Time Out pivots to hospitality as losses widen

Time Out Group (TMO), the media and hospitality company, saw pre-tax losses widen in the year to the end of June as exceptional costs connected to site closures stacked up. 

In addition to its websites, the company operates ‘Time Out Markets’ – featuring local food and drink vendors – in cities worldwide. Net revenue growth here rose 48 per cent, but it has encountered its share of operational difficulties.

In June, the group shuttered its Miami market, which made a loss of £2.7mn across the year. In the process, the business incurred more than £7mn in costs, the majority of which related to non-cash impairments of assets.

Time Out also withdrew from negotiations to open a market location in Spitalfields, London – resulting in impairment charges of £1mn. However, the company thinks markets are a promising enterprise, and it has nine contracted sites set to open between 2023 and 2027.

On the media side, it reported digital revenue growth of 44 per cent, and 16 per cent growth in its global monthly brand audience to 83mn. The group closed its remaining print titles last year.

Management has indicated that advertising campaigns on behalf of corporate clients in an expanded range of sectors will be a key growth driver for its media business going forward. Given the uncertain economic outlook, it doesn’t seem like a good time for the company to be pinning its hopes on advertising spend.

While the company says property developers are keen on its markets proposition, we don’t think growth here is certain, either. We think it’s time to sell.

Last IC View: Hold, 55p, 29 October 2021