REG - LBG Media PLC - Half Year Results
21/09/2022 07:00
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RNS Number : 0636A LBG Media PLC 21 September 2022
21
September 2022
This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the Company's obligations under Article 17 of
MAR.
LBG Media plc
("LBG Media", the "Company" or "Group")
Results for the half year ended 30 June 2022
LBG Media plc, the UK-based multi-brand, multi-channel digital youth
publisher, is pleased to report its results for the half year ended 30 June
2022. During the period, the Group delivered a robust performance, both
operationally and financially, against a challenging macro environment, and
continued to grow its global audience and content views.
OVERVIEW
Financial Highlights
HY22 (£m) HY21 (£m) Change
Revenue
- Direct 10.6 9.5 11%
- Indirect 13.6 13.1 4%
- Other 0.6 0.4 61%
Total Group Revenue 24.8 23.0 8%
Adjusted EBITDA(1) 1.6 7.3 (78%)
- Adjusted EBITDA margin(1) 7% 32% (25pp)
Adjusted Profit before tax(2) 0.5 6.2 (92%)
(Loss) / Profit before tax (1.9) 5.6 (134%)
Cash and cash equivalents 28.6 12.6 127%
· Revenue of £24.8m (HY21: £23.0m), up 8% YoY, compared with a
strong prior year, where revenue grew 133% in HY21.
o Direct revenue increased by 11% to £10.6m (HY21: £9.5m) driven by strong
growth in the Group's international operations, most notably its Australia
business.
o Indirect revenue grew by 4% to £13.6m (HY21: £13.1m). The significant
growth in the volume of views continued in HY22, up 38% vs the prior year
period, reflecting growth in market share. As previously stated, this has been
offset by a reduced revenue per view across the platforms as a result of the
current economic environment.
· Adjusted EBITDA(1) of £1.6m (HY21: £7.3m), down 78% YoY, and
move to statutory loss before tax (HY21: profit), primarily due to investment
into people in H2 2021 to increase content and views across our brands and
drive growth into the future, along with increased spend on physical marketing
events that did not go ahead in the prior year due to Covid-19 restrictions.
· Cash and cash equivalents at the period-end amounted to £28.6m
(2021: £34.3m, HY21: £12.6m). The reduction in cash in comparison to the
year end is primarily driven by the payment of IPO related costs and the Go
Animals acquisition.
Operational Highlights
· Global audience grew by 62m people (including the Go Animals
acquisition) to over 315m (HY21: 253m), with 35.8bn content views in the
period, up 38% on the prior year, following investment in people to increase
volumes and drive more engaging content across all platforms.
· On 19 May 2022, the Group completed the small bolt on acquisition
of the Go Animals Facebook pages, with a total of 6.8m followers, increasing
its target audience and bringing a new genre of content to the Group's brand
portfolio.
· The Group continued to progress plans to launch operations in the
US and has begun the recruitment process in New York City, with activity
expected to commence in early 2023.
· The Group signed a new contract with Vodafone to provide a
cutting edge solution for its VOXI owned social channels. Vodafone recognised
LBG Media's expertise in creating deeply engaging content for youth and young
adults at scale. VOXI perfectly aligns with the Group's target audiences,
speaking directly to the youth generation and providing services tailored to
them.
OVERVIEW continued
Outlook
In recent weeks, we have seen improving momentum in indirect revenues as we
have responded to the demand for more short format videos on our partner
platforms, positively impacting revenue per view. This trend is expected to
continue throughout our seasonally stronger second half. Direct bookings are
also showing good momentum, although advertisers are making decisions with
shorter lead-times given current uncertainty around consumer demand into the
winter months and we continue to monitor this closely.
Management believes results for the full year will be broadly in line with
market expectations(3), supported by activity around the Qatar World Cup as
well as the usual seasonal peak. As previously guided, given the investments
made in the first half and the end of year peak in advertising activity,
profitability is expected to be heavily weighted towards the final quarter of
the year.
CEO, Solly Solomou commented:
"The Group has seen solid performance in the first half of the year in what is
a challenging macro environment. The growth we have achieved in our audience
and views is a testament to the hard work of our teams and our ability to
adapt creatively to changing market conditions. Our partner brands and
platforms recognise our differentiated offering and significant engagement
with hard to reach audiences and we remain leaders in our field.
We continue to focus on our growth strategy, excited by the potential of the
US market, and assess M&A opportunities that are complementary to our
existing offering. We remain confident in the long-term prospects for the
business and significant growth potential for the future."
Notes:
(1 )Adjusted EBITDA - earnings before interest, tax, depreciation, and
amortisation adjusted for share based payments (including employers NIC as
appropriate) and exceptional items. Adjusted EBITDA margin is Adjusted
EBITDA divided by Group Revenue represented as a percentage.
(2) Adjusted Profit before tax - earnings before tax, share based payments
(including employers NIC as appropriate) and exceptional items.
(3) External market consensus for year ended 31 December 2022 (FY22) is
currently: Revenue £65.4m, Adj EBITDA £20.1m.
For further information please contact:
LBG Media plc investors@ladbiblegroup.com
Tim Croston, Chief Financial Officer
Clara Melia, Investor Relations
Mark Mochalski, Investor Relations
Zeus Tel: +44 (0) 161 831 1512
(Nominated Adviser & Broker) www.zeuscapital.co.uk (http://www.zeuscapital.co.uk/)
Dan Bate / Nick Cowles / Benjamin Robertson
Media enquiries Tel: +44 (0) 20 7466 5000
Buchanan www.buchanan.uk.com (http://www.buchanan.uk.com/)
Richard Oldworth / Chris Lane / Toto Berger / Jack Devoy
Analyst Presentation
LBG Media plc will be hosting an analyst presentation on Wednesday 21
September 2022 following the release of these results for the half year ended
30 June 2022. Attendance is by invitation only. Slides accompanying the
analyst presentation, along with a recording, will be available on the LBG
Media plc website following the event.
Notes to editors
LBG Media is a multi-brand, multi-channel digital youth publisher and is a
leading disrupter in the digital media and social publishing sectors. The
Group produces and distributes digital content across a range of mediums
including video, editorial, image, audio, and experience (virtual and
augmented reality). Since its inception in 2012, the Group has curated a
diverse collection of ten core specialist brands using social media platforms
(primarily Facebook, Instagram, Snapchat, Twitter, YouTube and TikTok) and has
built multiple websites to reach new audiences and drive engagement. Each
brand is dedicated to a distinct popular interest point (e.g. sport, gaming,
etc.), which is designed to achieve broader engagement, increase relevance and
ultimately build a loyal community of followers.
The Group operates two core routes to market: Direct revenue, which is
principally generated from the provision of content marketing services to
corporates, brand owners, marketing agencies and other entities such as
government bodies and where the relationship with the client is held directly
by LBG Media; and Indirect revenue, which is generated via a third-party, such
as a social media platform or via a programmatic advertising exchange/ online
marketplace, which holds the relationship with the brand owner or agency.
BUSINESS REVIEW
Overview
In the period ended 30 June 2022, LBG Media delivered a robust performance
with revenue up 8% to £24.8m (HY21: £23.0m), building on an exceptional
prior year, where revenue grew 133% in HY21. Adjusted EBITDA fell 78% to
£1.6m (HY21: £7.3m), primarily due to our investment in staff in H2 2021,
enabling the Group to deliver an increased breadth of relevant and exciting
content to its global youth audience to drive future growth.
LBG Media remains focused on delivering relevant and exciting content to the
youth audience, with the volume of views continuing to grow in HY22, up 38% vs
the first half of 2021, driving growth in market share. Following investments
made into our teams in the second half of last year, we have increased content
volumes and views across our broad portfolio of distinct brands, driving
further engagement with our existing audience and increasing our following
base.
The global digital media market is forecast to grow at 15%(4) this year,
despite the current challenging economic environment. LBG Media operates
within some of the fastest growing segments of the digital media market,
including social video and mobile, and is therefore well placed to continue to
increase its market share.
Our addressable market within our four core geographies of focus, being the
United Kingdom, Australia, Ireland and the United States, continues to grow as
we increase and diversify our content.
Revenue
Revenue is generated through our two core revenue channels, Direct and
Indirect, and many capabilities with which we monetise the relationship we
have with our audience can be used across both sales channels.
Direct revenue is generated from the provision of content marketing services
to corporates, brand owners, marketing agencies and other entities such as
government bodies, and increased by 11% in HY22 to £10.6m (HY21: £9.5m),
driven by strong growth in the Group's international business. Direct revenue
also includes some revenue from direct display advertising, where brand
owners' pre-existing content (not created by LBG Media) can be displayed
across our websites for an agreed fee.
Indirect revenue is generated via a third party, such as a social media
platform (e.g. Facebook, Snapchat, YouTube) through social videos or via a
programmatic advertising exchange / online marketplace, which holds the
relationship with the brand owner or agency, and in the first half of 2022
increased by 4% to £13.6m (HY21: £13.1m). In terms of monetisation, Facebook
is an already monetised platform, Snapchat is advancing its monetisation
progress, while TikTok and Instagram are at earlier stages of monetisation.
Audience, followers & engagement
LBG Media's 200 expert content creators produce engaging and relevant content
for our audience. The content is then distributed through various platforms
and websites and in-depth analysis is then performed on interactions and
audience engagement in real time. The learnings from this then drive the
refinement of content to make it even more engaging for the audience, in a
cycle of continuous improvement.
In the first half of 2022, our global audience grew to 315m, up from 276m(5)
at 31 December 2021 and 253m at 30 June 2021. In the UK alone, the Group
reaches almost two thirds of 18 to 34 year-olds. Our content was viewed over
35bn times, up 38% YoY and this was well diversified across our brand
portfolio.
Brand portfolio
LBG Media's 11 core brands are each based around specific interest points such
as sports, gaming, music, technology, and travel. We have recently launched
LADnation, the Group's consumer youth research panel, which already has over
50,000 subscribers. LADnation offers real time insights for brands to uncover
the social generation's habits and motivations to help them find ways to
connect with their target audiences in an authentic way.
Strategic progress
The United States is one of the largest social media markets in the world and
we have already built a substantial community of followers there whilst being
strategically focused on the UK market. In HY22 we commenced a recruitment
process to begin to build up a team on the ground, having identified New York
City as the perfect home for our new US operations. We expect to have a team
of roughly 10 people by the end of the year, including content creators and
relationship managers to build brand partnerships and drive growth in Direct
revenue.
In May 2022, we completed the small bolt-on acquisition of the 'Go Animals'
Facebook pages, with a total of 6.8m followers, increasing our target audience
and bringing a new genre of content to our brand portfolio. Since acquisition
and rebranding, we have reallocated a small team to create content, increase
engagement and bring new followers to the Group.
(4.) EMarketer data
(5.) Updated from 264m reported at year end to include non-core accounts
BUSINESS REVIEW (continued)
Future growth strategy
LBG Media has a proven track record of delivering strong organic growth, as
well as via acquisition. Our strategy for growth can be summarised into the
below three core pillars.
1) Geographies: LBG Media currently has a physical presence in four
territories - the UK, Ireland, Australia, and New Zealand. With our new team
in the United States, we will continue to increase engagement and followers
and begin to monetise the market. We aim to grow these communities, by
continuing to create and publish relevant digital content, further building
brand awareness levels and increasing follower numbers. The majority of LBG
Media's Direct revenue is currently generated in the UK, however, active
audiences in other geographies provide a foundation for future growth across
both the Indirect and Direct revenue streams.
2) Mergers & Acquisitions ("M&A"): Where an established digital
media brand with a physical presence and understanding of the local market
already exists, it can be significantly more time and cost efficient to access
such markets through selective acquisitions compared to building a new brand
from scratch. We continue to actively consider and assess M&A
opportunities that have diversification potential, both geographically and in
terms of genre of content, as we look to increase our audience.
3) Capabilities: Our agile model allows us to actively replicate content
across any new platforms, ensuring it reaches the widest possible audience and
we intend to continue to expand our capabilities to produce innovative
content. Increasing audience monetisation is key to driving LBG Media's
growth. Currently only Facebook, Snapchat and YouTube facilitate such
monetisation of users through adverts, but we believe that in time these
capabilities will be introduced across all social media platforms as they
mature, providing significant upside opportunities for us.
Awards/Events
We are pleased to have been nominated for, and subsequently won, several
awards that recognise our positive impact on tackling complex social issues,
including a bronze award for The Creative Use of Media at this year's Festival
of Media Global Awards, for our 'Think Outside The Box' campaign with Tampax
and Starcom on Tyla. In addition, we won at the Digiday Content Marketing
Awards for 'Best Agency and Client Collaboration' for our campaign with The
Walt Disney Company and Publicis for the launch of the Star content hub on
Disney+ and the Best Equality & Inclusion Cause Campaign Award for 'A
Solider Is A Solider' with The British Army at the Campaign Magazine
UK Purpose Awards.
LADstudios has been awarded 'Best Original Web Channel' at the Broadcast
Digital Awards and LADbible Australia's documentary series UNHEARD, won the
Social Responsibility Award at the Mumbrella Commcon Awards. Additionally, LBG
Media was crowned Commercial Team of the Year at The Drum Awards for Online
Media and also at the Campaign Magazine UK Media Awards - two wins being
testament to our commitment to creating social-first and authentic content for
partners to reach and capture a youth audience.
ESG
As a leading social youth publisher, LBG Media has a powerful global platform
to push socially responsible agendas and we have run several social awareness
campaigns recently to help raise awareness of key social issues.
Over the last 6 months, we have taken part in the global PRIDE events,
supporting and celebrating the LGBTQIA+ community, launching a special episode
of The Gap, with two transgender women from different generations. We also
launched a new campaign, 'Someone You Love', which aims to end the stigma
around talking about abortion, whilst educating our audience on abortion
rights closer to home and how they can support women in the US following
changes to abortion laws there.
FINANCIAL REVIEW
HY22 HY21 HY22 v HY21
£m £m %
Revenue 24.8 23.0 8%
Net operating expenses (26.6) (17.4) 53%
Operating (loss)/profit (1.8) 5.7 (132%)
Adjusted EBITDA(1) 1.6 7.3 (78%)
Adjusted EBITDA(1) % 7% 32% (25ppts)
Share based payments (2.4) (0.1) 1994%
Depreciation (0.7) (0.6) 4%
Amortisation (0.4) (0.4) (9%)
Exceptional costs 0.0 (0.5) (100%)
Operating (loss)/profit (1.8) 5.7 (132%)
Net finance costs (0.1) (0.1) (57%)
Share of joint ventures (0.0) 0.1 (166%)
(Loss)/profit before taxation (1.9) 5.6 (134%)
Corporation tax credit/(expense) 0.1 (1.4) (109%)
(Loss)/profit for the period (1.8) 4.2 (143%)
Cash and cash equivalents 28.6 12.6 127%
Notes:
(1) Earnings before interest, tax, depreciation, and amortisation adjusted for
share based payments (including employers NIC as appropriate) and exceptional
items. Adjusted EBITDA % is Adjusted EBITDA divided by Group Revenue
represented as a percentage.
FINANCIAL REVIEW (continued)
Key performance indicators ("KPIs")
The board monitors progress of the Group by reference to the following KPIs:
HY22 HY21 HY22 v HY21
£m £m
£m %
Financial
Revenue 24.8 23.0 1.8 8%
Adjusted EBITDA 1.6 7.3 (5.7) (78%)
Adjusted EBITDA as a % of revenue 7% 32% (25ppts)
Adjusted Profit Before Tax 0.5 6.2 (5.7) (92%)
(Loss) / Profit before Tax (1.9) 5.6 (7.1) (134%)
Non-Financial
Global audience (m)* 315 253 62 25%
Content views (bn)** 35.8 26.0 9.8 38%
Average number of employees (no.) 473 380 93 24%
* Global audience includes social followers and unique website users in June.
** Content views is views of content across all social platforms and websites.
The definition of what constitutes a view can vary across the social
platforms.
Revenue
HY22 HY21 HY22 v HY21
£m £m %
Direct 10.6 9.5 11%
Indirect 13.6 13.1 4%
Other 0.6 0.4 61%
Revenue 24.8 23.0 8%
Group revenue increased to £24.8m (HY21: £23.0m), an 8% increase in
comparison to the prior year. This performance follows a strong prior year,
where revenue grew 133% in HY21.
Direct revenue increased by 11% to £10.6m (HY21: £9.5m) driven by strong
growth in the Group's international operations, most notably our Australia
business.
Indirect revenue grew by 4% to £13.6m (HY21: £13.1m). The significant growth
in the volume of views continued in HY22, up 38% vs the prior year period,
reflecting growth in market share. However, this has been offset by a reduced
revenue per view across the platforms as a result of the current economic
environment.
Management have assessed the classification of the social agency revenue
stream and concluded that this should be recognised within Direct rather than
Other revenue. For comparability purposes a prior period reclassification has
been made to the HY21 results.
FINANCIAL REVIEW (continued)
Net operating expenses
Net operating expenses increased by 53% to £26.6m (HY21: £17.4m):
- Staff costs increased by 6.2m to £16.1m (HY21: £9.9m), up 58%
due to the continued investment in our teams in the second half of 2021 and
HY22 to support future growth of the business in addition to a share based
payment charge of £2.4m (HY21: £0.1m).
- Media costs increased by £2.3m to £3.8m (HY21: £1.6m), up
145% as we continue to increase and diversify our output across both monetised
and emerging (yet to be monetised) social platforms
- Establishment costs (including Technology costs and Marketing)
increased by £0.7m to £2.6m (HY21: £1.9m), up 39% being investment in our
technology infrastructure and marketing to support future growth in Direct
revenue.
- Travel and expenses increased by £0.8m to £1.0m (HY21:
£0.2m), up 353% as a result of the prior year being suppressed due to
Covid-19 restrictions, in addition to international travel to Australia and
USA in HY22 to support expansion.
Depreciation
Depreciation of £0.7m (HY21: £0.6m) was up 4%, mainly driven by a new lease
in Australia.
Amortisation
Amortisation of £0.4m (HY21: £0.4m) down 9%, the minor reduction being down
to certain software costs being fully amortised in the prior year.
Share based payments
Share based payment costs were £2.4m (HY21: £0.1m) mainly as a result of
Long-Term Incentives Plans being awarded to the Board and Senior Managers in
December 2021. The share based payments charge includes £0.4m (HY21: nil) of
accrued employers NIC on certain share options.
Exceptional costs
Exceptional costs were £nil (HY21: £0.5m). The comparative includes advisor
costs in relation to our IPO in December 2021.
Adjusted EBITDA
Adjusted EBITDA was £1.6m (HY21: £7.3m) representing a 78% decrease in
comparison to the prior year, with investment in people in H2 2021 to increase
content and views across our brands and drive growth into the future, along
with increased spend on physical marketing events that did not go ahead in the
prior year due to Covid-19 restrictions. Adjusted EBITDA margin decreased to
7% (HY21: 32%).
Adjusted EBITDA is used for internal performance analysis to assess the
execution of our strategies. Management believe that this adjusted measure is
an appropriate metric to understand the underlying performance of the Group.
More information on Alternative Performance Measures (APMs) can be found on
page 20.
Net finance costs
Net finance costs of £0.1m (HY21: £0.1m) were incurred during the year.
Share of JV
Share in joint ventures was £nil (HY21: £0.1m) representing our share in the
results of Pubity Group Ltd.
Adjusted Profit before tax
Adjusted Profit before tax decreased to £0.5m (HY21: £6.2m) representing a
92% decrease in comparison to the prior year. More information on Alternative
Performance Measures (APMs) can be found on page 20.
Loss before tax
Loss before tax was £1.9m (HY21: £5.7m profit) representing a 134% decrease
in comparison to the prior year.
Taxation
The tax credit for the period was £0.1m (HY21: £1.4m charge).
Balance sheet
Goodwill and other intangible assets increased by £0.8m to £15.4m (2021:
£14.6m, HY21 £14.7m) mainly representing the small bolt on acquisition of
the Go Animals Facebook pages (£1.1m) offset by amortisation (£0.4m).
Property plant and equipment (PPE) increased by £0.3m to £4.0m (2021:
£3.7m, HY21 £4.2m) reflecting the addition of a lease in Sydney (£0.7m),
PPE cash additions (£0.3m) partially offset by depreciation (£0.7m).
Other receivables increased by £0.1m to £0.6m (2021: £0.5m, HY21 £1.6m).
Other receivables reflects long term lease deposits in relation to our London
and Sydney offices. The movement of £1.1m in comparison to HY21 is mainly the
repayment of a Director's loan (£1.2m) in December 2021.
Other interest-bearing loans and borrowings amounted to £nil (2021: £nil,
HY21 £11.7m). The bank debt was fully repaid in December 2021 with IPO
proceeds.
FINANCIAL REVIEW (continued)
Trade and other payables decreased by £4.4m to £6.8m (2021: £11.2m, HY21
£7.8m) mainly driven by the settlement of IPO related costs of £2.9m,
payment of Australian employment taxes of £0.7m, a reduction in deferred
income of £0.5m and a reduction in other payables of £0.3m.
Cashflow and cash position
Cash and cash equivalents at the year-end amounted to £28.6m (2021: £34.3m,
HY21 £12.6m). The reduction in cash of £5.8m in the comparison to the year
end is driven by Adjusted EBITDA of £1.6m offset by the settlement of IPO
related costs of £2.9m, the acquisition of Go Animals for consideration of
£1.1m, the payment of Australian employment taxes of £0.7m, corporation tax
instalments of £0.8m, lease payments of £0.6m, PPE of £0.3m and a movement
on working capital of £1.0m
Solly Solomou
Tim Croston
Chief Executive
Officer
Chief Financial Officer
UNAUDITED INTERIM FINANCIAL INFORMATION - LBG MEDIA PLC
UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Note Period ended Period ended
30 June 2022 £'000 30 June 2021
£'000
(unaudited) (unaudited)
Revenue 3 24,763 23,006
Net operating expenses (26,577) (17,352)
Operating (loss)/profit (1,814) 5,654
Analysed as:
Adjusted EBITDA(1) 1,637 7,311
Depreciation (677) (648)
Amortisation 6 (366) (402)
Share based payment charge (2,408) (115)
Exceptional costs 4 - (492)
Group operating (loss)/profit (1,814) 5,654
Finance income 5 -
Finance costs (62) (132)
Net finance costs (57) (132)
Share of post-tax (loss)/profit of equity accounted joint venture (46) 70
(Loss)/profit before taxation (1,917) 5,592
Income tax 5 127 (1,395)
(Loss)/profit and total comprehensive (loss)/income (1,790) 4,197
Basic (loss)/earnings per share (pence) 7 (0.9) 2.4
Diluted (loss)/earnings per share (pence) 7 (0.9) 2.4
( )
(1)Adjusted EBITDA, which is defined as profit before net finance costs, tax,
depreciation, amortisation, loss on disposal of intangible assets, share based
payment charge (including employers NIC as appropriate) and exceptional costs
is a non-GAAP metric used by management.
All results derive from continuing operations. ( )
UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Note As at 30 As at 30 As at 31 December 2021
June 2022 June 2021 £'000
£'000 £'000
(unaudited) (unaudited) (audited)
Assets
Non-current assets
Goodwill and other intangible assets 6 15,374 14,652 14,558
Property, plant and equipment 4,038 4,188 3,705
Investments in equity-accounted joint ventures 314 315 359
Other receivables 574 1,643 469
Deferred tax asset - 61 -
Total non-current assets 20,300 20,859 19,091
Current assets
Trade and other receivables 14,733 12,245 15,153
Current tax asset 434 - -
Cash and cash equivalents 28,554 12,590 34,338
Total current assets 43,721 24,835 49,491
Total assets 64,021 45,694 68,582
Equity
Called up share capital 206 - 206
Share premium reserve 28,993 63 28,993
Retained earnings 23,317 19,244 23,082
Total equity 52,516 19,307 52,281
Liabilities
Non-current liabilities
Lease liability 8 2,474 3,187 2,648
Other interest-bearing loans and borrowings 8 - 8,772 -
Provisions 214 210 209
Deferred tax liability 618 - 920
Total non-current liabilities 3,306 12,169 3,777
Current liabilities
Lease liability 8 1,364 1,318 1,111
Other interest-bearing loans and borrowings 8 - 2,952 -
Trade and other payables 6,835 7,797 11,209
Current tax liabilities - 2,151 204
Total current liabilities 8,199 14,218 12,524
Total liabilities 11,505 26,387 16,301
Total equity and liabilities 64,021 45,694 68,582
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share capital Share premium Retained earnings Total equity
£'000 £'000 £'000 £'000
As at 1 January 2021 - 63 14,154 14,217
Profit for the financial period - - 4,197 4,197
Total comprehensive income for the period - - 4,197 4,197
Share based payments - - 115 115
Deferred tax on share options - - 778 778
Total transactions with owners, recognised directly in equity - - 893 893
As at 30 June 2021 (unaudited) - 63 19,244 19,307
Profit for the financial period - - 256 256
Total comprehensive income for the period - - 256 256
Share based payments - - 1,412 1,412
Deferred tax on share options - - (318) (318)
Current tax deduction on exercise of share options - - 2,600 2,600
IPO costs to share premium - (990) - (990)
Shares issued on incorporation - - - -
Share split and capital reduction 302 - (302) -
Exercise of pre-IPO share options 14 - - 14
Share issue on IPO 17 29,983 - 30,000
Purchase and cancellation of deferred shares (127) (63) 190 -
Total transactions with owners, recognised directly in equity 206 28,930 3,582 32,718
As at 31 December 2021 (audited) 206 28,993 23,082 52,281
Loss for the financial period - - (1,790) (1,790)
Total comprehensive loss for the period - - (1,790) (1,790)
Share based payments - - 2,025 2,025
Total transactions with owners, recognised directly in equity - - 2,025 2,025
As at 30 June 2022 (unaudited) 206 28,993 23,317 52,516
UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
Note Period ended 30 June 2022 Period ended 30 June 2021 Year ended 31 December 2021
£'000 £'000 £'000
(unaudited) (unaudited) (audited)
Cash flows from operating activities
Cash (used)/generated from operations (2,900) 7,435 13,004
Tax (paid)/received (803) 290 (678)
Net cash (used)/generated from operating activities (3,703) 7,725 12,326
Cash flows from investing activities
Purchase of intangible assets (1,147) - (295)
Purchase of property, plant and equipment (315) (146) (353)
Repayment of loan - 1,204 1,204
Loans to Directors - (1,200) (2,700)
Repayment of loan by Directors - - 2,700
Net cash (used)/generated in investing activities (1,462) (142) 556
Cash flows from financing activities
Repayment of borrowings - (1,476) (13,200)
Lease payments (584) (315) (1,055)
Costs incurred on IPO charged to share premium - - (990)
Proceeds from share issue - - 30,000
Proceeds from share options vested - - 14
Interest paid (60) (139) (250)
Net cash (used)/generated in financing activities (644) (1,930) 14,519
Net (decrease)/increase in cash and cash equivalents (5,809) 5,653 27,401
Cash and cash equivalents at the beginning of the period 34,338 6,937 6,937
Effect of exchange rate changes on cash and cash equivalents 25 - -
Cash and cash equivalents at the end of the period 28,554 12,590 34,338
6 months to 30 June 2022 6 months to 30 June 2021 Year ended 31 December 2021
Cash generated from operations £'000 £'000 £'000
(unaudited) (unaudited) (audited)
(Loss)/profit for the financial period/year (1,790) 4,197 5,231
Income tax (127) 1,395 2,899
Net interest expense 57 132 232
Share of post tax losses/(profits) of equity accounted joint venture 46 (70) (115)
Operating (loss)/profit (1,814) 5,654 8,247
Depreciation charge 677 648 1,332
Amortisation of intangible assets 366 402 793
Loss on disposal of fixed assets (40) - -
Share based payments 2,025 115 1,527
Increase/(decrease) in Directors' loan account - - 53
Increase in provisions - 3 3
Decrease/(increase) in trade and other receivables 60 231 (2,730)
(Decrease)/increase in trade and other payables (4,174) 382 3,779
Cash (used)/generated from operations (2,900) 7,435 13,004
NOTES TO THE UNAUDITED INTERIM FINANCIAL INFORMATION
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 & Wales. The registered office of the Company is 20 Dale Street,
Manchester, M1 1EZ. The Company registration number is 13693251. The company
is listed on the AIM market of the London Stock Exchange.
A copy of the audited annual statutory accounts for the Group and the Half
Yearly report can be found on the company's website: https://lbgmedia.co.uk
(https://lbgmedia.co.uk) .
2. Basis of preparation
The interim financial information of the Group for the six months ended 30
June 2022, which is unaudited, has been prepared in accordance with the
recognition and measurement principles of International Financial Reporting
Standards ('IFRS') and the accounting policies adopted by the Group and set
out in the Annual Report and Financial Statements for the year ended 31
December 2021. The Directors do not anticipate any changes in these accounting
policies for the year ended 31 December 2022.
The unaudited interim financial information has been prepared on a going
concern basis under the historical cost convention. The unaudited interim
financial information is presented in pounds sterling and all values are
rounded to the nearest thousand pounds (£'000), except where otherwise
indicated. The interim financial information, including for the year ended 31
December 2021, does not constitute statutory accounts for the purposes of
section 434 of the Companies Act 2006. The statutory accounts for the year
ended 31 December 2021 have been delivered to the Registrar of Companies and
the auditor's report on those accounts was unqualified, did not draw attention
to any matters by way of emphasis, and did not contain a statement under
498(2) or 498(3) of the Companies Act 2006.
This unaudited interim financial information has been prepared in accordance
with the requirements of the AIM Rules for Companies and in accordance with
this basis of preparation.
3. Revenue
The trading operations of the Group are in the online media publishing
industry and are all continuing.
Analysis of revenue
The Group's revenue and operating profit relate entirely to its principal
activity.
The analysis of revenue by stream is:
6 months to 30 June 2022 Restated
6 months to 30 June 2021
£'000 £'000
(unaudited) (unaudited)
Revenue
Direct 10,545 9,520
Indirect 13,578 13,088
Other 640 398
24,763 23,006
Management have assessed the classification of the social agency revenue
stream and concluded that this should be recognised within Direct rather than
Other revenue. This is because social agency contracts are direct with the
customer and involve all elements typically seen in the Direct revenue stream.
For comparability purposes a prior period reclassification has been made to
the 30 June 2021 results.
NOTES TO THE UNAUDITED INTERIM FINANCIAL INFORMATION (continued)
4. Exceptional items
A breakdown of exceptional costs/(income) are provided below:
6 months to 30 June 2022 6 months to 30 June 2021
£'000 £'000
(unaudited) (unaudited)
Exceptional costs/(income)
Initial public offering ('IPO') related costs - 516
Amounts recoverable from Bentley Harrington Limited - (24)
Total exceptional costs - 492
Initial public offering ('IPO') related costs
IPO costs related to the Group's admission to AIM in December 2021, which
included £250k of professional accountancy services and £150k in relation to
legal consultancy towards preparing to IPO. £155k of the total IPO related
costs had been paid during the period ended 30 June 2021 and the whole balance
has now been paid up to 30 June 2022.
Amounts recoverable from Bentley Harrington Limited
During the year to 31 December 2021, the Group received £1,204k from Bentley
Harrington Limited. £1,180k of this was recorded as a receivable at 31
December 2020. The remaining balance of £24k was in relation to statutory
interest received from the Administrator of that company which was not
recorded as a receivable at 31 December 2020 and was therefore booked as
exceptional income in the 6 month period to June 2021.
In October 2018, the Group acquired a loan from a creditor of Bentley
Harrington Limited amounting to £5,000k for cash consideration of £3,500k.
In 2020, a total of £4,000k was recovered in cash from Bentley Harrington
Limited. A further £1,180k (£1,000k + statutory interest) was confirmed by
the Administrators of Bentley Harrington Limited as a receivable at 31
December 2020. On the basis of that confirmation, management believed at 31
December 2020 that a cash inflow was virtually certain and recognised the
amount as an asset at that year end. £1,204k was subsequently recovered in
cash in June 2021.
5. Income tax
Tax (credit) / expense included in consolidated statement of comprehensive
income:
6 months to 30 June 2022 6 months to 30 June 2021
£'000 £'000
(unaudited) (unaudited)
Current period tax:
Current taxation charge for the period 171 1,273
Adjustments in respect of prior periods - (1)
Foreign tax incurred - -
Total current tax 171 1,272
Deferred tax:
Current period (510) (97)
Effect of change in tax rates (16) 269
Adjustments in respect of prior periods 228 (49)
Total deferred tax (298) 123
Total tax on (loss) / profit on ordinary activities (127) 1,395
Equity items
Current tax - -
Deferred tax - -
Total tax recognised in equity - -
NOTES TO THE UNAUDITED INTERIM FINANCIAL INFORMATION (continued)
5. Income tax (continued)
Reconciliation of tax charge
The tax assessed for the year is higher (2021: higher) than at the standard
rate of corporation tax in the UK. The differences are explained below:
6 months to 30 June 2022 6 months to 30 June 2021
£'000 £'000
(unaudited) (unaudited)
(Loss)/profit before taxation (1,917) 5,592
Tax on (loss)/profit multiplied by standard rate of corporation (364) 1,062
tax in the UK at 19.00% for Jun 22 (Jun 21: 19.00%, Dec 21: 19.00%)
Effects of:
Adjustments in respect of prior periods 229 (50)
Expenses not deductible 285 91
Non-taxable income (6) -
Losses - -
Effect of change in UK tax rates (16) 269
Effect of overseas tax rates 60 6
Exempt items 12 17
Amounts not recognised - -
Share valuation (327) -
Total taxation (credit)/charge (127) 1,395
Tax rate changes
On 3 March 2021, the UK Budget announced a further increase to the main rate
of Corporation tax to 25% from 1 April 2023. This rate was substantively
enacted on 24 May 2021, within the Finance Bill 2021, and as a result deferred
tax balances have been measured with a total impact of £16k as shown above.
NOTES TO THE UNAUDITED INTERIM FINANCIAL INFORMATION (continued)
6. Goodwill and other intangible assets
Trade-marks and licenses Software Relation- ships Brand Content library Goodwill Social Media Pages Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Cost
At 1 January 2021 and 30 June 2021 44 469 1,300 4,500 300 10,094 - 16,707
Additions - 170 - 126 - - - 296
Disposals (16) - - - - - - (16)
At 31 December 2021 28 639 1,300 4,626 300 10,094 - 16,987
Impact of FX - - - 2 - - - 2
Additions - 46 - - - - 1,134 1,180
Reclassification - - - (128) - - 128 -
At 30 June 2022 28 685 1,300 4,500 300 10,094 1,262 18,169
Accumulated Amortisation
At 1 January 2021 24 127 288 997 216 - - 1,652
Charge for the period - 57 53 261 32 - - 403
At 30 June 2021 24 184 341 1,258 248 - - 2,055
Charge for the period 13 52 79 196 50 - - 390
Eliminated on disposal (16) - - - - - - (16)
At 31 December 2021 21 236 420 1,454 298 - - 2,429
Charge for the period 4 62 61 224 - - 15 366
At 30 June 2022 25 298 481 1,678 298 - 15 2,795
Net book value
At 30 June 2021 20 285 959 3,242 52 10,094 - 14,652
At 31 December 2021 7 403 880 3,172 2 10,094 - 14,558
At 30 June 2022 3 387 819 2,822 2 10,094 1,247 15,374
Social Media Pages acquisitions
On 19 May 2022, the Group purchased a number of social media accounts and all
Intellectual Property Rights connected (the primary account being 'Go
Animals') for £1,074k from a third party with the full amount paid in the
period. An additional group of pages (the primary account being 'Irish
Banter') was purchased on 24 May 2022 for £60k with £27k paid in the period.
A reclassification has been made during the period to 30 June 2022 in relation
to a social media page acquired in November 2021 where management deemed it
more appropriate to recognise this within 'social media pages' in this
disclosure note rather than 'brand'.
During the period to 30 June 2022, £1,147k was paid by the Group in relation
to the acquisition of intangible assets.
NOTES TO THE UNAUDITED INTERIM FINANCIAL INFORMATION (continued)
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:
6 months to 30 June 2022 6 months to 30 June 2021 Year ended 31 December 2021
£'000 £'000 £'000
(unaudited) (unaudited) (audited)
(Loss)/earnings per share from continuing operations
(Loss)/earnings, £'000 (1,790) 4,197 5,231
Number of shares, number 205,714,289 174,951,429 176,682,740
(Loss)/earnings per share, pence (0.9) 2.4 3.0
Diluted earnings per share calculation:
6 months to 30 June 2022 6 months to 30 June 2021 Year ended 31 December 2021
£'000 £'000 £'000
(unaudited) (unaudited) (audited)
Diluted (loss)/earnings per share from continuing operations
(Loss)/earnings, £'000 (1,790) 4,197 5,231
Number of shares, number 205,714,289 175,087,628 177,177,443
Diluted (loss)/earnings per share, pence (0.9) 2.4 3.0
Reconciliation from weighted average number of shares used in basic earnings
per share to diluted earnings per share:
6 months to 30 June 2022 6 months to 30 June 2021 Year ended 31 December 2021
(unaudited) (unaudited) (audited)
Number of shares in issue at the start of the period 205,714,289 174,951,429 174,951,429
Effects of shares issued in the period - - 1,731,311
Weighted average number of shares used in basic earnings per share 205,714,289 174,951,429 176,682,740
Employee share options - 136,199 494,703
Weighted average number of shares used in diluted earnings per share 205,714,289 175,087,628 177,177,443
The options in existence of 6,344,752 are anti dilutive for the period ended
30 June 2022, given the loss made in the period.
8. Borrowings
6 months to 30 June 2022 6 months to 30 June 2021 Year ended 31 December 2021
£'000 £'000 £'000
(unaudited) (unaudited) (audited)
Current
Bank loans - 2,952 -
Lease liabilities 1,364 1,318 1,111
1,364 4,270 1,111
Non-current
Bank loans - 8,772 -
Lease liabilities 2,474 3,187 2,648
2,474 11,959 2,648
Total borrowings 3,838 16,229 3,759
Bank loans
The remaining balance of the bank loan was repaid in full on 31 December 2021
out of the proceeds from the IPO.
NOTES TO THE UNAUDITED INTERIM FINANCIAL INFORMATION (continued)
8. Borrowings (continued)
6 months to 30 June 2022 6 months to 30 June 2021 Year ended 31 December 2021
£'000 £'000 £'000
(unaudited)
(unaudited) (audited)
Amount repayable
Within one year 1,364 4,270 1,111
In more than one year but less than two years 1,127 4,094 1,062
In more than two years but less than three years 1,055 3,891 859
In more than three years but less than four years 292 3,740 727
In more than four years but less than five years - 234 -
In more than five years - - -
3,838 16,229 3,759
During the period to 30 June 2022, £584k was paid by the Group in relation to
lease payments and £60k of interest paid in relation to leases.
9. Related parties
The following transactions were carried out with related parties:
6 months to 30 June 2022 6 months to 30 June 2021 Year ended 31 December 2021
£'000 £'000 £'000
(unaudited) (unaudited) (audited)
Entity controlled by key management personnel
Directors' loan account (1) - 1,200 (53)
Sale of services (2) - - (143)
Purchase of services (3) - 135 356
- 1,335 160
1. In the year ended 31 December 2021, third party payments were made by
the Group on behalf of the Directors for personal expenses and a loan was
granted on 30 March 2021 and paid on 8 April 2021 for Solly Solomou of
£1,200k. A loan was granted on 25 August 2021 and paid on 26 August 2021 for
Arian Kalantari of £1,500k and both loans were repaid upon IPO on 15 December
2021. These were interest-free, short-term loans.
2. Services were provided to Boohoo.com UK Limited, an entity
controlled by key management personnel, on normal commercial terms and
conditions. Boohoo.com UK Limited is a firm belonging to Mahmud Abdullah
Kamani, a former Director of the Group and Carol Kane, a Non Executive
Director of the Group. The services provided in the six month period to June
2022 were £nil (year ended 31 December 2021: £143k, six month period ended
30 June 2022: £nil) of which £45k was paid within the six month period to
June 2022 (year ended 31 December 2021: £98k, six month period ended 30 June
2022: £nil) and £nil remained outstanding at 30 June 2022 (31 December 2021:
£45k, 30 June 2021: £nil).
3. In the comparative periods, services were purchased from Kamani
Commercial Property Ltd, an entity previously controlled by key management
personnel, on normal commercial terms and conditions. The entity previously
controlled by key management personnel is a firm belonging to Mahmud Abdullah
Kamani, a former Director of the Group. The Company rents the Manchester Dale
Street properties from Kamani Commercial Property Ltd. The 'purchase of
services' in the table above relates to the lease depreciation and interest
attributable to the Dale Street properties which has been recognised as a cost
in the income statement in the previous Group reporting periods. Payments made
in 2021 totalled £275k. The amount outstanding of the lease liability as at
31 December 2021 was £259k (30 June 2021: £343k). The outstanding service
charge balance at 31 December 2021 was £nil (30 June 2021: £nil) and
outstanding property insurance at 31 December 2021 was £nil (30 June 2021:
£nil). Rent paid in the year ended 31 December 2021 was £166k (30 June 2021:
£89k).
Products were purchased from Treat Yo Self Limited, an entity controlled by
close family of key management personnel on normal commercial terms and
conditions in comparative periods. Treat Yo Self Limited is a firm belonging
to the close family of Solly Solomou, a Director of the Company. The Group's
UK entity purchased confectionery goods from Treat Yo Self Limited. Payments
of £6k were made within the year ended 31 December 2021. This cost was
recognised in the income statement in that year. At 30 June 2022 £nil was
outstanding (year ended 31 December 2021: £nil, period ended 30 June 2022,
£nil).
NOTES TO THE UNAUDITED INTERIM FINANCIAL INFORMATION (continued)
9. Related parties (continued)
Services are purchased from Wilson's Consultancy Ltd, an entity controlled by
key management personnel on normal commercial terms and conditions. Wilson's
Consultancy Ltd is a firm belonging to Dave Wilson, a Non-Executive Director
of the Group. Wilson's Consultancy Limited provided general business advice
and also specific advice around the initial public offering. Within the period
£250 of costs were incurred (year ended 31 December 2022: £75k, period ended
30 June 2021: £nil). This cost has been recognised in the income statement in
the year. Payments of £20k were made within the period (year ended 31
December 2021: £55k, period ended 30 June 2021: £nil). At 30 June 2022 £nil
was outstanding (year ended 31 December 2021: £20k, period ended 30 June
2022: £nil).
Period-end balances arising from purchases of services and interest on other
loans:
6 months to 30 June 2022 6 months to 30 June 2021 Year ended 31 December 2021
£'000 £'000 £'000
(unaudited) (unaudited) (audited)
Entity controlled by key management personnel
Directors' loan account - 1,256 -
- 1,256 -
ALTERNATIVE PERFORMANCE MEASURES (APMs) and GLOSSARY OF TERMS
Introduction
In the reporting of financial information, the Directors have adopted various
Alternative Performance Measures (APMs) of financial performance, position or
cash flows other than those defined or specified under International Financial
Reporting Standards (IFRS). These measures are not defined by IFRS and
therefore may not be directly comparable with other companies' APMs, including
those in the Group's industry. APMs should be considered in addition to IFRS
measures and are not intended to be a substitute for IFRS measurements.
Purpose The Directors believe that these APMs provide additional useful
information on the underlying performance and position of LBG Media plc's.
APMs are also used to enhance the comparability of information between
reporting periods by adjusting for non-recurring or uncontrollable factors
which affect IFRS measures, to aid the user in understanding LBG Media plc's
performance. Consequently, APMs are used by the Directors and management for
performance analysis, planning, reporting and incentive-setting purposes and
have remained consistent with the prior period.
Purpose
The Directors believe that these APMs provide additional useful information on
the underlying performance and position of LBG Media plc's. APMs are also used
to enhance the comparability of information between reporting periods by
adjusting for non-recurring or uncontrollable factors which affect IFRS
measures, to aid the user in understanding LBG Media plc's performance.
Consequently, APMs are used by the Directors and management for performance
analysis, planning, reporting and incentive-setting purposes and have remained
consistent with prior year.
The key APMs that the Group has focused on this period are as follows:
Adjusted EBITDA This profit measure shows the Group's Earnings before Interest, Tax,
Depreciation and Amortisation adjusted for asset gains and losses, share based
payments (including employers NIC as appropriate) and exceptional
costs/income.
Adjusted EBITDA is used for internal performance analysis to assess the
execution of our strategies. Management believe that this adjusted measure is
an appropriate metric to understand the underlying performance of the Group.
Adjusted Profit Before Tax This profit measure shows the Group's Earnings before tax after adjusted for
share based payments (including employers NIC as appropriate) and exceptional
items.
Adjusted Profit before tax is used for internal performance analysis to assess
the execution of our strategies. Management believe that this adjusted measure
is an appropriate metric to understand the underlying performance of the
Group.
A glossary of other terms used in the interim financial information can be
found below:
Global audience Includes global social media platform followers and global monthly online
users to LBG Media websites.
Content views Content views is the number of views of content across all social platforms
and websites. The definition of what constitutes a view can vary across the
social platforms. The total excludes content view data form Instagram which is
currently not readily available.
IPO First public sale of shares by privately owned company. Allowing the company
to become publicly listed on a recognised stock exchange i.e. AIM.
AIM The Alternative Investment Market (AIM) is a sub-market of the London Stock
Exchange.
Multi-platform Refers to the Group operating on multiple social media platforms including
Facebook, Instagram, Snapchat, TikTok, Twitter and YouTube. In addition, the
Group operates 5 owned and operated websites - www.ladbible.com
(http://www.ladbible.com) , www.sportbible.com (http://www.sportbible.com) ,
www.tyla.com (http://www.tyla.com) , www.gamingbible.com
(http://www.gamingbible.com) and www.unilad.com (http://www.unilad.com) .
Multi-channel Refers to the Group's portfolio of brands more details can be found in the
publicly available admission document on pages 10 and 11.
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