REG - Electric Guitar PLC - Availability of Annual Report 2022 & AGM notice
23/11/2023 17:30
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RNS Number : 5206U Electric Guitar PLC 23 November 2023
23 November 2023
Electric Guitar PLC
("Electric Guitar" or the "Company")
Notification of availability of Annual Report and Financial Statements 2022
and AGM notice
The Board of Electric Guitar PLC (LSE: ELEG), the Special Purpose Acquisition
Company seeking acquisitions in the digital marketing and advertising industry
as a provider of first-party data solutions, provides confirmation of the
availability of annual reports and AGM notices that were not previously
announced.
The annual report and financial statements for the year ended 31 March 2022
were published on 2 December 2022 and copies were sent to shareholders and are
available on the Company's website at
https://www.electricguitarplc.com/wp-content/uploads/2023/10/Annual-report-and-financial-statements-31-Mar-22.pdf
(https://www.electricguitarplc.com/wp-content/uploads/2023/10/Annual-report-and-financial-statements-31-Mar-22.pdf)
. Key elements from the 2022 annual report have been extracted and set out
in Appendix A below.
The Company announced the publication of the annual report and financial
statements for the year ended 31 March 2023 on 1 August 2023 and copies were
sent to shareholders and are available on the Company's website at
https://www.electricguitarplc.com/investor-documents/electric-guitar-plc-annual-report-and-financial-statements-for-the-period-ended-31-march-2023.pdf
(https://www.electricguitarplc.com/investor-documents/electric-guitar-plc-annual-report-and-financial-statements-for-the-period-ended-31-march-2023.pdf)
. Key elements from the 2023 annual report have been extracted and set out in
Appendix B below.
This year's Annual General Meeting of the Company ("AGM") was held at One,
Bartholomew Close, London, England, EC1A 7BL at 10.00 a.m. on Thursday, 7
September 2023 and copies of the Notice of AGM were posted to shareholders and
are available on the Company's website at
https://www.electricguitarplc.com/wp-content/uploads/2023/10/Electric-Guitar-plc-2023-AGM-FINAL86.pdf
(https://www.electricguitarplc.com/wp-content/uploads/2023/10/Electric-Guitar-plc-2023-AGM-FINAL86.pdf)
. All resolutions were passed at the AGM, as announced on 7 September 2023.
The 2023 AGM notice and the annual reports for 2022 and 2023 referred to above
are also available on the National Storage Mechanism:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) .
For further information:
Electric Guitar PLC 01189 570 444
John Hutchinson
Chair
Axis Capital Markets 020 3026 0320
(Corporate Broker) rh@axcap247.com
Richard Hutchison
Yellow Jersey PR 020 3004 9512
Sarah Hollins electric@yellowjerseypr.com
(https://appriver3651008983.sharepoint.com/sites/CompanyData/Shared%20Documents/Corporate%20Finance/Mandated%20Transactions/Electric%20Guitar/Announcements/electric@yellowjerseypr.com)
Annabelle Wills
Bessie Elliot
Appendix A
Extracts from the annual report and financial statements for the year ended 31
March 2022.
Chairman's Statement
I have pleasure in presenting the annual report and financial statements for
the year ended 31 March 2022.
In January 2022, the company successfully listed its shares for trading on the
London Stock Exchange Main Market, and at the same time secured a placing of
additional ordinary shares for £1,200,000 (before expenses). This has enabled
the company to research suitable targets for acquisition in line with its
stated corporate strategy. As at the time of issuing this report, the company
has not yet identified a suitable target for acquisition.
The Company was formed to undertake an acquisition of a controlling interest
in a company or business (an "Acquisition") in the digital media and
advertising sectors. Since its listing, the Company has pursued this aim. Any
Acquisition is expected to constitute a reverse takeover transaction and
consideration for the Acquisition may be in part or in whole in the form of
sharebased consideration or funded from the Company's existing cash resources
or the raising of additional funds.
The business environment has changed significantly since the Company's
successful listing in January this year.
In early spring, there were already nascent signs of the now very evident
global inflationary pressures. These increased enormously with Russia's
attempted invasion of Ukraine in late February. A broad range of energy,
industrial and agricultural commodities saw significant price increases. These
have, in turn, fed into the consumer sector, making central banks' task of
managing inflation more problematical and increasing fears of an extended
period of higher interest rates.
In the Company's chosen sphere of interest, digital media and advertising, the
structural changes identified in our Admission Document became evident. These
structural changes have continued to be driven by the increasing importance of
data privacy. As expected, this year has seen legislation start to be
implemented with digital companies responding by implementing privacy
technology.
Legislation
In February 2022 a landmark ruling against the IAB found that the majority of
cookie based digital advertising practices are 'illegal'. The IAB has since
responded with a series of appeals, however the implications of this judgement
are expected to be far reaching.
Privacy Technology
Other large technology companies have implemented privacy technology that has
impacted digital revenues. As well as this, the reduction in the use of
cookies in the future (timetable for H2 of 2024) is likely to several impact
data collection on over 80% of internet users.
Structural shift
Privacy is now an increasing disadvantage for the incumbents and newcomers are
capitalising on this as advertisers seek new ways of reaching digital
audiences.
Whilst advertising overall has been subject to macro-economic headwinds,
digital media businesses with a focus on first party data and privacy continue
to prosper. This is the shift which the strategy of the business is designed
to capitalise on.
The challenge for the Directors is to find a suitable acquisition upon which
to base the Company's future at a time when assets in the media sector are
becoming increasingly hard to value correctly. However, given the
opportunities from privacy driven disruption which are increasingly evident,
the directors remain confident in their ability to achieve this.
As summer progressed, it became clear that 'transitory' inflation was, in
fact, more embedded, than first thought. Central banks, including the Bank of
England, started to increase interest rates from historically low levels. UK
base rates have risen from ¼% in January of this year to 3% currently.
Meanwhile, the current and forecast increase in energy prices, combined with a
wider rise in the cost of living has, and continues to dampen consumer
activities and expectations. With consumer activity representing over 60% of
UK nominal GDP, this anticipated slowdown has led businesses to review their
own expectations.
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 31 MARCH 2022
Period
ended
31 March
2022
£
Administrative expenses (245,387)
Operating (loss)/profit (245,387)
Income tax expense -
(Loss)/profit and total comprehensive income for the period (245,387)
STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2022
2022
£
Current assets
Trade and other receivables 31,787
Cash and cash equivalents 996,331
1,028,118
Current liabilities
Trade and other payables 35,562
Net current assets 992,556
Net assets 992,556
Equity
Called up share capital 289,314
Share premium account 948,629
Retained earnings (245,387)
Total equity 992,556
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 MARCH 2022
Share capital Share Retained Total
premium account earnings
£
£ £ £
Balance at 24 March 2021 - - - -
Period ended 31 March 2022:
Loss and total comprehensive income for the period - - (245,387) (245,387)
Transactions with owners in their capacity as owners:
Issue of share capital 210,485 1,027,458 - 1,237,943
Bonus issue 78,829 (78,829) - -
Balance at 31 March 2022 289,314 948,629 (245,387) 992,556
STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 31 MARCH 2022
2022
£ £
Cash flows from operating activities
Cash absorbed by operations (241,559)
Net cash outflow from operating activities (241,559)
Investing activities
Receipts arising from loans made (53)
Net cash used in investing activities (53)
Financing activities
Proceeds from issue of shares 1,346,152
Share issue costs (108,209)
Net cash generated from/(used in) financing activities 1,237,943
Net increase in cash and cash equivalents 996,331
Cash and cash equivalents at beginning of year -
Cash and cash equivalents at end of year 996,331
Appendix B
Extracts from the annual report and financial statements for the year ended 31
March 2023.
Chairman's Statement
I have pleasure in presenting the annual report and financial statements for
the year ended 31 March 2023.
In January 2022, the company successfully listed its shares for trading on the
London Stock Exchange Main Market, and at the same time secured a placing of
additional ordinary shares for £1,200,000 (before expenses). This has enabled
the company to research suitable targets for acquisition in line with its
stated corporate strategy.
Proposed 3radical RTO
I am pleased to announce that on 6 July 2023 the Company entered into a
non-binding heads of terms to acquire (through a reverse takeover subject to
regulatory and shareholder approval and due diligence) all the outstanding
shares in 3radical Limited ("3radical") in an all-share transaction
("Transaction").
The Transaction is in line with the Company's strategy set out at the time of
its IPO last year. On completion of the Transaction, the Company's intention
is to cancel its listing on the Standard List and seek admission of its
ordinary share capital, as enlarged following completion of the Transaction,
to trading on the AIM Market of the London Stock Exchange ("Admission").
The heads of terms place an initial valuation on 3radical of £3 million,
subject to adjustments.
Macro-economic climate
The business environment has changed significantly since the Company's
successful listing in January 2022. Global inflationary pressures, which first
became apparent in spring 2022, have continued and whilst pressures on energy
and food have abated, central banks' task of managing inflation remains
challenging and it is likely that higher interest rates will continue for the
time being. With bond yields rising as a result, equity investors can be
expected to focus more on growth stocks.
Generative AI
The use and capabilities of generative AI, such as ChatGPT, are rapidly
expanding. The ability to automate content creation, generate and implement
media plans autonomously, and replace traditionally people-oriented services
like campaign account management, is already hastening the shift to
data-driven, personalised marketing. Brands will have to deliver much more
varied content driven by exponentially more data points, and they will have to
make sense of it in ways never seen before. Technology like 3radical's is
therefore becoming increasingly important to marketers.
The shift towards privacy first marketing.
In the Company's chosen sphere of interest, digital media and advertising, the
structural changes identified last year have become evident. These structural
changes have continued to be driven by the increasing importance of data
privacy.
1. Audiences are shifting their interest from platforms based around sharing
and socialising such as Facebook, towards platforms designed for broadcasting
like Instagram and TikTok. As a result, user-generated content has an
increasing impact on advertising Return on Investment ("ROI").
2. Companies traditionally interacting indirectly with consumers are now
increasingly bypassing retail and media partners to engage and conduct
transactions directly with customers.
3. Chief Marketing Officers ("CMOs") are increasingly focussed on preserving
and improving consumer relationships by using consented data-driven insights
to enhance customers' experience and optimise their marketing journeys from
exploration to sales.
Legislation
As expected, in the last year privacy legislation has continued to evolve in
line with the growing privacy-centric environment.
February 2022 saw a landmark European ruling against the Internet Advertising
Bureau ("IAB") (the industry body for digital advertising), which declared
that the majority of cookie-based digital advertising practices are 'illegal'.
The IAB has since responded with a series of appeals, but the implications of
this judgement are expected to be far reaching. Discussion around this
judgement is ongoing. However, privacy legislation has continued to evolve
towards a new privacy-centric data environment in the last year. Highlights
are:
· In January 2023, the American Data Privacy and Protection Act (ADPPA) was
proposed in the US Senate and is still under review. If enacted, it could
homogenize data protection regulations throughout the US, thereby simplifying
the present system of varying State laws.
· March 2023 marked the introduction of the UK Data Protection and Digital
Information Bill (No. 2) to the House of Commons as a replacement for the
European GDPR legislation. If passed in its current form, the new Bill will
allow UK businesses to obtain consent in a more flexible way, including
through implied consent.
· By June 2023, the EU parliament reached an agreement on the Data Act which,
amongst other initiatives, creates a privacy-centric framework to allow
businesses to share data. This will potentially increase opportunities for
innovative privacy businesses in the marketing space.
Privacy Technology
Google's depreciation of cookies is now scheduled for the end of 2024, and
privacy measures continue to be a high priority for providers of advertising
networks and devices. As a result, these providers are gaining greater control
of consumer data and therefore of pricing, and so related advertising costs
are rising just as marketers are increasingly seeking efficiencies to offset
adverse macro-economic conditions.
Structural shift
As the advertising market adjusts to the privacy-centric environment, business
leaders, particularly CEOs and CMOs, are evolving their marketing to reflect a
'people first' focus on valued customers, rather than relying on commoditised
data to continually attract new audiences.
Digital advertising spend is increasing, but the challenging macroeconomic
environment, coupled with the dynamic landscape of consumer behaviour, the
evolving regulatory environment, and the transformative power of new
technologies, means that innovation and adaptation are critical to success.
The marketing environment is becoming more complicated for large incumbent
service providers, favouring nimbler, technology-oriented businesses.
The Company's strategy therefore continues to be to capitalise on this
structural disruption in the marketing industry. This approach is coupled with
relatively high interest rates leaving many growth-oriented technology
companies with less access to the capital they need, resulting in more
realistic valuations by their founders and seed investors, and creating more
opportunities for the Company to acquire complementary technology businesses
at attractive valuations.
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 31 MARCH 2023
31 March 24 March
2023 2021 to 31
£ March 2022
£
Administration expenses (544,420) (245,387)
Operating loss (544,420) (245,387)
Finance income 6,730 -
Loss before income tax (537,690) (245,387)
Income tax - -
Loss and other comprehensive income (537,690) (245,387)
Earnings per share
Basic (pence) (0.93) (1.18)
Diluted (pence) (0.93) (1.18)
STATEMENT OF FINANCIAL POSITION
for the year ended 31 March 2023
2023 2022
£ £
ASSETS
CURRENT ASSETS
Trade and other receivables 29,533 31,787
Cash and cash equivalents 491,635 996,331
521,168 1,028,118
TOTAL ASSETS 521,168 1,028,118
EQUITY
SHAREHOLDERS' EQUITY
Share capital 289,314 289,314
Share premium 948,629 948,629
Accumulated losses (783,077) (245,387)
TOTAL EQUITY 454,866 992,556
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 66,302 35,562
TOTAL LIABILITIES 66,302 35,562
TOTAL EQUITY AND LIABILITIES 521,168 1,028,118
STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March 2023
Share capital Share premium Retained earnings
Total
At 24 March 2021 £ £ £ £
- - - -
Comprehensive income for the year
Loss for the year - - (245,387) (245,387)
Total comprehensive income for the year - - (245,387) (245,387)
Contributions by and distributions to owners 210,485 1,027,458 - 1,237,943
Shares issued during the year
Issue of bonus shares 78,829 (78,829) - -
Total transactions with owners 289,314 948,629 - 1,237,943
At 1 April 2022 289,314 948,629 (245,387) 992,556
Comprehensive income for the year
Loss for the year - - (537,690) (537,690)
Total comprehensive income for the year - - (537,690) (537,690)
At 31 March 2023 289,314 948,629 (783,077) 454,866
STATEMENT OF CASH FLOWS
for the year ended 31 March 2023
24 March
31 March 2021 to 31
2023 March 2022
£ £
Cash flow from operating activities
Loss for the year/period (537,690) (245,387)
Adjustments for:
Finance income (6,730) -
Decrease/(increase) in trade and other receivables 2,254 (31,734)
Increase in trade and other payables 30,740 35,562
Net cash used in operating activities (511,426) (241,559)
Cash flow from investing activities
Finance income 6,730 -
Other payments - (53)
Net cash from / (used in) investing activities 6,730 (53)
Cash flow from financing activities
Proceeds from issue of shares - 1,346,152
Share issue costs - (108,209)
Net cash from investing activities - 1,237,943
Net (decrease)/increase in cash and cash equivalents (504,696) 996,331
Cash and cash equivalents at the beginning of the
year/period 996,331 -
Cash and cash equivalents at the end of the year/period 491,635 996,331
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