Virtual reality group confident of growth once markets reopen
Immotion, the Salford-based virtual reality business, said it expects to resume growth once its markets fully reopen following the coronavirus pandemic.
The company installs its VR headsets in tourist attractions, including aquariums, throughout Europe and the US.
It released its annual results for the year to December 31, 2019, today, which showed an increase in revenues, from £1.948m in 2018 to £3.606m. However, the pre-tax loss deepened, from a loss of £3.807m in 2018 to a pre-tax loss of £5.531m. This included an impairment charge of £458,000 and restructuring and other one-off costs of £427,000.
The burgeoning business said that, despite the uncertainties being caused by COVID-19, it is confident it has passed the “forming and storming” phase of its development and, once normal trading conditions return, is set for profitable growth and establishing itself as a market leader in out of home immersive ‘edutainment’ solutions.
Chief executive, Martin Higginson, said: “2019 was a year of intense activity for the group and our first full year as a listed company. It was only our second full year of trading, since the creation of the group in December 2017.
“As we have learned more about our nascent marketplace, we have adjusted our strategy accordingly.”
He said: “Following the equity fundraise of £2.85m in February 2020, the company was extremely well poised, not only with its honed business model, but also with the imminent installation and expected April 2020 opening of its large format installation into MGM Resort’s Mandalay Bay aquarium in Las Vegas.
“Together with other contracted installs then on hand, we expected to reach EBITDA breakeven in April 2020 and achieve positive operating cash flow shortly thereafter.
“However, during March 2020, and as a direct result of the COVID-19 pandemic, the vast majority of the company’s partner sites and all of our own ImmotionVR sites closed, following local and national government-imposed lockdowns.
“This has resulted in the group having no revenue. At the time of writing, it appears that many sites will remain closed until at least 30 June 2020 and revenue through to 30 June will be zero or minimal.
“In addition to the impact on existing partner and ImmotionVR sites, the company was unable to complete the major installation at Mandalay Bay (36 headsets) which was well under way before lockdown.
“Additionally, we were unable to install into a number of other contracted partner sites – in addition to Mandalay Bay, the company has a further 86 headsets contracted.”
“Beyond the contracted installs noted, we intend to invest very selectively for the remainder of 2020 unless a more rapid recovery emerges.”
He added: “We remain optimistic about our growth prospects once more normal trading conditions return and we believe that potential partners will continue to find our proposition compelling, particularly as many may be capital constrained and looking to re-build revenues.
“As we come out of lockdown and enter the recovery phase, we will continue marketing to prospective new partners, particularly in the aquarium sector in both the USA and Europe.
“We will be cautious as to entering new partnerships, being led by the extent of the wider recovery, as well as the quality of opportunity and commercial terms that can be struck.”
