Much-hyped EVR Holdings falls further on latest results – damp squib or VR pioneer? (EVRH)

By Patricia Miller


Shares in virtual reality (VR) business EVR Holdings (LSE:EVRH) sank 8.1pc to 7.1p this morning following the release of its six-month results for the period ended 30 June. EVR is the holding company for MelodyVR, a music platform that uses virtual reality to simulate the experience of being at a concert and allows fans to purchase digital tickets to sold-out, real-world events.

In its results, EVR reported revenues of £6,831 over the period, which, after subtracting the cost of sales (£218,197) and administrative expenses (£4,183,675), led to an operating loss of c.£4.4m. However, it is worth noting that the firm only launched MelodyVR in the US and Europe a matter of weeks before the end of the reporting period. As chief executive Anthony Matchett, put it:

‘With the launch of the MelodyVR platform occurring only a matter of weeks prior to the end of this reporting period, in tandem with the launch with the world’s first commercially viable standalone VR device, Facebook’s Oculus Go, revenue during the period has been influenced by the initially limited distribution and accessibility of Facebook’s VR Headset.

‘Whilst the MelodyVR platform has been available for only a limited period, I am pleased to report that our early metrics regarding user engagement and conversion rates are extremely encouraging and remain on track with management expectations; with over 72% of MelodyVR’s install base, now having utilised the platform to consume our content.’

Elsewhere, EVR reported that, as of 30 June 2018, it had cash and cash equivalents of c.£26.1m to fund its future expansion and development following a large raise in April, ahead of MelodyVR’s initial launch. At the current rate of cash burn, it anticipated that this will provide more than24 months of funding.

EVR also announced that it has entered into an agreement with Ansco Arena Limited, operator of the O2 arena London, to share revenue from live-streamed and recorded VR content. The deal comes hot on the heels of several additional agreements secured by in recent months – August has seen the business announce a tie-up with concert providers NEC Group and Alexandra Palace. Likewise, during its results period, it secured multi-year agreements with Warner/Chappell Music and Big Machine Label Group, as well as six further publishers and record labels.

Going forward, Matchett said EVR’s focus over the next twelve months is to drive awareness of the MelodyVR platform, in turn developing its user base and further monetising its VR content: ‘With the development and successful launch of a robust and proven technology platform behind us, backed by global licensing agreements with all of the major record labels and exclusive rights of capture at a significant number of the leading music venues and festivals from around the world, our company has never been better positioned for on-going success.

‘These developments provide us with great opportunities in the near term as we move in to the next phase of our company’s development and growth. A strong balance sheet and validation from the music industry and technology sectors, provide us with not only great confidence in being able to successfully execute on this exciting opportunity, but also in realising our goal of building the world’s next major global music service.’

Today’s drop will do little to win over those who believe EVR, a loss-making firm that has only just launched its flagship product, is over-valued. Despite a severe decline over the last few months from highs of c.18p a share, it still has a current market cap of c.£100m despite generating little-to-no-revenue. However, it may present an attractive buying opportunity for those who buy into forecasts of a boom in the VR sector over coming years and EVR’s plans to take advantage through of it in the music and concert space. EVR truly is a speculative punt if there ever was one.

Author: Daniel Flynn

The author does not own shares in the company mentioned in this article


Author: Patricia Miller

This article does not provide any financial advice and is not a recommendation to deal in any securities or product. Investments may fall in value and an investor may lose some or all of their investment. Past performance is not an indicator of future performance.

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