StockMarketWire.com - SpaceandPeople (SAL) said UK and German retail operations are performing in line with expectations.

The UK has seen an increase in venues and we have a strong pipeline of UK venues with whom we are in varying stages of discussion.

The reinvigorated retail offer 'POP Retail' has seen excellent traction so far and we are again currently hitting our internal budgets for this product.

In addition, the mobile promotions kiosk (MPK) achieved its 75th installation and is on track to achieve the budgeted 80-100 installed units in the UK by the end of the year.

The group's core UK and German promotion businesses are also trading in line with expectations and the board is pleased with revenues being generated under the new Network Rail and British Land contracts.

However, S&P+ which operates a venture in a niche sector distinct from SpaceandPeople's core businesses, has now been significantly curtailed and has insufficient prospects in both the short and medium term to allow it to trade profitably.

S&P+ had planned to book substantial business deals in June, which they had been working on for some time. These deals have been both delayed and cancelled entirely by clients.

This has resulted in considerable cash flow constraints for the S&P+ business and the board of SpaceandPeople, which owns 51% of S&P+, does not consider it prudent to continue funding the venture beyond that already provided.

The closure of S&P+ will have an effect on the group's consolidated results for 2016.

The loan of £425,000 that SpaceandPeople has provided to S&P+ will be written off as will approximately £50,000 of intercompany debts resulting in a one-off loss of approximately £275,000.

In addition to this, S&P+ had been expected to contribute £180,000 of profit before taxation (PBT) to the consolidated SpaceandPeople group results for 2016 which will now be a loss of approximately £200,000 instead.

This does not have a negative cash impact on the group and the core business will continue to be cash generative going forward.

The board of SpaceandPeople expects PBT of the group from continuing operations after minority interests and excluding S&P+, in 2016 will be broadly comparable with prior year.




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