REG - Blackbird PLC - Interim Results
05/09/2023 07:00
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RNS Number : 3357L Blackbird PLC 05 September 2023
5 September 2023
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 2023.
Ian McDonough, CEO of Blackbird plc, commented:
"I am delighted to report that there is continued momentum behind our
strategic progression to scale the business and the Company is well placed to
execute on this with a strong balance sheet. Since we raised funding in
December 2021, we have significantly progressed our Creator SaaS strategy and
we see this as an exciting route to expand our addressable market and
accelerate growth for the Company.
"Although revenue for the period was down 36% on the prior period at £985k,
the decrease can be predominantly explained by two non-recurring items earned
in H1 2022, being the EVS development fees on our technology licensing deal
and the revenues from the global winter games.
"The recent cyclical and structural changes in the Media and Entertainment
industry (M&E) have been considerable and impacted the professional Media
and Entertainment part of our business, most prominently our deal with A+E
Networks, which, as previously announced, was terminated at the end of June
2023. In anticipation of market shifts, we successfully raised money in 2021
to build a product for the Creator space. Therefore, we have reduced headcount
in our UK sales and marketing team in order to maximise return on resources by
investing in software developers and product specialists.
"Through our core streamlined Blackbird team, now physically located closer to
its target market, we are focusing on larger deals and OEM partnerships.
Following the delivery of our technology licensing deal at the end of 2022,
EVS announced strong interest, at NAB, in their product "IPD VIA Create" which
is 'Powered by Blackbird'. Through our deal structure, if this product is
successful, Blackbird will benefit from significantly increased royalty
payments.
"The development of the Creator SaaS platform, led by Chief Product Officer,
Sumit Rai, has made significant progress and will launch in early 2024. The
platform will align us closely with the fast-growing Creator Economy via a
self-service SaaS platform. We have attracted world class talent to deliver on
this strategy which is underpinned by our proven core patented technology.
We are well funded to launch this platform.
"We are very excited about this product and are looking forward to updating
investors later this month at our Special Event for investors on 13 September
2023.
Operational highlights (post period)
· Special Event for investors scheduled for 13 September 2023 to
update on the progress of our Creator SaaS platform
· New deal signed with a football confederation for use on
a high profile regional tournament
· Deal signed with Australian OTT provider for use at the
US Open on the back of successful deployments at other tennis majors (see
below)
Financial highlights (post period)
· £1,813k* secured revenue for 2023 as at 31 August 2023, down
32% vs prior year (2022 comparative: £2,684k)
· Contracted but unrecognised revenues of £1,997k* as at 31
August 2023 (2022 comparative: £4,047k). £568k relates to 2023 and £815k
revenue relates to 2024 and the remainder to 2025 and beyond
* Subject to exchange rate fluctuations
Operational highlights (during the period)
· Creator SaaS strategic validation through quantitative and
qualitative research undertaken by the Company
· Direct annual cost savings of £0.5m from reduction of UK
based sales and marketing staff. Reinvestment of funds in software development
team and product specialists
· Contract terminated by A+E Networks at end of June 2023
· Deal signed with Argentinian station Telefe, part of the
Paramount Global group and introduced by the CBS sports team, for football
highlights
· One year deal signed with a large Mexican broadcaster via
our partner Simplemente
· Deals signed with Australian OTT provider and subsequently used at
Roland Garros and then again at Wimbledon
· Further successful renewals with Sky News Arabia, BT and
Arsenal
· Increased IP portfolio to 17 patents, with a further 12
pending
· Guest exhibitor on Microsoft's stand at the NAB show in
April 2023
Financial highlights (during the period)
· Revenues of £985k for the 6 months to 30 June 2023,
down 36% year on year (6 months to 30 June 2022: £1,547k). The majority of
the decrease arose from H1 2022 containing non-recurring revenues, being: i)
£426k from development services for our first 'Powered by Blackbird'
licensing deal; and ii) on the global winter games
· Contracted but unrecognised revenues down 36% year
on year to £2,120k as at 30 June 2023 (£3,331k as at 30
June 2022) due to the loss of A+E Networks contract and a year less in the
order book on the Company's larger deals
· Increased operating costs, excluding LTIP charge, of
£2,422k (6 months to 30 June 2021: £2,113k), driven predominantly by an
increase in the team to work on our Creator SaaS product, £142k non-recurring
restructuring costs partially offset by higher capitalised development costs
· EBITDA loss of £1,523k (6 months to 30 June 2022:
£385k) due to lower revenues and higher operating costs, as described above,
and a £353k LTIP credit to the income statement in H1 2022 (2023: £nil) on
finalisation of the last LTIP scheme partially offset by a lower share option
expense as a result of leavers in the restructuring
· Net loss before tax of £1,617k (6 months to 30 June
2021: £604k) due to lower EBITDA partially offset by higher net financial
income
· Cash burn, excluding proceeds from share issues and
transfers from short term investments, increased to £1,921k (6 months to 30
June 2022: £1,253k) due to lower revenues and higher staff costs to work on
our Creator SaaS product
· Cash and short-term investments of £8,177k (30 June
2022: £11,586k) 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)
Operational review
The Company started 2023 with momentum, specifically:
• 2022 saw record revenues for the 5th consecutive year, up 38% on
the previous year;
• a strong balance sheet as a result of a successful fundraising in
December 2021, resulting in a 2023 opening cash position of £10.1million;
• successfully execution of the EVS contract with the jointly
created product, "IPD VIA Create", being rolled out to a US broadcaster and
used at a global sporting event at the end of 2022;
• expansion of our addressable market to prosumers and professional
teams with a significant refocussing of the team and key hires in Product,
Engineering and Product Marketing to build our Creator SaaS platform; and
• being crowned 'IABM Broadcast / Media Company of the Year' for
2022.
During the period, we reduced headcount in the UK sales and marketing areas in
order to focus our resources on product development and maximise the return on
investment from our technology. This was also partly driven by the continuing
cyclical and structural changes in the M&E industries. These led to major
media corporations seeking cost savings which has impacted this part of our
business, most prominently our deal with A+E Networks, which, as we announced
on 12 May 2023, terminated at the end of June 2023. Through our streamlined
team, now located closer to this market, we are focusing on larger deals and
OEM partnerships.
The development of the Creator SaaS platform, led by our Chief Product
Officer, Sumit Rai, is progressing well. Early access is scheduled for Q4
2023.
Commercial activity during the 6 months under review included:
In OEM:
• EVS announced strong interest in "IPD VIA Create", which is 'Powered
by Blackbird', at NAB. As previously explained, our commercial relationship
lasts for five years where the Company will financially benefit on the back of
the success of the deployment of the product, with the financials underpinned
by minimum guarantees; and
• Blackbird was present on Microsoft's stand at NAB, which
highlights the pedigree and perception of the Company's brand and product.
In direct deals:
• deal signed with Argentinian station Telefe, part of the Paramount
Global group and introduced by the CBS sports team, for football highlights;
• one year deal signed with a large Mexican broadcaster via our
partner Simplemente;
• deal signed with Australian OTT platform for use on Roland Garros.
They also used us again at Wimbledon and the US Open (post period); and
• successful renewals with Sky News Arabia, BT and Arsenal.
Financial review
Revenue decreased by 36% to £985k for the six-month period compared to the
corresponding period last year (six months to 30 June 2022 £1,547k). The
majority of the decrease can be explained by two non-recurring items earned in
H1 2022 - firstly £426k from development services for our technology
licensing deal with EVS, and secondly the licence fees earned from the global
winter games. As described above, the cyclical and structural changes within
the M&E industries have impacted growth in this area of the business.
Contracted but unrecognised revenue was £2,130k at 30 June 2023, a decrease
of 36% compared to 30 June 2022 due to the A+E Networks termination and one
year less in the order book on our larger deals.
Operating costs, excluding LTIP charges, for the period grew to £2,424k
versus £2,113k in the corresponding period last year reflecting an increase
in: i) £965k costs associated with our Creator SaaS platform (2021: £183k);
and ii) non-recurring restructuring costs of £142k offset by higher
development costs being capitalised during the period (£734 vs £176k in the
prior period) with the increase being predominantly driven by the additional
work on Creator SaaS compared to prior period. As previously announced, the
restructuring of the business that occurred in the period will lead to annual
savings of c.£500k.
Adjusted EBITDA loss, excluding share option costs and LTIP provision
movement, of £1,513k (6 months to 30 June 2022: £637k) from lower revenues
and higher operating costs.
EBITDA loss of £1,523k (6 months to 30 June 2022: £385k) due to the movement
in Adjusted EBITDA loss, excluding share option costs and no LTIP movement in
the period (6 months to 30 June 2022: LTIP credit of £353k on closure of the
last LTIP period) and £88k lower share option expense in the period compared
to prior year driven by the restructuring of the business.
The net loss for the period was £1,617k (2022: £603k). Lower EBITDA was
partially offset by increased net financial income from higher interest rates
compared to the prior period.
Cash burn in the period, excluding proceeds from share issues and transfers
from short-term investments, was £1,921k versus £1,253k in the same period
in 2022 driven by lower revenues and higher staff costs including for Creator
SaaS, as explained above.
Outlook
There is continued momentum behind our strategic progression to scale the
business and the Company's balance sheet is strong with £8,177k of cash and
short-term investments and no debt at the end of June 2023.
The Company continues to focus on large scale deals for the Blackbird platform
and 'Powered by Blackbird' with the aim of producing a positive net
contribution from this division. Additionally, the demands of our existing and
new customers will continue to drive innovations in our technology.
Significant progress continues on our Creator SaaS platform, led by a world
class team. This builds on our core technology and will expand our addressable
market. This product represents an exciting future for the Company and our
strong balance sheet will enable us to launch it. Regular updates will be
provided to shareholders, including a special event on 13 September 2023,
ahead of an expected launch in early 2024.
UNAUDITED AND CONDENSED STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHS
ENDED 30 JUNE 2023
Unaudited Unaudited Audited
Half year to Half year to Year to
30 June 30 June 31 December
2023 2022 2022
£ £ £
CONTINUING OPERATIONS
Revenue 985,115 1,546,544 2,847,202
Cost of Sales (76,268) (70,886) (143,149)
GROSS PROFIT 908,847 1,475,658 2,704,053
Operating costs excluding LTIP provision (2,421,622) (2,112,728) (4,509,938)
ADJUSTED EARNINGS BEFORE INTEREST, TAXATION, DEPRECIATION, AMORTISATION, (1,512,775) (637,070) (1,805,885)
EMPLOYEE SHARE OPTION COSTS AND LTIP PROVISION (Adjusted EBITDA pre LTIP)
Decrease in LTIP provision - 350,431 350,431
Employee share option costs(1) (10,028) (98,356) (168,981)
EARNINGS BEFORE INTEREST, TAXATION, DEPRECIATION, AMORTISATION (EBITDA) (1,522,803) (384,995) (1,624,435)
Depreciation (87,358) (68,169) (144,677)
Amortisation (163,564) (192,542) (383,330)
(250,922) (260,711) (528,007)
OPERATING LOSS (1,773,725) (645,706) (2,152,442)
Net Finance income 156,275 42,015 141,414
LOSS BEFORE INCOME TAX (1,617,450) (603,691) (2,011,028)
Income Tax - - 94,178
LOSS FOR THE PERIOD (1,617,450) (603,691) (1,916,850)
TOTAL COMPREHENSIVE LOSS FOR THE PERIOD (1,617,450) (603,691) (1,916,850)
Earnings per share expressed in pence per share:
Basic and diluted - continuing and total operations (0.44p) (0.16p) (0.52p)
UNAUDITED AND CONDENSED STATEMENT OF FINANCIAL POSITION AT 30 JUNE 2023
Unaudited Unaudited Audited
30 June 30 June 31 December
2023 2022 2022
ASSETS £ £ £
NON-CURRENT ASSETS
Other intangible assets 1,904,198 1,178,891 1,270,231
Property, plant and equipment 149,128 221,589 202,204
2,053,326 1,400,480 1,472,435
CURRENT ASSETS
Trade and other receivables 415,339 639,497 863,211
Current tax assets 0 32,167 94,178
Short-term investments 2,653,780 6,684,825 4,366,342
Cash and bank balances 5,523,638 4,901,435 5,732,350
8,592,757 12,257,924 11,056,081
TOTAL ASSETS 10,646,083 13,658,404 12,528,516
EQUITY
Issued share capital 2,941,044 2,940,524 2,941,044
Share premium 34,038,746 34,034,228 34,038,746
Capital contribution reserve 125,000 125,000 125,000
Retained earnings (27,512,196) (24,662,240) (25,904,774)
9,592,594 12,437,512 11,200,016
NON-CURRENT LIABILITIES
Lease & License - 85,543 29,783
- 85,543 29,783
CURRENT LIABILITIES
Lease 77,100 91,572 106,162
Trade and other payables 976,389 1,043,777 1,192,555
1,053,489 1,135,349 1,298,717
TOTAL LIABILITIES 1,053,489 1,220,892 1,328,500
TOTAL EQUITY AND LIABILITIES 10,646,083 13,658,404 12,528,516
UNAUDITED AND CONDENSED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2023
Called up share capital Share premium Capital contribution reserve Retained earnings Total equity
£ £ £ £ £
Balance at 1 January 2022 2,940,524 34,034,228 125,000 (24,156,905) 12,942,847
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
Changes in equity
Issue of share capital (net of expenses) 520 4,518 - - 5,038
Share based payment - - - 70,625 70,625
Total comprehensive income - - - (1,313,159) (1,313,159)
Balance at 31 December 2022 2,941,044 34,038,746 125,000 (25,904,774) 11,200,016
Changes in equity
Issue of share capital - - - - -
Share based payment - - - 10,028 10,028
Total comprehensive income - - - (1,617,450) (1,617,450)
Balance at 30 June 2023 2,941,044 34,038,746 125,000 (27,512,196) 9,592,594
UNAUDITED AND CONDENSED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 2023
Unaudited Unaudited Audited
Half year to Half year to Year to 31
30 June 30 June December
2023 2022 2022
£ £ £
EBITDA (1,522,803) (384,995) (1,624,435)
Decrease in LTIP provision - (350,431) (350,431)
Employee share option costs 10,028 98,356 168,981
(Increase) / Decrease in working capital 290,204 (360,824) (388,841)
Cash used in operations (1,222,571) (997,894) (2,194,726)
Interest paid on lease liabilities (2,158) (4,363) (7,692)
Tax received 94,178 - 32,166
Net cash outflow from operating activities (1,130,551) (1,002,257) (2,170,252)
Cash flows from investing activities
Payments for intangible fixed assets (809,906) (183,947) (470,200)
Payments for property, plant and equipment (34,280) (33,103) (90,226)
Transfer from / (to) short-term investments 1,712,562 (2,515,639) (197,156)
Interest received 102,089 14,651 82,041
Net cash inflow / (outflow) from investing activities 970,465 (2,718,038) (675,541)
Cash flows from financing activities
Share issue (net of expenses) - - 5,038
Payment of lease liabilities (48,626) (48,544) (97,169)
Net cash (outflow)/ inflow from financing activities (48,626) (48,544) (92,131)
Decrease in cash and cash equivalents (208,712) (3,768,839) (2,937,924)
Cash and cash equivalents at beginning of period 5,732,350 8,670,274 8,670,274
Cash and cash equivalents at end of period 5,523,638 4,901,435 5,732,350
NOTES TO THE UNAUDITED AND CONDENSED CONSOLIDATED INTERIM ACCOUNTS
FOR THE SIX MONTHS ENDED 30 JUNE 2023
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 2022. 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 4 September 2023. The
information for the year ended 31 December 2022 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 2022.
2. Divisional breakdown
Enterprise Corporate Creator SaaS Total
Unaudited Unaudited Unaudited Unaudited
Half year to Half year to Half year to Half year to
30 June 2023 30 June 2023 30 June 2023 30 June 2023
£ £ £ £
CONTINUING OPERATIONS
Revenue 985,115 - - 985,115
Cost of Sales (76,268) - - (76,268)
GROSS PROFIT 908,847 - - 908,847
Operating costs excluding LTIP provision (1,351,015) (566,219) (504,388) (2,421,622)
Adjusted EARNINGS BEFORE INTEREST, TAXATION, DEPRECIATION, AMORTISATION, (442,168) (566,219) (504,388) (1,512,775)
EMPLOYEE SHARE OPTION COSTS AND LTIP PROVISION (Adjusted EBITDA before LTIP
and share option costs)
LTIP Provision - - - -
Employee share option costs - - (10,028)
(10,028)
EARNINGS BEFORE INTEREST, TAXATION, DEPRECIATION, AMORTISATION (EBITDA) (442,168) (576,247) (504,388) (1,522,803)
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