by £1,530,000 and retained earnings increased by the same amount to reflect the fair value of the warrants issued at the same time.

A new category of costs, "Marketing" has been added to the disclosures in arriving at the Loss from Operating Activities to provide a greater clarity of the operational areas in which the costs have been incurred.

3. EXCEPTIONAL ITEMS

Increase in provision for settlement

The Group has a dispute with the solicitors who represented a claimant against the group and has provided

£75,000 in relation to the claim.

Reorganisation costs

During 2015, as a part of a continued strategy to reduce fixed costs, the group further reduced permanent headcount. The cost amounted to £87,000 (2014: £149,000)

New product costs

The Group incurred costs associated with new rooms that were not of a capital nature, these included test deployments, the development of new marketing and sales collateral and other costs associated with the launch programme.

4. LOSS PER SHARE

£'000 £'000 £'000

Number Number Number

5. PROPERTY, PLANT AND EQUIPMENT