REG - LBG Media PLC - Full Year Results
22/01/2025 07:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250122:nRSV1937Ua&default-theme=true
RNS Number : 1937U LBG Media PLC 22 January 2025
22 January 2025
LBG Media plc
("LBG Media", the "Company" or "Group")
Full year results for the nine months ended 30 September 2024
FINANCIAL PERFORMANCE AHEAD OF CALENDAR YEAR MARKET EXPECTATIONS.
STRONG MOMENTUM GOING INTO 2025.
LBG Media, the global digital entertainment business with a focus on young
adults, is pleased to announce its results for the nine months ended 30
September 2024 ("FY24" or "the period"). Following the change in year-end,
statutory financial results are being reported for the nine months ended 30
September 2024.
Highlights
● Financial performance ahead of market expectations for the calendar year to
December 2024(1)
● Deeper brand relationships and becoming integral to our clients' corporate
marketing strategies
● Integration of U.S. businesses delivered significant wins with a strong
pipeline, providing confidence in future growth
● Increasing diversification of revenues with Direct 51%, Indirect 47% (Social
26%, Web 21%), Other 2%(2)
● Strong results in Direct & Web; Social temporarily impacted by Facebook
commercial model change in calendar Q3
● Positive first quarter in the year ending 30 September 2025 ("FY25") giving
confidence over full year performance and clear line of sight to £200m
revenue
Financial Highlights
FY24 FY23 Unaudited 12 months to 30 September 2024 Unaudited 12 months to 30 September 2023 Unaudited 12 month YoY growth rate (%)
(9 months to 30 September 2024) (12 months to 31 December 2023)
- Direct 34.4 29.3 43.9 31.6 39%
- Indirect 29.4 37.1 40.7 38.3 6%
- Other 1.1 1.1 1.6 1.0 60%
Total Group Revenue (£m) 64.9 67.5 86.2 70.9 22%
Adjusted EBITDA (£m)(3) 16.9 17.4 24.5 21.1 16%
Adjusted EBITDA margin(3) 26% 26% 28% 30% (2)%pts
Profit before tax 12.1 5.9 14.5 11.0 32%
Cash and cash equivalents 27.2 15.8 27.2 30.7 (12)%
● Total Group revenue up 22% for the unaudited 12 months to 30 September 2024,
with 6% organic growth and the remainder attributed to the acquisition of
Betches in October 2023(4)
● Broadly even split between Direct and Indirect reflects effectiveness of
business model and reinforces sustainability of our growth, with Facebook now
accounting for 23% of total revenue for the unaudited 12 months to 30
September, compared to 37% at time of IPO
● Adjusted EBITDA up 16% for the unaudited 12 months to 30 September 2024,
predominantly driven by the expansion of our U.S. footprint, through the
acquisition of Betches, and a more efficient ANZ operating model
● Adjusted EBITDA margin impacted by investments for growth of £3.4m which have
focused on our Direct and Web segments, and which are already delivering
positive results
● Cash and cash equivalents of £27.2 million at 30 September 2024 (31 December
2023: £15.8 million) with very strong cash conversion of 105%(5)
Strategic and Operational Highlights
DIRECT: Continued demand from brands and media agencies for our content to
reach young adults online
● Strong performance in client retention and acquisition, with brief conversion
of 29%, repeat revenue of 74% and 9 clients that generate revenue over $1m(6)
● Expanded partnerships with major brands such as Google, where we have
supported campaigns for Android, Pixel, Gemini, and Google Pay, showcase our
ability to collaborate with brands on a macro scale
INDIRECT: Revenues we share with social media platforms that place adverts
next to our content
● Global audience has grown by 19% year-on-year, to 503m, with U.S. audience of
143m, highlighting our unparalleled engagement and extensive reach(7)
● Investment in Web driving sessions and yields higher, with positive progress
maintaining our position as one of Facebook's largest publishers
● From July to September 2024, changes to Facebook's commercial model resulted
in lower Indirect revenues from Social compared to the same period in the
prior year. As with previous platform changes, we were able to adapt quickly
and saw a return to normalised levels on exiting Q1 FY25, providing positive
momentum for the remainder of the new year ahead
U.S. EXPANSION: Combined business performing well in the world's largest ad
market
● Strong signs of early success with key client wins such as Netflix, L'Oreal
and White Castle and alignment of commercial teams in H1 bearing fruit with a
strong pipeline
● Collaboration between LBG Media and Betches has advanced Betches' social
content strategy, showcasing cross-business learning and presenting
opportunity for diversification of our U.S. revenues
Outlook
The Group has entered FY25 with good momentum across its three growth lenses
of Direct, Indirect, and U.S. expansion. The Board remains confident in the
size of the opportunity ahead and may consider further investment to
accelerate the U.S. growth strategy.
Building on a robust first quarter that achieved double-digit growth compared
to the same period last year, management is confident in the growth trajectory
for the remainder of FY25 and expects revenue to increase by approximately
10%.
CEO, Solly Solomou commented:
"2024 was a transformational year for LBG Media. We are running more campaigns
for more blue-chip brands, particularly in the U.S., the largest advertising
market in the world. We have been able to drive this momentum for two reasons.
Firstly, our acquisition of Betches has extended our already-strong reach with
U.S. social audiences and our combined business is performing well. Secondly,
LBG Media has a unique model. More than half a billion people globally,
including Gen Z and Millennials, see us as the go-to destination for digital
content. The biggest brands and the biggest celebrities therefore want to
partner with us to access the growing buying power and influence of this
hard-to-reach demographic. The strength of our model, our progress in the
U.S., and our fantastic team, explain why our results are ahead of calendar
year expectations and give us confidence of further progress in 2025."
Analyst Presentation
LBG Media will host a hybrid virtual and in-person analyst briefing at 9.30am
UK time, on Wednesday 22 January 2025. To join the briefing virtually, please
use the following webcast link: https://brrmedia.news/LBG_FY_24
(https://brrmedia.news/LBG_FY_24)
A recording of the presentation will also be available on the LBG Media
website at
www.lbgmedia.co.uk/results-reports-presentations/results-and-presentations
(http://www.lbgmedia.co.uk/results-reports-presentations/results-and-presentations)
following the event.
Notes
(1) External market consensus for year ending 31 December 2024: Revenue
£86.3m and Adjusted EBITDA £23.4m.
(2) On a proforma basis for the 12 months to the 30 September 2024. Social and
Web form part of Indirect, which, along with Direct, is one of two core
revenue streams.
(3) Adjusted EBITDA - earnings before interest, tax, depreciation, and
amortisation adjusted for share-based payments (including employers NIC as
appropriate) and adjusting items. Adjusted EBITDA margin is adjusted EBITDA
divided by Group Revenue represented as a percentage.
(4) Organic growth excludes the impact of Betches acquisition and ANZ model
restructure.
(5) Cash conversion is on a proforma basis for the 12 months to 30 September
2024 and calculated as operating cash flow divided by adjusted EBITDA.
(6) All numbers shown on a proforma basis for the 12 months to 30 September
2024. Repeat revenue represents percentage of proforma 2024 Direct revenue
from clients that ran campaigns with us in 2022 and 2023 proforma periods.
(7) Audience numbers reflect social followers, unique podcast listeners and
average monthly website users in the 12 months 30 September 2024. The
percentage growth indicates the change compared to the corresponding period in
the previous year.
For further information please contact:
LBG Media plc
Solly Solomou, Co-founder &
CEO investors@ladbiblegroup.com
Richard Jarvis, CFO
Matthew Lee, Investor Relations
Zeus (Nominated Adviser & Broker)
Dan Bate / Nick Cowles (Investment Banking) Tel: +44 (0) 161 831 1512
Benjamin Robertson (Equity Capital Markets) www.zeuscapital.co.uk (http://www.zeuscapital.co.uk/)
Peel Hunt LLP (Joint Broker)
Neil Patel
Tel: +44 (0) 207 418 8990
Benjamin Cryer
www.peelhunt.com
Alice Lane
Kate Bannatyne
Media Enquiries
FTI Consulting
LLP Tel: +44 (0) 203 727 1000 ladbiblegroup@fticonsulting.com
Jamie Ricketts / Kwaku Aning / Jemima Gurney (mailto:ladbiblegroup@fticonsulting.com)
Notes to editors
We help brands reach young adults on social media platforms, such as Facebook,
Instagram, Snapchat, X, YouTube and TikTok and our owned and operated
websites.
We produce and distribute digital content such as videos, editorial, images
and audio.
We do this through our brands, such as LADbible and SPORTbible, which are
dedicated to distinct popular interests (e.g. news, sport, gaming).
Engagement is at the heart of what we do - which comes through in our two main
revenue streams:
a. We create bespoke content for blue-chip advertisers that gives them access to
a young adult audience that is hard to reach for traditional media players.
This is distributed across social media platforms and our owned and operated
websites. We call this 'Direct' revenue.
b. Third parties - such as social media platforms - generate revenue by placing
advertising next to our content. We call this 'Indirect' revenue, and the
revenue is shared between the publisher, which is us, and the social media
platform.
LBG Media is listed on the AIM market of the London Stock Exchange (AIM: LBG).
CHAIR'S STATEMENT
LBG has come a long way from the organisation that joined the public markets
in 2021, and I am immensely proud of the incredible work our team has done to
shape the present-day business. The past nine months have been another period
marked by strong financial performance, further embedding of our footprint in
the U.S. and strengthening our line of sight to £200m of revenue.
Underpinning the success of our business model is our highly engaged audience.
This audience grew by 19% in the 12 month proforma period ended 30 September
2024, to 503m, as rising audience numbers, alongside key sporting and cultural
event campaigns, confirm our position as one of the 'go-to' digital
entertainment brands for young adults.
We remain extremely well positioned to capture the opportunity ahead of us as
the macro shift towards digital advertising continues and the purchasing power
of Gen Z expands. As a digital advertiser focused on young adults, LBG is
direct beneficiary of these macro trends, and this is evident in our financial
performance, and future opportunity, as we look to enhance value for our
shareholders and stakeholders alike.
Our progress
In the 9 months ended 30 September 2024, LBG made significant progress
focusing on three key growth lenses: Direct, Indirect, and U.S. expansion,
with the latter supplementing growth across both Direct and Indirect
operations. During this period, the Group delivered revenue of £64.9m,
adjusted EBITDA reached £16.9m, while profit before tax increased to £12.1m.
For the unaudited proforma 12 months ended 30 September 2024, the Group
reported revenue of £86.2m, up 22% compared to the same prior period. On an
unaudited 12 month proforma basis, adjusted EBITDA rose to £24.5m, an
increase of 16%, and profit before tax grew 32% to £14.5m.
Direct revenue, which is where we provide content marketing services to
blue-chip brands and media agencies, accounted for over 50% of total Group
revenue in the 9 months ended 30 September 2024 with the impressive growth
driven by an expanding client base, deeper relationships with existing
partners and the acquisition of Betches in October 2023. Direct brief
conversion of 29% and 74% repeat client revenue in the 12 month period to 30
September 2024 also highlights the confidence our partners have in our ability
to deliver targeted and unique campaigns that drive meaningful penetration and
results.
Our Indirect business is where we generate revenue on social platforms and
from our owned and operated websites. We have expanded our Web capabilities by
investing in people and technology that have enhanced our Web programmatic
offering, resulting in a significant increase in both sessions and yields
during the period. Social revenues were temporarily impacted by the Facebook
commercial model change in calendar Q3 but, as with previous platform changes,
we were able to adapt quickly and saw a return to normalised levels on exiting
Q1 FY25. This gives us confidence and positive momentum for the remainder of
the new year ahead.
We also saw significant progress in the U.S. market where we successfully
integrated the LBG and Betches commercial teams in the first half of the
period, resulting in several major wins that are a testament to the
complementary nature of our operations. Partnerships with global brands like
The Boston Beer Company, NYX Cosmetics, and White Castle illustrate the
growing demand for access to our vast audience and top-tier capabilities in
the U.S. market.
Change in accounting reference date
As announced on 24 July 2024, we have adopted 30 September as our accounting
year-end. In this transitionary reporting period we are required to present
the statutory statements as the 9 months ending 30 September 2024 in
comparison to the 12 months ending 31 December 2023. However, we appreciate
that it is difficult for the reader to understand the underlying performance
of the business on this basis, therefore our Annual Report and Accounts
include an unaudited proforma consolidated statement of comprehensive income
as supplementary information, providing insight into the Group's performance
on an annualised basis for the 12 months ending 30 September 2024 in
comparison to the 12 months ending 30 September 2023. This unaudited proforma
information, sourced from the Group's management accounts for the two
comparative periods, does not form part of the audited financial statements.
Additional notes, including segmental analysis, key assumptions, and
reconciliations to the reported financial statements, are detailed on pages 27
to 29 of the Group's Annual Report and Accounts.
Board changes
The Board is always open and transparent with its shareholders and announces
that, due to personal reasons, the Company's Chief Financial Officer, Richard
Jarvis, is currently taking some time away from the business. To ensure that
in the interim the Board has the appropriate oversight and guidance, I will
move into an executive Chair role, spending more time in the business, with
particular responsibility for the finance and legal teams. My career included
14 years as COO, CFO & Deputy CEO at GB Group plc, before I retired in
June 2021.
LBG announced on 6 January 2025 that Richard Flint has stepped down from his
non-executive role on the Board, effective 31 December 2024. I would like to
express my gratitude to Richard for his valuable contributions and guidance
during his tenure, particularly in helping to shape the Group's strategic
direction. The Board wishes him the very best in his future endeavours.
Social responsibility and governance
We take immense pride in the significant work we do to support meaningful
causes and drive positive change. Our commitment to being a socially
responsible organisation is rooted in our ability to engage with our audience,
empowering them by fostering communities that laugh, think, and act. This
engagement is a fundamental enabler of our success, and we are dedicated to
remaining true to these core values in the years ahead.
Outlook
Finally, none of the progress made this period would have been possible
without the dedication and hard work of our people. On behalf of the Board, I
want to thank every member of the LBG team for their commitment and effort
throughout the period - it has not gone unnoticed. I would also like to extend
my gratitude to the brands we work with, our global audience and our
shareholders for their continued support and trust.
As we look ahead to the opportunities and challenges of the coming year, I
remain confident that we present a unique and highly differentiated
proposition within the market. We capture the eyes and ears of a highly
sought-after demographic for marketers, and in the complex, digital media
landscape, the detailed understanding we have of this audience provides a
strong foundation for long-term growth and the delivery of sustained
shareholder value.
Dave Wilson
Chair
22 January 2025
CHIEF EXECUTIVE OFFICER'S REVIEW
2024 has been a period of strong financial growth and key strategic and
operational advancements as we progress along our line of sight to £200m in
revenue. This path to £200m is driven by a clear focus on three key growth
lenses: Direct, Indirect, and U.S. expansion, with our expansion in the U.S.
supporting growth across both Direct and Indirect segments. Combined with our
diversified revenue streams, strong client relationships, and dedicated team,
this provides us with a platform for sustainable growth, enabling LBG to
continue to capture market share from traditional media players in the years
ahead.
Market dynamics
The global ad market is expected to exceed $1 trillion by 2025.(1) Over
two-thirds of this is allocated to digital advertising and the momentum
continues to be one-way, with this figure expected to reach 70% in the next
year, up from 50% just five years ago.(1) This macro shift positions LBG as a
key player within the biggest and fastest-growing segment of global
advertising. A significant driver of this growth is social media, which has
become the largest global advertising medium, accounting for 24% of total ad
spend. With 94% of Gen Z using social media, we are uniquely positioned to
capture spend targeting this influential demographic.(1) Gen Z is not only the
largest generation ever from a population perspective, but it is also
demonstrating significant purchasing power - already Gen Z represents 17% of
global spend and is projected to become the wealthiest generation that has
ever lived.(1) Our focus on engaging this digitally native generation,
alongside the rapid expansion of the digital ad market, provides substantial
opportunities for sustainable long-term growth for our business.
1 - Sources: WARC, Global Ad Spend Outlook 2024/25 & NIQ, A Report on Gen
Z Spending Power.
Financial Performance
We have delivered a strong financial performance in both the reporting and
proforma period. Total revenue for the 9 months ended 30 September 2024
reached £64.9m (12 month FY23: £67.5m). Revenue was £86.2m for the
unaudited proforma financial statements for the 12 months ended 30 September
2024, an increase of 22% based on the same period from the prior year. The
growth of Direct, which now accounts for more than 50% of our total revenue,
up from 41% at the time of our IPO in 2021, underscores the effectiveness of
our business model and the strong relationships we have built with major
brands. Further diversity in Indirect revenues with the growth of our Web
offering provides the business with a robust and resilient financial base.
Our strong topline performance in the nine month period has resulted in
adjusted EBITDA of £16.9m (12 month FY23: £17.4m). For the unaudited
proforma financial statements for the 12 months ended 30 September 2024,
adjusted EBITDA increased by 16%, driven by strong revenue growth,
improvements to the ANZ operating model, and the accretive impact of Betches.
Our profit before tax increased to £12.1m for the nine month period ended 30
September 2024, whilst on an unaudited 12 month proforma basis, profit before
tax grew 32% to £14.5m. We are also pleased to report a healthy cash position
of £27.2m as at 30 September 2024, up from £15.8m at 31 December 2023. This
provides us with the flexibility to continue reinvesting in our business and
pursue strategic acquisitions, thereby supporting our long-term growth.
Strategic Progress
Direct: Direct revenue is where we provide content marketing services to
blue-chip brands and media agencies and have a direct relationship with the
advertiser.
Our Direct segment performed extremely well in the nine months ended 30
September 2024, driven by the strengthening of relationships with existing
clients, expansion of our client base and the acquisition of Betches in
October 2023. The growth in Direct revenue is a result of our ability to build
deeper, more strategic partnerships, particularly with brands like Google,
Lloyds and Costa Coffee, as well as our growing footprint in the U.S. where we
already have one $1 million client. Our Euros-themed edition of the highly
successful original series "Snack Wars", which was sponsored by Uber Eats, was
a great showcase of our expanding capabilities as we delivered brand
sponsored-content in a native format that resonated with our audience,
garnering millions of views.
As our client relationships continue to evolve, we have increasingly become an
integral part of corporate marketing strategies. Our direct brief conversion
rate for the 12 months ended 30 September 2024 stood at 29% and repeat client
revenue was 74% - both clear indicators of the trust and value brands place in
us, on a repeat basis. Our ability to provide partners with real time
analytics and ROI insights that demonstrate the value and success of their
advertising investment is a feature which sets us apart from the competition,
particularly traditional media. We continue to capture a growing share of
spend from these traditional players, as our unique value proposition,
high-quality content, and deep audience engagement resonate with advertisers
seeking to connect with young adults.
Indirect: Indirect is where we generate revenue on social platforms ("Social")
and from our owned and operated websites ("Web").
Indirect has performed in line with our expectations for the period, with
solid growth driven by the continued expansion of our global audience, which
increased by 19% to 503m in the 12 months to 30 September 2024. Our U.S.
audience now stands at 143m. Social, which includes revenues generated from
social media platforms and partners, delivered a robust performance despite
recent changes to Facebook's commercial model. While these changes impacted
social ad yields and introduced some short-term volatility, the segment
remained resilient as the new model focuses on high-quality, engaging content
- an area that aligns directly with our strengths. As we have demonstrated
with previous platform changes, our scale, expertise, and data-driven approach
enable us to adapt quickly and navigate such changes in the external
environment efficiently.
Web has been a standout performer and now accounts for 45% of Indirect revenue
for the 12 months ended 30 September 2024, up from 30% at the end of FY23. We
have seen significant growth, fuelled by ongoing investment in technology and
talent, which has led to substantially increased yields through the period.
The diversification of our Indirect revenue, supported by both social
platforms and our owned web assets, enhances the stability of our income
streams and provides multiple levers for sustained, long-term growth.
U.S. Expansion: Supporting our growth across both Direct and Indirect
segments.
Expanding our operations in the U.S., the world's largest advertising market,
presents a significant opportunity from both a Direct and Indirect
perspective. Since acquisition of Betches on 17 October 2023, we have made
significant strides in integrating our U.S. operations. This has included
consolidating offices at Betches HQ and reorganising sales teams to focus on
category specialisations in areas such as entertainment, alcohol and consumer
goods.
This operational shift has enabled us to build deeper client relationships and
is demonstrating encouraging signs of early success with new high-profile
partnerships, such as Netflix, L'Oreal and White Castle, and a very
encouraging pipeline. We are also excited about new opportunities such as the
launch of Betches Sports, a sub-sector where we already have significant
experience through our SPORTbible brand. Our U.S. operation offers brands a
'one-stop shop' to access our young adult audience and the steps we have taken
this year put the business in a fantastic position to capitalise on the
significant opportunity ahead of us in the U.S. market.
Purpose Driven Work & Awards
At LBG we believe strongly in leveraging our global platform to drive socially
responsible agendas, supporting meaningful change. During the period, we
launched the "You're On Mute" campaign to encourage young people to vote in
the general election and also partnered with charity Stamp Out Spiking to
launch the "End Spiking, Now" campaign, raising awareness of the drink spiking
problem and advocating for legal changes. The campaign, which included a
powerful mini-series, culminated in the UK government's decision to make drink
spiking a specific offence. Additionally, LBG was honoured to become The
King's Trust's first official social partner for their annual awards,
celebrating young people who have overcome significant barriers. These
initiatives reflect our ongoing commitment to using our platform to empower
young people and contribute to positive social change.
We are very proud to have been the most awarded media owner at the Campaign
Media Awards for the second year running, with three wins for our partnerships
with The AA, Jacamo, and McDonald's. We also took home Best Finance Campaign
at the Digital Media Awards for Bank of Ireland, along with other shortlists
including 'Channel of the Year,' 'Best Factual Channel,' and 'Best Short Form'
for our Honesty Box show.
Clear Line of Sight to £200m Revenue Opportunity
Through our strategic growth lenses LBG is uniquely positioned for significant
growth in the years ahead and we remain on track as we progress along our line
of sight to £200m of revenue. The positive momentum in our market and the
continued growth of our global audience, is supported by our ability to foster
even deeper relationships with blue-chip brands and key partners. Our U.S.
operations provide a solid foundation for further growth in the world's
largest advertising market and the diversification of our revenue streams,
along with our strong cash generation profile, provides us with the financial
flexibility to accelerate growth through strategic M&A opportunities.
We have made tremendous progress in the period, and with a clear strategy,
strong partnerships, and continued market expansion, LBG is well-positioned
for sustained, profitable growth in the years to come.
Solly Solomou
Chief Executive Officer
22 January 2025
FINANCIAL REVIEW
Highlights & KPIs
The Group delivered strong financial performance in the 9 months to 30
September 2024, reflecting the successful execution of our strategy across our
three growth lenses of Direct, Indirect and U.S. expansion. The following
highlights and key performance indicators ('KPIs') showcase our progress and
accomplishments over the period. As the current reporting period covers 9
months, compared to a 12 month period for the prior year, percentage changes
have not been presented.
UNAUDITED PROFORMA
9 months ended 30 Sept 24 Year ended 31 Dec 23 12 months ended 30 Sept 24 12 months ended 30 Sept 23 Change
£'000 £'000 £'000 £'000 %
Revenue 64,945 67,510 86,245 70,895 22%
Adjusted EBITDA 16,929 17,368 24,475 21,126 16%
Profit before tax 12,139 5,937 14,469 10,999 32%
Closing cash 27,174 15,800 27,174 30,727 (12%)
Cash generated from operations 20,264 10,100 25,817 14,954 73%
Cash conversion 120% 78% 105% 71% -
Financial KPIs
Adjusted EBITDA as a % of revenue 26.1% 25.7% 28.4% 29.8%
Profit before tax as a % of revenue 18.7% 8.8% 16.8% 15.5%
Non financial KPI's
Global audience* (m) 503 452 503 424 19%
Brief conversion 29% 29% 29% 29% -
Daily web sessions (m) 5.3 4.7 5.0 4.9 2%
Web yield per 1k sessions (£)( ) 10.01 6.87 10.07 6.04 67%
* Global Audience reflects social followers, unique podcast listeners and
average monthly website users in the period.
Adjusted EBITDA, which is defined as profit before net finance costs, tax,
depreciation, amortisation, asset impairment and release of related
liabilities, share based payment charge and adjusting items is a non-GAAP
metric used by management and is not an IFRS disclosure.
Financial Review
Revenue 9 months ended 30 Sept 24 Year ended 31 Dec 23 12 months ended 30 Sept 24 12 months ended 30 Sept 23 Change
£'000 £'000 £'000 £'000 %
Direct 34,443 29,349 43,920 31,635 39%
Indirect 29,368 37,111 40,749 38,272 6%
Other 1,134 1,050 1,576 988 60%
Total 64,945 67,510 86,245 70,895 22%
Total Group revenue for the 9 months ended 30 September 2024 was £64.9m,
demonstrating strong operational performance despite being lower than the
£67.5m reported for the 12 month prior period. This highlights the growing
appeal of our offerings to advertisers and reflects the accelerated growth
driven by the strategic value we deliver to our clients on both our Direct and
Indirect revenue streams.
The strength of our diversified revenue model continues to improve with Direct
accounting for more than 50% of total Group revenue, alongside progression of
our Web operations which now accounts for 49% of total Indirect revenue in the
9 months ended 30 September 2024.
On an unaudited proforma basis, revenue for the 12 months ended 30 September
2024 reached £86.2m, representing a 22% increase compared to the prior year.
This growth comprised 6% organic growth, driven by deeper relationships with
blue-chip brands and continued expansion of Web, offset by softer Social
revenues as a result of the Facebook commercial model change in calendar Q3.
The remainder of the increase in total Group revenue can be attributed to the
acquisition of Betches, which occurred in October 2023.
Direct revenue for the 9 months ended 30 September 2024 was £34.4m (FY23
(12m): £29.3m). This increase, despite the shorter reporting period, was
primarily driven by the inclusion of Betches, acquired as part of our U.S.
expansion strategy, which has strengthened our Direct revenue streams and
aligned with our focus on growing Direct revenue through targeted market
opportunities.
On an unaudited proforma basis, Direct revenue for the year ended 30 September
2024 increased by 39%, to £43.9m, up from £31.6m in the prior year. The
Group continued to deliver high-quality content, retained, strengthened and
developed new relationships with key blue-chip brands, expanded its presence
in the U.S., and capitalised on significant cultural and sporting moments with
successful campaigns during the year.
Indirect revenue for the 9 months ended 30 September 2024 was £29.4m, down
from £37.1m in the prior year. This decline reflects the impact of the
shorter reporting period, as well as changes in Facebook's commercial model
which resulted in some short-term volatility in Social revenues in calendar
Q3. As with previous platform changes, we were able to quickly adapt and saw a
return to normalised levels on exiting Q1 FY25.
On an unaudited proforma basis, Indirect revenue grew by 6% to £40.7m from
£38.3m in the prior year. This growth was driven by an expanding audience
base and significant monetisation improvements in our Web proposition,
aligning with the Group's strategy of delivering specialised content to
targeted audiences.
Operating expenses
Net operating expenses for the 9 months ended 30 September 2024 amounted to
£52.4m, compared to £61.4m for the previous 12 month period. On an unaudited
proforma basis, net operating expenses for the 12 months ended 30 September
2024 were £71.3m, representing an 19% increase from £59.8m in the prior
year. This increase primarily reflects the inclusion of a full year of
operating costs associated with Betches.
Adjusted EBITDA
Adjusted EBITDA for the 9 months ended 30 September 2024 was £16.9m, compared
to £17.4m for the year ended 31 December 2023.
On an unaudited proforma basis, Adjusted EBITDA was £24.5m for the 12 months
ended 30 September 2024, a 16% increase from £21.1m in the previous year.
Whilst this improvement reflects the Group's effective management of core
operations, growth in Adjusted EBITDA has been impacted by investments for
growth of £3.4m which have focused on our Direct and Web segments, and which
are already delivering positive results.
Adjusted EBITDA is used for internal performance analysis to assess the
execution of our strategy and is a benchmark that has been used by management
and the investment community to assess the performance of the Group. As such,
management believe that this adjusted measure is an appropriate measure to
assess the performance of the Group. Note that using Adjusted EBITDA produces
a materially different result to the most closely related GAAP measure, being
Profit Before Tax. It is therefore important to understand the nature of any
adjusting items.
Share-Based Payment Charges
Share-based payment charges decreased by £3.2m during the period, to £0.7m
compared to £3.9m as of 31 December 2023. The reduction was primarily driven
by the vesting of certain Non-Executive Director share schemes in the prior
year, which resulted in a decline in associated expenses for the current
period.
Amortisation and Depreciation
Amortisation for the 9 months ended 30 September 2024 was £1.8m, up from
£1.4m in the prior period, mainly reflecting the charge against intangible
assets acquired through Betches.
Unaudited proforma amortisation for the 12 months ended 30 September 2024 was
£2.4m, compared to £1.0m in the prior year. This is due to the amortisation
of intangible assets recognised as part of the Betches acquisition in October
2023.
The depreciation charge for the 9 months ended 30 September 2024 was £1.8m
(FY23 (12m): £2.1m) On a pro-rata basis, the current year charge reflects an
increase, primarily driven by higher depreciation on right-of-use assets and
new additions during the year.
Adjusting Items
Adjusting items were £nil for the 9 months ended 30 September 2024, a
decrease from £3.7m in the previous period.
Unaudited proforma adjusting items for the 12 months ended 30 September 2024
were £2.7m, compared to £3.5m in the prior year. These items included costs
related to business reorganisations and acquisition-related fees, which
management considers non-recurring.
Net finance costs
Net finance costs increased by £0.4m to £0.9m (FY23 (12m): £0.5m). The
increase in finance costs reflect the unwinding of the discount on contingent
consideration of £1.0m arising on acquisition (FY23 (12m): £0.3m), offset by
an increase in finance income of £0.2m.
Share of joint ventures
The share in joint ventures amounted to £0.5m for the nine months ended 30
September 2024 (FY23 (12m): £0.3m). This increase reflects the growth and
improved profitability of Pubity Group Ltd.
Profit before tax
Profit before tax for the 9 months to 30 September 2024 increased to £12.1m,
more than doubling from £5.9m in the prior year. This improvement was driven
by lower depreciation and amortisation expenses due to the shorter reporting
period, as well as a reduction in adjusting items.
Taxation
The tax charge for the period as £3.2m (FY23 (12m): £4.3m).
Balance Sheet
As of 30 September 2024, the balance sheet shows a strengthened financial
position with a £5.8m increase in total assets and an £8.0m rise in net
assets from 31 December 2023.
The balance sheet reflects a stronger liquidity position and a bank facility
free structure.
Total assets increased by £5.8m to £97.1m from £91.3m, mainly due to
trading performance and improved cash conversion, offsetting decreases in
non-current assets, such as goodwill and PPE.
Total liabilities reduced by £2.2m to £24.0m. Non-current liabilities
declined by £4.5m due to reductions in lease liabilities based on payments
made in the year of £1.6m and a £3.1m ($4.0m) payment of contingent
consideration relating to the Betches acquisition.
Included within reserves movements in the year is a £1.6m currency
translation difference (FY23 (12m): £1.1m). The increase in the year relates
to foreign exchange movements on intercompany loans.
Cashflow and cash position
The Group continues to maintain a strong cash position of £27.2m (FY23 (12m):
£15.8m). Cash generated from operations was £20.3m for the 9 month period
(FY23 (12m): £10.1m).
Cash conversion in the period was 120% of adjusted EBITDA (FY23 (12m): 78%).
This has been driven by improved focus on working capital management. During
the period, we made lease payments of £1.6m (FY23: £1.3m).
On an unaudited proforma basis, cash decreased from £30.7m to £27.2m over
the 12 months ended 30 September 2024, reflecting a net reduction of just
£3.5m.
This is particularly notable given the significant cash outflows related to
the acquisition of Betches, including £17.6m paid at the time of acquisition
and a further £3.1m in contingent consideration settled in July 2024.
Solly Solomou
Chief Executive Officer
22 January 2025
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Period ended 30 September 2024
Period ended Year ended
30 September 2024 31 December 2023
£'000 £'000
Revenue 64,945 67,510
Net operating expenses (52,383) (61,423)
Decrease in expected credit losses of trade receivables - (22)
Operating profit 12,562 6,065
Analysed as:
Adjusted EBITDA(1) 16,929 17,368
Depreciation (1,814) (2,088)
Amortisation (1,820) (1,369)
Asset impairment and release of related liabilities - (318)
Equity settled share-based payments charge (566) (3,853)
Cash settled share-based payments charge (167) -
Adjusting items - (3,675)
Group operating profit 12,562 6,065
Finance income 289 106
Finance costs (1,217) (565)
Net finance costs (928) (459)
Share of post-tax profits of equity-accounted joint venture 505 331
Profit before taxation 12,139 5,937
Income tax expense (3,185) (4,271)
Profit for the financial year attributable to equity holders of the Company 8,954 1,666
Currency translation differences (net of tax) (1,562) (1,082)
Profit and total comprehensive income for the financial year attributable to 7,392 584
equity holders of the Company
Basic earnings per share (pence) 4.3 0.8
Diluted earnings per share (pence) 4.1 0.8
1. Adjusted EBITDA, which is defined as profit before net finance costs, tax,
depreciation, amortisation, asset impairment and release of related
liabilities, share-based payment charge and adjusting items is a non-GAAP
metric used by management and is not an IFRS disclosure.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 September 2024
As at As at
30 September 2024 31 December 2023
£'000 £'000
Assets
Non-current assets
Goodwill and other intangible assets 37,330 39,782
Property, plant and equipment 4,947 5,982
Investments in equity-accounted joint ventures 1,195 690
Other receivables 219 198
Deferred tax asset 274 24
Total non-current assets 43,965 46,676
Current assets
Trade and other receivables 25,982 28,765
Current tax asset - 62
Inventory 22 27
Cash and cash equivalents 27,174 15,800
Total current assets 53,178 44,654
Total assets 97,143 91,330
Equity
Called up share capital 209 207
Share premium reserve 28,993 28,993
Accumulated exchange differences (2,615) (1,053)
Retained earnings 46,572 37,006
Total equity 73,159 65,153
Liabilities
Non-current liabilities
Non-current lease liability 1,757 2,975
Provisions 482 446
Non-current contingent consideration 3,240 6,523
Deferred tax liability 535 556
Total non-current liabilities 6,014 10,500
Current liabilities
Current lease liability 2,485 2,507
Trade and other payables 9,460 8,906
Contingent consideration 3,811 3,016
Current tax liabilities 2,214 1,248
Total current liabilities 17,970 15,677
Total liabilities 23,984 26,177
Total equity and liabilities 97,143 91,330
CONSOLIDATED STATEMENT OF CASH FLOWS
Period ended 30 September 2024
Period ended Year ended
30 September 2024 31 December 2023
£'000 £'000
Net cash flow from operating activities
Profit for the financial period/year 8,954 1,666
Income tax 3,185 4,271
Net interest expense 928 459
Share of post-tax profits of equity-accounted joint venture (505) (331)
Operating profit 12,562 6,065
Depreciation charge 1,814 2,088
Amortisation of intangible assets 1,820 1,369
Asset impairment and release of related liabilities - 318
Equity settled share-based payments 566 3,853
Cash settled share-based payment 167 -
Settlement of cash settled share options (305) -
Gain on disposal of property, plant and equipment - (30)
Effect of exchange rates on contingent consideration (13) -
Decrease/(increase) in trade and other receivables 2,737 (4,151)
Increase in trade and other payables 916 588
Cash generated from operations 20,264 10,100
Tax paid (2,638) (2,898)
Net cash generated from operating activities 17,626 7,202
Cash flows from investing activities
Purchase of intangible assets (563) (1,045)
Purchase of property, plant and equipment (466) (954)
Stamp duty paid - (26)
Acquisition of subsidiary, net of cash acquired - (17,580)
Payment of contingent consideration (3,120) -
Net cash used in investing activities (4,149) (19,605)
Cash flows from financing activities
Lease payments (1,621) (1,323)
Lease deposits paid (50) (23)
Lease deposits received 25 544
Proceeds from share issue 2 1
Interest paid (182) (142)
Net cash used in financing activities (1,826) (943)
Net increase/(decrease) in cash and cash equivalents 11,651 (13,346)
Cash and cash equivalents at the beginning of the period/year 15,800 29,268
Effect of exchange rate changes on cash and cash equivalents (277) (122)
Cash and cash equivalents at the end of the period/year 27,174 15,800
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
As at 30 September 2024
Share capital Share premium Accumulated exchange differences Retained earnings Total Equity
£'000 £'000 £'000 £'000 £'000
Balance as at 1 January 2023 206 28,993 29 31,998 61,226
Profit for the financial year - - - 1,666 1,666
Currency translation differences - - (1,082) - (1,082)
Total comprehensive (loss)/income for the year - - (1,082) 1,666 584
Issue of shares in the year 1 - - - 1
Share based payments - - - 3,853 3,853
Equity settled share options switched to cash - - - (494) (494)
settled share options
Deferred tax on share options - - - (17) (17)
Total transactions with owners, recognised directly in equity 1 - - 3,342 3,343
Balance as at 31 December 2023 207 28,993 (1,053) 37,006 65,153
and 1 January 2024
Profit for the financial period - - - 8,954 8,954
Currency translation differences - - (1,562) - (1,562)
Total comprehensive (loss)/income for the period - - (1,562) 8,954 7,392
Issue of shares in the period 2 - - - 2
Share based payments - - - 566 566
Deferred tax on share options and intangibles - - - 46 46
Total transactions with owners, 2 - - 612 614
recognised directly in equity
Balance as at 30 September 2024 209 28,993 (2,615) 46,572 73,159
NOTES TO THE FINANCIAL STATEMENTS
Period ended 30 September 2024
1. General information
The principal activity of LBG Media plc ('the Company') is that of a holding
company and the principal activity of the Company and its subsidiaries ('the
Group') is that of an online media publisher. The Company was incorporated on
20 October 2021 and is a public company limited by shares registered in
England and Wales. The registered office of the Company is 20 Dale Street,
Manchester, M1 1EZ. The Company registration number is 13693251.
The material accounting policies applied in the preparation of these financial
statements are set out below. These policies have been consistently applied to
all periods presented, unless otherwise stated.
2. Basis of preparation
The consolidated financial statements presented in this document have been
prepared in accordance with UK adopted International Accounting Standards in
conformity with the requirements of the Companies Act 2006.
The financial information set out herein does not constitute the Company's
statutory accounts for the period ended 30 September 2024 or year ended 31
December 2023 but is derived from those accounts. The financial information
has been prepared using accounting policies consistent with those set out in
the annual report and accounts for the period ended 30 September 2024.
Statutory accounts for the year ended 31 December 2023 have been delivered to
the Registrar of Companies, and those for 2024 will be delivered in due
course. The auditors have reported on those accounts; their report was
unqualified, did not include a reference to any matters to which the auditors
drew attention by way of emphasis without qualifying their report, and did not
contain any statements under Section 498(2) or (3) of the Companies Act 2006.
The financial information is presented in sterling and has been rounded to the
nearest thousand (£'000).
3. Going concern
The Group generated profit before tax of £12,139k during the period ended 30
September 2024 (FY23: £5,937k) and, at that date, the Group's total assets
exceeded its total liabilities by £73,159k (FY23: £65,153k) and it had net
current assets of £35,208k (FY23: £28,977k).
The financial statements have been prepared on a going concern basis. In
determining the appropriate basis of preparation of the financial statements,
the Directors have considered whether the Group can continue in operational
existence for the foreseeable future.
The Directors have considered the principal risks and uncertainties with
respect to their assessment of going concern, none of which in the opinion of
the Directors give rise to specific risk to the going concern status of the
Group. In particular, reliance on key individuals and social media platforms
do not give rise to any concerns with respect to projected trading in the
forthcoming 12 months.
The Directors have assessed the Group's ability to continue as a going
concern, considering its significant cash reserves, strong net current asset
position, and overall net asset position. Based on this assessment, the
Directors do not consider there to be any plausible scenario in which the
Group would cease to trade as a going concern within 12 months from the date
of approval of these financial statements.
As part of their assessment, the Directors have modelled a plausible downside
scenario, which includes the potential loss of a key customer. The results
indicate that the Group's business model is resilient and capable of
withstanding this event while maintaining sufficient cash reserves.
In addition, the Directors have prepared a severe downside scenario to
determine the level of revenue decline required for the Group to no longer be
considered a going concern. The analysis demonstrates that revenue would need
to fall by 75% from forecast levels for this to occur. Even in this extreme
scenario, the Group would retain sufficient liquidity to meet its obligations
and continue operations beyond 30 April 2026.
Accordingly, the Directors consider it appropriate to prepare the financial
statements on a going concern basis.
4. Revenue
The trading operations of the Group are in the online media publishing
industry and are all continuing. All assets of the Group reside in the UK with
the exception of £1,018k of property, plant and equipment held in the United
States (FY23: £1,311k), £419k held in Ireland (FY23: £59k), and £nil held
in Australia (FY23: £63k).
Analysis of revenue
The Group's revenue and operating profit relate entirely to its principal
activity. Note that gross margin is not assessed separately for the revenue
streams below.
The analysis of revenue by stream is:
FY24 FY23
£'000 £'000
Direct 34,443 29,349
Indirect 29,368 37,111
Other 1,134 1,050
64,945 67,510
The geographical analysis of revenue by customer location is:
FY24 FY23
£'000 £'000
United Kingdom 24,073 24,230
U.S. 20,564 9,571
Ireland 15,810 26,379
Australia 457 4,206
Rest of the World 4,041 3,124
64,945 67,510
Major customers
In FY24 there was 1 major customer that individually accounted for at least
10% of total revenue (FY23: 1) (Customer A: 20%) (FY23: Customer A: 34%). The
total revenues relating to this customer in FY24 was £13,209k (FY23: total
revenues relating to this customer was £23,203k).
5. Employees and Directors
The average monthly number of persons employed by the Group (including
Directors) during the period, analysed by category, was as follows:
Number of employees Number of employees
FY24 FY23
Sales 50 43
Administration 421 403
471 446
The aggregate payroll costs of these persons were as follows:
FY24 FY23
£'000 £'000
Wages and salaries 23,059 25,142
Social security costs 2,421 2,863
Other pension costs 497 516
Share based payments 733 3,853
Total payroll costs 26,710 32,374
Capitalised payroll costs to software costs (211) (281)
Net payroll costs recorded within net operating expenses 26,499 32,093
The Group operates a defined contribution plan which receives fixed
contributions from Group companies. The Group's legal or constructive
obligation for these plans is limited to the contributions. The expense
recognised in the current year in relation to these contributions was £497k
(FY23: £516k).
Pension contributions included in accruals at 30 September 2024 were £124k
(31 December 2023: £118k).
Key management compensation
Key management includes Directors. The compensation paid or payable to key
management for services is shown below:
FY24 FY23
£'000 £'000
Salaries including bonuses 930 1,181
Social security costs 122 152
Short-term monetary benefits 8 7
Termination benefits - 267
Share based payment charge 340 2,672
Total short-term benefits 1,400 4,279
Directors
The Directors' emoluments were as follows:
FY24 FY23
£'000 £'000
Directors' aggregate emoluments 930 1,183
Defined contribution pension(1) 5 7
Gain on exercise of share options(2) 1,927 -
Share based payment charge 340 2,672
3,202 3,862
1. In the period, 1 Director accrued retirement benefits in respect of
qualifying services under a defined contribution scheme (FY23: 2 Directors).
2. In the period, 2 Directors exercised share options and received shares
under long-term incentive schemes (FY23: no Directors).
Remuneration was paid by LADbible Group Limited, a subsidiary company of the
Group.
The remuneration of the highest paid Director, excluding share-based payment
charge, was as follows:
FY24 FY23
£'000 £'000
Directors' aggregate emoluments 348 373
Defined contribution pension - -
348 373
The highest paid Director did not exercise share options within the current or
prior period. No shares were received or receivable by the Director in the
current or prior period in respect of qualifying services under a long term
incentive scheme.
6. Net operating expenses
FY24 FY23
£'000 £'000
Employee benefit expense 26,499 32,093
Amortisation 1,820 1,369
Depreciation 1,814 2,088
Asset impairment and release of related liabilities - 318
Auditor's remuneration 442 275
Legal and professional 1,920 1,721
Media costs 5,075 5,841
Production costs 5,772 5,285
Travel and expenses 1,221 1,366
Establishment costs 6,011 6,481
Foreign currency loss/(gain) 635 (110)
Adjusting items - 3,675
Other expenses 1,174 1,021
Total net operating expenses 52,383 61,423
Auditor's remuneration in FY24 includes £335k (FY23: £260k) for the audit of
the Group and £15k for the audit of the Company (FY23: £15k), the remaining
£92k relates to additional fees incurred in relation to the FY23 audit.
A breakdown of the asset impairment and release of related liabilities is
provided below:
FY24 FY23
£'000 £'000
Impairment of plant, property and equipment - 559
Release of dilapidation provision - (123)
Modification of lease liability - (118)
Total asset impairment and release of related liabilities - 318
During the prior year, as part of the ANZ business reorganisation, the Group
impaired certain assets which included right of use assets, released a
dilapidation provision no longer required and modified a lease liability after
a reduction in the lease term was agreed with the landlord.
A breakdown of adjusting items is provided below:
FY24 Gross FY24 Tax impact FY23 Gross FY23 Tax impact
£'000 £'000 £'000 £'000
Costs associated with business reorganisations - ANZ - - 1,371 406
Acquisition related fees - - 1,141 331
One-off retention payment in 2023 - - 621 158
Costs associated with business reorganisations - Non-ANZ - - 609 152
Tax credits - - (67) (17)
Total adjusting items - - 3,675 1,030
The blended tax rates for each adjusting item differ due to the costs being
incurred within different jurisdictions, thus incurring tax at differing
rates.
Costs associated with business reorganisations - ANZ
On 8 November 2023, the Group announced changes to the Group's operating model
within ANZ to address declining profitability. This change involved
centralising the Social and Web operations into the UK, as well as appointing
a third-party partner, Val Morgan Digital, to perform commercial operations in
Australia and New Zealand. Significant costs were incurred, mainly the
termination costs of the local team members that didn't transfer to Val Morgan
Digital and it is appropriate to categorise these costs as adjusting items to
better reflect the underlying performance of the Group.
These adjusting items total £nil (FY23: £1,371k) and include £nil (FY23:
£1,210k) of staff related costs and £nil (FY23: £161k) of non-staff related
costs. Of the total cost of £1,371k, £375k was paid within the period (FY23:
£964k), with the remaining balance of £32k (FY23: £407k) being accrued at
the year end date.
Acquisition related fees
Acquisition related costs of £nil (FY23: £1,141k) include legal,
professional advisor and other costs directly attributable to the acquisition
of Betches Media, LLC in October 2023, and other target acquisitions. Of the
total cost of £1,141k, £313k was paid within the period (FY23: £828k), with
£nil (FY23: £313k) being accrued at the year end date.
One-off retention payment in 2023
In FY23, recognising a set of unique circumstances of stabilising and
retaining staff following the large reorganisation in the last quarter of 2022
that was also compounded by the cost-of-living crisis, the Group made a
payment of £710k to employees to mitigate retention risks. This payment was
fully repayable if they chose to leave within the year, £89k was recovered in
the prior year as a result of leavers. Due to the one-off nature of this
payment and to facilitate meaningful understanding of underlying performance
and comparison with prior and future years this was considered an adjusting
item. The cost of £621k was recognised in full within FY23 and there was no
outstanding liability at the year end.
Costs associated with business reorganisations - Non-ANZ
Costs associated with team member reorganisations within the prior year of
£609k related to exit costs of personnel leaving the business due to
reorganisations within our operating divisions and Board. £397k of that cost
related to Board level changes due both the resignation of the CFO in April
2023 which led to some dual CFO costs and the resignation of the COO in July
2023 who left the business at that point. The remaining £212k related to the
exit costs of senior team members. Due to the nature of these costs,
management deemed them to be adjusting items in order to better reflect the
underlying performance of the Group. Exit costs outside of these circumstances
were treated as operating expense.
Of the total cost of £609k, £152k was paid within the period (FY23: £457k),
with £nil (FY23: £152k) accrued at the year end date.
Tax credits
In FY22, the Group agreed to settle a PAYE liability on behalf of two
employees, totalling £224k. As this was a one-off settlement, it was
classified as an adjusting item. In the prior year, following a settlement
agreement with HMRC this liability was reduced by £67k and the revised
liability of £157k was paid in full. As this was a one-off settlement, this
was classified as an adjusting item.
7. Earnings per share
There is no difference between profit as disclosed within the statement of
comprehensive income and earnings used within the earnings per share
calculation for the reporting periods.
Basic earnings per share calculation:
FY24 FY23
Earnings per share from continuing operations
Earnings, £'000 8,954 1,666
Number of shares, number (m) 209.1 206.5
Earnings per share, pence 4.3 0.8
Diluted earnings per share calculation:
FY24 FY23
Diluted earnings per share from continuing operations
Earnings, £'000 8,954 1,666
Number of shares, number (m) 217.7 217.7
Diluted earnings per share, pence 4.1 0.8
Reconciliation from weighted average number of shares used in basic earnings
per share to diluted earnings per share:
FY24 FY23
(m) (m)
Number of shares in issue at the start of the period 206.5 205.7
Effect of shares issued in period 2.6 0.8
Weighted average number of shares used in basic earnings per share 209.1 206.5
Employee share options 8.6 11.2
Weighted average number of shares used in diluted earnings per share 217.7 217.7
8. Net finance costs
FY24 FY23
£'000 £'000
Unwinding of discount on provisions (17) (24)
Unwinding of discount on contingent consideration liability (1,014) (314)
On lease interests (182) (142)
Other interest (4) (85)
Finance costs (1,217) (565)
Unwinding of discounts on deposits 7 57
Bank interest received 282 49
Finance income 289 106
Net finance costs (928) (459)
9. Income tax expense
Tax expense included in profit or loss:
FY24 FY23
£'000 £'000
Current year tax:
Current taxation charge for the period 2,758 3,742
Adjustments in respect of prior years 273 146
Foreign tax suffered 635 -
Total current tax 3,666 3,888
Deferred tax:
Current year 5 231
Adjustments in respect of prior years (486) 115
Effect of change in tax rates - 37
Total deferred tax (481) 383
Total tax on profit on ordinary activities 3,185 4,271
Equity items
Current tax - -
Deferred tax (46) 17
Total tax recognised in equity (46) 17
Reconciliation of tax charge
The tax assessed for the year is higher (FY23: higher) than at the standard
rate of corporation tax in the UK. The differences are explained below:
FY24 FY23
£'000 £'000
Profit before taxation 12,139 5,937
Tax on profit multiplied by standard rate of corporation tax in the UK at 3,035 1,395
25.0% (FY23: 23.50%)
Effects of:
Adjustments in respect of prior years (110) 260
Expenses not deductible 252 555
Income not taxable (134) -
Effect of change in UK tax rates - 37
Effects of overseas tax rates (50) (152)
Exempt items - 25
Amounts not recognised 4 1,434
Foreign exchange - 4
Effect of deferred tax on share options 188 713
Total taxation charge 3,185 4,271
Amounts not recognised in 2023 include losses incurred from the changes to ANZ
operations during the year.
10. Goodwill and other intangible assets
Trade-marks and licenses Software Relationships Brand Content library Goodwill Social Media Pages Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Cost
At 1 January 2023 28 1,183 1,300 4,694 300 10,094 1,074 18,673
Additions - 524 - - - - 521 1,045
Acquired through - - 3,850 6,744 - 15,197 - 25,791
business combination
Exchange adjustments - - (164) (294) - (646) (21) (1,125)
At 31 December 2023 28 1,707 4,986 11,144 300 24,645 1,574 44,384
Additions - 211 - - - - 352 563
Disposals - (404) - - - - - (404)
Exchange adjustments - - (182) (326) - (718) (23) (1,249)
At 30 September 2024 28 1,514 4,804 10,818 300 23,927 1,903 43,294
Accumulated Amortisation
At 1 January 2023 27 359 550 1,949 298 - 54 3,237
Charge for the year - 266 225 642 2 - 234 1,369
Exchange adjustments - - - (2) - - (2) (4)
At 31 December 2023 27 625 775 2,589 300 - 286 4,602
Charge for the year 1 241 442 865 - - 271 1,820
Elimination on disposal - (404) - - - - - (404)
Exchange adjustments - - (21) (33) - - - (54)
At 30 September 2024 28 462 1,196 3,421 300 - 557 5,964
Net book value
At 1 January 2023 1 824 750 2,745 2 10,094 1,020 15,436
At 31 December 2023 1 1,082 4,211 8,555 - 24,645 1,288 39,782
At 30 September 2024 - 1,052 3,608 7,397 - 23,927 1,346 37,330
Goodwill relates to two acquisitions. The first was Bentley Harrington
(trading as 'UNILAD') which was acquired in FY18 (£10,094k), the second is
Betches which was acquired in FY23 (£15,197k at the date of acquisition). See
Note 16 for details of the Betches Media, LLC acquisition.
Brand and relationships intangible assets relate partly to those acquired in
the prior year following the Betches acquisition (total of £10,594k at the
date of acquisition). The remaining position in this category relate to assets
acquired from Bentley Harrington in FY18, net of amortisation to date.
With regard to social media pages, in FY23, the Group acquired the social
media accounts, the social media content, the IP records, the third party
rights, the records and all intellectual property rights connected to such
assets for total consideration of CA$700k (£521k) from Lessons Learned in
Life Inc. In FY24, the Group completed the bolt-on asset acquisition of social
media pages from Creative Expansions, Inc. for $450k (£352k).
During the year, £404k (FY23: £nil) of fully written down assets were
disposed of. Within the year, £563k of the additions were paid for (FY23:
£1,045k, net of business combinations).
The individually material intangible assets at the period end, excluding
goodwill, are summarised below:
Intangible asset name Asset category Net book value at the period end £'000 Remaining amortisation period (years) Description
Betches - Brand Brand 5,552 9 The Betches brand was acquired in FY23 as part
of the acquisition of Betches Media, LLC.
Betches - Content partner relationships 3,086 7 The Betches content partner relationships were acquired in FY23 as part of the
Content acquisition of Betches Media, LLC.
partner relationships
UNILAD - Brand Brand 1,813 4 The UNILAD brand was acquired from Bentley Harrington in FY18.
Go Animals social media pages Social media pages 832 8 The Go Animals social media pages were acquired in FY22.
UNILAD - Content partner relationships 524 4 The UNILAD content partner relationships were acquired from Bentley Harrington
Content partner relationships in FY18.
Order Management System (OMS) Software 403 3 The OMS was completed in FY23 and serves as
the Group's order management system.
Lessons Learned in Life social media pages Social media pages 247 1 The Lessons Learned In Life social media pages were acquired in FY23.
Women Working Facebook page Social media pages 246 2 The Women Working Facebook page was acquired in FY24.
The individually material intangible assets at the prior year end, excluding
goodwill, are summarised below:
Intangible asset name Asset category Net book value at the year end Remaining amortisation period (years) Description
£'000
Betches - Brand Brand 6,325 10 The Betches brand was acquired in FY23 as part
of the acquisition of Betches Media, LLC - see
Note 16.
Betches - Content partner relationships 3,592 8 The Betches content partner relationships were acquired in FY23 as part of the
Content partner relationships acquisition of Betches Media, LLC - see Note 16.
UNILAD - Brand Brand 2,150 5 The UNILAD brand was acquired from Bentley Harrington in FY18.
Go Animals social media pages Social media pages 913 9 The Go Animals social media pages were acquired in FY22.
UNILAD - Content partner relationships 621 5 The UNILAD content partner relationships were acquired from Bentley Harrington
Content partner relationships in FY18.
Order Management System (OMS) Software 485 4 The OMS was completed in FY23 and serves as the Group's order management
system, which is a step change in the way the Group manages the sales process.
Lessons Learned in Life social media pages Social media pages 374 2 The Lessons Learned In Life social media pages were acquired in FY23.
The Group is required to test, on an annual basis, whether goodwill has
suffered any impairment. The recoverable amount is determined based on value
in use calculations. The use of this method requires the estimation of future
cash flows and the determination of a discount rate in order to calculate the
present value of the cash flows.
The performance of the Group has historically been monitored at a Group level,
with the Group considered the only cash-generating unit (CGU) in prior
periods. However, following the acquisition of Betches in October 2023, it has
been determined that Betches operates largely independently of the legacy LBG
Media Group, although key strategic decisions are made centrally. As a result,
Betches will be treated as a separate CGU going forward.
The NBV of goodwill by CGU is as follows:
CGU FY24 FY23
£'000 £'000
LBG Media: 10,094 10,094
Betches Media, LLC: 13,833 14,552
The value in use assessments for both CGUs - LBG Media and Betches - are based
on discounted cash flow models prepared over a five-year forecast period, with
cash flows extrapolated into perpetuity using a long-term growth rate. Key
assumptions used in the value in use calculations are as follows:
LBG Media Group:
● a long-term growth rate of 2.0% (FY23: 2.0%) for the period beyond which
detailed budgets and forecasts do not exist, based on macroeconomic
projections for the geographies in which the entity operates; and
● a post-tax discount rate of 13.9% (FY23: 12.0%) based upon the risk-free rate
for government bonds adjusted for a risk premium to reflect the increased risk
of investing in equities and investing in the Group's specific sector and
regions.
Betches Media, LLC:
● a short-term growth rate of 25.0% (FY23: 25.0%);
● a long-term growth rate of 2.0% (FY23: 2.1%) for the period beyond which
detailed budgets and forecasts do not exist, based on macroeconomic
projections for the geographies in which the entity operates; and
● a post-tax discount rate of 13.5% (FY23: 13.9%) based upon the risk-free rate
for government bonds adjusted for a risk premium to reflect the increased risk
of investing in equities and investing in the entity's specific sector
and regions.
Management has applied sensitivities to the key assumptions, including
discount rates and growth rates, and believes that there are no reasonably
possible scenarios which would result in an impairment of goodwill. While the
model for Betches remains sensitive to changes in these assumptions due to the
proximity of the acquisition, management is comfortable that there is no
impairment based on the current performance and outlook.
Discount rate Long term growth rate
Change in value in use Change in value in use
(£'000s) (£'000s)
LBG Media CGU
Used in value in use model: 13.9% 2.0%
Value in use: 165,122 165,122
1% increase 151,164 175,604
1% decrease 180,404 156,264
Betches Media, LLC CGU
Used in value in use model: 13.5% 2.0%
Value in use: 33,543 33,543
1% increase 31,861 35,778
1% decrease 35,552 31,671
Management has also considered downside scenarios to reflect risks specific to
each CGU. For the LBG Media CGU, a downside model was prepared to reflect the
potential loss of a key indirect supplier, which would negatively impact
revenue. For the Betches CGU, a downside scenario was developed assuming
growth in line with the broader digital advertising market at approximately 8%
per annum. In all scenarios, the recoverable amounts exceeded the carrying
values, and no impairment of goodwill has been recognised.
Based on the results of these assessments, the Directors believe that there
are no reasonably possible changes in the key assumptions that would result in
an impairment of goodwill for either CGU. The total recoverable amount for
each CGU significantly exceeds its carrying amount, providing sufficient
headroom under all tested scenarios.
11. Investments in equity-accounted joint ventures
The Group has a 30% (FY23: 30%) interest in joint venture, Pubity Group Ltd,
an online media publisher, incorporated and operating in the United Kingdom.
Pubity Group's registered office is Unit 14, 7 Wenlock Road, London, England,
N1 7SL.
The contractual arrangement provides the Group with only the rights to the net
assets of the joint arrangement, with the rights to the assets and obligation
for liabilities of the joint arrangement resting primarily with Pubity Group
Ltd. Under IFRS 11, this joint arrangement is classified as a joint venture
and has been included in the consolidated financial statements using the
equity method.
Pubity Group Ltd operates in the same market as the Group and therefore its
business risks remain consistent with that of the Group. Details of the
Group's business risks can be found in the Groups Annual Report.
Summarised financial information in relation to the joint venture is
presented later in this note.
In FY24, additions in the year relates to the Group's share of total
comprehensive income of £505k (FY23: £331k).
Name Country of incorporation and principal place of business Proportion of ownership interest held as at 30 September 2024
Pubity Group Ltd United Kingdom 30%
Summarised financial information (Pubity Group Ltd)
As at 30 September 2024 As at 31 December 2023
£'000 £'000
Trade and other receivables 2,663 1,607
Cash and cash equivalents 2,119 567
Non-current assets 68 6
Current liabilities (1,662) (657)
Net assets (100%) 3,188 1,523
Group share of net assets (30%) 956 457
Period ended Year ended 31 December 2023
30 September 2024 £'000
£'000
Revenue 5,356 3,240
Profit from continuing operations 1,684 1,103
Total comprehensive income 1,684 1,103
Group share of total comprehensive income (30%) 505 331
FY24 FY23
£'000 £'000
Carrying amount of investment
At 1 January 690 359
Group share of total comprehensive income 505 331
At end of the period/year 1,195 690
12. Cash and cash equivalents
FY24 FY23
£'000 £'000
Cash and cash equivalents
Cash at bank and in hand 27,174 15,800
27,174 15,800
In these currencies
UK Pound 17,993 10,123
United States Dollar 7,829 4,162
Euros 1,233 1,207
Australian Dollar 54 291
New Zealand Dollar 65 17
27,174 15,800
13. Share based payments
The Group operates a number of Share Option Schemes under which Executive
Directors, Non-Executive Directors, managers and team members of the Group are
granted options over shares. The Group did not enter into any share based
payment transactions with other parties other than employees during the
current or prior period. The charge recognised from equity-settled share-based
payments in respect of employee services received during the year is £566k
(FY23: £3,822k). The charge recognised from cash-settled share-based payments
in respect of employee services received during the year is £167k (FY23:
£31k).
Scheme Number of Ordinary Shares
At 01 January Granted Forfeited Exercised At 31 December 2023 and Granted Modified Forfeited Lapsed Exercised At 30 September 2024
2023 01 January 2024
Australia SIP 71,440 - (14,288) - 57,152 - - - (23,218) (30,362) 3,572
Ireland SIP 13,668 - - - 13,668 - - (4,556) - - 9,112
UK SIP 511,380 - (119,322) - 392,058 - - (66,290) (13,258) (56,820) 255,690
2022 SAYE 420,323 - (191,132) - 229,191 - - (61,105) - - 168,086
2023 SAYE - 355,350 (26,269) - 329,081 - - (56,100) - - 272,981
Non-Executive Director Awards 2,459,098 - - - 2,459,098 - - - - (2,459,098) -
FY21 Executive Director Awards 899,996 - (111,002) - 788,994 - - - - - 788,994
FY24 Executive Director Awards - - - - - 1,478,606 - - - - 1,478,606
LADbible Incentive Plan 465,002 - (441,699) - 23,303 - - (23,303) - - -
LTIP Group A - Base Award - 359,084 (88,479) - 270,605 - - (69,588) - - 201,017
LTIP Group A - Top-up - 1,726,632 (397,236) - 1,329,396 - 714,286 (187,555) - - 1,856,127
LTIP Group D - Base Award - 187,949 - - 187,949 - - - - - 187,949
LTIP Group D - Top-up - 554,907 - - 554,907 - - - - - 554,907
LTIP Senior Managers 534,283 - (534,283) - - - - - - - -
LTIP Group B - Base Award - 267,141 (95,661) - 171,480 - - (72,321) - - 99,159
LTIP Group B - Top-up - 2,279,286 (622,196) - 1,657,090 - - (1,292,321) - - 364,769
LTIP Group C - Base Award - 62,678 - - 62,678 - - - - - 62,678
LTIP Group C - Top-up - 1,080,179 - - 1,080,179 - - - - - 1,080,179
LTIP Group E - Base Award - 478,468 - - 478,468 - - (478,468) - - -
LTIP Group E - Top-up - 92,961 - - 92,961 - - (92,961) - - -
LTIP Group F - 550,239 - - 550,239 - - - - - 550,239
FY24 LTIP Senior Leadership - - - - - 502,392 - - - - 502,392
Key Management Personnel Award 789,865 - - (351,000) 438,865 - - - - (315,000) 123,865
6,165,055 7,994,874 (2,641,567) (351,000) 11,167,362 1,980,998 714,286 (2,404,568) (36,476) (2,861,280) 8,560,322
Number of awards granted Grant date Vesting date Contractual life (days) Exercise price (£) Hurdle share price for Share price at grant date (£) Annual risk free rate (%) Annual expected dividend growth rate (%) Volatility (%) Fair value per award (£) Valuation Method
top-up (£)
UK SIP 738,660 19/01/22 19/01/25 1,096 - - 1.94 - - 40%(1) 1.94 Monte-Carlo
Australia SIP 78,584 26/05/22 26/05/25 1,096 - - 1.60 - - 40%(1) 1.60 Monte-Carlo
Ireland SIP 13,668 26/05/22 26/05/25 1,096 - - 1.60 - - 40%(1) 1.60 Monte-Carlo
2022 SAYE 568,032 24/05/22 30/06/25 1,133 1.34 - 0.58 1.47% - 40%(2) 0.58 Black-Scholes
2023 SAYE 355,350 14/06/23 30/06/26 1,112 0.81 - 0.97 4.76% - 43%(2) 0.40 Black-Scholes
Non-Executive Director Awards 2,459,098 15/12/21 15/12/23 730 - - 1.75 - - 40%(1) 1.75 Monte-Carlo
FY21 Executive Director Awards 1,189,280 22/12/21 31/12/24 1,105 - - 1.94 0.68% - 40%(1) 1.45 Monte-Carlo
FY24 Executive Director Awards 1,478,606 15/01/24 31/12/25 717 - 1.75 0.87 3.93% - 58%(4) 0.35 Monte-Carlo
LADbible Incentive Plan 576,053 13/01/22 12/01/25 1,095 - - 1.94 - - 40%(1) 1.94 Monte-Carlo
LTIP Group A - Base Award 359,084 13/01/22 12/01/25 1,095 - - 1.94* - - 40%(1) 1.94 Monte-Carlo
LTIP Group A - Top-up 1,726,632 04/05/23 31/12/25 973 - 1.75 1.00 3.76% - 44%(3) 0.28 Monte-Carlo
LTIP Group D - Base Award 187,949 04/05/23 12/01/25 620 - - 1.00 3.76% - 44%(3) 0.35 Monte-Carlo
LTIP Group D - Top-up 554,907 04/05/23 31/12/25 973 - 1.75 1.00 3.76% - 44%(3) 0.33 Monte-Carlo
LTIP Senior Managers 836,424 12/01/22 12/01/25 1,096 - - 1.94 - - 40%(1) 1.29 Monte-Carlo
LTIP Group B - Base Award 267,141 12/01/22 12/01/25 1,096 - - 1.94* - - 40%(1) 1.29 Monte-Carlo
LTIP Group B - Top-up 2,279,286 04/05/23 31/12/25 973 - 1.75 1.00 3.76% - 44%(3) 0.27 Monte-Carlo
LTIP Group C - Base Award 62,678 04/05/23 12/01/25 620 - - 1.00 3.76% - 44%(3) 0.35 Monte-Carlo
LTIP Group C - Top-up 1,080,179 04/05/23 12/01/25 620 - 1.75 1.00 3.76% - 44%(3) 0.25 Monte-Carlo
LTIP Group E - Base Award 478,468 04/05/23 31/12/25 973 - - 1.00 3.76% - 44%(3) 0.42 Monte-Carlo
LTIP Group E - Top-up 92,961 04/05/23 31/12/25 973 - 1.75 1.00 3.76% - 44%(3) 0.78 Monte-Carlo
LTIP Group F 550,239 04/05/23 31/12/25 973 - - 1.00 3.76% - 44%(3) 0.45 Monte-Carlo
FY24 LTIP Senior Leadership 502,392 30/05/24 31/12/25 581 - - 1.06 4.49% - 49%(4) 0.41 Monte-Carlo
Key Management Personnel Award 789,865 15/12/21 17/09/22 92 - - 1.75 - - 40%(1) 1.75 Monte-Carlo
* These awards were treated as a modification and the fair value of these
replacement awards is reflective of the incremental fair value to be
recognised on modification.
1. The volatility assumption, measured at the standard deviation of expected
share price returns, is based upon a statistical analysis of daily share
prices for comparable listed media businesses over the three-year
'Pre-Covid-19' period, being the three years prior to 1 January 2020. It is
considered that volatility levels during Covid-19 will not be representative
of likely volatility over the vesting period, hence Pre-Covid-19 volatility
levels are considered more appropriate.
2. The volatility assumption for the 2023 SAYE scheme is based on the median
daily share price volatility for a group of peer companies over a historical
period prior to the date of grant with length commensurate with the expected
life assumption of 3.05 years. For the 2022 SAYE scheme this was based on the
historical 3.1 year volatility of the constituents of the FTSE AIM Media super
sector as of the date of grant.
3. The volatility assumption of 44% is based on the median daily share price
volatility for a group of peer companies over a historical period prior to the
date of grant with length commensurate with the remaining projection period of
2.66 years.
4. The volatility assumptions of 49% and 58% are based on the historical
volatility of the Company's TSR at the calculation dare using daily return
index data over a period commensurate with the performance period.
Save As You Earn (SAYE) Schemes
The Group operates saving-related share option plans, under which employees
save on a monthly basis, over a three-year period, towards the purchase of
shares at a fixed price determined when the option is granted. All employees
were offered the opportunity to join the SAYE schemes. This price is set at a
20% discount to the average closing price for a share on the five dealing days
prior to the grant date. The option must be exercised within six months of
maturity of the savings contract, otherwise it lapses.
At 30 September 2024, none of the options were exercisable (31 December 2023:
nil).
Share Incentive Plans
In the year ended 31 December 2022, the Group introduced Share Incentive Plan
(SIP) awards. These awards are subject to continued employment, and vest after
three years. After the third anniversary of the award date employees can elect
to sell or transfer the awards.
At 30 September 2024, none of the options were exercisable (31 December 2023:
nil).
Non-Executive Director Awards
Awards were granted to certain Non-Executive Directors prior to, but
conditional on, Admission which vest on the second anniversary of Admission
subject to continued employment and no further performance conditions. The
scheme vesting period was reached on 15 December 2023 and the options were
exercised in full in January 2024. The share price at the date of exercise was
78.44p.
At 30 September 2024, none of the options were exercisable (31 December 2023:
2,459,098).
The Company only share-based remuneration charge in the year, relating to the
above Non-Executive Director remuneration scheme only was £nil (FY23:
£2,341k expense).
Executive Director Awards
The Long Term Incentive Plan awards for the Executive Directors were granted
on 23 December 2021, and vest subject to revenue and Adjusted EBITDA margin
performance conditions ('base'). The Long Term Incentive Plan awards are also
subject to a multiplier based on absolute TSR performance ('stretch'). The
overall award was granted as a combination of nil cost options over LBG Media
plc shares and an award of A shares in LBG Holdco Limited, in respect of the
base and stretch amounts respectively. The A shares in LBG Holdco Limited will
convert to LBG Media plc shares on exercise. Within 2023, for two outgoing
former Directors the vesting period has been shortened to their leave dates in
2024. Similarly, the number of shares that vest has been pro-rated downwards
to align with the shortened tenure.
Further awards were granted within FY24 to Executive Directors, the awards for
the Executive Directors, granted in the form of nil cost options, are subject
to the satisfaction of stretching performance conditions measured over a three
year performance period (1 January 2023 to 31 December 2025) and continued
employment. The awards consist of a 'Base Award' (which will vest subject to
stretching financial targets) and a 'Stretch Award' (which will vest subject
to stretching total shareholder return targets of 30% and 50% CAGR over a
three year performance period ending on 31 December 2025).
At 30 September 2024, none of the options were exercisable (31 December 2023:
nil).
LAD Incentive Plans
The Group operates incentive plans for senior employees subject to revenue
performance conditions and an Adjusted EBITDA margin underpin. Vesting is
contingent upon continued employment. In May 2023 the LADbible Incentive Plan
awards were forfeited in return for the Group A awards which mirrored the
terms of the original awards with additional market based performance
conditions, including top-up awards. The top-up options will only vest if the
series of performance conditions are fully met, at which point the quantity of
options vesting will represent those equivalent to a fixed maximum value to
the option-holder. The scheme was changed in order to better align with the
Group's objectives.
At 30 September 2024, none of the options were exercisable (31 December 2023:
nil).
LTIPs - Senior Leadership
The Group operates long term incentive plans for senior employees subject to
revenue performance conditions and an Adjusted EBITDA margin underpin. Vesting
is contingent upon continued employment. In May 2023 the LTIP Senior Manager
awards were forfeited in return for the Group B awards which mirrored the
terms of the original awards with additional market based performance
conditions, including top-up awards, and removal of the Total Shareholder
Return (TSR) multiplier. The top-up options will only vest if the series of
performance conditions are fully met, at which point the quantity of options
vesting will represent those equivalent to a fixed maximum value to the
option-holder. The scheme was changed in order to better align with the
Group's objectives.
Further awards were granted within FY23 and FY24 to senior employees, subject
to revenue and market performance conditions and an Adjusted EBITDA margin
underpin.
At 30 September 2024, none of the options were exercisable (31 December 2023:
nil).
Key Management Personnel Award
Awards were granted to a member of Key Management Personnel (KMP) under the
Long Term Incentive Plan on 15 December 2021 (Date of Admission) which vest on
17 September 2022, with no employment conditions attached. Awards were granted
to a member of KMP which vested immediately on 15 December 2021, with no
performance conditions attached.
Following an election made by the Group to settle liabilities in relation to
this scheme in cash (rather than shares), this scheme was reassessed as a
cash-settled share scheme in the prior year. The cash-settled share-based
payment liability at 30 September 2024 is £182k (31 December 2023: £375k).
This liability is included within other payables.
315,000 options were exercised within the period (FY23: 351,000) at a weighted
average share price of 95.64p at the date of exercise (FY23: 87.29p). The cash
settlement of these exercised options totalled £305k in the period.
At 30 September 2024, 132,865 of the options were exercisable (31 December
2023: 438,865).
14. Called up share capital
Ordinary shares of £0.001 each FY24 FY24 FY23 FY23
Number £ Number £
At 01 January 206,620,642 206,621 205,714,289 205,714
Issued during the year 2,459,098 2,459 906,353 907
At period/year end 209,079,740 209,080 206,620,642 206,621
15. Subsequent events
The Group established an Employee Benefit Trust (EBT) during the year to
facilitate the remuneration of employees, including the administration of
share-based payment schemes. The EBT is managed independently and operates
under the terms of the trust deed, funded by the Group.
The EBT did not hold any shares at the reporting date. However, subsequent to
the year-end, the EBT acquired shares totalling £1,900k to support its
objectives. These post-year-end transactions will be reflected in the Group's
consolidated financial statements for the next reporting period.
16. Acquisitions
On 17 October 2023, the Group acquired the entire share capital of Betches
Media, LLC ('Betches') for total consideration of £29,175k ($35,593k).
Betches is a US-based media brand founded by women and focused on digital
media content production and publication for women.
Consideration for the acquisition was entirely in cash, with no shares in the
Group issued to the sellers. The cash consideration is comprised of £19,541k
($23,840k) funded from existing cash resources, with up to a further $30,000k
cash consideration payable in instalments (£23,548k at the closing balance
sheet rate), subject to Betches achieving certain revenue and EBITDA targets
to 2026. The contingent consideration is payable in annual tranches from March
2024 up until March 2026.
Of the maximum contingent consideration of $30,000k (£23,548k) payable to the
sellers, based upon revenue and EBITDA forecasts at the date of acquisition, a
total of £9,634k ($11,753k) is management's best estimate of the amount
payable within a range of potential outcomes. The fair value of total
consideration at the date of acquisition is therefore £29,175k.
The contingent consideration estimate remains management's best estimate. The
Group have paid £3,120k ($4,000k) to the founders in relation to the earnout
and the remaining liability on the balance sheet is £7,051k. Refer to the
contingent consideration section of this note for a reconciliation of the
current position.
Summary of the acquisition balance sheet:
Fair value recognised on acquisition
£000
Net assets
Non-current assets
Content partnership relationships 3,850
Brand 6,744
Fixed assets 261
Right of use asset 1,143
Current assets
Cash 1,713
Security deposits 63
Accounts receivable 3,915
Inventory 31
Prepayments 380
Contract asset 422
Current liabilities
Accounts payable (97)
Accruals (998)
Provisions (7)
Other payables (39)
Transaction costs payable (2,285)
Lease liability (239)
Non-current liabilities
Lease liability (879)
Total identifiable net assets at fair value 13,978
Goodwill arising on acquisition 15,197
Total purchase consideration transferred 29,175
Purchase consideration:
Cash 19,293
Amounts unpaid 248
Contingent consideration 9,634
Total purchase consideration 29,175
Analysis of cash flows on acquisition:
Net cash acquired with the subsidiary 1,713
Cash paid (19,293)
Acquisition of subsidiaries, net of cash acquired (included in cash flows from (17,580)
investing activities)
Transaction costs of the acquisition (included within cash flows from (799)
operating activities)
Net cash outflow (18,379)
Cash consideration per the RNS on 18 October 2023 was noted as being $24,000k
(£19,673k). The difference between this and that noted as the initial cash
payment of $23,537k (£19,293k) are adjustments in line with the acquisition
agreement for working capital movements, cash reflected on acquisition,
sell-side transaction expenses and bonus accruals, totalling $463k (£380k).
Further as a result of the finalisation of the completion accounts an
additional £228k (£248k at the acquisition date spot rate) remains unpaid at
30 September 2024, we expect this to be paid in FY25.
17. Contingent consideration
The Group has adopted the following fair value hierarchy in relation to its
financial instruments that are carried in the balance sheet at the fair values
at the year end (being solely contingent consideration):
● Quoted prices (unadjusted) in active markets for identical assets or
liabilities (level 1);
● Inputs other than quoted prices included within level 1 that are observable
for the asset or liability, either directly (that is, as prices) or indirectly
(that is, derived from prices) (level 2); and
● Inputs for the asset or liability that are not based on observable market data
(unobservable inputs) (level 3).
The following table sets out the fair value of all financial assets and
liabilities that are measured at fair value:
Liabilities measured at fair value FY24 FY23
Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
£000 £000 £000 £000 £000 £000
Contingent consideration - - 7,051 - - 9,539
Total - - 7,051 - - 9,539
Contingent consideration is included in Level 3 of the fair value hierarchy.
The provision for contingent consideration is in respect of the Betches Media,
LLC acquisition in October 2023, further details of which can be found above.
The fair value is determined considering the expected payments, discounted to
present value using a risk adjusted discount rate.
The significant unobservable inputs are the financial performance forecasts
for the Year 1 (2023), Year 2 (2024), Year 3 (2025) and Year 4 (2026) twelve
month periods and the risk adjusted discount rate of 17.6%.
The estimated fair value could increase or decrease if Revenue or EBITDA was
higher or lower. This is because the potential earn out payments are split
into two tranches.
The first element of contingent consideration (Earnout 1) is based upon
Betches Media, LLC revenue performance in 2023, 2024 and 2025 respectively.
Contingent consideration of up to $15m is payable under Earnout 1 in three
tranches in 2024, 2025 and 2026 respectively.
The second element of contingent consideration (Earnout 2) is based upon
Betches Media, LLC meeting a minimum EBITDA hurdle in 2023, 2024, 2025 and
2026. Contingent consideration of up to $15m is payable under Earnout 2 in
four tranches in 2024, 2025, 2026 and 2027 respectively.
At the acquisition date the discounted fair value of the contingent
consideration was estimated at £9,634k having been determined from
management's estimates of the range of outcomes and their respective
likelihoods.
At 30 September 2024, the value of the contingent consideration after
unwinding of the discounting and a £3,120k ($4,000k) earnout payment was
£7,051k (31 December 2023: £9,539k). Adjustments to the fair value of the
contingent consideration are made in the Consolidated Statement of
Comprehensive Income under IFRS 3 Business Combinations.
Further, the estimated fair value would increase or decrease if the risk
adjusted discount rate was higher or lower.
A reasonably possible change to one of these significant unobservable inputs,
holding the other inputs constant, would have the following effects:
Effect of change in assumption on income statement FY24 FY23
Increase Decrease Increase Decrease
£000 £000 £000 £000
Revenue movement by £500k - - - -
EBITDA movement by £500k 1,940 - 928 -
Risk adjusted discount rate change by 1.0% 51 53 79 85
Note that moving revenue up or down does not impact the fair value because
without meeting the EBITDA hurdle, tranche 2 payments will not be made.
However, if the EBITDA hurdle was met, then the earnout 2 payments would be
material.
For example, if revenue was $25m (£15.7m) in each of the years 2024, 2025 and
2026 and the EBITDA hurdle was met, then the additional earnout payments would
be £0.8m per annum.
A reconciliation from the opening to closing contingent consideration balance
can be found below:
FY24 FY23
£000 £000
At 1 January 9,539 -
Recognition on the acquisition of subsidiary undertakings - 9,634
Unwinding of discount(1) 1,014 314
Settlement of consideration (3,120) -
Effect of exchange rates on the settlement of consideration (13) -
Exchange adjustment (369) (409)
At period/year end 7,051 9,539
Analysed as:
Amounts falling due within 12 months 3,811 3,016
Amounts falling due after one year 3,240 6,523
At period/year end 7,051 9,539
1. The discount rate used for the unwinding of the contingent consideration is
17.6%.
Unaudited Proforma Statement of Comprehensive Income
The unaudited proforma consolidated statement of comprehensive income has been
included as supplementary information to the statutory 9-month reporting
requirements. It is intended to provide insight into the Group's performance
on an annualised basis, recognising the significance of the fourth calendar
quarter. This unaudited proforma information is unaudited and does not
constitute part of the audited financial statements. Selected income statement
data has been sourced from the Group's management accounts for the two
comparative periods. Additional notes, including segmental analysis and key
assumptions underlying the proforma income statement, are detailed below.
AUDITED UNAUDITED UNAUDITED AUDITED UNAUDITED UNAUDITED UNAUDITED
Note 9 months ended Plus 3 months ended 12 months ended Year ended Deduct 3 months Plus 3 months ended 12 months ended
30 Sept 24
31 Dec 23
30 Sept 24
31 Dec 23
01 Oct 23 to 31 Dec 23
1 Oct 22 to
30 Sept 23
£'000
£'000
31 Dec 22
£'000 £'000 £'000
£'000
£'000
Revenue 8 64,945 21,300 86,245 67,510 (21,300) 24,685 70,895
Net operating expenses (52,383) (18,895) (71,278) (61,445) 18,895 (17,295) (59,845)
Operating profit/(loss) 12,562 2,405 14,967 6,065 (2,405) 7,390 11,050
Analysed as:
Adjusted EBITDA 16,929 7,546 24,475 17,368 (7,546) 11,304 21,126
Depreciation (1,814) (786) (2,600) (2,088) 786 (450) (1,752)
Amortisation (1,820) (574) (2,394) (1,369) 574 (216) (1,011)
Asset impairment and release of related liabilities - (318) (318) (318) 318 - -
Share based (733) (760) (1,493) (3,853) 760 (685) (3,778)
payments charge
Adjusting items 9 - (2,703) (2,703) (3,675) 2,703 (2,563) (3,535)
Group operating 12,562 2,405 14,967 6,065 (2,405) 7,390 11,050
profit/(loss)
Finance income 289 58 347 106 (58) 4 52
Finance costs (1,217) (351) (1,568) (565) 351 (26) (240)
Net finance costs (928) (293) (1,221) (459) 293 (22) (188)
Share of post-tax profits 505 218 723 331 (218) 24 137
of equity accounted
joint venture
Profit/(loss) before taxation 12,139 2,330 14,469 5,937 (2,330) 7,392 10,999
Income tax expense (3,185) (1,805) (4,990) (4,271) 1,805 (2,236) (4,702)
Profit/(loss) for the financial year attributable to equity holders of 8,954 525 9,479 1,666 (525) 5,156 6,297
the Company
Currency translation differences (net of tax) (1,562) (1,039) (2,601) (1,082) 1,039 70 27
Profit/(loss) and total comprehensive income 7,392 (514) 6,878 584 514 5,226 6,324
for the financial year
attribute to equity holders of the Company
Basic earnings/(loss) 10 4.3 0.3 4.6 0.8 (0.3) 2.5 3.0
per share (pence)
Diluted earnings/(loss) 10 4.1 0.2 4.3 0.8 (0.2) 2.3 2.9
per share (pence)
BASIS OF PREPARATION FOR PROFORMA DISCLOSURE
1.Unaudited purpose of proforma disclosure
The proforma statement of comprehensive income has been prepared to provide
stakeholders with a full 12 month view of the Group's performance, following
the recent change in year-end from 31 December to 30 September. This proforma
disclosure covers the period from 1 October 2023 to 30 September 2024,
supporting comparability with previous periods and offering insight into the
Group's annualised results.
2. Unaudited basis of preparation
The proforma statement of comprehensive income has been prepared in accordance
with International Financial Reporting Standards (IFRS) as adopted by the
United Kingdom. The accounting policies applied are consistent with those used
in the statutory financial statements.
Key assumptions in the proforma statement of comprehensive income include the
consistent application of the effective tax rate used in prior financial years
and uniform treatment of share-based payments across the proforma period.
Adjusting items have been included in the proforma disclosure, with each item
allocated to the period in which it was incurred. This approach provides a
realistic view of the Group's financial performance, reflecting all
significant items impacting operations during the 12 month period.
3. Unaudited revenue and expense allocation
Revenue recognition has been applied consistently across both the statutory
and proforma periods, in line with IFRS 15 guidelines. Revenue streams have
been allocated across the proforma period according to performance
obligations.
Operating expenses, including direct and indirect costs, have been allocated
on a basis consistent with the statutory period.
4. Unaudited adjusting items
Adjusting items during the reporting period are reflected in the proforma
statement of comprehensive income based on the actual period in which they
were incurred. Detailed notes accompany the proforma statement of
comprehensive income, outlining the nature and timing of each adjusting item
to enhance transparency and clarity for users.
5. Unaudited taxation
A blended effective tax rate has been applied across the proforma period to
reflect relevant tax rates for each segment. Specifically, the FY22 effective
tax rate was applied to the first 3 months, with the FY23 effective tax rate
applied to the remaining 9 months of the year ended 30 September 2023. For the
12 month proforma period ending 30 September 2024, a blended rate combining
the FY23 rate and the rate applicable to the statutory 9 month period has been
applied, providing a representative tax view across the proforma period.
6. Unaudited share-based payments
Share-based payments have been calculated and applied consistently throughout
the proforma period, using the same valuation methodologies and recognition
criteria as in prior periods, ensuring comparability with statutory accounts.
7. Unaudited presentation of comparative information
The proforma statement of comprehensive income serves as supplementary
information and is not part of the statutory financial statements. Comparative
figures for the statutory 9 month period (1 January 2024 to 30 September 2024)
are disclosed alongside the proforma 12 month period for clarity and enhanced
comparability.
DISCLOSURES
8. Unaudited revenue
AUDITED UNAUDITED UNAUDITED AUDITED UNAUDITED UNAUDITED UNAUDITED
9 months ended Plus 3 months ended Year ended Year ended Deduct 3 months Plus 3 months ended Year ended
30 Sept 24
31 Dec 23
30 Sept 24
31 Dec 23
01 Oct 23 to 31 Dec 23
1 Oct 22 to
30 Sept 23
£'000
£'000
31 Dec 22
£'000 £'000 £'000
£'000
£'000
Revenue
Direct 34,443 9,477 43,920 29,349 (9,477) 11,763 31,635
Indirect 29,368 11,381 40,749 37,111 (11,381) 12,542 38,272
Other 1,134 442 1,576 1,050 (442) 380 988
64,945 21,300 86,245 67,510 (21,300) 24,685 70,895
9. Unaudited adjusting items
A breakdown of adjusting items is provided below
AUDITED UNAUDITED UNAUDITED AUDITED UNAUDITED UNAUDITED UNAUDITED
9 months ended Plus 3 months ended Year ended Year ended Deduct 3 months Plus 3 months ended Year ended
30 Sept 24
31 Dec 23
30 Sept 24
31 Dec 23
01 Oct 23 to 31 Dec 23
1 Oct 22 to
30 Sept 23
£'000
£'000
31 Dec 22
£'000 £'000 £'000
£'000
£'000
Costs associated with - 1,629 1,629 1,980 (1,629) 1,571 1,922
business reorganisations
Acquisition related fees - 1,141 1,141 1,141 (1,141) - -
One off retention payment - - - 621 - - 621
in 2023
U.S. set up costs - - - - - 626 626
Tax (credits)/settlements - (67) (67) (67) 67 365 365
- 2,703 2,703 3,675 (2,703) 2,562 3,534
10. Unaudited EPS
AUDITED UNAUDITED AUDITED UNAUDITED
9 months ended Year ended Year ended Year ended
30 Sept 24
30 Sept 24
31 Dec 23
30 Sept 2023
£'000
£'000
£'000 £'000
Basic Earnings per share
Earnings, £m 8,954 9,479 1,666 6,297
Number of shares (m) 209.1 208.4 206.5 206.5
Earnings per share, pence 4.3 4.6 0.8 3.0
Diluted Earnings per share
Earnings, £m 8,954 9,479 1,666 6,297
Number of shares (m) 217.7 217.7 217.7 217.7
Earnings per share, pence 4.1 4.4 0.8 2.9
Cautionary Statement
Certain statements included or incorporated by reference within this
announcement may constitute "forward-looking statements" in respect of the
Group's operations, performance, prospects and/or financial condition.
Forward-looking statements are sometimes, but not always, identified by their
use of a date in the future or such words and words of similar meaning as
"anticipates", "aims", "due", "could", "may", "will", "should", "expects",
"believes", "intends", "plans", "potential", "targets", "goal" or "estimates".
By their nature, forward looking statements involve a number of risks,
uncertainties and assumptions and actual results or events may differ
materially from those expressed or implied by those statements. Accordingly,
no assurance can be given that any particular expectation will be met, and
reliance should not be placed on any forward-looking statement. Additionally,
forward-looking statements regarding past trends or activities should not be
taken as a representation that such trends or activities will continue in the
future. No responsibility or obligation is accepted to update or revise any
forward-looking statement resulting from new information, future events or
otherwise. Nothing in this announcement should be construed as a profit
forecast. This announcement does not constitute or form part of any offer or
invitation to sell, or any solicitation of any offer to purchase any shares or
other securities in the Company, nor shall it or any part of it or the fact of
its distribution form the basis of, or be relied on in connection with, any
contract or commitment or investment decisions relating thereto, nor does it
constitute a recommendation regarding the shares or other securities of the
Company. Past performance cannot be relied upon as a guide to future
performance and persons needing advice should consult an independent financial
adviser. Statements in this announcement reflect the knowledge and information
available at the time of its preparation. Liability arising from anything in
this announcement shall be governed by English law. Nothing in this
announcement shall exclude any liability under applicable laws that cannot be
excluded in accordance with such laws.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR BBMBTMTMTTPARecent news on LBG Media
See all newsREG - LBG Media PLC - Half-Year Trading Update and Notice of Results
AnnouncementREG - LBG Media PLC - Result of AGM
AnnouncementREG - LBG Media PLC - Notice of Annual General Meeting
AnnouncementREG - LBG Media PLC - Director/PDMR Shareholding
AnnouncementREG - LBG Media PLC - Director/PDMR Shareholding
Announcement