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Immotion Group: DEEP DIVE

Immotion revenue surges past £1mln mark in second half, and it’s not done there

The out-of-home VR hardware and content maker turned over more than £1mln in the second half of 2018 with ‘only’ 150 or so headsets in operation, but it wants that figure to climb to over 1,000 by the end of this year
immotion vr racing game
OVERVIEW: IMMO The Big Picture
One headset can generate more than £20,000 per year
  • Makes immersive VR pods and the associated content

  • Revenue share agreements with the likes of Rank Group and Merlin

  • Recently raised £3.3mln to fund next stage of land grab

  • On track to have more than 1,000 seats installed by end of 2019


What it does

Immotion Group PLC (LON:IMMO), which only joined AIM last summer, makes immersive virtual reality ‘pods’ and the content that goes with it.

Customers can put on one of the Immotion headsets, sit in a pod or a racing car, for example, and take in experiences which range from rollercoaster rides to supercar racing right through to fighting alien invaders in space.

The company, which is still a relative tiddler at £12mln, also has an ‘edutainment’ – education and entertainment combined – division. York Museum, for example, used Immotion for its Jurassic exhibition and Sir David Attenborough opened the event feeding a dinosaur in virtual reality.

It has signed revenue-share agreements with a host of household names, such as Grosvenor Casino operator Rank, Thorpe Park parent Merlin Entertainment and Gravity trampoline parks.

Immotion puts its products in their sites and splits the revenue they generate, which can be upwards of £400 per headset per week.

It also sells its products outright to private buyers, operates in its arcades and also licenses out its content and experiences to other companies.


How it’s doing

A quick look at last year’s figures will give you an idea of the kind of trajectory Immotion is on.

It turned over a respectable £100,000 in the first half of 2018, but this rocketed to more than £1mln in the second half of the year as it installed more of its headsets throughout the UK.

Chief executive Martin Higginson is confident that this growth still has a way to go. Immotion currently has 150 or so headsets in operation, but it is on track to take that figure above 1,000 by the end of 2019.

That growth will be fuelled by a recent £3.3mln fundraise, which will help it finance the roll-out of its headsets in more casinos, attractions and shopping centres.

For example, Immotion’s products are only in five of Rank’s casinos at the moment, but that is likely to rise this year, while Merlin recently agreed to put the pods and VR platforms in most of its Lego Discovery Centres, as well as a trial run in three of its Sea Life centres.


What the boss says

Chief executive Martin Higginson thinks shopping centres will be a key revenue stream over the next couple of years as they look to entertainment to reverse slowing footfall.

“Initially we would rent space from shopping centres but now we’re working much more in partnership with them,” Higginson told Proactive.

“So they’re now taking some of the risk. It’s a completely different model than it once was and that has transformed itself over the past year.”

He added: “The reality is shopping malls have got to change if they want to hang on to their audience because it’s no longer just about shopping.

“People still want to go out, but millennials are more into buying experiences now over goods, so we fit very much into that category.”


Blue sky

There is no doubt that the UK is Immotion’s main point of focus and 2019 looks to be an exciting year in this regard, what with the roll-out of its headsets in more Rank casinos and the extension of the agreement with Merlin.

What is just as exciting is the potential abroad. Immotion struck a licensing deal in China earlier this month with its VR hardware supplier in the country.

LEKE VR is paying at least £224,000 over the next year for the right to install two of Immotion’s experiences on its own platforms, while it is paying a further £588,000 for the right to sell 12 experiences to other VR hardware makers in territories where the company has no presence.

The group is targeting more rapid growth across the pond, where it recently opened its first test site in Los Angeles and hopes to have 100 US centres open by the end of 2020.

In November, Immotion made a move into the potentially lucrative Middle East market, having signed an agreement with shopping malls owner Al Hokair Group.

An ImmotionVR Experience is being trialled in Abu Dhabi, but with Al Hokair owning dozens of shopping centres, there is chance for that figure to grow substantially.

As mentioned earlier, Immotion is on track to have more than 1,000 headsets in operation by the end of this year. It is not a particularly seasonal business, either, so there is no reason why the £1mn of sales it generated in the second half of 2018 can’t be surpasses this time around.

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