REG - Audioboom Group PLC - Final Results
15/04/2024 07:00
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RNS Number : 5241K Audioboom Group PLC 15 April 2024
This announcement contains inside information as stipulated under the UK
Market Abuse Regulations ("MAR").
Audioboom Group plc
("Audioboom", the "Group" or the "Company")
Final audited results for the year ended 31 December 2023
Audioboom (AIM: BOOM), the leading global podcast company, is pleased to
announce its final audited results for the year ended 31 December 2023.
Financial and operating highlights
· 2023 revenue of US$65 million (2022: US$74.9 million)
· Annual adjusted EBITDA((1)) loss of US$0.4 million (2022: US$3.6
million adjusted EBITDA profit)
· Average 2023 global monthly downloads of 121.9 million, up 4% on
2022 (117.1 million)
· Average 2023 monthly brand advertiser count of 7,727 up 47% on
2022 (5,257)
· 2023 eCPM (revenue per 1,000 downloads) of US$45 (2022: US$52.88)
· Group cash at year end of US$3.7 million (31 December 2022:
US$8.1 million), with a further US$1.8 million available via an undrawn
overdraft
· The Company anticipates record revenue in 2024 and a return to
adjusted EBITDA profitability
· Q1 2024 trading update (announced today) details further revenue
growth, adjusted EBITDA profitability and record Q1 eCPM and brand count
Key commercial developments
· Continued strong growth of Showcase, our global advertising
marketplace. Revenue from Showcase in 2023 was more than 35% greater than in
2022 and is now contributing more than 23% to Group revenue (up from 15% in
2022)
· Positive development of our newly launched brand advertising
unit, increasing our customer base with new early-stage commercial
partnerships at 8 of the top 15 biggest US advertising agencies
· Expansion of our creator network through new tier one content
partnerships, including Matt & Shane's Secret Podcast, The Why Files, The
Broski Report, Heart Starts Pounding, Your Mom & Dad, Girls Next Level,
Myths & Legends, and Out of the Pods
· Reduction of more than US$2 million of annual minimum
guarantee obligations beginning 1 January 2024 through the successful
re-structuring of creator partnerships, with further reductions to our minimum
guarantee exposure expected throughout 2024
· Significant expansion of advertising inventory made available
to customers, with October 2023 achieving the milestone of one billion
available advertising impressions. Audioboom now creates more than eight
advertising slots per episode download, positioning the Company to capture
maximum available advertiser demand
· Successful launch of AdVet, a new proprietary tool for our
creators that reduces advertising booking times by more than 60% and optimises
Audioboom's win-rate of brand budgets
Post year-end highlights
· Record audience reach achieved in January 2024, with more
than 38.6 million unique listeners consuming podcasts through the Audioboom
platform
· Record revenue from Showcase, our global advertising marketplace,
in March 2024 reflects the Company's continued progress in building key
advertising technology
· Record advertising inventory levels, with more than 1.1 billion
impressions being made available to customers in March 2024, a 10% increase on
the previously announced record from October 2023 (1 billion)
· Audioboom climbed the February 2024 Triton Digital podcast
ranker for audience reach, and is now the fourth biggest publisher in the US -
the world's largest podcast market
· Audioboom achieved a record level of podcasts in the January
2024 Triton Digital podcast ranker, with the Company publishing 14 of the top
100 US shows
· Successful renewal of contracts with top tier podcasts in the
Audioboom Creator Network, including The Tim Dillon Show, True Crime Obsessed,
I Think Not, Crime Weekly, and Real Ghost Stories. These podcasts contribute
more than 90 million downloads to the network on an annual basis
· Further expansion of the Audioboom Creator Network through
the signing of new shows including: Pretty X Unfiltered, Soder, BDA with
Katherine Schwarzenegger, Omnibus, Do We Know Them?, and George Conway
Explains It All To Sarah Longwell. These shows are expected to deliver more
than 4 million downloads to the network each month
· Reduction of a further US$3 million of annual minimum
guarantee obligations through the successful re-structuring of creator
partnerships
· The expansion of Audioboom's executive team, with the hiring
of Molly Harvey as Vice President of Brand Sales (formerly of SiriusXM and CBS
Radio), and Shaun Wilson as Vice President of UK Sales (formerly of Spotify
and Sony Entertainment). These roles will focus on the expansion of
Audioboom's brand sales business
· The Company has currently contracted revenue of more than
US$55.0 million for 2024, through advance advertising bookings
(1)Earnings before interest, tax, depreciation, amortisation, share based
payments, non-cash foreign exchange movements, material one-off items, and
onerous contract provisions and losses incurred
Enquiries
Audioboom Group plc
Stuart Last, Chief Executive Officer Tel: +44(0)20 3714 4285
Brad Clarke, Chief Financial Officer
Cavendish Capital Markets Ltd (Nominated Adviser and Broker)
Jonny Franklin-Adams/Abigail Kelly/Rory Sale (Corporate Finance) Tel: +44(0)20 7220 0500
Harriet Ward (ECM)
About Audioboom
Audioboom is a global leader in podcasting - our shows are downloaded more
than 135 million times each month by 38 million unique listeners around the
world. Audioboom is ranked as the fourth largest podcast publisher in the US
by Triton Digital.
Audioboom's ad-tech and monetisation platform underpins a scalable content
business that provides
commercial, distribution, marketing and production services for a premium
network of top tier podcasts. Key partners include the official Formula 1
podcasts 'F1: Beyond the Grid' and 'F1 Nation', 'Casefile True Crime' (US),
'True Crime Obsessed' (US), 'The Tim Dillon Show' (US), 'No Such Thing As A
Fish' (UK) and 'The Cycling Podcast' (UK).
Audioboom operates internationally, with global partnerships across North
America, Europe, Asia and Australia. The platform distributes content via
Apple Podcasts, YouTube, Spotify, Pandora, Amazon Music, Google Podcasts,
iHeartRadio, Facebook and Twitter as well as a partner's own websites and
mobile apps.
For more information, visit audioboom.com.
CHAIRMAN'S STATEMENT
I am pleased to introduce these annual results which reflect upon the
Company's resilience and on-going operational improvements during a
challenging 2023, and which highlight the return to growth achieved in the
final quarter of the year that has carried on into the start of 2024.
Whilst it is naturally disappointing to report lower annual revenue and an
adjusted EBITDA loss for the period, the resilience of the business model in a
soft advertising market, constrained by macro economic headwinds, was
illustrated by further growth across certain KPIs and operational areas of
focus. This growth has once again led to increased market share and reinforced
the Company's position as one of the world's largest independent podcast
companies in an industry that continues its rapid maturity into mainstream
media.
The Board is confident that the business is fully primed for further growth
across 2024, with record annual revenues forecast, together with a return to
sustained EBITDA profitability.
In his CEO Review, Stuart Last provides further detail around the Company's
strategy and focus, component parts of the business, operational and financial
performance, the start to 2024 and the outlook for the future.
I would like to take this opportunity to thank the entire Audioboom team for
their continuing professionalism and commitment, and also to thank our
shareholders and partners for their loyalty and vision in supporting Audioboom
as it continues to grow.
Michael Tobin OBE
Chairman
12 April 2024
CHIEF EXECUTIVE OFFICER'S REVIEW
Introduction
2023 will be defined as a year of operational improvements and enhancements to
the Audioboom business model which were recognised in Q4 through a return to
year-on-year top-line growth, a return to adjusted EBITDA positivity, and a
return to cash generation. Our full-year financial performance was down on the
prior year, impacted by further deterioration of the advertising market that
first began in mid-2022 and continued throughout the summer of 2023 with our
customers continuing to reduce their marketing budgets.
Early in the year we identified key areas of the business where enhancements
would increase our resilience to the weaker market and enable the near-term
capture of maximum revenue despite worsening conditions, as well as structural
improvements that would position us to optimise our monetisation once
headwinds eased in the medium to long-term. Key improvements, which I examine
in more detail later in this report, include the launch of a new brand
advertising revenue unit, a drive to accelerate ad inventory generation,
bolstering of our Showcase global marketplace, and the restructuring of
creator contracts on more favourable terms.
We continued to progress our mission to power podcasting for creators in 2023
- launching new technology, tools and services for our podcast partners. We
consolidated our position as the leading global independent podcast publisher,
as well as the leading global pure-play podcast publisher.
We are confident the momentum we saw in the final quarter of 2023 will
continue, delivering further growth and record revenue performance in 2024.
The advancements we made to the business will drive this progress, and I
believe there is further upside potential as the advertising market looks to
makes its initial steps in recovery. Sentiment within the advertising
community has been positive in the early part of the year - and we are
encouraged by the more than US$55m of advertising revenue booked for the year
at this point. I am pleased to provide a more detailed update on 2024 later in
this report.
Strategy
Audioboom powers podcasting. Our platform connects the world's best podcast
content with advertisers, and then distributes it to audiences globally. We
are an indispensable component in podcasting's 3-sided marketplace of
audience, advertiser and creator. Each is important to the successful growth
of the medium individually - but they require Audioboom at the centre to
connect them all, to ensure they operate effectively and to extract maximum
value for all.
The Audioboom platform is efficient and scalable. Today it handles more than
8,000 content channels, 8,000+ advertisers, and receives more than 130 million
episode downloads monthly by a unique audience of more than 38 million.
Our growth strategy continues to focus on the expansion of the Audioboom
Creator Network where we platform the world's leading podcasts. We develop
technology and commercial productions to optimise the value of that content.
Audioboom has developed three clearly differentiated advertising products to
support this content growth:
- Premium Advertising, in which leading podcast hosts endorse
products and brands to their engaged audience natively within their shows.
These ads drive actions in the form of attributable product sales or
awareness. This advertising product is highly effective - the combination of
trusted influencers, engaged audiences, and third-party attribution data - and
enables campaigns to be sold at a premium price point. Our Premium ad product
- sold exclusively by our in-house sales teams in the UK and the US - is a key
driver of revenue for the business, contributing more than 55% to our top-line
in 2023.
- Showcase is our automated tech-driven marketplace which launched
in 2021 and is focused on optimising revenue by monetising back catalogue
content and unfilled premium inventory via Dynamic Ad Insertion (DAI). Our ad
tech consolidates the large supply of advertising inventory we create and
exposes it to a portfolio of demand channels which include international
monetisation partners, a self-serve campaign booking platform, and a
programmatic ecosystem of more than 40 established demand-side platforms
(DSPs) used by the biggest advertising buyers in the world. 2023 was a very
successful year for Showcase - 7 billion advertising impressions were made
available in the marketplace (up from 4 billion in 2022), it delivered more
than 35% revenue growth, and contributed 23% of the Group's revenue (vs 15% in
the prior year).
- Sonic is our brand platform focused on providing tools and
services directly to podcast advertisers. The platform enables brands to
execute high-value advertising campaigns across the world's biggest podcasts,
and provides partners with market-leading insights and ROI data. Sonic has
been a key pillar of Audioboom for the past 4 years, and now contributes 22%
to Group revenue.
Operating Review
Key Performance Indicators
1. Average monthly brand advertiser count of 7,727 in 2023, up 47% on 2022
(5,257)
Brand advertiser count measures Audioboom's active customers across our
advertising products. Key drivers of this KPI growth include: expansion of
Showcase marketplace; addition of new content genres to widen brand appeal;
development of relationships with new brands and agencies; overall market
growth and expansion of brands advertising in podcasts.
2. e-CPM (revenue per 1,000 downloads) in 2023 of US$45 (2022: US$$52.88)
e-CPM is a measure of the value we extract from every 1,000 downloads on the
platform, and how we optimise the supply of available advertising inventory.
Growth drivers for this KPI include: increasing fill rates; increasing
pricing; increased use of AdRip inventory creation tool; contracting of
back-fill inventory in new and renewal partnership agreements. e-CPM was
negatively impacted during 2023 by continued deterioration of the advertising
market, but corrected course in Q4 where the e-CPM reached US$58.82.
3. Average monthly downloads in 2023 up 4% to 121.9 million (117.1 million in
2022)
Global monthly downloads is an industry standard metric. It is a measure for
the scale of our platform, and enables accurate comparisons to be drawn with
our competitors. This data point is measured using the Interactive Advertising
Bureau's most recent Podcast Measurement Standard and is verified by Triton
Digital - a leader in audio measurement. In September 2023, Apple's iOS17
update removed automatic downloading of back-catalogue content, negatively
impacting downloads across the industry by an average of 32%. This change in
consumption data will provide long-term revenue upside opportunities due to
the increased return-on-investment brands advertising in podcasting will see
through more accurate audience data.
Operational Improvements
Brand Advertising Unit Launch
Podcasting's growth between 2015 and 2022 was strongly fuelled by direct
response or performance marketing advertisers. These brands are characterised
as smaller, direct-to-consumer businesses, in growth mode who are disrupting
their sectors. Utilising trusted, influential podcast hosts with loyal,
engaged fan-bases to endorse their product enables these brands to deliver
strong ROI (return on investment), with product sales measured through
promotional codes, vanity URLs and attribution technology. Early in the
advertising market downturn it became clear that these brands were deeply
impacted by the macro environment, with most cutting back their marketing
budgets and many exiting the podcast space completely.
Audioboom identified the need to expand its customer base beyond these direct
response advertisers, and launched a new sales unit focused on building
partnerships with brand advertisers. Brand advertisers are more established
businesses, often operating globally. Their advertising strategy is geared
towards generating awareness of their brand rather than being a direct sales
channel, and they are more resilient to economic changes.
Initial traction from the brand awareness unit can be seen in early-stage
partnerships at 8 of the top 15 digital ad agencies in the US, and I expect
continued customer development through this initiative in 2024.
Audioboom Creator Network
Audioboom successfully expanded its creator network in 2023, achieving record
monthly consumption (global downloads KPI) and set a new record audience reach
of more than 38 million unique monthly listeners. As a result of this growth
Audioboom recorded its highest positions on both Edison Research and Triton
Digital's podcast publisher rankers during the year.
The network development environment remains very competitive with the majority
of top tier creator partnerships being brokered by the Hollywood talent
agencies (UTA, WME, CAA) and requiring guaranteed financial packages to secure
commercial rights to these podcasts. Audioboom has focused on utilising the
value of its core services, including marketing, distribution, technology and
production, to ensure financial commitments to creators are kept at a minimal
level while remaining competitive.
Across 2023 we formed exclusive new partnerships with top tier podcasts
including Matt & Shane's Secret Podcast, The Why Files, The Broski Report,
Heart Starts Pounding, Your Mom & Dad, Girls Next Level, Myths &
Legends, and Out of the Pods.
Inventory Exploitation
Beginning in early 2023, the Company began an initiative designed to maximise
the value of our content through heightened extraction of advertising
inventory, in order to combat the weakening ad market. This piece of work
involved the restructuring of contracts with creators, further roll-out of our
proprietary AdRip inventory creation tool, a re-education process for our
8,000 creators, and the focused development of our ad tech marketplace. In
2022 we created 5.3 available advertising impressions from each download - or
to put it another way, each podcast episode averaged 5.3 ad breaks. By
December 2023 we had increased this number to 8 - a significant 51% increase
in the level of inventory our platform creates. In October 2023 we achieved
the milestone of making 1 billion advertising impressions available for
buyers.
Audioboom Studios
In early 2023, we restructured our production arm, refocusing it as a
production-as-a-service unit in order to align its function with our wider
creator-first business. Previously, Audioboom Studios had focused on
developing original content in the US and the UK. This development and
production process involved upfront investment, marketing costs, and a
significant lag-time before revenue could be realised. Additionally between
2020 and 2022, as a result of the Covid-19 pandemic, more than 2 million new
podcasts were launched making competition for listeners more challenging and
raising the costs of audience acquisition.
In its new production-as-a-service form, Audioboom Studios is able to
meaningfully support the work of our creators. It is often a differentiator in
our partnerships with top tier talent, enabling us to secure new podcasts to
the network, develop more equitable relationships, and operate contracts on
more favourable terms to the Company. In 2023 Audioboom Studios deepened its
flagship production partnership with Formula 1, and will produce the official
F1 podcasts until 2026.
Contract Restructuring
As previously noted, acquiring top tier podcasts for the network requires a
commitment to provide the creator with a minimum revenue guarantee. During the
advertising market downturn, lower sales resulted in Audioboom needing to
utilise its share of ad revenue to satisfy a small number of podcaster minimum
guarantees. This impacted the Company's gross margin on those shows. In order
to reduce this risk should the weaker market persist, as well as improve our
gross margin, a number of podcaster contracts were restructured during the
year and we have removed more than US$5 million of minimum guarantee
obligations for 2024.
Additionally, we increased the Audioboom share of revenue in new podcaster
deals signed in 2023. This has led to an improvement in our total contracted
revenue share across the Company to 24% - up from 20% in 2022.
These key changes have dramatically improved the operational health of the
business, ensuring that we continue to grow and setting us up to capture
maximum value from our platform. This work has already positively impacted our
performance, returning us to year-on-year revenue growth in Q4, delivering the
strongest revenue quarter since early 2022, returning us to adjusted EBITDA
positivity, and generating positive cash once again. These initiatives will
deliver further benefits in 2024 where we are focused on a record annual
performance.
Overview of the Market
Podcasting continues on its path of structural growth despite negative
headlines in 2023 that focused on unsuccessful acquisitions and investments in
the space from large media companies. This structural industry growth is
driven by increases in audience numbers and audience engagement levels. People
love podcasting and that is highlighted in key data points(1);
· The number of podcast listeners in the US increased by 47%
between 2019 and 2023
· Podcast listeners increased the time they spend listening to
podcasts during that time-frame by 50%
· This results in total consumption of podcasts increasing by 120%
over the past 4 years.
This significant jump in consumption - and therefore revenue opportunity
including sales of advertising inventory - is set to play out with a
quadrupling of podcasting's Total Addressable Market (TAM) between now and
2030(2). In 2023, the global podcast industry TAM was $4 billion. By 2030
this is set to rise to $16 billion, providing generational opportunity for
businesses such as Audioboom who are primed to capture a share of this value.
Audioboom's position amongst the world's leading podcast businesses is
highlighted by three trusted measurement services - Triton Digital's Podcast
Reports, Podtrac's Podcast Ranker, and Edison's Top Podcast Networks chart:
· In Edison Research's list of largest podcast networks, Audioboom
ranks as 5(th) for 2023, only beaten by Spotify, SiriusXM, Amazon and
iHeartMedia. Edison's list is the only ranker that measures all podcast
companies.
· In Triton Digital's US ranker Audioboom is currently the fourth
largest publisher in terms of unique audience reach
· Audioboom would rank as the second largest podcast publisher if
the Company opted-in to Podtrac's industry ranker, on both metrics - US unique
audience and global monthly downloads.
On each measurement service Audioboom ranks as the highest independent podcast
publisher, as well as the highest ranking pure-play podcast publisher.
2023 saw a very low level of M&A and investment activity across the
industry. There were no notable acquisitions in the space, with the only
noteworthy transaction involving the public listing of Podcast One in
September 2023, now trading on Nasdaq.
We are confident that the structural growth of the medium and the sharp
increase of the Total Addressable Market will lead to M&A activity
reigniting during the next 12 months. Audioboom's business model, structure
and performance continues to provide strong optionality on our future path.
Our global scale and ownership of technology and commercial services will make
us an attractive proposition for major media or technology businesses looking
to fast-track a leadership position in podcasting. Alternatively, our business
model sees us set for continued growth and a strong future as the leading
independent player in the space. As always, the Board will continue to strive
to deliver maximum shareholder value.
(1)Source: Edison Research Infinite Dial study 2024
(2)Source: Grand View Research, Podcast Market Size, Share, Trends &
Growth Report 2030
Financial Review
Total revenue for 2023 of US$65 million (2022: US$74.9 million) reflected a
softer advertising market during the year and the loss of the Morbid podcast
in May 2022. Faced with these challenges, the Company implemented many
operational improvements and enhancements during the year and in Q4 2023
delivered revenue growth versus both Q3 2023 and Q4 2022, as well as
delivering an adjusted EBITDA profit in Q4 2023. The impacts of a softer
advertising market were seen specifically in the second and third quarters and
it was testament to the Audioboom team that, despite these challenges, Q4
represented the highest revenue quarter since Q2 2022 at the start of the
advertising market downturn.
In 2023, the Company recognised an adjusted EBITDA (earnings before interest,
tax, depreciation, amortisation, share based payments, non-cash foreign
exchange movements and before exceptional items, including the provision for,
and losses on, two onerous contracts) loss of US$0.4 million (2022: adjusted
EBITDA profit of US$3.6 million). Cash reduced year-on-year to US$3.7 million,
however, Q4 saw a return to quarter-on-quarter cash generation, increasing
from US$3.4 million at the end of Q3.
In 2023, as in the prior year, the vast majority of Group revenue (97%) was
generated in the United States - which is the largest and most developed
market for podcasting. There was exceptional growth once again in Showcase
revenue, which was up 35% year on year, and Sonic Integrated Marketing
increased its Group revenue contribution to 22%.
Group gross margin, excluding the impact of onerous contracts (described
below), was 17% (2022: 19%). During the advertising market downturn, lower
sales revenue resulted in the Company needing to utilise its share of
advertising revenue to satisfy a small number of podcaster minimum guarantees
which in turn impacted the gross margin recognised. This, combined with the
increased revenue contribution of Sonic Integrated Marketing, which recognised
a 16% gross margin, led to the lower gross margin in 2023.
The Company continued to control overheads very well during the year and we
continue to align staff globally to ensure that every employee contributes to
the growth of the business. Despite inflationary pressures across the
business, the Company was able to report opex (excluding interest, tax,
depreciation, amortisation, share based payments, non-cash foreign exchange
movements and material one-off items) of US$10.4 million, slightly lower than
in 2022 (US$10.6 million). We continue to monitor the cost base closely and
align it to the Company's operational demands and this will continue into 2024
as we focus on areas that we believe can drive further revenue growth. The
average headcount for 2023 was 39 and this is not expected to materially
increase during 2024.
The total loss before tax for the year was US$16.8 million versus the prior
year loss of US$0.4 million, mainly due to the US$7.4 million provision for
the future estimated net loss of two onerous contracts and the US$5.1 million
loss incurred on the two contracts in 2023. The ad rates that have been
commanded, and the future ad rates that are likely to be commanded, are lower
than those modelled when these contracts were signed, due to advertising
markets being more challenging for longer than anticipated. In light of
revenue growth being lower than projected at the previous reporting date, it
is now assumed that it is unavoidable that the contracts will generate a net
loss through to their conclusions in January and July 2025 respectively and as
such have been recognised as onerous.
The Company saw a cash outflow from operating activities of US$4.5 million
(2022: cash inflow of US$3.2 million), mainly due to softer ad market
conditions and servicing of all partner minimum guarantee obligations. The
Company continues to operate an extremely efficient working capital cycle
which is now well established in terms of processes built and refined over the
last six years. Debtor collections continue to be strong and, over the last
four years, collections have averaged 95% of revenue recognised in the year.
In 2023, debtor days of 81 are reported, 13 higher than the 68 reported in
2022, with the increase being due to the return to revenue growth in the final
quarter of 2023. We continue to remain below our ongoing debtor day target of
90 days. The Company continues to incur very minimal bad debt write offs
(US$0.1 million in 2023 and US$0.2 million in 2022) and average payable days
increased to 68 in 2023 from 54 in 2022, again due to the return to revenue
growth in Q4 which led to an increase in year-end partner payments that have
been satisfied in Q1 2024.
The Company ended 2023 with cash of US$3.7 million. In addition, the Company
had access to a US$1.9 million undrawn overdraft with HSBC. Therefore, the
Company had access to circa US$5.6 million going into 2024, with the Company
being fully funded for its current growth trajectory.
Outlook
2024 is set to be a record year for Audioboom, and - as I highlight in our
Q1 2024 Trading Update, released today - we are perfectly positioned to
achieve these goals after positive trading in the first 3 months of 2024 in
which we delivered revenue of US$17.1 million (up 11% on Q1 2023: US$15.4
million) and adjusted EBITDA profit of US$0.1 million. I expect the revenue
growth rate to accelerate through upcoming quarters, and EBITDA profit to grow
accordingly.
I am buoyed by the US$55 million of advertising that we currently have booked
for the year. This compares with the US$50 million booked at the same stage
last year but, in relative terms, we are even further ahead, as in 2023
approximately US$7 million of advertising campaigns were cancelled between
April and September due to ad market deterioration.
In 2024 our main investment will be into our sales operation, specifically the
growth of our brand awareness team tasked with bringing a new group of
blue-chip customers to Audiobooom. We recently announced the hiring of 2 key
executives - Shaun Wilson, formerly of Sony Entertainment and Spotify, in
the role of Head of UK Sales and Molly Harvey, formerly of SiriusXM and CBS
Radio in the role of Vice President of Brand Sales.
Operationally 2024 has started well. In January we hit a new record user
number with 38.6 million unique listeners downloading content from Audioboom.
Our creator network continues to grow with recently announced new signings
including Pretty X Unfiltered, Soder, BDA with Katherine Schwarzenegger,
Omnibus, Do We Know Them? and George Conway Explains It All To Sarah Longwell
expected to add more than 4 million downloads to the network each month. Our
pipeline of new business remains strong, and we expect to convert this
opportunity to new podcaster partnerships throughout the year.
We continue to focus on the core operational improvements we initiated last
year. Alongside the growth of our brand advertising unit and expansion of our
creator network, the upward momentum of Showcase, the further exploitation of
advertising inventory levels, and the continued growth of our Sonic brand
platform, we are forecasting record revenue in 2024.
Record revenue, combined with the improved podcaster revenue shares and
removal of more than US$5 million of minimum guarantee obligations through
contract restructuring, is expected to take us back to a position of EBITDA
profitability for the full year and as a Board, look to the future with
confidence.
We are committed to delivering these financial goals despite still operating
in a weakened advertising market. Any meaningful recovery in the ad market
would bring further upside.
Audioboom is building the world's leading podcasting business, and I am
pleased with the start we have made in 2024. I look forward to the future with
renewed confidence and would like to thank our creators, clients, customers
and partners, as well as our incredibly talented Audioboom team and our
supportive shareholders.
Stuart Last
Chief Executive Officer
12 April 2024
AUDIOBOOM GROUP PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
Notes Majority of business Onerous contracts 2023 2022
US$'000 US$'000
Continuing operations
Revenue 2 58,788 6,242 65,030 74,879
Cost of sales (48,775) (11,329) (60,104) (60,667)
Cost of sales - contract provision 19 - (7,499) (7,499) -
----------------- ----------------- ----------------- -----------------
Gross (loss) / profit 10,013 (12,586) (2,573) 14,212
Other income - forgiven loan liability - 374
Administrative expenses (14,078) (14,909)
----------------- -----------------
Adjusted EBITDA (loss) / profit - Non-GAAP (396) 3,591
- Share based payments 17 (2,807) (4,358)
- Depreciation (33) (47)
- Depreciation - leases 14 (239) (250)
- Operating foreign exchange (loss) / gain (497) 1,141
- Contract settlement - (400)
- Onerous contracts net loss 19 (5,087) -
- Onerous contracts provision 19 (7,499) -
- Restructuring costs (93) -
---------------- ----------------
Operating loss 3 (16,651) (323)
Finance income 16 (106)
Finance costs 6 (119) (106)
---------------- ----------------
Loss before tax (16,754) (429)
Taxation on continuing operations 7 (2,672) (328)
---------------- ----------------
Loss for the financial period attributable to equity holders of the parent (19,426) (757)
---------------- ----------------
Other comprehensive loss
Foreign currency translation difference 1,076 (2,233)
---------------- ----------------
Total comprehensive loss for the period (18,350) (2,990)
======== ========
Loss per share
from continuing operations
Basic and diluted EPS 8 (118.8) cents (4.7) cents
============ ============
All results for both periods are derived from continuing operations.
AUDIOBOOM GROUP PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER
2023
As at 31 December 2023 As at 31 December 2022
Notes US$'000 US$'000
ASSETS
Non-current assets
Property, plant and equipment 9 30 59
Right of use asset 14 1,117 329
Deferred tax asset 7 1,581 3,609
--------------- ---------------
2,728 3,997
Current assets
Trade and other receivables 11 16,328 16,013
Cash and cash equivalents 3,726 8,067
Deferred tax asset 7 395 805
--------------- ---------------
20,449 24,885
------------------- -------------------
TOTAL ASSETS 23,177 28,882
------------------- -------------------
Current liabilities
Trade and other payables 12 (12,399) (10,614)
Provision - - (400)
Onerous contract provision 19 (5,046) -
Lease liability 14 (68) (278)
------------------- -------------------
NET CURRENT ASSETS 2,936 13,593
------------------- -------------------
Non-current liabilities
Lease liability 14 (1,042) (80)
Onerous contract provision 19 (2,453) -
------------------- -------------------
NET ASSETS 2,169 17,510
========= =========
EQUITY
Share capital 13 - -
Share premium 13 63,104 62,902
Issue cost reserve (2,048) (2,048)
Foreign exchange translation reserve (1,426) (2,502)
Reverse acquisition reserve (3,380) (3,380)
Retained earnings (54,081) (37,462)
---------------- ----------------
TOTAL EQUITY 2,169 17,510
======== ========
The accompanying accounting policies and notes form an integral part of these
financial statements.
These financial statements for Audioboom Group plc (Jersey company
registration number 85292), which comprise the Consolidated Statement of
Comprehensive Income, the Consolidated Statement of Financial Position, the
Consolidated Statement of Cash Flow, the Consolidated Statement of Changes in
Equity and related notes 1 to 22 were approved and authorised for issue by the
Board of Directors on 12 April 2024 and were signed on its behalf by:
Brad Clarke
Chief Financial Officer
AUDIOBOOM GROUP PLC
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
2023 2022
US$'000 US$'000
Loss from continuing operations (19,426) (757)
---------------- ----------------
Loss for the period (19,426) (757)
Adjustments for:
Tax charge 2,672 328
Interest payable 119 106
Interest received (16) -
Depreciation of fixed assets 33 47
Depreciation of right of use assets 239 -
Share based payments 2,807 4,358
(Increase) / decrease in trade and other receivables (316) 2,134
Increase / (decrease) in trade and other payables 1,387 (1,154)
Decrease in lease liability - (269)
Increase in onerous contract provision 7,499 -
Foreign exchange gain / (loss) 831 (1,557)
---------------- ----------------
Cash flows (used in) / from operating activities (4,171) 3,236
Investing activities
Purchase of property, plant and equipment (7) (29)
---------------- ----------------
Net cash used in investing activities (7) (29)
---------------- ----------------
Financing activities
Principle lease payments (365) -
Proceeds from issue of ordinary share capital 202 1,891
---------------- ----------------
Net cash generated from financing activities (163) 1,891
======== ========
Net increase / (decrease) in cash and cash equivalents (4,341) 5,098
---------------- ----------------
Cash and cash equivalents at beginning of period 8,067 2,969
---------------- ----------------
Cash and cash equivalents at end of period 3,726 8,067
======== ========
The Group had no borrowings at the end of either financial period and
therefore no reconciliation of net debt has been provided.
AUDIOBOOM GROUP PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
Share capital Share premium Issue cost reserve Reverse acquisition reserve Foreign exchange translation reserve Retained earnings Total equity
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
------------------- ------------------- ------------------- ------------------- ------------------- ------------------- -------------------
At 31 December 2021 - 61,011 (2,048) (3,380) (270) (41,063) 14,250
------------------- ------------------- ------------------- ------------------- ------------------- ------------------- -------------------
Loss for the period - - - - - (757) (757)
Issue of shares - 1,891 - - - - 1,891
Equity-settled share-based payments - - - - 4,358 4,358
-
Foreign exchange loss on translation of overseas subsidiaries - - - - (2,232) - (2,232)
------------------- ------------------- ------------------- ------------------- ------------------- ------------------- -------------------
At 31 December 2022 - 62,902 (2,048) (3,380) (2,502) (37,462) 17,510
------------------- ------------------- ------------------- ------------------- ------------------- ------------------- -------------------
Loss for the period - - - - - (19,426) (19,426)
Issue of shares - 202 - - - - 202
Equity-settled share-based payments - - - - 2,807 2,807
-
Foreign exchange loss on translation of overseas subsidiaries - - - - 1,076 - 1,076
------------------- ------------------- ------------------- ------------------- ------------------- ------------------- -------------------
At 31 December 2023 - 63,104 (2,048) (3,380) (1,426) (54,081) 2,169
------------------- ------------------- ------------------- ------------------- ------------------- ------------------- -------------------
Share premium
Share premium represents the consideration paid for shares in excess of par
value (nil), less directly attributable costs.
Issue cost reserve
The issue cost reserve arose from expenses incurred on share issues.
Reverse acquisition reserve
The reverse acquisition reserve relates to the reverse acquisition of
Audioboom Limited by Audioboom Group plc on 20 May 2014.
Foreign exchange translation reserve
The foreign exchange translation reserve is used to record exchange
differences arising from the translation of the financial statements of
foreign operations.
Retained earnings
Includes all current and prior period retained profits and losses and equity
settled share-based payment charges.
AUDIOBOOM GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
1. ACCOUNTING POLICIES
General information and basis of preparation
Audioboom Group plc is incorporated in Jersey under the Companies (Jersey) Law
1991. The Company's shares are traded on AIM, the market of that name,
operated by the London Stock Exchange. The Company is required under rule 19
of the AIM Rules for Companies to provide shareholders with audited
consolidated financial statements.
The Group prepares its consolidated financial statements in accordance with
International Financial Reporting Standards and International Accounting
Standards as issued by the International Accounting Standards Board (IASB) and
Interpretations (collectively IFRSs). The financial statements have been
prepared on the historical cost basis. The consolidated financial statements
have been prepared in accordance with and in compliance with the Companies
(Jersey) Law 1991, an amendment to which (Amendment No. 4 s. 105(11) - 2009)
means separate parent company financial statements are not required.
These results are audited, however the financial information set out in this
announcement does not constitute the Group's statutory accounts for the period
ended 31 December 2023, but is derived from the 2023 Annual Report &
Accounts. The auditors have reported on those accounts; their report was
unqualified.
The preparation of financial statements in accordance with IFRS requires the
use of estimates and assumptions that affect the reported amounts of assets
and liabilities, and disclosure of contingent assets and liabilities, at the
date of the financial statements and the reported amounts of revenue and
expenses during the reporting period. Although these estimates are based on
management's best knowledge of current events and actions, actual results may
ultimately differ from those estimates.
New and amended IFRS Accounting Standards that are effective for the current
year
In the current year, the Group has applied a number of amendments to IFRS
Accounting Standards issued by the International Accounting Standards Board
(IASB) that are mandatorily effective for an accounting period that begins on
or after 1 January 2023. Their adoption has not had any material impact on the
disclosures or on the amounts reported in these financial statements.
· IAS 1: Classifications of Liabilities as Current or Non-Current
(effective for periods commencing on or after 1 January 2023);
· IAS 1 and IFRS Practice Statement 2: Disclosure of Accounting
Policies (effective for periods commencing on or after 1 January 2023);
· IAS 8: Definition of Accounting Estimates (effective for periods
commencing on or after 1 January 2023); and
· IAS 12: Deferred Tax related to Assets and Liabilities arising
from a Single Transaction (effective for periods commencing on or after 1
January 2023).
New and revised IFRS Accounting Standards in issue but not yet effective
Certain standards, amendments to, and interpretations of, published standards
have been published that are mandatory for the Group's accounting years
beginning on or after 1 January 2024 or later years and which the Group has
decided not to adopt early:
· IFRS 7 and IAS 7: Supplier Finance Arrangements (effective for
periods commencing on or after 1 January 2024);
· IAS 1: Non-current liabilities with covenants (effective for
periods commencing on or after 1 January 2024).
None of the above listed changes are anticipated to have a material impact on
the Group's financial statements.
AUDIOBOOM GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
ACCOUNTING POLICIES (continued)
Key accounting policies
Going concern
The financial statements have been prepared on the going concern basis, which
assumes that the Group will have sufficient funds to continue in operational
existence for at least twelve months from the date of approval of the
financial statements. The Group ended the year with access to US$3.7 million
of cash and a US$1.8 million HSBC overdraft remaining available to draw down.
The overdraft is subject to an annual renewal process and has a renewal date
of 30 June 2024. At the date of this report, there is no indication that the
HSBC overdraft will not be renewed, but should the HSBC overdraft not be
renewed, then the Board believes that it would be able to obtain alternative
financing options that can be called upon, if required. The Board's forecasts
for the Group, including due consideration of the business forecasting a
return to positive adjusted EBITDA in 2024, projected increase in revenues and
cash utilisation of the Group and taking account of reasonably possible
adverse changes in trading performance, including changes outside of expected
trading performance, indicate that the Group will have sufficient cash and
financing facilities available to continue in operational existence for the
next 12 months from the date of approval of the financial statements and
beyond. This includes considering those partner contracts that have minimum
guarantees attached to them and assessing whether there will be any adverse
effect should there be prolonged adverse trading performance. Based on the
Board's forecasts, the Group considers that it will not require additional
funding for the foreseeable future for the purposes of meeting its liabilities
as and when they fall due. The Board believes that the Group is well placed to
manage its business risks, and longer-term strategic objectives, successfully.
Management has carried out sensitivity analyses of the Group's cash flow
models to assess the impact of a range of possible outcomes, including lower
than anticipated revenues, and the mitigations that the Group has available to
it, including a reduction in overhead costs, active working capital management
and the availability of finance from HSBC. Accordingly, the Directors are
satisfied that the Group will continue to be able to meet its ongoing
liabilities as and when they fall due in reasonably foreseeable circumstances.
Therefore, the Directors consider the going concern basis of preparation of
these financial statements appropriate.
Revenue
Revenue represents amounts receivable for services provided in the normal
course of business, and excludes intra-group sales, Value Added Tax and trade
discounts.
Revenue is recognised when the amount of revenue can be measured reliably, it
is probable that the economic benefits associated with the transaction will
flow to the entity, the costs incurred or to be incurred can be measured
reliably, and when the criteria for each of the Group's different activities
has been met. Revenue comprises:
l Sale of advertising: the value of goods and services is recognised on
broadcast of the podcast
l Sale of subscriptions: the value of goods and services is recognised
across the period of subscription
The Directors have considered the requirements of IFRS 15 in respect of
multiple performance obligations within one contract and have not identified
any such instances. There are no contracts which incorporate variable or
contingent consideration.
The Group entities, Audioboom Limited and Sonic Influencer Marketing, are both
considered to be the principal entity in terms of revenue recognition. The
entities set or communicate the advertising pricing that is required to
advertise on represented podcast content, contracts directly with the brand or
agency to secure the advertising and confirms the date at which that
advertising will be allocated. The entities are also responsible for invoicing
and collecting payment from customers who have booked advertising slots and
furthermore bear inventory risk associated with advertising slots acquired but
not sold.
Content partner minimum revenue guarantees
In order to attract and retain leading podcast partners, the Group offers
certain partners minimum revenue guarantees ("MG") over the life of the
agreement between the parties. The MG offers guaranteed revenue over the life
of the agreement in the form of monthly payments and/or an upfront advance
payment, which is then recouped over the life of the agreement, thus reducing
future expected payments proportionally. The MGs provided secure the right of
access to future content and therefore the expenditure in relation to these
guarantees is recognised over the term of the contract, as this is the period
over which the content providers' obligations are discharged to the Group and
accordingly the basis
AUDIOBOOM GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
ACCOUNTING POLICIES (continued)
on which the Group consumes the benefit of these obligations. In accordance
with IFRS 9, no liability is recognised at the date of the contract as the MG
relates to future performance obligations of the content provider.
Should a contract be considered onerous (i.e., it is expected to give rise to
an unavoidable loss) then that loss is provided for at the reporting date if
the contract and conditions associated with it were in place at the year end.
Should a multi-year contract generate a revenue share that is lower than the
MG in the initial stages of the contract but is expected to generate revenue
share that is higher than the MG over the entire length of the contract, the
payments made will be held as an asset on the balance sheet.
Foreign currency
For the purpose of the consolidated financial statements, the results and
financial position of each Group company are expressed in US Dollars, which is
the presentational currency of the consolidated financial statements. The
majority of trade in the Company is recognised in Audioboom Limited, whose
functional currency is sterling, along with the Audioboom Group plc entity.
These entities are consolidated at a Group level in US Dollars, along with
Audioboom Inc and Austin Advertising Inc, whose functional currency is US
Dollars.
In preparing the financial statements of the individual companies,
transactions in currencies other than the entity's functional currency
(foreign currencies) are recorded at the rates of exchange prevailing on the
dates of the transactions. At each balance sheet date, monetary assets and
liabilities that are denominated in foreign currencies are retranslated at the
rates prevailing on the balance sheet date. Non-monetary items that are
measured in terms of historical cost in a foreign currency are not
retranslated.
Exchange differences arising on the settlement of monetary items, and on the
retranslation of monetary items, are included in profit or loss for the
period.
For the purpose of presenting consolidated financial statements, the assets
and liabilities of the Group's foreign operations are translated at exchange
rates prevailing on the balance sheet date. Income and expense items are
translated at the average monthly rate of exchange ruling at the date of the
transaction, unless exchange rates fluctuate significantly during that month,
in which case the exchange rates at the date of the transactions are used.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation
and impairment losses, if any.
Depreciation is calculated under the straight-line method to write off the
depreciable amount of the assets over their estimated useful lives.
Depreciation of an asset does not cease when the asset becomes idle or is
retired from active use unless the asset is fully depreciated. The principal
annual rates used for this purpose are between three and five years.
The depreciation method, useful lives and residual values are reviewed, and
adjusted if appropriate, at the end of each reporting period to ensure that
the amounts, method and years of depreciation are consistent with previous
estimates and the expected pattern of consumption of the future economic
benefits embodied in the items of the property, plant and equipment.
Subsequent costs are included in the asset's carrying amount or recognised as
a separate asset, as appropriate, only when the cost is incurred, and it is
probable that the future economic benefits associated with the asset will flow
to the Group and the cost of the asset can be measured reliably. The carrying
amount of parts that are replaced is derecognised. The costs of the day-to-day
servicing of property, plant and equipment are recognised in profit or loss as
incurred. Costs also comprise the initial estimate of dismantling and removing
the asset and restoring the site on which it is located for which the Group
are obligated to incur when the asset is acquired, if applicable.
Leases
Leases of property for periods longer than one year are capitalised at the
fair value of the leased property (disclosed as a right of use asset on the
face of the statement of financial position) with the corresponding rental
obligations, net of finance charges, included in current and non-current
liabilities. The fair value of the lease asset and corresponding liability is
calculated as the present value of the minimum value of lease payments for
which the Group will become liable, discounted at a rate considered
appropriate.
AUDIOBOOM GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
ACCOUNTING POLICIES (continued)
Lease rental payments are split between a reduction in the lease liability and
finance cost, with depreciation charges of the right of use asset over its
useful economic life recognised as an expense in the Group's income statement.
Payments made under operating leases, where the risks and rewards are not
transferred to the Group, are recognised as an expense in the income
statement.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits and other
short-term, highly liquid investments that are readily convertible to a known
amount of cash and are subject to an insignificant risk of changes in value.
Basis of consolidation
The consolidated financial statements consolidate the financial statements of
Audioboom Group plc and all its subsidiary undertakings up to 31 December
2023, with comparative information presented for the year ended 31 December
2022. No profit and loss account is presented for Audioboom Group plc as
permitted by Companies (Jersey) Law 1991.
Subsidiaries are all entities over which the Group has the power to control
the financial and operating policies and is exposed to or has rights over
variable returns from its involvements with the investee and has the power to
affect returns. Audioboom Group plc obtains and exercises control through more
than half of the voting rights for all its subsidiaries. All subsidiaries have
a reporting date of 31 December and are consolidated from the acquisition
date, which is the date from which control passes to Audioboom Group plc.
The results of associate undertakings are consolidated under the equity method
of accounting. The Group applies uniform accounting policies and all
intra-group transactions, balances, income and expenses are eliminated on
consolidation.
Share based payments
Where share options are awarded to employees, the fair value of the options at
the date of grant is charged to the statement of comprehensive income on a
straight-line basis over the vesting period. Non-market vesting conditions are
taken into account by adjusting the number of options expected to vest at each
statement of financial position date so that, ultimately, the cumulative
amount recognised over the vesting period is based on the number of options
that eventually vest. Market vesting conditions are factored into the fair
value of the options granted. The cumulative expense is not adjusted for
failure to achieve a market vesting condition.
Warrants
Warrants issued to Directors, employees and third-party suppliers are measured
at the fair value of the service provided with reference to comparable cash
settled transactions or, where the value of the services provided is
uncertain, with reference to an appropriate valuation methodology. Warrants
are ascribed a value at the date of grant, with this value recognised as an
expense in the statement of comprehensive income over the relevant vesting
period.
Current and deferred taxation
Current tax is the expected tax payable on taxable income for the period,
using tax rates enacted or substantively enacted at the balance sheet date,
and any adjustments to tax payable in respect of previous periods.
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profits ('temporary differences') and is accounted for using the balance sheet
liability method.
Deferred tax liabilities are generally recognised for all taxable temporary
differences.
Deferred tax assets are generally recognised to the extent that it is probable
that taxable profits will be available against which deductible temporary
differences can be utilised. Where there are deductible temporary differences
arising in subsidiaries, deferred tax assets are recognised only where it is
probable that they will reverse in the foreseeable future and taxable profits
will be available against which the temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at each balance sheet
date and reduced to the extent that it is no longer probable that sufficient
tax profits will be available to allow all or part of the asset to be
recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled or the asset is realised. Deferred tax is
charged or credited to the statement of income.
AUDIOBOOM GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
ACCOUNTING POLICIES (continued)
Financial Instruments
Financial assets
Trade receivables and other receivables that have fixed or determinable
payments that are not quoted in an active market are classified as loans and
receivable financial assets, using the effective interest method less
impairment. Interest is recognised by applying the effective interest method,
except for short-term receivables when the recognition of interest would be
immaterial.
Financial liabilities
All financial liabilities are initially measured at fair value plus directly
attributable transaction costs and subsequently measured at amortised cost
using the effective interest method, other than those categorised as fair
value through profit or loss. Financial liabilities are classified as current
liabilities unless the Group has an unconditional right to defer settlement of
the liability for at least 12 months after the reporting date.
Equity instruments
Instruments classified as equity are measured at cost and are not remeasured
subsequently.
Critical accounting judgements and key areas of estimation uncertainty
Minimum guarantees
The Group offers contracts of between one and three years to secure
advertising representation of third party podcast partners. The contracts can
include commitments to pay Minimum Guarantee (MGs) revenue shares over the
contractual period to the third party. Should the revenue share generated not
be above the MG contractual amount, the Group will need to true up the revenue
share payments to the MG level. The Group continually assesses its exposure to
onerous contracts by assessing contractual MGs (see note 18 for further detail
on MGs contracted at the year end). There is an element of uncertainty with
all contracts signed as they are based on future expected revenue generation
and if the future performance does not meet expectations, it may result in a
material cash outflow and the recognition of expected losses in the financial
period in which the contract is considered to become onerous.
Onerous contract provisions
The Group continually assesses its exposure to onerous contracts by assessing
contractual minimum guarantees versus future revenue and growth expectations.
Should future revenue and growth expectations be lower than previously
anticipated which take a partner contract into a loss-making scenario, a
provision will be created using a range of growth scenarios to estimate the
total estimated net loss of the contract. A weighted average of the different
growth scenarios will be used as the performance of future advertising markets
and the specific show under review can only be estimated at the balance sheet
date. A weighted average cost of capital discount factor has been applied to
future revenues to discount the provision to current value. The revenue, net
loss and projected net loss of the contract are disaggregated within the
consolidated statement of comprehensive income so that the specific impact of
onerous contracts and provisions recognised in relation to them is clear to
users of the financial statements. No other overheads or costs will be
included in the provision assessment because the main cost of the contract is
the revenue share owed to the partner. The onerous contract provision
calculations are estimates and actual outcomes may be materially different to
the value of provision estimated.
Share based compensation
The Group issues equity settled share based payments to certain Directors and
employees, which have included grants of options in the current period. Equity
settled share based payments are measured at fair value at the date of grant,
with the charge being recognised within the statement of comprehensive income
over the period of service to which the grant relates.
The fair value of share options is measured using a Black-Scholes framework.
The Directors have used judgement in the calculation of the fair values of the
share based compensation which has been granted during the period, and
different assumptions in the model would change the financial result of the
business. Certain share options include performance criteria and the charge
will vary depending on whether that criteria is met, therefore it is an
estimate and is uncertain.
AUDIOBOOM GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
ACCOUNTING POLICIES (continued)
Warrants
The Group has issued warrants to certain Directors and third parties. Warrants
are measured at the fair value of the service provided with reference to
comparable cash settled transactions or appropriate valuation methodologies at
the date of grant, with the charge being recognised within the statement of
comprehensive income over the period of service to which the grant relates.
IFRS 16: Leases
The Group recognises lease liabilities at the present value of future cash
flows. The determination of present value involves judgements and estimates,
in particular in relation to the discount factor to be applied to those cash
flows. In determining an appropriate discount factor the Directors considered
a range of factors including the Group's cost of capital together with the
interest rate charged on the Group's external debt facilities. Having
considered these factors the Directors have assessed that 8% is an appropriate
discount factor to determine the value of the Group's lease liabilities.
Bad debt provision
The Group creates a specific bad debt provision for all debtors which are over
365 days old and reviews all debtors on a continual basis, providing for any
under 365 days which are not deemed to be recoverable. The Group utilises the
expected credit loss model to calculate an appropriate bad debt provision,
which incorporates an assessment of historical losses in deriving a provision
to be recognised against the likelihood of future bad debt. Such an assessment
requires the application of judgement, and bad debts may materially exceed the
amount provided for at the reporting date.
Recognition and measurement of deferred tax assets
The Group recognises deferred tax assets in relation to unutilised tax losses
which can be utilised to offset tax arising on future taxable profits.
Utilisation of these tax losses is dependent on the timing and extent of
future taxable profits of the Group. Therefore the recognition and measurement
of deferred tax assets is based on the judgement of the Directors as to this
profitability and represents an area of material estimation uncertainty. Refer
to note 7.
AUDIOBOOM GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
2. REVENUE 2023 2022
US$'000 US$'000
Subscription - recognised over time 432 479
Advertising - recognised at point in time 64,598 74,400
-------------- --------------
65,030 74,879
======= =======
The Directors consider the Group to operate within one operating segment,
content related revenue, and consequently expenditure and balance sheet
analysis is not presented between subscription and advertising services.
Geographical information
The Group's operations are principally located in the UK and the USA. The main
assets of the Group, cash and cash equivalents, are held in the UK and the
USA.
The Group's revenue from external customers by geographical location is
detailed below:
2023 2022
US$'000 US$'000
United Kingdom 1,772 3,327
USA 63,258 71,552
-------------- --------------
65,030 74,879
======= =======
The Group invoiced three customers who each represented more than 10% of the
reported revenue and in aggregate 37% of the total invoiced. The three
customers are advertising agencies and represent a number of brands, thus
reducing the customer concentration.
The Group currently has two material geographic revenue regions, however, as
the Group's controlling operations are primarily based in the UK, there is no
separation of income, expenditure and sections of the balance sheet for the
purposes of segmental reporting.
3. OPERATING PROFIT 2023 2022
US$'000 US$'000
Operating profit for the period has been arrived at after charging the
following:
Depreciation of property, plant & equipment 33 47
Operating foreign exchange (loss) / gain (497) 1,141
Staff costs (refer to note 5 for detail) 8,725 11,039
======= =======
AUDIOBOOM GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
4. AUDITOR'S REMUNERATION 2023 2022
US$'000 US$'000
Audit services
Fees for the audit of the consolidated annual financial statements and the 109 98
audit of the Company's subsidiaries pursuant to legislation
-------------- --------------
109 98
======= =======
5. STAFF COSTS 2023 2022
Number Number
Average number of production, editorial and sales staff 27 34
Average number of management and administrative staff 12 11
-------------- ---------------
39 45
======= =======
US$'000 US$'000
Wages and salaries 4,986 5,469
Social security costs 496 794
Pension costs (defined contribution scheme) 436 418
Share based payments 2,807 4,358
-------------- ---------------
8,725 11,039
======= =======
Details of Directors' remuneration are set out in the
Remuneration Committee Report in the Annual Report.
6. FINANCE COSTS 2023 2022
US$'000 US$'000
Depreciation - lease interest (see note 14) 100 87
Overdraft arrangement fee 19 19
------------ -------------
119 106
======= =======
The Company has a US$1.8 million overdraft
facility with HSBC and this was not utilised as at the date of this report.
AUDIOBOOM GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
7. TAXATION
Tax reconciliation
The taxation charge on the loss for the period differs from the amount
computed by applying the corporation tax rate to the loss before tax for the
following reasons:
2023 2022
US$'000 US$'000
Loss on ordinary activities before tax (16,754) (429)
---------------- ----------------
Tax at UK corporation tax rate of 23.5% (2022: 19.00%) (3,937) (82)
Expenses not deductible for tax purposes 2 7
Foreign taxes at different rates (8) -
Movement in deferred tax 2,670 -
Utilisation of tax losses brought forward (69) (385)
Unrelieved tax losses 3,368 -
Effect of share-based payments 646 788
---------------- ----------------
Tax charge and effective tax rate for the period 2,672 328
========= =========
2023 2022
US$'000 US$'000
Current tax
Foreign tax charge on profits in the year 2 33
Deferred tax charge 2,670 295
---------------- ----------------
Tax charge recognised in the consolidated statement of 2,672 328
income
========= =========
The Group has carried forward UK losses amounting to US$40.8 million as of 31
December 2023 (2022: US$26.7 million). The gross amount of losses upon which
the deferred tax asset has been recognised amounts to US$7.9 million (2022:
US$17.9 million). This is based on expected utilisation of future taxable
profits as estimated by the Directors. The deferred tax asset is expected to
be utilised within five years. Refer to the Recognition and measurement of
deferred tax assets accounting judgement detail in the accounting policies
section for further disclosure.
There was a deferred tax liability of US$nil (2022: US$nil).
2023 2022
US$'000 US$'000
Deferred tax asset at beginning of period 4,414 5,275
Asset derecognised in the year (2,670) (295)
Foreign exchange effect 232 (566)
----------------- -----------------
Total deferred tax asset 1,976 4,414
======== ========
Deferred tax current asset (unutilised tax losses) 395 805
Deferred tax non-current asset (unutilised tax losses) 1,581 3,609
----------------- -----------------
Total deferred tax asset 1,976 4,414
======== ========
AUDIOBOOM GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
8. LOSS PER SHARE
Basic earnings per share is calculated by dividing the profit or loss
attributable to shareholders by the weighted average number of ordinary shares
in issue during the period.
IAS 33 requires presentation of diluted EPS when a company could be called
upon to issue shares that would decrease earnings per share, or increase the
loss per share. For a loss-making company with outstanding share options, the
net loss per share would be decreased by the exercise of options. Therefore,
as per IAS33:36, the anti-dilutive potential ordinary shares are disregarded
in the calculation of diluted EPS.
Loss Weighted average Per share
number of shares amount
2023
US$'000 Thousand Cents
Basic and diluted EPS
Loss attributable to equity holders (19,426) 16,357 (118.8)
========= ========= =========
2022
US$'000 Thousand Cents
Basic and diluted EPS
Loss attributable to equity holders (757) 16,192 (4.7)
========= ========= =========
AUDIOBOOM GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
9. PROPERTY, PLANT AND EQUIPMENT
Furniture &
equipment Computers Technical Studio Total
US$'000 US$'000 US$'000 US$'000 US$'000
Cost
At 31 December 2021 26 266 3 124 419
Additions - 29 - - 29
Disposals - (130) - (23) (153)
Foreign exchange effect (2) - - - (2)
-------------- --------------- --------------- --------------- ----------------
At 31 December 2022 24 165 3 101 293
-------------- --------------- --------------- --------------- ----------------
Additions - 7 - - 7
Disposals (24) (88) (3) (95) (210)
Foreign exchange effect - 2 - - 2
-------------- --------------- --------------- --------------- ----------------
At 31 December 2023 - 86 - 6 92
-------------- --------------- --------------- --------------- ----------------
Depreciation
At 31 December 2021 19 196 3 124 342
Charge for the period 2 28 - 17 47
Disposals - (130) - (23) (153)
Foreign exchange effect 2 22 - (26) (2)
---------------- --------------- --------------- --------------- ----------------
At 31 December 2022 23 116 3 92 234
----------------- --------------- --------------- --------------- ----------------
Charge for the period 2 23 - 8 33
Disposals (24) (88) (3) (95) (210)
Foreign exchange effect (1) 6 - - 5
---------------- --------------- --------------- --------------- ----------------
At 31 December 2023 - 57 - 5 62
----------------- --------------- --------------- --------------- ----------------
Net book value
At 31 December 2021 7 70 - - 77
========= ========= ========= ========= =========
At 31 December 2022 1 49 - 9 59
========= ========= ========= ========= =========
At 31 December 2023 - 29 - 1 30
========= ========= ========= ========= =========
10. SUBSIDIARIES
As at 31 December 2023, Audioboom Group plc held more than 20% of the share
capital of the following companies:
Registered office Class of shares % held by parent
Audioboom Limited 2-6 Boundary Row, London, SE1 8HP Ordinary 100%
Audioboom Inc. 251 Little Falls Drive, Wilmington, Delaware 19808, USA Ordinary 100%
Austin Advertising Inc. 1013 Centre Road, Suite 403S, Wilmington, Delaware 19805, USA Ordinary 100%
Audioboom Inc is held through Audioboom
Limited. Austin Advertising Inc is held through Audioboom Inc.
AUDIOBOOM GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
11. TRADE AND OTHER RECEIVABLES 2023 2022
US$'000 US$'000
Amounts receivable for the sale of goods and services 14,504 13,966
Allowance for doubtful debts (149) (325)
---------------- ----------------
Net receivables 14,355 13,641
Deferred cost of sales relating to minimum guarantee payments - 93
Other receivables 246 237
Prepayments and accrued income 1,626 1,923
Taxes recoverable 101 119
---------------- ----------------
16,328 16,013
========= =========
The average credit period taken on sales of goods and services is 81 days
(2022: 68 days). No interest is charged on receivables. Trade receivables are
provided for based on estimated irrecoverable amounts from the sale of goods
and services, determined by reference to past default experience and
likelihood of recovery as assessed by the Directors.
Included in the Group's trade receivable balance are debtors with a carrying
amount of US$2.1 million (2022: US$2.3 million) which are past due at the
reporting date.
In addition, US$nil (2022: US$0.1 million) relates to deferred cost of sales
relating to podcast partner contractual minimum guarantee payments. These are
payments which were made to a podcast partner with a multi-year contract
during the year due to revenue shares earned being lower than the contractual
minimum guaranteed amount.
Having considered the Group's exposure to bad debts and the probability of
default by customers, no material adjustment has been identified between
recognition of bad debts on a specific basis and expected credit losses
outlined below in accordance with IFRS 9 (2022: US$nil).
Accrued income carried forward into 2024, that will reverse fully in 2024, is
US$0.4 million (2022: US$0.6 million).
As at 31 December 2023 the lifetime expected loss provision for trade
receivables was:
US$'000 Current More than 30 days past due More than 60 days past due More than 90 days past due Total
Expected loss rate 0.3% 1% 1% 3%
Gross carrying amount 6,799 3,483 1,988 2,234 14,504
Loss provision 20 29 22 78 149
As at 31 December 2022 the lifetime expected loss provision for trade
receivables was:
US$'000 Current More than 30 days past due More than 60 days past due More than 90 days past due Total
Expected loss rate 0.5% 1% 3% 8%
Gross carrying amount 5,334 4,227 2,148 2,257 13,966
Loss provision 27 27 65 191 325
AUDIOBOOM GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
12. TRADE AND OTHER PAYABLES 2023 2022
US$'000 US$'000
Current liabilities
Trade payables 9,156 5,932
Other taxes and social security 29 37
Accruals 3,144 4,522
Other payables 70 123
---------------- ----------------
Trade and other payables due within less than one year 12,399 10,614
========= =========
Trade payables and accruals principally comprise amounts outstanding for trade
purchases and ongoing costs. The average credit period taken for trade
purchases is 68 days (2022: 54 days). The Group has financial risk management
policies in place to ensure that all payables are paid within the credit time
frame.
The Group records negligible deferred income and therefore no analysis of
contract liabilities has been provided.
13. STATED CAPITAL ACCOUNT
No. of Share Share
shares capital premium
US$'000 US$'000
At 31 December 2021 15,768,017 - 61,011
Shares issued in the period
Share options exercised 179,402 - 357
Warrants exercised 350,000 - 1,534
---------------------- ------------------- ---------------------
At 31 December 2022 16,297,419 - 62,902
---------------------- ------------------- ---------------------
Shares issued in the period
Share options exercised 79,517 - 202
-------------------- --------------------- -----------------------
At 31 December 2023 16,376,936 - 63,104
=========== =========== ===========
There is no authorised share capital and all shares rank pari passu. All
issued share capital is fully paid up. All ordinary shares have no par value.
AUDIOBOOM GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
14. RIGHT OF USE ASSET LEASES
Set out below are the carrying amounts of
right-of-use assets recognised and the movements during the period:
Office Lease Total
US$'000
At 31 December 2021 576
Depreciation expense (250)
Foreign exchange 3
----------------
At 31 December 2022 329
----------------
Depreciation expense (239)
Lease modification 1,023
Foreign exchange 4
----------------
At 31 December 2023 1,117
=========
Set out below are the carrying amounts of lease liabilities and the movements during the period:
2023 2022
US$'000 US$'000
Balance at 1 January 358 627
Payment of lease liabilities (365) (356)
Imputed lease interest costs 100 87
Lease modification 1,017 -
------------- -------------
Balance at 31 December 1,110 358
======== ========
Current 68 278
Non-current 1,042 80
The following are the amounts recognised in the statement of comprehensive
income:
2023 2022
US$'000 US$'000
Depreciation expense of right of use assets 239 250
Interest expense on lease liabilities 100 87
------------- -------------
Total amount recognised 339 337
======== ========
The Company recorded total cash outflows for leases of US$481,000 in 2022
(2022: $442,000).
The following are the total value of the commitments on an undiscounted basis:
2023 2022
US$'000 US$'000
Under one year 199 365
One to five years 1,376 109
------------- -------------
Total value of commitments 1,575 474
======== ========
AUDIOBOOM GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
15. OPERATING LEASE ARRANGEMENTS 2023 2022
$'000 $'000
The Group as lessee
Lease payments under operating leases recognised as an expense
in the year 113 94
------------- -------------
At the balance sheet date, the Group had outstanding commitments for future
minimum lease payments under non-cancellable operating leases, which fall due
as follows:
Under one year 91 110
------------- -------------
91 110
======== ========
The operating lease is not recognised as an asset or liability in the
Statement of Financial Position under IFRS 16 due to its total length being
less than one year.
16. RELATED PARTY TRANSACTIONS
Key management personnel remuneration
See the Remuneration Committee Report for details relating to key management
personnel remuneration during the year. Key management during the year being
Stuart Last, CEO and Brad Clarke, CFO.
AUDIOBOOM GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
17. SHARE-BASED PAYMENTS
The Company has share option schemes for employees of the Group. Options are
exercisable at the price agreed at the time of the issue of the share option.
The vesting period and/or any performance conditions vary between employees.
If the options remain unexercised after a period of 10 years from date of
grant the options expire. Options are typically forfeited if the employee
leaves the Group before the options vest. Details of the share options granted
during the period are as follows:
2023 2022
Weighted Weighted
Average Average
Number of Exercise Number of Exercise
Share options Price (£) Share options Price (£)
Outstanding at beginning of period 1,403,642 6.838 1,147,213 2.650
Granted during the period 457,000 3.567 442,831 15.550
Forfeited/lapsed during the period (96,674) 11.108 (7,000) 7.693
Exercised during the period (79,517) 2.004 (179,402) 1.646
-------------------- ---------------------
Outstanding at end of period - time vesting based 852,451 5.041 753,968 5.420
Outstanding at end of period - performance vesting based(1) 832,000 6.845 649,674 8.483
-------------------- ---------------------
Total outstanding at end of period 1,684,451 5.932 1,403,642 6.838
============= =============
Exercisable at end of period 1,225,401 5.477 926,591 4.587
============= =============
(1)Options with performance-based vesting will vest, subject to Remuneration
Committee discretion, if the Company meets market expectations for revenue and
adjusted EBITDA targets
The options outstanding at 31 December 2023 had a weighted average exercise
price of £5.932, and an average remaining contractual life of 7 years. The
inputs into the Black-Scholes model are as follows:
2023 2022
Weighted average share price £3.567 £15.550
Weighted average exercise price £3.567 £15.550
Expected volatility 60% 63%
Expected life 10 years 10 years
Risk-free rate 4.02% 2.39%
Expected dividend yield 0% 0%
============= =============
Expected volatility was determined by assessing the share price volatility
from the current year. The Group recognised total expenses of US$2.807 million
related to equity-settled share-based payment transactions for the year ended
31 December 2023 (31 December 2022: US$4.358 million).
2023 2022
US$'000 US$'000
Share option charge 2,807 4,358
-------------- --------------
2,807 4,358
======== ========
At the period end, the Company had in issue outstanding share warrants for a
total of 170,000 shares (2022: 170,000 shares) with a weighted average
exercise price of £2.74 (2022: £2.74). All 170,000 (2022: 170,000) of the
warrants were exercisable at the period end. Post period end 120,000 of the
warrants have lapsed, with the remaining 50,000 warrants having an exercise
price of £3.30.
AUDIOBOOM GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
18. CONTENT PARTNER MINIMUM GUARANTEES
In order to attract and retain leading podcast partners, the Group offers
certain partners minimum revenue guarantees ("MG") over the life of the
agreement between the parties. The MG offers guaranteed revenue over the life
of the agreement in the form of monthly payments and/or an upfront contracted
advance payment, which is then recouped over the life of the agreement, thus
reducing future expected payments proportionally. The MGs provided secure the
right of access to future content and therefore the expenditure in relation to
these guarantees is recognised over the term of the contract. The content
providers' obligations are discharged to the Group over the term of the
contract in line with when the Group consumes the benefit of these
obligations.
As at 31 December 2023, US$nil (2022: US$0.1 million) is included within trade
and other receivables and relates to deferred cost of sales relating to
podcast partner contractual minimum guarantee payments.
As at 31 December 2023, of the US$33 million (2022: US$47.8 million) total
minimum guarantee amount committed to expenditure, US$18.5 million (2022:
US$29.9 million) relates to the two onerous contracts provided for detailed in
note 19.
The amounts detailed below are undiscounted.
2023 2022
US$'000 US$'000
MG expenditure committed in 12 months or less 24,396 24,348
MG expenditure committed in more than 12 months 9,020 23,408
----------------- -----------------
Total MG amount committed to expenditure 33,416 47,756
======== ========
19. ONEROUS CONTRACT PROVISION
A provision has been recognised as at 31 December 2023 in relation to two
partner contracts. As advertising markets have performed below the
expectations previously modelled for these agreements, it is now assumed that
it is unavoidable that the contracts will generate a loss through to their
conclusion in January 2025 and July 2025 respectively. The contracts, which
were both negotiated in early 2022 during buoyant podcast advertising market
conditions, recorded a net loss of US$5.1 million in 2023 and in light of
revenue growth being lower than projected at the previous reporting date it is
considered likely that they will continue to be loss making through to their
conclusion.
A provision has therefore been created for the estimated total contract loss
with the trigger point being future revenue and growth assumptions for the
shows being lowered due to the advertising markets being more challenging for
longer than anticipated during 2023. Consequently, the ad rates that have
been, and are likely to be, commanded for the contract are likely to be lower
than those previously assumed.
In estimating the potential net loss of the contracts, high, medium and low
growth projections have been used to estimate the total net loss of the
contracts. The provision has been recognised as, even under the high growth
scenario, it is estimated that the contracts will incur a net loss due to
insufficient time and opportunity to derive sufficient revenue growth for the
contracts to generate a profit before their expiration in January 2025 and
July 2025 respectively. A weighted average of the different growth scenarios
has been used as the performance of future advertising markets and the
specific shows can only be estimated at the balance sheet date.
It has been deemed appropriate to disaggregate the revenue, net loss and
provided for projected net loss of this contract within the consolidated
statement of comprehensive income in order to detail revenue and gross margin
which reflects the performance of the underlying business. No overheads or
other costs have been included in the provision assessment because the main
cost of the contract is the revenue share owed to the partner.
AUDIOBOOM GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
19. ONEROUS CONTRACT PROVISION (continued)
The following are the amounts recognised in the statement of comprehensive
income:
2023 2022
US$'000 US$'000
Onerous contracts net loss incurred in 2023 5,087 -
Onerous contracts provision for expected future net losses 7,499 -
----------------- -----------------
Total 12,586 -
======== ========
The following are the total value of the provision which has been calculated
on a weighted average basis based on a range of scenarios then discounted to
detail the net present value of the provision:
2023 2022
US$'000 US$'000
Current contract provision 5,046 -
Non-current contract provision 2,453 -
----------------- -----------------
Total contract provision 7,499 -
======== ========
AUDIOBOOM GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
20. FINANCIAL INSTRUMENTS
Capital risk management
The Group manages its capital to ensure that entities in the Group will be
able to meet their financial obligations as they arise while maximising the
return to stakeholders. The capital structure of the Group consists of cash
and cash equivalents and equity attributable to equity holders of the parent,
comprising issued capital, reserves and retained earnings as disclosed in the
consolidated statement of changes in equity. As at the period end, the Group
did not have any external borrowings and was not subject to externally imposed
capital requirements. On 14 April 2022 the Company secured a £1.5 million
overdraft with HSBC which remains undrawn.
Categories of financial instruments
2023 2022
US$'000 US$'000
Loans & receivables
Trade and other receivables 14,601 13,878
Cash and cash equivalents 3,726 8,067
Financial liabilities at amortised cost
Trade and other payables 9,228 6,054
======== ========
The carrying amounts of financial assets and financial liabilities recorded at
amortised cost approximates to their fair values.
Financial and market risk management objectives
It is, and has been throughout the period under review, the Group's policy not
to use or trade in derivative financial instruments. The Group's financial
instruments comprise its cash and cash equivalents and various items such as
trade debtors and trade creditors that arise directly from its operations. The
main purpose of the financial assets and liabilities is to provide finance for
the Group's operations in the period.
Currency risk management
The Group has limited exposure to foreign currency risk as a result of
matching local currency costs to local currency receipts; thus the main risks
arising from the Group's financial instruments are interest rate risk and
liquidity risk. The Board reviews and agrees policies for managing these risks
and they are summarised below. These policies have remained unchanged
throughout the period under review.
Interest rate risk management
The Group holds the majority of its cash and cash equivalents in corporate
current accounts. These accounts offer a competitive interest rate with the
advantage of quick access to the funds.
Credit risk management
Credit risk refers to the risk that a counterparty will default on its
contractual obligations resulting in financial loss to the Group. The Group
has adopted a policy of only dealing with creditworthy counterparties, as a
means of mitigating the risk of financial loss from defaults. The Group only
transacts with entities after assessing credit quality using independent
rating agencies and, if not available, the Group uses other publicly available
financial information and its own trading records to rate its major customers.
The Group's exposure is continuously monitored and the aggregate value of
transactions concluded is spread amongst approved counterparties. Credit
exposure is controlled by counterparty limits.
AUDIOBOOM GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
21. FINANCIAL INSTRUMENTS (continued)
Ongoing credit evaluation is performed on the financial condition of accounts
receivable. The credit risk on liquid funds is limited because the
counterparties are banks with high credit-ratings assigned by international
credit-rating agencies. The carrying amount of financial assets recorded in
the financial statements, which is net of impairment losses, represents the
Group's maximum exposure to credit risk. Please refer to note 11 for more
detail on the trade receivables collection period.
The ageing of trade receivables (US$'000s) as at 31 December 2023 was:
Current Over 30 days Over 60 days 90 days + Total
US$6,799 US$3,483 US$1,988 US$2,234 US$14,504
49% 25% 14% 16%
Liquidity risk management
The Group's policy throughout the period has been to ensure continuity of
funds. The Group manages liquidity risk by maintaining adequate reserves and
banking facilities by continuously monitoring forecast and actual cash flows
and matching the maturity profiles of financial assets and liabilities. Please
refer to note 12 for more detail on the trade payables payment period.
Fair value of financial instruments
The fair value of other non-derivative financial assets and financial
liabilities are determined in accordance with generally accepted pricing
models based on discounted cash flow analysis using prices from observable
current market transactions.
22. POST BALANCE SHEET EVENTS
There are no post balance sheet events as at the date of this report.
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