REG - Audioboom Group PLC - Half-year Report
23/07/2024 07:00
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RNS Number : 3622X Audioboom Group PLC 23 July 2024
This announcement contains inside information as stipulated under the UK
Market Abuse Regulations ("MAR")
Audioboom Group plc
("Audioboom", the "Group" or the "Company")
Half-Year Report
Audioboom (AIM: BOOM), the leading global podcast company, announces its
unaudited half-year results for the six months ended 30 June 2024.
Financial and operational KPIs
· H1 revenue of US$34.1 million, up 7% on H1 2023 (US$31.8 million)
· Adjusted EBITDA((1)) profit of US$0.3 million (H1 2023: US$0.3
million) - Q2 represented the third successive quarter of positive adjusted
EBITDA
· Record average quarterly eCPM (revenue per 1,000 downloads) in Q2 of
US$60.09, up 38% (Q2 2023: US$43.55). Audioboom continues to maximise the
value it extracts from downloads versus its peers
· Average Q2 brand advertiser count of 8,062 (Q2 2023: 8,042).
Strategic pricing increases in our Showcase advertising product have limited
access to lower-value brands, continuing our focus on high-quality
monetisation
· Average Q2 global monthly downloads of 94.8 million (Q2 2023: 125.9
million). While Audioboom has added a number of new tier-1 podcasts to the
creator network in the past year, Apple's iOS17 update in late 2023 has
reduced and rebased download reporting materially across the wider podcast
industry - decreasing by an average of 32% ((2)). We expect the impact of the
iOS17 update to create more favourable long-term commercial conditions in the
podcast industry due to the increased levels of return-on-investment that more
accurate download data will deliver to advertisers
· The Company has in excess of US$65 million revenue for 2024 booked -
more than total revenue for 2023 with more than five months of the year
remaining
· Group cash at 30 June 2024 of US$3.5 million (31 March 2024: US$3.1
million), with a further US$1.9 million available via an undrawn overdraft
Commercial highlights
· Record H1 revenue from Showcase, our global advertising marketplace,
reflecting the Company's continued progress in building key, scalable
advertising technology. H1 2024 Showcase revenue of US$9.3 million, up 37% on
H1 2023 (US$6.8 million). Showcase now contributes more than 27% to Group
revenue (H1 2023: 21%)
· Audioboom consolidated its position as the fifth largest podcast
network in the US on both the Triton Digital Ranker and the Edison Research
Ranker. Since the start of the year Audioboom has moved from 2.2 million
downloads behind the next ranked network Audacy, to 0.7 million downloads
ahead of them in the June 2024 ranker - highlighting the performance of the
Company relative to our competitors
· Key contracts renewed with leading podcasts in our creator network
including: The Broski Report, Serialously, National Park After Dark, Nateland
and Minds of Madness. These shows were downloaded more than 42 million times
in H1 2024
· Further restructuring of creator contracts in this period has reduced
Audioboom's annual minimum guarantee obligations by more than US$3 million
· New, top-tier podcasts signed to the Audioboom Creator Network
including: Cancelled with Tana Mongeau, 13(th) Juror and Stavvy's World. These
podcasts are expected to contribute more than 4 million monthly downloads or
YouTube views to the network
· The Board continues to examine opportunities to maximise shareholder
value including, amongst other initiatives, transactional opportunities and
the option of Audioboom also being publicly listed in the US
(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
(2) Podnews analysis of Apple iOS17 impact utilising Triton Digital download
data
Stuart Last, CEO of Audioboom, commented:
"I'm pleased to report that Audioboom has continued to record positive
results, with our third successive quarter of year-on-year revenue growth and
our third successive quarter of adjusted EBITDA profitability. Our record eCPM
- the value that we extract from every 1,000 downloads across our network - is
market-leading, and highlights the work we have done to optimise our
monetisation engine in order to extract maximum value from our podcasts.
We have delivered these results despite the double-whammy of the advertising
market recession now being followed by deep cuts to our advertising inventory
due to Apple's iOS17 update, which changed how listeners download content.
These external impacts are frustrating - with the iOS17 change restricting our
revenue in the first half of the year by an estimated US$9 million.
Our revenue growth for H1 is in line with the Interactive Advertising Bureau's
Podcast Revenue Study forecasts for the industry, and we do expect our growth
rate to substantially improve across the second half of the year. We have more
than US$65 million of advertising bookings in place - the same level as the
entirety of last year's revenue - which means, with more than 5 months of the
year remaining, all future bookings will translate directly to growth.
Showcase - our ad-tech driven marketplace - continues to build impressively.
In June we delivered more than US$2 million of revenue through the product for
the first time, and it now contributes more than 27% of our Group revenue.
This performance is fuelled by our technology innovation as well as the
early-stage work of our recently launched brand awareness sales unit.
I'm pleased to welcome hit shows like Cancelled and Stavvy's World to the
Audioboom Creator Network, while we have also continued to build-out our
political programming ahead of the US election - in the coming months podcasts
like The Bulwark, Hacks on Tap and The Politics War Room will play an
important role in guiding listeners through the campaign season.
I remain extremely optimistic about our future, and believe that the Company
continues to be significantly undervalued. As such the Board are actively
working to understand the benefits and requirements of listing Audioboom in
the US in order to increase the valuation of the business, as well as
assessing transactional opportunities to give the Company greater scale. I
would like to express my appreciation to the Audioboom team for building our
business so efficiently, and to thank shareholders for their continued support
and belief in the future of the Company."
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 100
million times each month by 38 million unique listeners around the world.
Audioboom is ranked as the fifth 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.
Chief Executive's Report
Strategy and Business Model
Audioboom powers podcasting - connecting creators, brands and audience to
create value across the industry. Since 2018 we have generated more than
US$250 million in revenue for our podcast creators and helped thousands of
brands deliver more than US$300 million of advertising campaigns.
Creators are the heartbeat of the platform. Our technology enables more than
8,000 podcasters to manage their content publishing process, grow their
audience, distribute to all major listening apps, and see insights into the
consumption of their content with our data and analytics dashboard.
Brands can access unique advertising options, including the Premium Network,
our high-value product in which the host of the podcast delivers campaign
messages for the brand and endorses the product directly to their engaged
audience. Showcase - our highly automated marketplace - enables brands to
pinpoint their target audience at scale and with great efficiency through our
ad-tech stack, while Sonic - our platform for brands - helps advertisers
develop and execute campaigns across the podcast landscape.
Audioboom delivers strong global scale, with monthly downloads of around 100
million. More than 38 million unique users consume content from Audioboom each
month, and in 2024 we will create around 15 billion available advertising
impressions.
Audioboom is the fifth largest podcast publisher in the US - the world's
largest podcast market - on Edison Research's publisher ranker. We also rank
third in Australia, second in New Zealand and fourth in Canada.
A global advertising recession emerged in 2022 and lasted across 2023,
creating extremely challenging operating conditions. To combat this, we
launched an in-house team focused on developing partnerships with 'brand
awareness' advertisers to diversify our customer base and ensure we were less
reliant on the traditional podcast advertisers who are susceptible to weaker
economic conditions. This unit has seen excellent early traction, with new
partnerships beginning with blue chip brands from 10 of the world's largest 15
advertising agencies.
This traction has flowed into the continued success story of Showcase, our
advertising marketplace, where these blue chip brands can execute their
advertising campaigns efficiently and at scale through our advertising
technology. During H1 2024, Showcase contributed 27% of Group revenue (up from
21% in H1 2023 and 12% in H1 2022). In June 2024 Showcase delivered record
monthly revenue of US$2.2 million.
In H1 2024 we have experienced our second external challenge of recent times.
In late 2023 Apple updated their podcast listening app in the iOS17 release
which changed the way users downloaded content. With this change, the Apple
podcast app - which historically has contributed around 40% of total podcast
consumption - no longer automatically downloaded newly released episodes from
podcast channels that the user had not listened to recently. This eroded
consumption measurement across the entire podcast industry by approximately
32% according to a Podnews analysis. At Audioboom we have seen net downloads
decrease in our network by around 23%, which restricted our revenue growth
materially but were pleased to have been less affected overall in comparison
to the industry. We are working hard to reverse the impact of Apple's iOS17
change through the signing of top tier shows. During H1 2024 we added podcasts
including: Cancelled, The 13(th) Juror, Stavvy's World, Basically Unfiltered,
Soder and George Conway Explains It All.
Financial Review
Group revenue in the first half of 2024 increased by 7% year on year to
US$34.1 million (H1 2023: US31.8 million) with Q2 2024 representing our third
successive quarter of year-on-year revenue growth. Adjusted EBITDA profit
(earnings before interest, tax, depreciation, amortisation, share based
payments, non-foreign exchange movements, material one off items and onerous
contract provisions and losses incurred) was US$0.3 million (H1 2023: US$0.3
million), with Q2 representing the third successive quarter of positive
adjusted EBITDA. The total loss before tax in the first half of 2024 decreased
by US$9.3 million to a loss before tax of US$1.3 million (H1 2023: US$10.6
million loss before tax) with the prior year loss before tax being driven by
the recognition of an onerous contract provision and the onerous contract net
loss in the first half of 2023.
As detailed further in Note 9, an onerous contract provision was created in
relation to two specific partner contracts in the prior period. The ad rates
that have been commanded, and the future ad rates that are likely to be
commanded, are lower than those modelled when the contracts were signed in
early 2022 due to advertising markets being more challenging for longer than
anticipated. In light of revenue growth being lower than projected it is now
assumed that it is unavoidable that the contracts will generate a net loss
through to their conclusion in January 2025 and December 2025 respectively.
The contracts recorded a net loss of US$2.6 million in H1 2024 and this loss
was offset by the provision created in the prior period. The provision held
on the balance sheet for future estimated net losses of the two contracts is
US$4.9 million.
Group gross margin, excluding the impact of onerous contracts, improved to 18%
(2023: 17%) due to the reduced impact of the Company utilising its share of
advertising revenue to satisfy a small number of podcaster minimum guarantees.
The Company continued to control overheads very well during the first six
months of 2024 despite inflationary pressures, with the Company maintaining
opex (excluding interest, tax, depreciation, amortisation, share based
payments, non-cash foreign exchange movements and material one-off items) of
US$5.4 million (H1 2023: US$5.4 million). Average headcount increased to 42
(30 June 2023: 39) due to the Company investing in its sales operation to
drive increased revenue performance. Total salary and commission costs
increased by 14% (US$0.3 million) vs H1 2023 to US$3.4 million. This increase
was offset due to savings across all other cost categories, with the main
reduction occurring within technology costs, with hosting and bandwidth costs
decreasing by US$0.2 million to US$1.3 million due to the impact of iOS17.
Cash collections continue to perform well thanks to our efficient internal
processes and good relationships with our customers. We report a debtor day
figure of 71, in line with 30 June 2023 (72) and lower than 31 December 2023
(81). Total cash collected in H1 2023 of US$35.4 million was 104% of revenue
reported and US$2.5 million higher than H1 2023 (US$32.9 million). Operating
cash outflow, before working capital movements, totalled US$3.1 million (H1
2023: US$1.3 million cash outflow) largely due to the impact of the contract
net loss provision as detailed in note 9 (US$2.6 million). Cash held at 30
June 2024 of US$3.5 million increased by US$0.4 million from 31 March 2024 and
decreased by US$0.2 million from 31 December 2023 (US$3.7 million). The US$1.9
million overdraft with HSBC was renewed in H1 2024 and remained undrawn at 30
June 2024, giving the Company access to capital of US$5.4 million at the
period end.
Outlook
Q2 2024 was our third successive quarter of revenue growth against prior
comparable periods and adjusted EBITDA profit, and it highlights how well the
business has recovered from the global advertising recession of 2022-23.
Unfortunately, that recovery has been restricted by a new external impact -
the changes Apple made to their podcast player in the most recent iOS update.
This change reduced download measurement across the podcast industry and
restricted our revenue in H1 2024 by an estimated US$9 million.
Although the Apple change will continue to limit our performance upside, we do
expect our growth rate to significantly accelerate in Q3 2024 and beyond.
We have made progress in a number of key operational areas that have improved
our business and resulted in record e-CPM during the last quarter of more than
US$60 - this is a measure of how much value we create from every 1000
downloads on our network. Our work to widen our customer base and attract
robust, reliable brands is working well. Showcase, our global ad marketplace,
goes from strength to strength - now contributing more than 27% of Group
revenue - and we continue to sign new top tier podcasts to expand our network.
While frustrated that our work has been made more challenging by a second
external issue that is out of our control, we do believe that our positive
momentum will continue, and we are well placed to strengthen our position as
the biggest independent podcast network globally. Additionally, we are now
actively investigating the opportunity for Audioboom to be publicly listed in
the US as the Board believes the Company continues to be under-valued and this
route will create a fairer reflection of value for shareholders.
Stuart Last
Chief Executive Officer
Audioboom Group PLC
Consolidated Statement of Comprehensive Income
Unaudited six months to 30 June 2024 Unaudited six months to 30 June 2023 Audited 12
months to 31 Dec 2023
Majority of business Onerous contract Majority of business Onerous contract Majority of business Onerous contract
Notes US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Continuing operations
Revenue 2 31,249 2,871 34,120 29,381 2,427 31,808 58,788 6,242 65,030
Cost of sales (25,511) (5,487) (30,998) (23,614) (4,250) (27,864) (48,775) (11,329) (60,104)
Cost of sales - contract provision 9 - 2,616 2,616 - (7,090) (7,090) - (7,499) (7,499)
Gross profit / (loss) 5,738 - 5,738 5,767 (8,913) (3,146) 10,013 (12,586) (2,573)
Administrative expenses (7,006) (7,420) (14,078)
Adjusted EBITDA profit / (loss) - Non-GAAP 300 315 (396)
- Share based payments 8 (994) (1,403) (2,807)
- Depreciation (14) (19) (33)
- Depreciation - leases (57) (131) (239)
- Operating foreign exchange (loss) (155) (331) (497)
- Onerous contract net loss 9 - (1,823) (5,087)
- Onerous contract provision 9 - (7,090) (7,499)
- Contract settlement and costs (348) - -
- Restructuring costs - (84) (93)
Operating loss (1,268) (10,566) (16,651)
Finance income 12 - 16
Finance costs (85) (43) (119)
Loss before tax (1,341) (10,609) (16,754)
Taxation on continuing operations (8) (2) (2,672)
Loss for the financial period (1,349) (10,611) (19,426)
Other comprehensive income
Foreign currency reserves translation difference (293) 841 1,076
Total comprehensive loss for the period (1,642) (9,770) (18,350)
Loss per share
Basic and diluted EPS 4 (8.2) cents (64.8) cents (118.8)cents
Audioboom Group PLC
Consolidated Statement of Financial Position
Unaudited as at 30 June 2024 Unaudited as at 30 June 2023 Audited as at
31 Dec 2023
Notes US$'000 US$'000 US$'000
ASSETS
Non-current assets
Property, plant and equipment 29 38 30
Right of use asset 1,017 205 1,117
Deferred tax asset 1,571 3,770 1,581
2,617 4,013 2,728
Current assets
Trade and other receivables 5 14,938 15,579 16,328
Cash and cash equivalents 3,456 5,297 3,726
Deferred tax asset 392 840 395
18,786 21,716 20,449
TOTAL ASSETS 21,403 25,729 23,177
Current liabilities
Trade and other payables 6 (13,940) (9,075) (12,399)
Onerous contract provision 9 (3,682) (3,386) (5,046)
Lease liability 6 (78) (220) (68)
NET CURRENT ASSETS 1,086 9,035 2,936
Non-current liabilities
Lease liability 6 (981) - (1,042)
Onerous contract provision 9 (1,200) (3,703) (2,543)
NET ASSETS 1,521 9,345 2,169
Equity
Share capital - - -
Share premium 4 63,104 63,104 63,104
Issue cost reserve (2,048) (2,048) (2,048)
Foreign exchange translation reserve (1,719) (1,661) (1,426)
Reverse acquisition reserve (3,380) (3,380) (3,380)
Retained earnings (54,436) (46,670) (54,081)
TOTAL EQUITY 1,521 9,345 2,169
Audioboom Group PLC
Consolidated Cash Flow Statement
Unaudited six months to 30 June 2024 Unaudited six months to 30 June 2023 Audited 12 months to 31 Dec 2023
US$'000 US$'000 US$'000
Loss from operations (1,349) (10,611) (19,426)
Adjustments for:
Tax charge 8 2 2,672
Interest payable 85 43 119
Interest received (12) - (16)
Depreciation of fixed assets 13 19 33
Depreciation of right of use assets 57 - 239
Share based payments 994 1,403 2,807
(Decrease) / Increase in partner contract provision (2,617) 7,090 7,499
Foreign exchange (loss) / gain (264) 725 831
Cash used in operating activities before working capital movements (3,085) (1,329) (5,242)
Decrease / (increase) in trade and other receivables 1,391 433 (316)
Increase / (decrease) in trade and other payables 1,539 (1,894) 1,387
Net cash used in operating activities (155) (2,790) (4,171)
Investing activities
Purchase of property, plant and equipment - - (7)
Net cash used in investing activities - - (7)
Financing activities
Principal lease payments (115) (182) (365)
Proceeds from issue of ordinary share capital - 202 202
Net cash (used in) / generated from financing activities (115) 20 (163)
Net decrease in cash and cash equivalents (270) (2,770) (4,341)
Cash and cash equivalents at beginning of period 3,726 8,067 8,067
Cash and cash equivalents at end of period 3,456 5,297 3,726
Audioboom Group PLC
Consolidated Statement of Changes in Equity
Share premium Other reserves* Retained earnings Total equity
US$'000 US$'000 US$'000 US$'000
At 31 December 2022 62,902 (7,930) (37,462) 17,510
Loss for the period - - (10,611) (10,611)
Issue of shares 202 - - 202
Equity-settled share-based payments - - 1,403 1,403
Foreign exchange loss on translation - 841 - 841
of overseas subsidiaries
At 30 June 2023 63,104 (7,089) (46,670) 9,345
Loss for the period - - (8,815) (8,815)
Equity-settled share-based payments - - 1,404 1,404
Foreign exchange loss on translation - 235 - 235
of overseas subsidiaries
At 31 December 2023 63,104 (6,854) (54,081) 2,169
Loss for the period - - (1,349) (1,349)
Issue of shares - - - -
Equity-settled share-based payments - - 994 994
Foreign exchange loss on translation - (293) - (293)
of overseas subsidiaries
At 30 June 2024 63,104 (7,147) (54,436) 1,521
*Other reserves relate to the following reserves: Issue Cost Reserve, Foreign
Exchange Translation Reserve and the Reverse Acquisition Reserve. Full details
are disclosed in the 2023 Annual Report.
Audioboom Group plc
Notes to the financial statements
1. General information and basis of preparation
Audioboom Group plc is incorporated in Jersey under the Companies (Jersey) Law
1991. The Company's ordinary shares of no par value are traded on AIM, a
market operated by the London Stock Exchange.
These consolidated interim financial statements, which are unaudited, have
been approved by the Board of Directors on 22 July 2024. They have been
drawn up using the accounting policies and the basis of presentation expected
to be adopted in the Group's full financial statements for the year ending 31
December 2024, which are not expected to be significantly different to those
set out in note 1 to the Company's audited financial statements for the year
ending 31 December 2023.
The consolidated interim financial statements have been prepared under the
historical cost convention and in accordance with International Financial
Reporting Standards ("IFRS") and with IAS 34 "Interim financial reporting", as
adopted by the UK.
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 as at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Those estimates and assumptions are
consistent with those as reported in the Company's audited financial
statements for the year ending 31 December 2023.
Going concern
These interim 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
these interim financial statements. The Group ended the period with access to
US$3.4 million of cash, and a US$1.9 million HSBC overdraft remaining
available to draw down. The overdraft is subject to an annual renewal process
and has been renewed through to 30 May 2025. 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 continuing positive adjusted EBITDA in 2024,
projected increase in revenues and cash utilisation of the Group and taking
account of reasonable possible changes in trading performance, including
changes outside of expected trading performance and the impact of missed
partner minimum guarantees, indicate that the Group will have sufficient cash
and financing facilities available to continue in operational existence for
the next twelve months from the date of approval of these interim 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 the HSBC overdraft. 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 interim financial statements appropriate.
2. Revenue
The Group's operations are principally located in the UK and the USA. The
Group's revenue from external customers by geographical location is detailed
below:
Unaudited six months to 30 June 2024 Unaudited six months to 30 June 2023 Audited 12 months to 31 Dec 2023
US$'000 US$'000 US$'000
United Kingdom and Rest of the World 892 963 1,772
USA 33,228 30,845 63,258
Total 34,120 31,808 65,030
3. Loss per share
Basic earnings per share (EPS) 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, net
loss per share would be decreased by the exercise of share options. Therefore,
for the periods ending 30 June 2024, 31 December 2023 and 30 June 2023, as per
IAS 33:36, the anti-dilutive potential ordinary shares are disregarded on the
calculation of diluted EPS.
Reconciliation of the loss and weighted average number of ordinary shares used
in the calculation are set out below:
30 June 2024
Loss Weighted average number of shares Per share amount
US$'000 Thousand Cents
Basic and diluted EPS
Loss attributable to equity shareholders (1,349) 16,377 (8.2)
30 June 2023
Profit Weighted average number of shares Per share amount
US$'000 Thousand Cents
Basic and diluted EPS
Loss attributable to equity shareholders (10,611) 16,357 (64.9)
31 December 2023
Loss Weighted average number of shares Per share amount
US$'000 Thousand Cents
Basic and diluted EPS
Loss attributable to equity shareholders (19,426) 16,357 (118.8)
4. Share capital
Issued and fully paid - ordinary shares of no par value
At 30 June 2024 16,376,936
At 30 June 2023 16,376,936
At 31 December 2023 16,376,936
During the period no new ordinary shares were issued.
The total number of instruments over equity (including both share options and
warrants) outstanding at the period end was 1,740,617 and, of these, 1,203,349
had vested at the period end.
5. Trade and other receivables
Unaudited six months to 30 June 2024 Unaudited six months to 30 June 2023 Audited 12 months to 31 Dec 2023
US$'000 US$'000 US$'000
Amounts receivable for the sale of goods and services 13,286 12,547 14,504
Allowance for doubtful debts (96) (209) (149)
Net receivables 13,190 12,338 14,355
Deferred cost of sales relating to minimum guarantee payments - 382 -
Other receivables 142 241 246
Prepayments and accrued income 1,507 2,533 1,626
Taxes recoverable 99 85 101
Total 14,938 15,579 16,328
The average credit period taken on sales of goods and services is 71 days (30
June 2023: 72; 31 December 2023: 81). Accrued income carried forward that will
fully reverse is US$0.5 million (30 June 2023: US$0.4 million; 31 December
2023: US$0.4 million).
6. Trade and other payables
Unaudited six months to 30 June 2024 Unaudited six months to 30 June 2023 Audited 12 months to 31 Dec 2023
US$'000 US$'000 US$'000
Current liabilities
Trade payables 11,558 7,577 9,156
Other taxes and social security 42 31 29
Accruals 2,298 1,392 3,144
Other payables 42 75 70
Trade and other payables due within one year 13,940 9,075 12,399
Trade payables and accruals principally comprise amounts outstanding for trade
purchases and ongoing costs. The average credit period taken for trade
purchases is 72 days (30 June 2023: 51; 31 December 2023: 68 days). The
Company currently accrues all costs based on contract terms. Payables relating
to leases total US$0.1 million which is due in under one year.
7. Related party transactions
During the period, there were no related party transactions.
8. Share based payments
During the period, 515,157 share options were issued to qualifying current
employees with an exercise price of £2.40 per share. The options granted were
largely in replacement of 391,157 options that were previously granted at an
exercise price of £15.55 per share which have now been forfeited and
cancelled.
9. Contract provision and costs
A provision was recognised in the prior year 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 December 2025 respectively. The contracts,
which were both negotiated in early 2022 during buoyant podcast advertising
market conditions, recorded a net loss of US$2.6 million in H1 2024 and in
light of revenue growth being lower than projected at the previous reporting
date it is considered likely that they will continue to be loss making through
to their conclusion.
A provision was therefore created for the estimated total contract loss with
the trigger point being future revenue and growth assumptions for the shows
being lowered due to the advertising markets being more challenging for longer
than anticipated. Consequently, the ad rates that have been, and are likely to
be, commanded for the contract are likely to be lower than those previously
assumed.
In estimating the potential net loss of the contracts, high, medium and low
growth projections have been used to estimate the total net loss of the
contracts. The provision has been recognised as, even under the high growth
scenario, it is estimated that the contracts will incur a net loss due to
insufficient time and opportunity to derive sufficient revenue growth for the
contracts to generate a profit before their expiration in January 2025 and
December 2025 respectively. A weighted average of the different growth
scenarios has been used as the performance of future advertising markets and
the specific shows can only be estimated at the balance sheet date.
It has been deemed appropriate to disaggregate the revenue, net loss and
provided for projected net loss of these contracts within the consolidated
statement of comprehensive income in order to detail revenue and gross margin
which reflects the performance of the underlying business. No overheads or
other costs have been included in the provision assessment because the main
cost of the contract is the revenue share owed to the partner.
The following are the amounts recognised in the statement of comprehensive
income:
Unaudited six months to 30 June 2024 Unaudited six months to 30 June 2023 Audited 12 months to 31 Dec 2023
US$'000 US$'000 US$'000
Onerous contracts net loss incurred 2,616 1,823 5,087
Onerous contracts provision for expected future net - 7,090 7,499
losses
Onerous contracts provision release (2,616) - -
Total - 8,913 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:
Unaudited six months to 30 June 2024 Unaudited six months to 30 June 2023 Audited 12 months to 31 Dec 2023
US$'000 US$'000 US$'000
Current contract provision 3,682 3,386 5,046
Non-current contract provision 1,200 3,703 2,453
Total 4,882 7,090 7,499
ENDS
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