REG - Bidstack Group PLC - Trading Update

BidstackAnnouncement

17/12/2021 07:05

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RNS Number : 9797V  Bidstack Group PLC  17 December 2021

 

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17 December 2021

 

Bidstack Group Plc

("Bidstack" or the "Company")

Trading Update

 

Bidstack Group Plc (AIM: BIDS), the native in-game advertising group, is
pleased to publish a trading update.

 

Key Commercial Highlights:

 

·    Due to the recently signed commercial agreements, Bidstack has
secured a revenue stream of a guaranteed minimum of US$30 million advertising
spend over two years, commencing 1 March 2022;

·    Signed a multiple format advertising agreement covering the mobile
portfolio of one of the world's leading AAA gaming companies; the arrangement
includes exclusivity for one of the publisher's biggest sporting franchises;

·    Brand count doubled year-on-year to 70 (FY20: 35);

·    Publisher portfolio nearly tripled year-on-year to 58 (FY20: 20);

·    Growing global footprint: active in over 30 markets (FY20: 17);

·    Implemented 76 ad campaigns in FY21 (FY20: 44); and

·    Structural improvement in gross margins, associated with scaling
in-game advertising revenue.

 

FY21 Financial Update

The Board is pleased with the Company's progress, which has prioritised
improving the quality of revenues and gross margin alongside strategic
investments in key talent and operations.  The Company has chosen not to
pursue some low margin revenue opportunities and instead has invested in
building the foundation for future high quality, higher margin growth areas.
The Directors believe that this was the appropriate, long-term approach, as
evidenced by the recent agreements with Azerion and one of the world's leading
AAA gaming companies.

 

As a result, and subject to audit, the Board expects FY21 gross margins to
have improved significantly, to in excess of 30% (FY20: 13%).  As a result,
gross and net profits are both expected to be broadly in line with market
expectations.  Due to delays in completing certain agreements and certain
deferrals of ad campaigns, we anticipate revenues for FY21 to be below current
market expectations.  However, revenue for the year will be significantly
higher than last year (FY20: £1.7m).

 

Year-end cash is expected to be in line with market expectations at
approximately £7 million.

 

FY22 Outlook and Prospects:

 

·    Robust pipeline of additional AAA and independent titles in contract
or in active negotiation stage;

·    Implementation and rollout of the Azerion agreement announced today;
and

·    Execution of the multiple ad format deal with one of the world's
leading AAA game publishers.

 

Bidstack has made material progress in recent months resulting in
significantly improved revenue visibility leading into FY22.  In addition,
the gross margin improvement noted above is expected to continue in the coming
year.  These developments should provide Bidstack with a meaningful step on
the pathway to profitability.

 

The Company intends to give a more detailed update at the time of the
publication of its 2021 results.

 

James Draper, CEO of Bidstack said:

 

"In the second half of 2021, as the in-game market has started to mature, we
have focussed on delivering advertising campaigns that have an accretive
impact on gross margins.

 

"Since our fundraise in July 2021, establishing a pathway towards
profitability has been a key focus which comprises a balance between investing
for growth and strategic cost control.  We have been pleased with the run of
network deals across our portfolio, where blended margins have been healthy
and have helped drive operational leverage.

 

"With our network now growing, through the tremendous work of our publisher
acquisition team, our portfolio is now diversified sufficiently to attract a
broader range of advertising verticals.

 

"The management team has been working toward ensuring that we capitalise on
the solid commercial opportunities ahead of us. The success of the media
business, which has led to the announcement of today's transformational deal,
will empower the product team to work on a number of technology-only and
software-as-a-service deals that are expected to drive additional recurring
revenue over and above the Group's advertising revenue.

 

"I'm pleased to see our Board and executive teams have worked closely to
ensure the business is well capitalised with clear revenue visibility going
into FY22 and FY23."

 

 

-ENDS-

Contacts

 Bidstack Group Plc

 James Draper, CEO                                            via Buchanan
 SPARK Advisory Partners Limited (Nomad)                      +44 (0) 203 368 3550

 Mark Brady / Neil Baldwin / James Keeshan
 Stifel Nicolaus Europe Limited (Broker)

 Fred Walsh                                                   +44 (0) 20 7710 7600

 Buchanan Communications Limited

 Chris Lane / Stephanie Watson / Kim van Beeck                +44 (0) 20 7466 5000

 bidstack@buchanan.uk.com (mailto:bidstack@buchanan.uk.com)

 

Notes to editors

About Bidstack

 

Bidstack is an advertising technology company which provides dynamic, targeted
and automated native in-game advertising for the global video games industry
across multiple platforms. Its proprietary technology is capable of inserting
advertisements within video games.  Bidstack's customers are games publishers
and developers (on the supply side), and advertising agencies, brands and
media-buying platforms (on the demand side).

 

 

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