REG - LBG Media PLC - Interim Results
20/09/2023 07:00
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RNS Number : 9851M LBG Media PLC 20 September 2023
20 September 2023
LBG Media plc
("LBG Media", the "Company" or "Group")
Results for the half year ended 30 June 2023
Good progress across our strategic pillars, on track to meet full year
expectations
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
2023 ("HY23" or "the period"). During the period, the Group delivered a strong
performance, growing its global audience and content views, and is on track to
meet full year market expectations.
Financial Highlights
HY23 HY22 Change
(£m) (£m) %
Revenue
- Direct 11.4 10.6 9%
- Indirect 15.3 13.6 13%
- Other 0.5 0.6 (28%)
Total Group Revenue 27.2 24.8 10%
Adjusted EBITDA(1) 3.0 1.6 84%
Adjusted EBITDA margin(1) 11% 7% +4% pts
Loss before tax (1.2) (1.9) 39%
Cash and cash equivalents 32.7 28.6 15%
· Total Group Revenue of £27.2m (HY22: £24.8m) up 10% and in line
with the typical seasonal split between H1 and H2, and which we have
experienced historically.
o Direct revenues increased by 9% to £11.4m (HY22: £10.6m) driven by the
Group's growing reputation for successful campaigns with global brands.
Visibility of booking levels for the second half of the year has also improved
compared to this time last year.
o Indirect revenue increased by 13% to £15.3m (HY22: £13.6m). Year-on-year
content views increased by 87%, on the back of strong growth of 38% in the
prior year, enabling the Group to greater capitalise on the market shift to
short-form content that occurred in the second half of last year.
· Adjusted EBITDA(1) of £3.0m (HY22: £1.6m), up 84%, reflective
of the stronger revenue performance of the Group and disciplined cost
management. Loss before tax was £1.2m (HY22: loss of £1.9m) representing a
39% improvement in comparison to the prior year.
· Cash and cash equivalents at the period-end amounted to £32.7m
(FY22: £29.3m, HY22: £28.6m), reflecting a net increase in cash of £3.4m,
after £0.5m of consideration paid in March for the acquisition of Lessons
Learned in Life ('LLIL').
Operational Highlights
· Global audience grew by 95m people (including the LLIL
acquisition with 19.6m followers as at 30 June 2023) to over 410m (HY22:
315m), with 67.1bn content views in the period, up 87% on the prior period.
· In March 2023, the Group completed the acquisition of LLIL - an
under-monetised US Facebook page that is on track to achieve payback within
its first year.
· Continued to support socially responsible campaigns with a
cross-business, post-earthquake Turkey / Syria appeal fund, working with the
'If U Care, Share' charity and our recent partnership with the London Mayor's
office supporting the 'Have A Word' campaign.
· Achieved direct revenue brief conversion of 29%; a significant
uplift from 18% conversion in HY22.
CEO, Solly Solomou commented:
"We have made good financial and operational progress throughout the first
half of 2023. The significant increase in content views demonstrates our
effective ongoing engagement with the hard to reach 18 to 34 year-old
demographic which remains a highly attractive proposition for our partner
brands and platforms and will continue to drive the business forward.
"Our growth continued to outperform the wider digital advertising market as we
operate within the fastest growing segments, giving us confidence as we look
forward. In addition, our strategic progress in the half was encouraging. We
continued to execute on our plans to broaden geographically, with good early
progress in our recently established US operations, to acquire businesses,
plugging in under-monetised brands onto our platform, and to broaden our
capabilities, with our agile business model ensuring we can reach the widest
possible audience.
"We have started H2 with positive momentum and I am excited by the
opportunities that lie ahead."
Outlook
The Board believes that the Group's highly differentiated offering and
strategic programme will continue to fuel our growth. Normal seasonality in
advertising revenue combined with the relatively even split of costs means
that profitability is significantly weighted towards the second half of the
year, as has been the case in prior years. Notwithstanding the general
challenges in the overall market, our momentum on audience and content growth,
as well as client brief conversion rate, has continued into H2 and will help
us capitalise on that seasonality. We can confirm the outlook for the full
year remains in line with market expectations(2).
Notes:
(1) 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.
(2) External market consensus for the year ending 31 December 2023 is
currently: Revenue of £69.3m and Adjusted EBITDA of £19.3m.
Analyst Presentation
LBG Media plc will be hosting an analyst presentation on 20 September 2023
following the release of these results for the half year ended 30 June 2023.
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.
For further information please contact:
LBG Media plc investors@ladbiblegroup.com
Solly Solomou, Co-founder & CEO
Richard Jarvis, CFO
Mark Mochalski, Investor Relations
Fiona O'Nolan, Investor Relations
Zeus Capital Limited Tel: +44 (0) 161 831 1512
(Nominated Adviser & Broker) www.zeuscapital.co.uk (http://www.zeuscapital.co.uk/)
Dan Bate / Nick Cowles (Investment Banking)
Benjamin Robertson (Equity Capital Markets)
Peel Hunt LLP (Joint Broker) Tel: +44 (0) 207 418 8990
Neil Patel www.peelhunt.com
Paul Gillam
Richard Chambers
Media enquiries Tel: +44 (0) 20 7466 5000
Buchanan www.buchanancom (http://www.buchanancom) ms.co.uk
Richard Oldworth / Chris Lane / Toto Berger / Jack Devoy
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 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 2023, LBG Media delivered a strong performance,
with revenue growth of 10% to £27.2m (HY22: £24.8m), while Adjusted
EBITDA increased by 84% to £3.0m (HY22: £1.6m). The Group remains cash
generative with a healthy cash position of £32.7m (FY22: £29.3m, HY22:
£28.6m).
LBG Media remains focused on delivering relevant and exciting content to the
predominantly youth audience, with the volume of views continuing to grow in
the first half of the year, by 87% versus HY22, driving growth in market
share. The growth in views came as the Group used its insights and first-mover
advantage to capitalise on the market shift to short-form content that
occurred in the second half of last year.
LBG Media operates within some of the fastest growing segments of the digital
media market, including social video and mobile. With the global digital
advertising revenue forecast to grow at 7.6% this year(1), LBG Media is once
again outgrowing the digital market.
Revenue
Revenue is generated through our two core revenue channels, Direct and
Indirect. Despite being distinct channels, our capabilities and opportunities
to monetise our audience relationship can be used across both.
Direct revenue is generated from the provision of content marketing services
to brand owners, marketing agencies and other entities such as government
bodies, and has increased by 9% in HY23 to £11.4m (HY22: £10.6m). This was
driven by strong momentum with our branded clients such as Vodafone,
McDonalds, Google and Disney. Direct revenue also includes some revenue from
direct display advertising, where brand owners' pay for advertising space on
our websites for an agreed fee.
Indirect revenue is received via third party social media platforms (e.g.
Facebook, Snapchat, YouTube) or via programmatic partners, which hold the
relationship with the brand owner, or agency. In HY23 indirect revenue
increased by 13% to £15.3m (HY22: £13.6m), driven by the market shift to
short-form video seen in the second half of 2022. Facebook, YouTube and
Snapchat are already monetised platforms, while TikTok and Instagram are at
earlier stages of monetisation.
Audience, followers & engagement
LBG Media's 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 2023, our global audience grew to 410m, which is a 33%
growth rate year-on-year. In the UK alone, the Group reaches almost two thirds
of 18 to 34-year-olds. Our content was viewed over 67.1bn times, up 87%
compared to HY22 and this was well diversified across our brand portfolio.
Brand portfolio
LBG Media's 14 core brands serve both niche and mainstream audiences. Each of
the brands are based around specific interest points such as sports, gaming,
music, technology, and travel. The portfolio has been enhanced over recent
years, with the well targeted acquisitions of Go Animals in 2022 (since
rebranded as Furry Tails) and LLIL in 2023.
Strategic Progress
In line with the Group's growth strategy, in March 2023, LBG Media acquired
the social media accounts, social media content, domain names, website,
intellectual property licenses, third party rights and records of LLIL for a
consideration of £0.5m. This was an under-monetised asset that is on track to
achieve payback within its first year.
Our presence in the US continues to expand following the launch of our US
operations last year. We are proud to have a multi-platform global audience,
and international represents 17% of Group revenue.
We saw another significant increase in followers on TikTok, up 66%
year-on-year, where we are the largest media publisher.
Growth strategy
LBG Media has a proven track record of delivering strong growth, both
organically and via acquisitions. Our strategy for growth can be summarized by
the three core pillars below:
1) Geographies: LBG Media currently has a physical presence in five
territories - the UK, Ireland, Australia, New Zealand, and United States. 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 and help to de-risk revenue through diversification.
2)
1 - Source: GroupM, This Year Next Year Report, December 2022
Acquisitions: It can be significantly more time and cost efficient to access markets through selective acquisitions compared to building a new brand from scratch if an established digital media brand with a physical presence, existing audiences and understanding of the local market is already present. We continue to actively consider and assess acquisition 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, as well as using data and new technologies, including AI, to further
enhance our service offering. 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.
Events & Awards
LBG Media have proactively reached out to current and potential direct revenue
clients by hosting events within the first six months of the year. Once again,
our headline event was at Heckfield Place, which gave brands and agencies the
chance to learn more about our commercial capabilities. Over the two-day
event, we had a series of tailored presentations shining a light on Gen Z
behaviours, the new era of social broadcast, the creator economy and more.
Sessions were then interspersed with external speakers such as
ex-international footballer Jill Scott and comedian Mo Gilligan. The event had
exceptional feedback with guests saying they now had a much deeper
understanding of our commercial capabilities.
During the first half of the year, we were proud to have been shortlisted for
20 awards recognising the quality of work we produce within the industry. Our
Tango Berry Peachy campaign won in the Campaign Media Awards for 'Best Social
Strategy' and also in the Digiday Content Marketing Awards in the 'Best
Product Launch' category. Our Budweiser campaign for the 2022 World Cup also
took the winning spot at the Campaign Media Awards in the 'Branded Content'
category.
ESG
As a leading social youth publisher, LBG Media has a powerful global platform
to pursue socially responsible agendas and we have run several social
awareness campaigns recently to help raise interest of key social issues.
Within the first half of the year, we have actively supported those impacted
by the earthquake in Turkey and Syria by activating a cross-business
fundraising emergency appeal generating more than £50k in just over a week.
We also worked with the 'If U Care, Share' charity to encourage our audience
to talk about how they are feeling.
More recently, we kickstarted a partnership with the London Mayor's office to
combat sexism amongst peer groups supporting the 'Have A Word' campaign. We
used LADnation to conduct research into our engaged youth audience's views and
experience of sexual harassment, before creating original content which we
amplified across our platforms.
FINANCIAL REVIEW
HY23 HY22 Change
£m £m %
Revenue 27.2 24.8 10%
Net operating expenses (28.5) (26.6) (7%)
Operating loss (1.3) (1.8) 31%
Adjusted EBITDA(1) 3.0 1.6 84%
Adjusted EBITDA(1) % 11% 7% +4% pts
Depreciation (0.9) (0.7) (35%)
Amortisation (0.5) (0.4) (39%)
Share based payments (2.2) (2.4) 10%
Adjusting items (0.7) - -
Operating loss (1.3) (1.8) 31%
Net finance costs (0.0) (0.1) 95%
Share of joint ventures 0.1 (0.0) 283%
Loss before taxation (1.2) (1.9) 39%
Corporation tax credit/(expense) (0.6) 0.1 (535%)
Loss for the period (1.7) (1.8) 4%
Cash and cash equivalents 32.7 28.6 15%
Notes:
(1) Earnings before interest, tax, depreciation, and amortisation adjusted for
share based payments (including employers NIC as appropriate) and adjusting
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:
HY23 HY22
£m £m
£m Change
%
Financial
Revenue 27.2 24.8 2.4 10%
Adjusted EBITDA 3.0 1.6 1.4 84%
Adjusted EBITDA as a % of revenue 11% 7% +4% pts
Loss before tax (1.2) (1.9) 0.7 39%
Non-Financial
Global audience (m)* 410 315 95 33%
Content views (bn)** 67.1 35.8 31.3 87%
Average number of employees (no.) 427 473 (46) (10%)
* Global audience includes social followers, in addition to average monthly
website users for the six months to June.
** Content views is total views of content across all social platforms and
websites.
The definition of what constitutes a view can vary across the social
platforms.
Revenue
HY23 HY22 Change
£m £m %
Direct 11.4 10.6 9%
Indirect 15.3 13.6 13%
Other 0.5 0.6 (28%)
Total Group Revenue 27.2 24.8 10%
Total Group Revenue of £27.2m (HY22: £24.8m), representing growth of 10% and
in line with the seasonality we anticipate between H1 and H2.
Direct revenues increased by 9% to £11.4m (HY22: £10.6m) driven by the
Group's growing reputation for successful campaigns with global brands
including Vodafone, Google and Disney. Visibility of booking levels for the
second half of the year has also improved compared to this time last year.
Indirect revenue increased by 13% to £15.3m (HY22: £13.6m). Year on year
content views increased by 87%, enabling the Group to greater capitalise on
the market shift to short-form content that occurred in the second half of
last year.
Net operating expenses
Net operating expenses increased by 7% to £28.5m (HY22: £26.6m).
Production and media costs increased by £0.1m to £5.0m (HY22: £4.9m), with
the increase driven by more branded content (Direct) in the period.
Establishment costs, the majority of which is technology costs, increased by
£0.6m to £3.1m (HY22: £2.5m), up 22% mainly due to increased software
subscriptions to support our content production and continued investment to
support future growth in Direct revenue.
Staff costs reduced by £0.3m to £15.8m (HY22: £16.1m). This reduction is
mainly a result of the restructuring exercise undertaken in the second half of
2022, offset by inflationary pay rises and our continued investment in our
international businesses.
Travel and expenses decreased by £0.3m to £0.7m (HY22: £1.0m). The prior
half year included the costs of celebrating our 10-year anniversary.
Depreciation of £0.9m (HY22: £0.7m) was up 35%, mainly driven by a new
property lease in Australia.
Net operating expenses (continued)
Amortisation of £0.5m (HY22: £0.4m) up 39%, the increase mainly being due
the acquisition of LLIL in March 2023 in addition to the full six-month period
of amortisation of Go Animals (Furry Tails) social media pages which were
acquired in May 2022.
Share based payment costs were £2.2m (HY22: £2.4m). The share based payments
charge includes £0.2m (HY22: £0.4m) of employers NIC on certain share
options.
Adjusting items were £0.7m (HY22: £nil). Adjusting items includes costs
associated with team reorganisation, a one-off cost-of-living payment and
acquisition related fees. More information on these items can be found in note
4.
Adjusted EBITDA
Adjusted EBITDA was £3.0m (HY22: £1.6m) representing an 84% increase in
comparison to the prior half year and in line with the revenue seasonality we
anticipate between H1 and H2. Adjusted EBITDA margin increased to 11% (HY22:
7%).
Normal seasonality in advertising revenue combined with the relatively even
split of costs means that profitability is significantly weighted towards the
second half of the year.
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 18.
Net finance costs
Net finance costs of £0.0m (HY22: £0.1m) were incurred during the year.
Share of JV
Share in joint ventures was £0.1m profit (HY22: £0.0m loss) representing our
percentage share in the results of Pubity Group Ltd.
Loss before tax
Loss before tax was £1.2m (HY22: £1.9m) representing a 39% improvement in
comparison to the prior year.
Taxation
The tax charge for the period was £0.6m (HY22: £0.1m credit).
Balance sheet
Goodwill and other intangible assets increased by £0.3m to £15.7m (FY22:
£15.4m) reflecting additions of the bolt-on acquisition of LLIL for £0.5m
and software additions of £0.3m, offset by amortisation of £0.5m.
Property plant and equipment (PPE) decreased by £0.5m to £3.2m (FY22:
£3.7m). Within the period we acquired a new property lease accounting for
£0.4m, offset by depreciation of £0.9m.
Other receivables reduced to £0.1m (FY22: £0.6m). Other receivables reflect
long term lease deposits in relation to our offices. During HY23, we received
a significant repayment of £0.5m for the London lease deposit.
Trade and other receivables reduced by £0.9m to £19.5m (FY22: £20.4m)
mainly due to effective cash collection within the period including a
reduction in accrued income of £3.9m.
Trade and other payables increased by £1.8m to £6.1m (FY22: £4.3m) mainly
driven by timing differences of our working capital movements.
Cash flow and cash position
Cash and cash equivalents at the period end amounted to £32.7m (FY22:
£29.3m, HY22: £28.6m).
The increase in cash of £3.4m in comparison to the year-end includes net cash
generated from operating activates of £5.3m, and outflows relating to
investing and financing activities of £1.8m. More information on the cash
flow can be found on page 11.
Solly Solomou
Richard Jarvis
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 2023 £'000 30 June 2022
£'000
(unaudited) (unaudited)
Revenue 3 27,247 24,763
Net operating expenses (28,499) (26,577)
Operating loss (1,252) (1,814)
Analysed as:
Adjusted EBITDA(1) 3,013 1,637
Depreciation (911) (677)
Amortisation 6 (507) (366)
Share based payment charge (2,178) (2,408)
Adjusting items 4 (669) -
Group operating loss (1,252) (1,814)
Finance income - 5
Finance costs (3) (62)
Net finance costs (3) (57)
Share of post-tax (loss)/profit of equity accounted joint venture 84 (46)
Loss before taxation (1,171) (1,917)
Income tax 5 (553) 127
Loss for the period attributable to equity holders of the company (1,724) (1,790)
Currency translation differences (net of tax) (78) -
Loss and total comprehensive income for the financial year attributable to (1,802) (1,790)
equity holders of the company
Basic (loss)/earnings per share (pence) 7 (0.8) (0.9)
Diluted (loss)/earnings per share (pence) 7 (0.8) (0.9)
( )
(1)Adjusted EBITDA, which is defined as profit before net finance costs, tax,
depreciation, amortisation, share based payment charge and adjusting items is
a non-GAAP metric used by management and is not an IFRS disclosure.
All results derive from continuing operations. ( )
UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Note As at 30 As at 30 As at 31 December 2022
June 2023 June 2022 £'000
£'000 £'000
(unaudited) (unaudited) (audited)
Assets
Non-current assets
Goodwill and other intangible assets 6 15,707 15,374 15,436
Property, plant and equipment 3,203 4,038 3,670
Investments in equity-accounted joint ventures 443 314 359
Other receivables 124 574 592
Deferred tax asset 651 - 260
Total non-current assets 20,128 20,300 20,317
Current assets
Trade and other receivables 19,500 14,733 20,370
Current tax asset - 434 378
Cash and cash equivalents 32,708 28,554 29,268
Total current assets 52,208 43,721 50,016
Total assets 72,336 64,021 70,333
Equity
Called up share capital 207 206 206
Share premium reserve 28,993 28,993 28,993
Accumulated exchange differences (49) - 29
Retained earnings 32,453 23,317 31,998
Total equity 61,604 52,516 61,226
Liabilities
Non-current liabilities
Lease liability 8 1,428 2,474 1,960
Provisions 502 214 540
Deferred tax liability 445 618 394
Total non-current liabilities 2,375 3,306 2,894
Current liabilities
Lease liability 8 1,334 1,364 1,282
Trade and other payables 6,077 6,835 4,295
Current tax liabilities 946 - 636
Total current liabilities 8,357 8,199 6,213
Total liabilities 10,732 11,505 9,107
Total equity and liabilities 72,336 64,021 70,333
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share capital Share premium Accumulated exchange differences Retained earnings Total equity
£'000 £'000 £'000 £'000 £'000
As at 1 January 2022 206 28,993 - 23,082 52,281
Loss for the financial period - - - (1,790) (1,790)
Total comprehensive income for the period - - - (1,790) (1,790)
Share based payments - - - 2,025 2,025
Deferred tax on share options - - - - -
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
Profit for the financial period - - - 7,137 7,137
Currency translation differences (net of tax) - - 29 - 29
Total comprehensive income for the period - - 29 7,137 7,166
Share based payments - - - 1,527 1,527
Deferred tax on share options - - - 17 17
Total transactions with owners, recognised directly in equity 206 28,993 - 1,544 30,743
As at 31 December 2022 and 1 January 2023 (audited) 206 28,993 29 31,998 61,226
Loss for the financial period - - - (1,724) (1,724)
Currency translation differences (net of tax) - - (78) - (78)
Total comprehensive loss for the period - - (78) (1,724) (1,802)
Share based payments - - - 2,178 2,178
Deferred tax on share options - - - 1 1
Share issue 1 - - - 1
Total transactions with owners, recognised directly in equity 1 - - 2,179 2,180
As at 30 June 2023 (unaudited) 207 28,993 (49) 32,453 61,604
UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
6 months to 30 June 2023 6 months to 30 June 2022 Year ended 31 December 2022
£'000 £'000 £'000
(unaudited) (unaudited) (audited)
Cash flows from operating activities
Cash generated/(used) from operations 5,486 (2,900) 1,295
Tax paid (192) (803) (2,693)
Net cash generated/(used) from operating activities 5,294 (3,703) (1,398)
Cash flows from investing activities
Purchase of intangible assets (798) (1,147) (1,675)
Purchase of property, plant and equipment (191) (315) (544)
Net cash generated/(used) in investing activities (989) (1,462) (2,219)
Cash flows from financing activities
Lease payments (750) (584) (1,227)
Lease deposits paid - - (105)
Interest paid (50) (60) (121)
Net cash generated/(used) in financing activities (800) (644) (1,453)
Net increase/(decrease) in cash and cash equivalents 3,505 (5,809) (5,070)
Cash and cash equivalents at the beginning of the period 29,268 34,338 34,338
Effect of exchange rate changes on cash and cash equivalents (65) 25 -
Cash and cash equivalents at the end of the period 32,708 28,554 29,268
6 months to 30 June 2023 6 months to 30 June 2022 Year ended 31 December 2022
Cash generated/(used) from operations £'000 £'000 £'000
(unaudited) (unaudited) (audited)
(Loss)/profit for the financial period/year (1,724) (1,790) 5,347
Income tax 553 (127) 1,976
Net interest expense 3 57 143
Share of post tax (profits)/losses/ of equity accounted joint venture (84) 46 -
Operating (loss)/profit (1,252) (1,814) 7,466
Depreciation charge 911 677 1,633
Amortisation of intangible assets 507 366 804
(Loss)/profit on disposal - (40) 21
Share based payments 2,178 2,025 3,552
Provisions (38) - -
Decrease/(increase) in trade and other receivables 1,394 60 (5,210)
(Decrease)/increase in trade and other payables 1,786 (4,174) (6,971)
Cash generated/(used) from operations 5,486 (2,900) 1,295
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 2023, 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 2022. The Directors do not anticipate any changes in these accounting
policies for the year ended 31 December 2023.
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 2022, 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 2022 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 2023 6 months to 30 June 2022
£'000 £'000
(unaudited) (unaudited)
Revenue
Direct 11,464 10,545
Indirect 15,321 13,578
Other 462 640
27,247 24,763
NOTES TO THE UNAUDITED INTERIM FINANCIAL INFORMATION (continued)
4. Adjusting items
A breakdown of adjusting items is provided below:
6 months to 30 June 2023 6 months to 30 June 2022
£'000 £'000
(unaudited) (unaudited)
Costs associated with team reorganisation 273 -
One-off cost-of-living payment 272 -
Acquisition related fees 124 -
Total adjusting items 669 -
Restructuring
During the period, the Group continued to review its divisional and central
structures and made a small number of further redundancies totalling £0.3m.
Costs associated with team member reorganisations of £0.3m relate to exit
costs of personnel leaving the business on an involuntary basis, due to
reorganisations within our operating divisions and centralised functions. Due
to the nature of these costs, management deem them to be adjusting items in
order to better reflect our underlying performance. Exit costs outside of
these circumstances are treated as an operating expense.
One-off cost-of-living payment
Recognising the cost-of-living crisis and the need to retain staff in these
challenging times, the Group awarded a one-off cost-of-living payment to
employees within the period with the condition of continued employment. The
payment is repayable by employees if they were to leave prior to the year end.
This is considered a one-off incentive and there are no current plans to
complete a similar exercise in the future.
Acquisition related fees
During the period, the Group incurred legal and other advisory costs
associated with our acquisition activity totalling £0.1m.
5. Income tax
Tax expense/(credit) included in consolidated statement of comprehensive
income:
6 months to 30 June 2023 6 months to 30 June 2022
£'000 £'000
(unaudited) (unaudited)
Current period tax:
Current taxation charge for the period 856 171
Adjustments in respect of prior periods 72 -
Total current tax 928 171
Deferred tax:
Current period (506) (510)
Effect of change in tax rates 13 (16)
Adjustments in respect of prior periods 118 228
Total deferred tax (375) (298)
Total tax on loss on ordinary activities 553 (127)
Equity items
Current tax - -
Deferred tax (1) -
Total tax recognised in equity (1) -
NOTES TO THE UNAUDITED INTERIM FINANCIAL INFORMATION (continued)
5. Income tax (continued)
Reconciliation of tax charge
The tax assessed for the year is higher (2022: higher) than at the standard
rate of corporation tax in the UK. The differences are explained below:
6 months to 30 June 2023 6 months to 30 June 2022
£'000 £'000
(unaudited) (unaudited)
Loss before taxation (1,171) (1,917)
Tax on loss multiplied by standard rate of corporation tax in the UK at 22% (258) (364)
(2022: 19%)
Effects of:
Adjustments in respect of prior periods 190 229
Expenses not deductible 558 285
Non-taxable income (14) (6)
Effect of change in UK tax rates 13 (16)
Effect of overseas tax rates (117) 60
Exempt items 19 12
Amounts not recognised 175 -
FX (12) -
Share valuation (1) (327)
Total taxation (credit)/charge 553 (127)
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 2022 28 639 1,300 4,626 300 10,094 - 16,987
Additions - 46 - - - - 1,134 1,180
Reclassifications - - - (128) - - 128 -
Exchange adjustments - - - 2 - - - 2
At 30 June 2022 28 685 1,300 4,500 300 10,094 1,262 18,169
Additions - 498 - - - - - 498
Reclassification - - - 188 - - (188) -
Exchange Adjustments - - - 6 - - - 6
At 31 December 2022 28 1,183 1,300 4,694 300 10,094 1,074 18,673
Additions - 340 - - - - 458 798
Exchange Adjustments - - - (11) - - (14) (25)
At 30 June 2023 28 1,523 1,300 4,683 300 10,094 1,518 19,446
Accumulated Amortisation
At 1 January 2022 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
Charge for the period 2 60 68 269 - - 39 438
Exchange Adjustments - 1 1 2 - - - 4
At 31 December 2022 27 359 550 1,949 298 - 54 3,237
Charge for the period - 90 65 256 2 - 94 507
Exchange Adjustments - - - (4) - - (1) (5)
At 30 June 2023 27 449 615 2,201 300 - 147 3,739
Net book value
At 30 June 2022 3 387 819 2,822 2 10,094 1,247 15,374
At 31 December 2022 1 824 750 2,745 2 10,094 1,020 15,436
At 30 June 2023 1 1,074 685 2,482 - 10,094 1,371 15,707
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 2023 6 months to 30 June 2022 Year ended 31 December 2022
£'000 £'000 £'000
(unaudited) (unaudited) (audited)
(Loss)/earnings per share from continuing operations
(Loss)/earnings, £'000 (1,724) (1,790) 5,347
Number of shares, number 206,458,742 205,714,289 205,714,289
(Loss)/earnings per share, pence (0.8) (0.9) 2.6
Diluted earnings per share calculation:
6 months to 30 June 2023 6 months to 30 June 2022 Year ended 31 December 2022
£'000 £'000 £'000
(unaudited) (unaudited) (audited)
Diluted (loss)/earnings per share from continuing operations
(Loss)/earnings, £'000 (1,724) (1,790) 5,347
Number of shares, number 217,777,464 205,714,289 211,879,344
Diluted (loss)/earnings per share, pence (0.8) (0.9) 2.5
Reconciliation from weighted average number of shares used in basic earnings
per share to diluted earnings per share:
6 months to 30 June 2023 6 months to 30 June 2022 Year ended 31 December 2022
(unaudited) (unaudited) (audited)
Number of shares in issue at the start of the period 205,714,289 205,714,289 205,714,289
Effects of shares issued in the period 744,453 - -
Weighted average number of shares used in basic earnings per share 206,458,742 205,714,289 205,714,289
Employee share options 11,318,722 - 6,165,055
Weighted average number of shares used in diluted earnings per share 217,777,464 205,714,289 211,879,344
8. Borrowings
6 months to 30 June 2023 6 months to 30 June 2022 Year ended 31 December 2022
£'000 £'000 £'000
(unaudited) (unaudited) (audited)
Current
Lease liabilities 1,334 1,364 1,282
1,334 1,364 1,282
Non-current
Lease liabilities 1,428 2,474 1,960
1,428 2,474 1,960
Total borrowings 2,762 3,838 3,242
NOTES TO THE UNAUDITED INTERIM FINANCIAL INFORMATION (continued)
8. Borrowings (continued)
6 months to 30 June 2023 6 months to 30 June 2022 Year ended 31 December 2022
£'000 £'000 £'000
(unaudited)
(unaudited) (audited)
Amount repayable
Within one year 1,334 1,364 1,282
In more than one year but less than two years 1,131 1,127 1,162
In more than two years but less than three years 297 1,055 798
In more than three years but less than four years - 292 -
2,762 3,838 3,242
During the period to 30 June 2023, £750k was paid by the Group in relation to
lease payments and £50k of interest paid in relation to leases.
9. Related parties
The following transactions were carried out with related parties:
6 months to 30 June 2023 6 months to 30 June 2022 Year ended 31 December 2022
£'000 £'000 £'000
(unaudited) (unaudited) (audited)
Entity controlled by key management personnel
Purchase of services (1) 135 140 276
Tax settlement on behalf of Director (2) - - 224
135 140 500
(1) Services are purchased from Kamani Commercial Property Ltd (an entity
controlled by a significant shareholder) on normal commercial terms and
conditions. Kamani Commercial Property Ltd is a firm belonging to Mahmud
Abdullah Kamani, a former Director of the Group. The Group leases the
Manchester Dale Street properties from Kamani Commercial Property Ltd. The
'purchase of services' in the table above relates to the payments made in the
year for the Dale Street properties for both rent and service charges.
Payments made to 30 June 2023 totalled £135k (31 December 2022: £276k, 30
June 2022: £140k). The amount outstanding of the lease liability as at 30
June 2023 is £nil (31 December 2022: £88k, 30 June 2022: £177k). The
outstanding service charge balance at 30 June 2023 is £nil (31 December 2022:
£nil, 30 June 2022: £nil) and outstanding property insurance is £nil (31
December 2022: £nil, 30 June 2022: £nil).
(2) In the prior year the Group agreed to settle a PAYE liability
(relating to a previously undisclosed benefit in kind) on behalf of Solly
Solomou and Jess Solomou (former employee and wife of Solly Solomou),
totalling £0.2m. This balance remains accrued as a liability at the half
year.
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 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 adjusting items.
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.
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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