Spaceandpeo (LONDON:SAL) has been awarded preferred bidder status for brand events, promotions and retail for Network Rail. This is a very prestigious contract that, if awarded, would run for five years and substantially boost the group’s portfolio. There would inevitably be front-end costs associated with setting up the operation, but it gives the group a real step up in accessing above-the-line marketing budgets of major brands. Receiving preferred bidder status in such a high-profile contract is a clear endorsement of the group’s strategy and the effectiveness of events and promotions staged at other heavy footfall locations.
The two parties now enter a 10-day standstill, after which they aim to agree a contract to start on 1 October 2015. We will not be making any alterations to our forecasts prior to public confirmation that the contract has been agreed and signed. With a December year end, it is not likely to have a meaningful impact on current year numbers, although some initial set-up costs may be incurred, with a greater potential effect on FY16 and FY17. With Network Rail increasingly focused on maximising its commercial opportunities, the scale of this potential contract is significant in the group context. The contract for experiential marketing is currently with JCDecaux.
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