REG - Blackbird PLC - Interim Results
14/09/2022 07:01
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RNS Number : 3406Z Blackbird PLC 14 September 2022
14 September 2022
Blackbird plc
(the "Company")
Interim results
Blackbird plc (AIM: BIRD; OTCQX: BBRDF), the technology licensor, developer
and seller of the market-leading cloud video editing platform, Blackbird(®),
announces its interim results for the six months ended 30 June 2022.
Ian McDonough, CEO of Blackbird plc, commented:
"I am delighted to again deliver record revenues for the six-month period of
£1,547k, up 78% year on year. The main driver behind this increase in revenue
was from development work on our first technology licensing deal. We have made
good progress towards delivery and it is currently being tested by the
licensor together with their first customer, a major US broadcaster, ahead of
a full launch and promotion later in the year. The product will be co-branded
'Powered by Blackbird'.
"Post our fundraise last December, we have made good progress in recruiting
key new talent to the business, which was signalled as a key objective of the
raise. This new team will be crucial in defining and implementing our products
and leveraging our world-class technology, as we enter the sizeable creator
economy market.
"In the period we also released two strategically important white papers. The
first one highlighted Blackbird's unique architecture and the associated
benefits, whilst the second one reinforced our sustainability credentials and
how, amongst other green technologies, it can help the video industry reduce
its carbon footprint.
"As we develop our enterprise solution and start to introduce solutions for
the creator economy, these are incredibly exciting times for the Company and I
look forward to working with my colleagues to deliver further success."
Operational highlights (post period)
· Multi-year deal signed with Next College Student
Athlete (NCSA), who are a part of the IMG group
· Deal signed with SBS Belgium to produce media
assets for its OTT platform
· Three-year renewal signed with A+E Networks
· Partnered with both Microsoft and EVS at IBC show
in September in Amsterdam
Financial highlights (post period)
· £2,684k* secured revenue for 2022 at 31 August
2022, up 52% vs prior year (2021 comparative: £1,763k)
· Record contracted but unrecognised revenues of £4,047k* at
31 August 2022 (2021 comparative: £1,987k). £768k relates to 2022 and
£1,472k revenue relates to 2023 and the remainder to 2024 and beyond
* Subject to exchange rate fluctuations
Operational highlights (during the period)
· First technology licensing deal nears delivery and
with the first customer a major US broadcaster secured for the product
o endorsing the value that Blackbird's technology can bring to a third party's
infrastructure
· Successful deployment at the winter games in
February 2022, allowing editors to work remotely from another continent
o validating that Blackbird can be trusted on the most valuable content
· Key hires made for Blackbird's creator economy
growth focus
· Expansion within the Univision and 'global
financial news service' accounts
o reaffirming our 'land and expand' approach
· Three-year renewal with IMG group closed with
revenue uplift
· Further successful renewals with Deltatre,
Gfinity and Arsenal
· Successful FIFA deployment and now extensively
used on their FIFA+ OTT service
· LiveU/Blackbird solution used in coverage of a
further two German elections
· One of four partners chosen to be on Microsoft's
stand at the NAB show in April 2022
· Achieved AWS Technology Partner status and completed
Foundational Technical Review to accelerate AWS engagement
o stepping stone to launching Blackbird in a public cloud which will open up
the Company's addressable market
· Strategic white papers released by the Company on
o Blackbird architecture: highlighting the 'magic' behind Blackbird's cloud
native solution and the associated unique benefits
o sustainability: endorsed by Hannah Mills and leading a call for action to
the industry to reduce carbon at source in video production
· Multiple award wins, including the 'Queen's Award
for Enterprise' and 'NAB Product of the Year 2021'
Financial highlights (during the period)
· Record revenues of £1,547k for the 6 months to 30
June 2022, up 78% year on year (6 months to 30 June 2021: £867k). Includes
£426k of non-recurring revenues from development services for our first
'Powered by Blackbird' licensing deal
· Contracted but unrecognised revenues up 69% year
on year to £3,331k at 30 June 2022 (£1,974k at 30
June 2021)
· Increased operating costs, excluding LTIP charge, of
£2,113k (6 months to 30 June 2021: £1,444k) driven predominantly from
strengthening of the team, particularly in R&D, product and marketing;
wage inflation; attendance at trade shows and recruitment costs. £183k of
these costs relate to the 'Creator' division post last December's fundraise
· EBITDA loss, excluding LTIP provision movement, of £637k (6
months to 30 June 2021: £661k) from increased revenue, partially offset by
higher operating costs
· EBITDA loss of £287k (6 months to 30 June 2021: £874k) with the
decreased loss year on year predominantly due to the movement in LTIP charge
year on year (2022: £350k credit, 2021: £213k expense) resulting from the
falling share price and by the improvement in EBITDA pre LTIP provision
mentioned above
· Net loss before tax £604k (6 months to 30 June
2021: £1,168k)
· Cash burn, excluding proceeds from share issues and
transfers from short term investments, up £310k to £1,253k year on year (6
months to 30 June 2021: £943k) due to higher operating expenses as explained
above and an increase in working capital. £116k of this related to one-off
items
· Cash and short-term investments of £11,586k (30
June 2021: £5,710k) and no debt
Enquiries:
Blackbird plc Tel: +44 (0)20 8879 7245
Ian McDonough, Chief Executive Officer
Stephen White, Chief Operating and Financial Officer
Allenby Capital Limited (Nominated Adviser and Broker) Tel: +44 (0)20 3328 5656
Nick Naylor/ Piers Shimwell (Corporate Finance)
Amrit Nahal (Sales and Corporate Broking)
About Blackbird plc
Blackbird plc operates in the fast-growing SaaS and cloud video market. It has
created Blackbird(®), the world's most advanced suite of cloud-native
computing applications for video, all underpinned by its lightning-fast codec.
Blackbird plc's patented technology allows for frame accurate navigation,
playback, viewing and editing in the cloud. Blackbird(®) underpins multiple
applications, which are used by rights holders, broadcasters, sports and news
video specialists, esports, live events and content owners, post-production
houses, other mass market digital video channels and corporations.
Since it is cloud-native, Blackbird(®) removes the need for costly, high-end
workstations and can be used from almost anywhere on almost any device. It
also allows full visibility on multi-location digital content, improves time
to market for live content such as video clips and highlights for digital
distribution, and ultimately results in much more effective monetisation.
Blackbird plc is a licensor of its core video technology under its "Powered by
Blackbird" licensing model, enabling video companies to accelerate their path
to true cloud business models. Licensees benefit from power and carbon
reductions, cost and time savings, lower hardware and bandwidth requirements
and easy scalability.
Blackbird(®) is a registered trademark of Blackbird plc.
Websites
www.blackbird.video (http://www.blackbird.video/)
Social media
www.linkedin.com/company/blackbird-cloud
(http://www.linkedin.com/company/blackbird-cloud)
www.twitter.com/blackbirdcloud (http://www.twitter.com/blackbirdcloud)
www.facebook.com/blackbirdplc (http://www.facebook.com/blackbirdplc)
Chief Executive Officer's statement
I am pleased to report record revenues for the six-month period to 30 June
2022. During the period we continued our momentum, particularly in our core
targeted markets of Sports and News.
In OEM:
· We made good progress on our first Technology licensing deal which
nears delivery and is currently being tested by the licensor together with
their first customer, a major US broadcaster, ahead of a full launch and
promotion later in the year. The product will be co-branded 'Powered by
Blackbird'. As previously explained, our commercial relationship lasts for a
further five years where Blackbird will financially benefit on the back of the
success of the deployment of the product, and the financials are underpinned
by minimum guarantees.
· Through EVS we successfully deployed to a second prestigious global
sporting event, on the back of the first one in mid-2021. This deal
reemphasizes that Blackbird is trusted with the world's most valuable content
by industry leading technology partners.
· Together with LiveU, delivered on fast turnaround news on a further
two German regional elections.
· Through an unnamed OEM partner, we successfully renewed and
expanded our operations on two deals in the sports sector.
In Direct:
· Successfully deployed to FIFA on the back of our mid-December 2021
deal. They are using Blackbird extensively on their FIFA+ OTT service.
· Expansions with both Univision and our 'global financial news
service' accounts. This reaffirms our 'land and expand' strategy.
· Renewals included a three-year extension to our IMG deal which
included a revenue uplift, together with renewals with Deltatre, Gfinity and
Arsenal.
· Post-period a multi-year deal with NCSA and a new deal with SBS
Belgium.
The Company issued two strategically important and well received white papers
in the period. The first one explained some, although not too much, of the
magic behind Blackbird's architecture and how, being cloud native, can benefit
our customers. The second white paper was focused on 'Decarbonizing Video
production' and reemphasized how cloud native green technologies, such as
Blackbird, can cut out carbon emissions at source rather than producing them
and having to offset them.
Post our fundraise last December, we made good progress in recruiting key new
talent to the business. These included Sumit Rai, as Chief Product Officer; Mo
Volans as Senior Vice President Product Marketing and Morgan Henry as Vice
President Engineering. They all joined us in June and are already making a
great impact on the business as we look to further refine our Enterprise
solution and develop successful products for the creator economy market.
These are very exciting times for the Company and I look forward to working
with the team to deliver further success.
Ian McDonough
Chairman's statement
The Company made encouraging financial progress in the period. In the
six-month period to 30 June 2022, we continued sales growth momentum and
booked record revenues. The growth was predominantly on the back of delivering
against our first technology licensing deal and on deploying to FIFA, whose
deal was finalized in December 2021.
The value of the technology continues to be recognised and during the period
the Company received numerous awards including the prestigious 'Queen's Award
for Enterprise' and 'NAB Product of the Year 2021'.
Financial
Revenue increased by 78% to £1,547k for the six-month period compared to the
corresponding period last year (six months to 30 June 2021 £867k). Contracted
but unrecognised revenue was £3,331k at 30 June 2022, an increase of 69%
compared to 30 June 2021.
Our focus on the Sports and News sectors continued to bear fruit with revenue
up 32% and 34% year on year at £436k and £327k respectively. Our first
'Powered by Blackbird' licensing deal delivered £426k non-recurring revenue
relating to development in the period. Blackbird will financially share in the
commercial success of the product and our share of revenues is underpinned by
annual minimum guarantees with the first one due at the end of 2022.
Operating costs, excluding LTIP charge, for the period were £2,113k versus
£1,444k in the corresponding period last year reflecting an increase in: i) a
strengthening of the team in Sales, R&D and Product and a full period of
costs relating to 2021 hires; ii) wage inflation; iii) increased marketing
costs due to attending trade shows again post lockdowns; and iv) one-off
recruitment fees of £135k in the period (2021:£24k). £183k of operating
costs related to the 'Creator' area, post the December fundraise.
EBITDA loss, excluding LTIP provision movement, of £637k (6 months to 30 June
2021: £661k) from increased revenue predominantly offset by higher operating
costs. There was a £563k difference in the LTIP charge year on year (2022:
£350k credit, 2021: £213k expense) as the Company's share price fell on the
back of the global technology sell off and the war in Ukraine. This movement
in the LTIP charge was the principal driver behind the improved EBITDA loss of
£287k for the period (6 months to 30 June 2021: £874k).
Cash burn in the period, excluding proceeds from share issues and transfers
from short-term investments, was £1,253k versus £943k in the same period in
2021 driven by higher operating costs including in the 'Creator' area as
explained above.
Outlook
The Company made good progress on revenue growth in H1 of this year driven
predominantly by our first technology licensing deal, co-branded 'Powered by
Blackbird' and from infrastructure deals with revenue in the period from,
amongst others, CBS Sports, FIFA and Univision which was not in the prior year
period.
Ian and the team have also made great progress in bringing in key new talent
on the back of the December 2021 fundraise. Their skillsets and experience
will be crucial both in refining our Enterprise solution and developing and
launching new product(s) for the creator economy where we believe that the
potential for Blackbird is significant.
The future prospects for the Company continue to be very bright and I look
forward to working with the team to deliver these.
Andrew Bentley
UNAUDITED AND CONDENSED STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHS
ENDED 30 JUNE 2022
Unaudited Unaudited Audited
Half year to Half year to Year to
30 June 30 June 31 December
2022 2021 2021
£ £ £
CONTINUING OPERATIONS
Revenue 1,546,544 866,644 2,066,271
Cost of Sales (70,886) (84,096) (155,691)
GROSS PROFIT 1,475,658 782,548 1,910,580
Operating costs excluding LTIP provision (2,112,728) (1,443,816) (3,107,283)
EARNINGS BEFORE INTEREST, TAXATION, DEPRECIATION, AMORTISATION, EMPLOYEE SHARE (637,070) (661,268) (1,196,703)
OPTION COSTS AND LTIP PROVISION (EBITDA pre LTIP)
Decrease / (increase) in LTIP provision 350,431 (212,925) (357,712)
EARNINGS BEFORE INTEREST, TAXATION, DEPRECIATION, AMORTISATION, EMPLOYEE SHARE (286,639) (874,193) (1,554,415)
OPTION COSTS (EBITDA)
Depreciation (68,169) (54,456) (117,199)
Amortisation (192,542) (163,060) (337,078)
Employee share option costs (98,356) (83,665) (176,583)
(359,067) (301,181) (630,860)
OPERATING LOSS (645,706) (1,175,374) (2,185,275)
Net Finance income 42,015 7,862 18,382
LOSS BEFORE INCOME TAX (603,691) (1,167,512) (2,166,893)
Income Tax - - 32,167
LOSS FOR THE PERIOD (603,691) (1,167,512) (2,134,726)
TOTAL COMPREHENSIVE LOSS FOR THE PERIOD (603,691) (1,167,512) (2,134,726)
Earnings per share expressed in pence per share:
Basic - continuing and total operations (0.16p) (0.35p) (0.63p)
UNAUDITED AND CONDENSED STATEMENT OF FINANCIAL POSITION AT 30 JUNE 2022
Unaudited Unaudited Audited
30 June 30 June 31 December
2022 2021 2021
ASSETS £ £ £
NON-CURRENT ASSETS
Other intangible assets 1,178,891 1,152,634 1,195,736
Property, plant and equipment 221,589 276,043 256,655
1,400,480 1,428,677 1,452,391
CURRENT ASSETS
Trade and other receivables 638,602 501,414 395,315
Stock 895 895 895
Current tax assets 32,167 25,415 32,167
Short-term investments 6,684,825 1,214,302 4,169,186
Cash and bank balances 4,901,435 4,495,923 8,670,274
12,257,924 6,237,949 13,267,837
TOTAL ASSETS 13,658,404 7,666,626 14,720,228
EQUITY
Issued share capital 2,940,524 2,705,553 2,940,524
Share premium 34,034,228 26,614,950 34,034,228
Capital contribution reserve 125,000 125,000 125,000
Retained earnings (24,662,240) (23,282,609) (24,156,905)
12,437,512 6,162,894 12,942,847
NON-CURRENT LIABILITIES
LTIP - 311,152 -
Lease & License 85,543 185,424 131,908
85,543 496,576 131,908
CURRENT LIABILITIES
Lease 91,572 87,074 89,388
Trade and other payables 1,043,777 920,082 1,556,085
1,135,349 1,007,156 1,645,473
TOTAL LIABILITIES 1,220,892 1,503,732 1,777,381
TOTAL EQUITY AND LIABILITIES 13,658,404 7,666,626 14,720,228
UNAUDITED AND CONDENSED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2022
Called up share capital Share premium Capital contribution reserve Retained earnings Total equity
£ £ £ £ £
Balance at 1 January 2021 2,696,433 26,516,613 125,000 (22,198,762) 7,139,284
Issue of share capital 9,120 98,337 - - 107,457
Share based payment - - - 83,665 83,665
Total comprehensive income - - - (1,167,512) (1,167,512)
Balance at 30 June 2021 2,705,553 26,614,950 125,000 (23,282,609) 6,162,894
Changes in equity
Issue of share capital (net of expenses) 234,971 7,419,278 - - 7,654,249
Share based payment - - - 92,918 92,918
Total comprehensive income - - - (967,214) (967,214)
Balance at 31 December 2021 2,940,524 34,034,228 125,000 (24,156,905) 12,942,847
Changes in equity
Issue of share capital - - - - -
Share based payment - - - 98,356 98,356
Total comprehensive income - - - (603,691) (603,691)
Balance at 30 June 2022 2,940,524 34,034,228 125,000 (24,662,240) 12,437,512
UNAUDITED AND CONDENSED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 2022
Unaudited Unaudited Audited
Half year to Half year to Year to 31
30 June 30 June December
2022 2021 2021
£ £ £
EBITDA (286,639) (874,193) (1,554,415)
(Increase) / Decrease in working capital (711,255) 216,287 653,349
Cash used in operations (997,894) (657,906) (901,066)
Interest paid on lease liabilities (4,363) (6,447) (11,979)
Tax received - - 25,415
Net cash outflow from operating activities (1,002,257) (664,353) (887,630)
Cash flows from investing activities
Payments for intangible fixed assets (183,947) (218,286) (443,657)
Payments for property, plant and equipment (33,103) (21,934) (65,288)
Transfer (to)/ from short-term investments (2,515,639) 403,518 (2,551,366)
Interest received 14,651 9,922 25,393
Net cash (outflow)/ inflow from investing activities (2,718,038) 173,220 (3,034,918)
Cash flows from financing activities
Share issue (net of expenses) - 107,456 7,761,706
Payment of lease liabilities (48,544) (48,421) (96,905)
Net cash (outflow)/ inflow from financing activities (48,544) 59,035 7,664,801
(Decrease)/ Increase in cash and cash equivalents (3,768,839) (432,098) 3,742,253
Cash and cash equivalents at beginning of period 8,670,274 4,928,021 4,928,021
Cash and cash equivalents at end of period 4,901,435 4,495,923 8,670,274
NOTES TO THE UNAUDITED AND CONDENSED CONSOLIDATED INTERIM ACCOUNTS
FOR THE SIX MONTHS ENDED 30 JUNE 2022
1. Basis of preparation and accounting policies
These interim statements have been prepared on a basis consistent with
International Financial Reporting Standards (IFRS). They do not contain all
of the information required for full financial statements and should be read
in conjunction with the financial statements of the Company as at and for the
year ended 31 December 2021. These interim financial statements do not
constitute statutory accounts within the meaning of the Companies Act.
The interim financial information has not been audited. The interim financial
information was approved by the Board of Directors on 13 September 2022. The
information for the year ended 31 December 2021 is extracted from the
statutory financial statements for that year which have been reported on by
the Company's auditors and delivered to the Registrar of Companies. The audit
report was unqualified and did not contain a statement under s498 (2) or
498(3) of the Companies Act 2006.
The accounting policies applied by the Company in these interim financial
statements are the same as those applied by the Company in its financial
statements for the year ended 31 December 2021.
2. Divisional breakdown
Enterprise Creator Total
Unaudited Unaudited Unaudited
Half year to Half year to Half year to
30 June 30 June 30 June
2022 2022 2022
£ £ £
CONTINUING OPERATIONS
Revenue 1,546,544 - 1,546,544
Cost of Sales (70,886) - (70,886)
GROSS PROFIT 1,475,658 - 1,475,658
Operating costs excluding LTIP provision (1,930,220) (182,508) (2,112,728)
EARNINGS BEFORE INTEREST, TAXATION, DEPRECIATION, AMORTISATION, EMPLOYEE SHARE (454,562) (182,508) (637,070)
OPTION COSTS AND LTIP PROVISION (EBITDA Pre LTIP)
LTIP provision 350,431 - 350,431
EARNINGS BEFORE INTEREST, TAXATION, DEPRECIATION, AMORTISATION, EMPLOYEE SHARE (104,131) (182,508) (286,639)
OPTION COSTS (EBITDA)
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