REG - LBG Media PLC - Interim Results
18/09/2024 07:00
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RNS Number : 5958E LBG Media PLC 18 September 2024
18 September 2024
LBG Media plc
("LBG Media", the "Company" or "Group")
Results for the half year ended 30 June 2024
STRONG FIRST HALF FINANCIAL PERFORMANCE AND MEANINGFUL PROGRESS TOWARDS £200M
OF REVENUE.
LBG Media, the global digital entertainment business with a focus on young
adults, is pleased to announce its results for the half year ended 30 June
2024 ("HY24" or "the period").
Key Highlights
· Record audience of 494m globally, of which 141m is US,
highlighting our unparalleled engagement and extensive reach with young adult
audiences.(1)
· Strong revenue momentum with organic growth of 29% driving
operational leverage and a significant increase in profitability.(2)
· Proven business model driving progress towards £200m of revenue
with significant strategic and operational developments across growth lenses
of Direct, Indirect and US expansion.
· Strong momentum in the period to date and the Board is confident
in delivering on market expectations for the 12 months to 31 December 2024.(3)
Financial Highlights
HY24 HY23 Change
(£m) (£m) %
Revenue
- Direct 22.0 11.4 92%
- Indirect 19.7 15.3 28%
- Other 0.6 0.5 36%
Total Group Revenue 42.3 27.2 55%
Adjusted EBITDA(4) 10.2 3.0 240%
Adjusted EBITDA margin(4) 24% 11% 13ppts
Profit before tax 7.1 (1.2) 703%
Cash and cash equivalents 26.6 32.7 (19%)
· Total Group revenue up 55% on a reported basis, with organic
growth of 29%, which is faster than the overall market as our proposition
continues to be increasingly compelling for advertisers.
· The strength of our diversified revenue model continues to
improve with Direct accounting for more than 50% of total Group revenue for
the first time since inception, alongside progression of our Web operations
which now account for 45% of total Indirect revenue in HY24.
· Adjusted EBITDA of £10.2m (HY23: £3.0m) up 240% and benefitting
from revenue growth, improvements delivered from the ANZ operating model
changes and the accretive impact of Betches. Organic growth in adjusted EBITDA
in the period was 190%.
· Strong adjusted cash conversion of 152% resulted in cash and cash
equivalents of £26.6m at the period end (31 December 2023: £15.8m).(5)
Strategic and Operational Highlights
Direct:
o Continuing to build deeper relationships with blue-chip brands with HY24
brief conversion of 33% and repeat client revenue of 75%.(6)
o Uber Eats sponsored Euros-themed editions of the hugely popular original
series "Snack Wars", launched in June, demonstrates expanding capabilities and
success in delivering brand sponsored content in a native format with viewing
figures for these episodes surpassing viewership of the Euros final on the
BBC.
o Notable wins for the Group in the half-year include Costa Coffee,
Wilkinson Sword and GetYourGuide.
Indirect:
o Global audience has grown by 20% year-on-year, to 494m, with a US audience
of 141m.
o Web yields, which reflect the level of demand for our Web advertising
inventory, are up approximately 90%, benefitting from a focus on high quality
content, web platform enhancements as well as strong partner demand for our
inventory and reach with young adult audiences.
o Facebook's new commercial model launched at the end of H1 emphasises
engaging and high-quality content - both of which align to our strengths.
Whilst this has created some initial volatility, revenues remain resilient
and, as we have demonstrated with previous platform changes, our scale and
data-driven expertise means we are better placed than anyone to adapt quickly
to these changes.
US Expansion:
o Continued to build market share in the US, presenting partners with a 'one
stop shop' when wanting to connect with the young adult audience.
o Significant wins including Boston Beer Co., NYX and White Castle highlight
good momentum and complementary nature of the businesses.
o US operations consolidated into Betches HQ, with a reorganisation of sales
teams to better encourage cross portfolio selling and enable growth.
Outlook
With strong financial performance and positive momentum across our growth
lenses of Direct, Indirect and US expansion, management remains confident in
the size of the opportunity ahead and the line of sight to £200m of
revenue. Given the progress in the period to date the Board is confident in
delivering on market expectations for the 12 months to 31 December 2024.(3)
As announced on 24 July 2024, the Group has changed its accounting reference
date and financial year end so that, going forward, interim and annual
accounts will be prepared and published for the six months ended 31 March and
12 months ended 30 September. The decision to change the year end was taken to
better guide business planning and investment pacing and improve visibility
over market dynamics, providing transparency for stakeholders by bringing the
calendar Q4 spend into the first half of the financial year. As a result, our
audited FY24 results, which in the first instance will be for the nine-month
period ending 30 September, are expected to be announced in January 2025.
A further update on current trading will be provided at our full year results
in January, alongside expanded proforma disclosures for the Annual Report and
FY24 results presentation.
CEO, Solly Solomou commented:
"Our strong first-half performance demonstrates excellent progress along our
line of sight to £200m of revenue and showcases our team's success in
diversifying income and strengthening our operating model. Key sporting event
activations and rising audience numbers confirm our position as the number one
digital entertainment brand for young adults, a highly sought-after but
challenging demographic for marketers.
"I am more excited than ever by the opportunity that lies ahead, particularly
in the US, where we are going from strength to strength and where the
complementary nature of our combined businesses is already demonstrating
success. Our thoughtful and engaging campaigns, which frequently deploy
messages of social responsibility, remain central to our mission.
"In the complex digital media landscape, the detailed understanding we have of
our audience and our propensity to be agile in such a dynamic market provide a
strong foundation for long-term growth and the delivery of shareholder value."
Analyst Presentation
LBG Media plc will be hosting an analyst presentation on 18 September 2024.
Attendance is by invitation only. A recording of the presentation will be
available on the LBG Media plc website at
www.lbgmedia.co.uk/results-reports-presentations/results-and-presentations
(http://www.lbgmedia.co.uk/results-reports-presentations/results-and-presentations)
following the event.
Notes
(1) Audience numbers reflect social followers, unique podcast listeners and
average monthly website users in the 6 months to the end of June 2024.
(2) Organic growth excludes the impact of the Betches acquisition.
(3) External market consensus for year ending 31 December 2024: Revenue
£86.0m and Adjusted EBITDA £23.5m.
(4) 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.
(5) Cash conversion is calculated as operating cash flow divided by adjusted
EBITDA.
(6) Repeat client revenue represents percentage of HY24 Direct revenue from
clients that ran campaigns with us in 2022 and 2023.
For further information please contact:
LBG Media plc
Solly Solomou, Co-founder &
CEO
investors@ladbiblegroup.com
Richard Jarvis, CFO
Mark Mochalski, Investor Relations
Matthew Lee, Investor Relations
Zeus (Nominated Adviser &
Broker)
Tel: +44 (0) 161 831 1512
Dan Bate / Nick Cowles (Investment
Banking)
www.zeuscapital.co.uk (http://www.zeuscapital.co.uk/)
Benjamin Robertson (Equity Capital Markets)
Peel Hunt LLP (Joint Broker)
Neil
Patel
Tel: +44 (0) 207 418 8990
Benjamin
Cryer
www.peelhunt.com
Kate Bannatyne
Media Enquiries
Burson
Buchanan
Tel: +44 (0) 20 7466 5000
Richard Oldworth / Chris Lane / Toto Berger / Jack
Devoy LBGmedia@buchanan.uk.com
Notes to editors
LBG Media is a global digital entertainment business with a focus on young
adults and a leading disrupter in the digital media and social publishing
sectors. The Group produces and distributes digital content across a range of
media 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, X, 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 OVERVIEW
It has been a strong start to the year for the Group with strong financial
performance matched by significant strategic and operational steps designed to
position the business for future success. The Company continues to progress
along its line of sight to £200m of revenue and, as outlined as part of our
FY23 results in April, is doing so by focusing on our three growth lenses of
Direct, Indirect and US expansion.
Direct
In HY24, Direct revenue was up 92% to £22.0m (HY23: £11.4m), or by 33%
organically. For the first time since the Groups inception, Direct now
accounts for more than 50% of total Group revenue.
This growth is fuelled not only by the expansion of our client base but also
by the deepening of relationships with existing partners, such as Lloyds and
Uber Eats. The strengthening of these partnerships reflects our ability to
drive even greater value for our clients, cementing our role as a trusted and
integral partner. Additionally, we have secured important new partnerships
during the period, including with Costa Coffee, Wilkinson Sword and
GetYourGuide, as well as a number of high-profile clients in the US, such as
Boston Beer Co., NYX and White Castle.
Our direct brief conversion stood at 33% at HY24. This rate of conversion is a
direct result of the deeper relationships we are building with brands, our
highly engaged and growing young adult audience, as well as our ability to
provide partners real time analytics and ROI insights that demonstrate the
value and success of their advertising investment. Underscoring this improving
conversion are high levels of repeat client revenue as brands keep coming back
to work with us. This metric stood at 75%, meaning that 75% of clients that
worked with us in HY24 also worked with us in the two previous years,
demonstrating the confidence and trust our clients have in us.
Indirect
Indirect revenue grew by 28% to £19.7m (HY23: £15.3m), or by 27% on an
organic basis. Our audience and reach continued to expand, with global
audience growing by 20% year-on-year, to 494m. Our US audience now stands at
141m.
Indirect revenue is split between income from social platforms and income from
web programmatic streams from our owned and operated websites. Diversification
of our indirect channel and the ability to drive revenues from our audience,
reach and content via our social platforms and owned and operated webpages
provides stability and multiple levers to deliver growth.
Web accounted for 45% of total indirect revenue in HY24 and the acceleration
of our Web programmatic offering reflects targeted investment in people and
technology as we have driven higher quality sessions and higher yields through
HY24. Web sessions are up year-on-year and our yield per session is up
approximately 90%. Google's announcement that it is reversing its decision to
deprecate third-party cookies can also be taken as positive for the Group,
though it will mostly serve to prevent any immediate volatility in revenues.
As indicated as part of our trading update in July, the change in Facebook's
commercial model has created some initial volatility in Social revenues.
Despite this volatility, revenues have remained resilient as the new model
emphasises engaging and high-quality content - both of which align to our
strengths. As we have demonstrated with previous platform changes, our scale
and data driven expertise means we are extremely well-placed to adapt quickly.
US Expansion
Expanding our operations in the world's largest advertising market presents a
huge opportunity from both a Direct and Indirect perspective. Integration
between the two businesses has progressed at pace over the last six-months,
with US operations now consolidated into Betches HQ and sales teams
reorganised to focus on category specialisation. This operational shift, which
has seen a reorganisation of sales teams into key sectors such as
entertainment, alcohol and spirits and consumer goods, is an enabler for
future growth as it helps foster deeper client relationships.
This refined approach is already yielding results, with new high-profile
partnerships and a very encouraging pipeline. Betches accounted for £7.1m of
revenue and £1.5m of adjusted EBITDA in HY24 and post period-end in H2, the
first earnout payment of $4m was made.
We are increasingly excited by the opportunity that lies ahead in the US
market, with significant launches such as Betches Sports in H2, a subsector in
which we already have significant experience through SPORTbible, a Group
brand. Our refined sales approach seeks to build deeper client relationships
and an offering that presents brands with a 'one stop shop' to access our
young adult audience.
Events & Awards
Recognising the opportunity UEFA Euro 2024 presented for the Group, and as
part of our ongoing programme to build out relationships with new and existing
clients, we hosted two events in February which sought to showcase our
sporting expertise and ability to place brands at the heart of the action. An
intimate client lunch, followed by an agency showcase featuring a Q&A with
ex-England footballer Joe Cole, were both a success in kickstarting
conversations and securing partnerships with a number of brands as the UEFA
Euro 2024 countdown began.
In April, we held our annual client conference which gave brands and agencies
the chance to learn more about our commercial capabilities. The event involved
a series of tailored presentations shining a light on building cultural
relevance through our original programming, transforming news and culture for
the social generation and how we found success with The AA on a campaign that
helped inject cultural capital into the brand. Feedback was very positive,
with partners commenting on the deeper understanding of our commercial
capabilities they had obtained as part of the event.
During the first half of the year, we were proud to have been shortlisted for
13 awards recognising the quality of work we produce. Our campaigns with The
AA, Jacamo and McDonald's won in the Campaign Media Awards, ensuring we
retained our position as the 'most awarded media owner' for the second year in
a row, whilst our VISA campaign also won a silver award at the Drum Marketing
Awards in the Finance category. Our Studios team's LADbible TV, which recently
hit three million subscribers, was nominated for Best Factual Channel and
Channel of the Year at the Broadcast Digital Awards.
Purpose Driven Work
LBG Media has a powerful global platform to pursue socially responsible
agendas, and we continue to recognise the importance of using our platform as
a force for good having run several awareness campaigns in the period. Most
recently, we launched our 'You're On Mute' campaign, designed to inspire young
people across the country to vote in the general election. We partnered with
creators Grime Gran, Star Holroyd and Aydan Alsaad to spread the message to
vote and boost election awareness among young adults with the campaign
beginning with an out-of-home creative that appeared at sites around
Glastonbury festival.
This year we also worked with the charity Stamp Out Spiking to launch our 'End
Spiking, Now' campaign, which sought to raise awareness of the severity of the
drink spiking problem in the UK, and exert pressure on the UK government to
enact legislation changes. The campaign utilised the Group's consumer youth
panel, LADnation, and involved an original four-part mini-series titled
'Survivors of Spiking: Our Stories'. This was supported by work with Capital
XTRA radio host Jourdan, additional social content and the launch of
out-of-home advertising in Manchester, all designed to raise campaign
awareness. On 17 July 2024, the UK government announced that drink spiking is
to be made a specific offence.
Finally, LBG Media was selected as The Prince's Trust's first ever official
social partner for its annual awards that celebrate the achievements of young
people who have overcome barriers. We delivered content activation in the
build-up to the awards and were present on the red carpet to interview and
showcase those in attendance.
FINANCIAL REVIEW
HY24 HY23
(£m) (£m)
Revenue 42.3 27.2
Net operating expenses (35.0) (28.5)
Operating profit/(loss) 7.3 (1.3)
Adjusted EBITDA(1) 10.2 3.0
Adjusted EBITDA margin(2) 24% 11%
Depreciation (1.2) (0.9)
Amortisation (1.2) (0.5)
Share based payments (0.5) (2.2)
Adjusting items - (0.7)
Operating profit/(loss) 7.3 (1.3)
Net finance costs (0.6) -
Share of joint ventures 0.4 0.1
Profit/(loss) before taxation 7.1 (1.2)
Corporation tax credit/(expense) (2.3) (0.5)
Profit/(loss) for the period 4.8 (1.7)
Cash and cash equivalents 26.6 32.7
(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.
(2) 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:
HY24 HY23 Change Change
(£m) (£m) £m %
Financial
Revenue 42.3 27.2 15.1 55%
Adjusted EBITDA 10.2 3.0 7.2 240%
Adjusted EBITDA as a % of revenue 24% 11% 13ppts
Profit/(loss) before tax 7.1 (1.2) 8.3 703%
Cash conversion %(1) 152% 182%
Non-Financial
Global audience(2) (m) 494 410 84 20%
Brief conversion 33% 29% 4ppts
Daily web sessions(3) (m) 5.2 5.1 0.1 2%
Web yield per 1k sessions(3) (£) 9.3 4.9 4.4 90%
(1) Cash conversion is calculated as operating cash flow divided by adjusted
EBITDA.
(2) Global Audience reflects social followers, unique podcast listeners and
average monthly website users in the 6 months to June 2024.
(3) Daily web sessions reflect unique individual interactions with our
website.
Revenue
HY24 HY23 Change
(£m) (£m) %
Revenue
Direct 22.0 11.4 92%
Indirect 19.7 15.3 28%
Other 0.6 0.5 36%
Total Group Revenue 42.3 27.2 55%
Total Group revenue reached £42.3m (HY23: £27.2m), marking a substantial 55%
increase despite the expected seasonal variation between H1 and H2. The 55%
growth included 29% from organic growth, with the remaining portion attributed
to the acquisition of Betches.
Direct revenues increased by 92% to £22.0m (HY23: £11.4m), with 33% organic
growth being achieved, driven from the Group's growing reputation, quality of
work and depth of relationships with global brands. The Group benefited from a
number of successful campaign activations across the UEFA Euro 2024
tournament, including Euros-themed editions of the hugely popular original
series of "Snack Wars", sponsored by Uber Eats. Significant joint-wins in the
US highlight the complementary nature of Betches and LADbible US, enabling the
Group to continue to build market share within the territory. A high brief
conversion rate is being maintained and is tracking 4ppts higher than the
prior period.
Indirect revenue increased by 28% to £19.7m (HY23: £15.3m). Organic growth
accounted for 27% of this increase, with improving web yields (up 90%)
supporting the Group's strategy of driving specialist content to our audiences
that provides contextual relevancy for our advertising partners, enhancing
broader revenue diversification.
Net operating expenses
Net operating expenses increased by 23% to £35.0m (HY23: £28.5m) driven by
the acquisition of Betches. Excluding Betches, net operating expenses
increased by 1% (£0.2m).
Share based payment costs were by £1.6m lower at £0.6m (HY23: £2.2m) due
primarily to the Non-Executive Director scheme vesting fully in the prior
year. The reduction in share-based payment costs were offset by a 32% (£1.6m)
increase in media and production costs correlating to the organic direct
revenue growth of 33% achieved within the period. Staff costs excluding
Betches remained consistent year on year.
Amortisation of £1.2m (HY23: £0.5m) was up by 135%. The increase is mainly a
result of the amortisation arising on intangible assets acquired through the
Betches acquisition in October 2023, including brand and relationships.
Depreciation of £1.2m (HY23: £0.9m) was up by 33%, mainly driven by new
property lease agreements in the UK and Dublin.
Adjusting items were £nil (HY23: £0.7m). The prior period adjusting items
included costs associated with business reorganisations, a one-off retention
payment and acquisition related fees.
Adjusted EBITDA
Adjusted EBITDA was £10.2m (HY23: £3.0m) representing a 240% increase in
comparison to the prior year, driven by operational leverage, the Betches
acquisition and a more efficient ANZ operating model that is delivering
benefits as planned. On an organic basis adjusted EBITDA has increased by
190%. Adjusted EBITDA margin increased to 24% (HY23: 11%).
Betches contributed £7.1m of revenue and £1.5m of adjusted EBITDA in HY24 as
integration continues to progress well.
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 £0.6m (HY23: £0.0m) were incurred during the year,
mainly due to the unwinding of discount on contingent consideration liability
in relation to the acquisition of Betches.
Share of JV
Share in joint ventures was £0.4m profit (HY23: £0.1m) representing our
percentage share in the results of Pubity Group Ltd.
Profit/(loss) before tax
Profit before tax was £7.1m (HY23: loss of £1.2m) representing a significant
improvement in comparison to the prior year.
Taxation
The tax charge for the period was £2.2m (HY23: £0.6m). The effective tax
rate for the period is 32% as a result of permanent and temporary differences.
Cash flow and cash position
Cash and cash equivalents at the period end amounted to £26.6m (FY23:
£15.8m, HY23: £32.7m).
The increase in cash of £10.8m in comparison to the year-end includes net
cash generated from operating activities of £12.8m, and outflows relating to
investing and financing activities of £2.0m.
More information on the cash flow can be found on page 12.
Solly Solomou Richard Jarvis
Chief Executive Officer Chief Financial Officer
UNAUDITED INTERIM FINANCIAL INFORMATION - LBG MEDIA PLC
UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Period ended Period ended
30 June 2024 30 June 2023
£'000 £'000
Note (unaudited) (unaudited)
Revenue 3 42,275 27,247
Net operating expenses 4 (35,002) (28,499)
Operating profit/(loss) 7,273 (1,252)
Analysed as:
Adjusted EBITDA(1) 10,243 3,013
Depreciation (1,212) (911)
Amortisation 8 (1,193) (507)
Share based payments charge 10 (565) (2,178)
Adjusting items 4 - (669)
Group operating profit/(loss) 7,273 (1,252)
Finance income 5 190 55
Finance costs 5 (812) (58)
Net finance costs (622) (3)
Share of post-tax profits of equity accounted joint venture 411 84
Profit/(loss) before taxation 7,062 (1,171)
Income tax expense 6 (2,247) (553)
Profit/(loss) for the financial year attributable to equity holders of the 4,815 (1,724)
company
Currency translation differences (net of tax) (65) (78)
Profit/(loss) and total comprehensive income for the financial year 4,750 (1,802)
attributable to equity holders of the company
Basic earnings/(loss) per share (pence) 7 2.3 (0.8)
Diluted earnings/(loss) per share (pence) 7 2.2 (0.8)
(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
As at 30 As at 30 As at 31
June 2024 June 2023 December 2023
£'000 £'000 £'000
(unaudited) (unaudited) (unaudited)
Assets
Non-current assets
Goodwill and other intangible assets 8 39,037 15,707 39,782
Property, plant and equipment 5,620 3,203 5,982
Investments in equity-accounted joint ventures 1,101 443 690
Other receivables 220 124 198
Deferred tax asset 37 651 24
Total non-current assets 46,015 20,128 46,676
Current assets
Trade and other receivables 27,893 19,500 28,765
Current tax asset - -- 62
Inventory 25 - 27
Cash and cash equivalents 26,582 32,708 15,800
Total current assets 54,500 52,208 44,654
Total assets 100,515 72,336 91,330
Equity
Called up share capital 209 207 207
Share premium reserve 28,993 28,993 28,993
Accumulated exchange differences (1,118) (49) (1,053)
Retained earnings 42,393 32,453 37,006
Total equity 70,477 61,604 65,153
Liabilities
Non-current liabilities
Non-current lease liability 9 2,291 1,428 2,975
Provisions 479 502 446
Non-current contingent consideration 11 3,849 - 6,523
Deferred tax liability 1,003 445 556
Total non-current liabilities 7,622 2,375 10,500
Current liabilities
Current lease liability 9 2,555 1,334 2,507
Trade and other payables 13,112 6,077 8,906
Contingent consideration 11 6,423 - 3,016
Current tax liabilities 326 946 1,248
Total current liabilities 22,416 8,357 15,677
Total liabilities 30,038 10,732 26,177
Total equity and liabilities 100,515 72,336 91,330
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share capital Share premium Accumulated exchange differences Retained earnings Total Equity
£'000 £'000 £'000 £'000 £'000
Balance as at 1 January 2023 206 28,993 29 31,998 61,226
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)
Issue of shares in the period 1 - - - 1
Share based payments - - - 2,178 2,178
Deferred tax on share options - - - 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
Profit for the financial period - - - 3,390 3,390
Currency translation differences (net of tax) - - (1,004) - (1,004)
Total comprehensive (loss)/income for the period - - (1,004) 3,390 2,386
Share based payments - - - 1,675 1,675
Equity settled share options switched to cash settled - - (494) (494)
share options -
Deferred tax on share options - - - (18) (18)
Total transactions with owners, recognised directly in equity - - - 1,163 1,163
As at 31 December 2023 and 1 January 2024 (audited) 207 28,993 (1,053) 37,006 65,153
Profit for the financial period - - - 4,815 4,815
Currency translation differences (net of tax) - - (65) - (65)
Total comprehensive (loss)/income for the period - - (65) 4,815 4,750
Issue of shares in the period 2 - - - 2
Share based payments - - - 565 565
Deferred tax on share options - - - 7 7
Total transactions with owners, recognised directly in equity 2 - - 572 574
Balance as at 30 June 2024 (unaudited) 209 28,993 (1,118) 42,393 70,477
UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
Period ended 30 June 2024 Period ended 30 June 2023 Year ended 31 December 2023
£'000 £'000 £'000
(unaudited) (unaudited) (audited)
Net cash flow from operating activities
Profit/(loss) for the financial period/year 4,815 (1,724) 1,666
Income tax 2,247 553 4,271
Net interest expense 622 3 459
Share of post-tax (profits)/losses of equity accounted joint venture (411) (84) (331)
Operating profit 7,273 (1,252) 6,065
Depreciation charge 1,212 911 2,088
Amortisation of intangible assets 1,193 507 1,369
Asset impairment and release of related liabilities - - 318
Share based payments 565 2,178 3,853
Gain on disposal of property, plant and equipment - - (30)
Provisions 9 (38) -
Decrease/(increase) in trade and other receivables 1,055 1,394 (4,151)
Increase in trade and other payables 4,206 1,786 588
Cash generated/(used) from operations 15,513 5,486 10,100
Tax paid (2,666) (192) (2,898)
Net cash generated from/(used in) operating activities 12,847 5,294 7,202
Cash flows from investing activities
Purchase of intangible assets (356) (798) (1,045)
Purchase of property, plant and equipment (327) (191) (954)
Stamp duty paid - - (26)
Acquisition of subsidiary, net of cash acquired - - (17,580)
Net cash used in investing activities (683) (989) (19,605)
Cash flows from financing activities
Shares issued (2) - -
Lease payments (1,294) (750) (1,323)
Lease deposits paid - - (23)
Lease deposits received - - 544
Proceeds from share issue - - 1
Interest received 140 - -
Interest paid (134) (50) (142)
Net cash used in financing activities (1,290) (800) (943)
Net increase/ (decrease) in cash and cash equivalents 10,874 3,505 (13,346)
Cash and cash equivalents at the beginning of the period 15,800 29,268 29,268
Effect of exchange rate changes on cash and cash equivalents (92) (65) (122)
Cash and cash equivalents at the end of the period 26,582 32,708 15,800
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 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 2024, 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 2023. The Directors do not anticipate any changes in these accounting
policies for the period ended 30 September 2024.
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 2023, 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 2023 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 2024 6 months to 30 June 2023
£'000 £'000
(unaudited) (unaudited)
Direct 21,984 11,464
Indirect 19,662 15,321
Other 629 462
42,275 27,247
NOTES TO THE UNAUDITED INTERIM FINANCIAL INFORMATION (continued)
4. Net operating expenses
6 months to 30 June 2024 6 months to 30 June 2023
£'000 £'000
(unaudited) (unaudited)
Employee benefit expense 18,167 15,839
Amortisation 1,193 507
Depreciation 1,212 911
Auditor's remuneration 233 155
Legal and professional 1,336 911
Media costs 3,649 2,854
Production costs 3,607 2,152
Travel and expenses 691 672
Establishment costs 4,073 3,136
Foreign currency (gain) / loss 16 238
Adjusting items - 670
Other expenses 825 454
Total net operating expenses 35,002 28,499
A breakdown of adjusting items has been provided below:
6 months to 30 June 2024 6 months to 30 June 2023
£'000 £'000
(unaudited) (unaudited)
Costs associated with business reorganisations - 273
One-off retention payment in 2023 - 272
Acquisition related fees - 124
Total adjusting items - 669
During the prior period, the Group incurred £0.3m in redundancy costs from
business reorganisations, made a one-off retention payment to employees
following a reorganisation in late 2022 to address retention risks, and
incurred £0.1m in legal and advisory fees related to acquisition activity.
5. Net finance costs
6 months to 30 June 2024 6 months to 30 June 2023
£'000 £'000
(unaudited) (unaudited)
Unwinding of discount on provisions (10) (8)
Unwinding of discount on contingent consideration liability (667) -
On lease liabilities (135) (50)
Finance costs (812) (58)
Unwinding of discounts on deposits 5 55
Bank interest received 185 -
Finance income 190 55
Net finance costs (622) (3)
NOTES TO THE UNAUDITED INTERIM FINANCIAL INFORMATION (continued)
6. Income tax expense
Tax expense/(credit) included in consolidated statement of comprehensive
income:
6 months to 30 June 2024 6 months to 30 June 2023
£'000 £'000
(unaudited) (unaudited)
Current year tax:
Current taxation charge for the period 1,822 856
Adjustments in respect of prior periods (15) 72
Total current tax 1,807 928
Deferred tax:
Current period 444 (506)
Effect of change in tax rates - 13
Adjustments in respect of prior periods (4) 118
Total deferred tax 440 (375)
Total tax on profit on ordinary activities 2,247 553
Equity items
Current tax - -
Deferred tax (7) (1)
Total tax recognised in equity (7) (1)
Reconciliation of tax charge
The tax assessed for the year is higher (2023: higher) than at the standard
rate of corporation tax in the UK. The differences are explained below:
6 months to 30 June 2024 6 months to 30 June 2023
£'000 £'000
(unaudited) (unaudited)
Profit/(loss) before taxation 7,062 (1,171)
Tax on profit/(loss) multiplied by standard rate of corporation tax in the UK 1,766 (258)
at 25% (2023: 22%)
Effects of:
Adjustments in respect of prior periods (19) 190
Expenses not deductible 209 558
Non-taxable income (103) (14)
Effect of change in UK tax rates - 13
Effects of overseas tax rates 78 (117)
Exempt items - 19
Amounts not recognised 121 175
FX - (12)
Share valuation 195 (1)
Total taxation charge/(credit) 2,247 553
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 2024 6 months to 30 June 2023 Year ended 31 December 2023
£'000 £'000 £'000
(unaudited) (unaudited) (audited)
Earnings per share from continuing operations
Earnings, £'000 4,815 (1,724) 1,666
Number of shares, number 209,079,740 206,458,742 206,542,642
Earnings per share, pence 2.3 (0.8) 0.8
Diluted earnings per share calculation:
6 months to 30 June 2024 6 months to 30 June 2023 Year ended 31 December 2023
£'000 £'000 £'000
(unaudited) (unaudited) (audited)
Diluted earnings per share from continuing operations
Earnings, £'000 4,815 (1,724) 1,666
Number of shares, number 219,145,721 217,777,464 217,710,005
Diluted earnings per share, pence 2.2 (0.8) 0.8
Reconciliation from weighted average number of shares used in basic earnings
per share to diluted earnings per share:
6 months to 30 June 2024 6 months to 30 June 2023 Year ended 31 December 2023
(unaudited) (unaudited) (audited)
Number of shares in issue at the start of the period 206,542,642 205,714,289 205,714,289
Effect of shares issued in period 2,537,098 744,453 828,353
Weighted average number of shares used in basic earnings per share 209,079,740 206,458,742 206,542,642
Employee share options 10,065,981 11,318,722 11,167,363
Weighted average number of shares used in diluted earnings per share 219,145,721 217,777,464 217,710,005
NOTES TO THE UNAUDITED INTERIM FINANCIAL INFORMATION (continued)
8. Goodwill and other intangible assets
Trade-marks & licenses Software Relation-ships Brand Content library Goodwill Social media pages Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Cost
At 1 January 2023 28 1,183 1,300 4,694 300 10,094 1,074 18,673
Additions - 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
Additions - 184 - - - - 63 247
Acquired through business - - 3,850 6,744 - 15,197 - 25,791
combinations
Exchange adjustments - - (164) (283) - (646) (7) (1,100)
At 31 December 2023 28 1,707 4,986 11,144 300 24,645 1,574 44,384
Additions - - - - - - 356 356
Exchange adjustments - - - - - 90 - 90
At 30 June 2024 28 1,707 4,986 11,144 300 24,735 1,930 44,830
Accumulated Amortisation
At 1 January 2023 27 359 550 1,949 298 - 54 3,237
Charge for the year - 90 65 256 2 - 94 507
Exchange adjustments - - - (4) - - (1) (5)
At 30 June 2023 27 449 615 2,201 300 - 147 3,739
Charge for the year - 176 160 386 - - 140 862
Exchange adjustments - - - 2 - - (1) 1
At 31 December 2023 27 625 775 2,589 300 - 286 4,602
Charge for the year - 166 65 860 - - 102 1,193
Exchange adjustments - - - (2) - - - (2)
At 30 June 2024 27 791 840 3,447 300 - 388 5,793
Net book value
At 30 June 2023 1 1,074 685 2,482 - 10,094 1,371 15,707
At 31 December 2023 1 1,082 4,211 8,555 - 24,645 1,288 39,782
At 30 June 2024 1 916 4,146 7,697 - 24,735 1,542 39,037
NOTES TO THE UNAUDITED INTERIM FINANCIAL INFORMATION (continued)
9. Borrowings
6 months to 30 June 2024 6 months to 30 June 2023 Year ended 31 December 2023
£'000 £'000 £'000
(unaudited) (unaudited) (audited)
Current
Lease liabilities 2,555 1,334 2,507
2,555 1,334 2,507
Non-current
Lease liabilities 2,291 1,428 2,975
2,291 1,428 2,975
Total borrowings 4,846 2,762 5,482
6 months to 30 June 2024 6 months to 30 June 2023 Year ended 31 December 2023
£'000 £'000 £'000
(unaudited) (unaudited) (audited)
Amount repayable
Within one year 2,555 1,334 2,507
In more than one year but less than two years 1,144 1,131 1,678
In more than two years but less than three years 738 297 580
In more than three years but less than four years 331 - 484
In more than four years but less than five years 78 - 233
4,846 2,762 5,482
During the period to 30 June 2024, £1,294k (HY23: £750k) was paid by the
Group in relation to lease payments and £134k (HY23: £50k) of interest paid
in relation to leases.
10. Share based payments
The Group operates a number of Share Option Schemes under which Executive
Directors, Non-Executive Directors, managers and team members of the Group
are granted options over shares. The Group did not enter into any share based
payment transactions with other parties other than employees during the
current or prior period.
The charge recognised from equity-settled share-based payments in respect of
employee services received during the year is £539k (HY23: £2,178k).
The charge recognised from cash-settled share-based payments in respect of
employee services received during the year is £26k (HY23: £nil).
NOTES TO THE UNAUDITED INTERIM FINANCIAL INFORMATION (continued)
11. Contingent consideration
6 months to 30 June 2024 6 months to 30 June 2023 Year ended 31 December 2023
£'000 £'000 £'000
(unaudited) (unaudited) (audited)
At beginning of the period 9,539 - -
Recognition on the acquisition of subsidiary undertakings - - 9,634
Unwinding of discount(1) 668 - 314
Exchange adjustment 65 - (409)
At period end 10,272 - 9,539
Analysed as:
Amounts falling due within 12 months 6,423 - 3,016
Amounts falling due after one year 3,849 - 6,523
At period end 10,272 - 9,539
(1) The discount rate used for the unwinding of the contingent consideration
is 17.6%.
The contingent consideration is in respect of the acquisition of Betches
Media, LLC on 17 October 2023. Refer to the 2023 annual report for further
details.
Since the contingent consideration is payable in stages, it was discounted to
fair value on the acquisition date and subsequently unwound to profit and
loss. Contingent consideration of $4m for the first tranche of Earnout 1 was
paid in July 2024 as a result of the 2023 performance target being achieved.
12. Related party transactions
The following transactions were carried out with related parties:
6 months to 30 June 2024 6 months to 30 June 2023 Year ended 31 December 2023
£'000 £'000 £'000
(unaudited) (unaudited) (audited)
Entity controlled by key management personnel
Purchase of services (1) 242 135 161
Tax settlement on behalf of Director (2) - - (67)
242 135 94
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 2024 totalled £242k (31 December 2023: £161k, 30
June 2023: £135k). The amount outstanding of the lease liability as at 30
June 2024 is £1,258k (31 December 2023: £1,296k, 30 June 2023: £nil). The
outstanding service charge balance at 30 June 2024 is £17k (31 December 2023:
£17k, 30 June 2023: £nil) and outstanding property insurance is £nil (31
December 2023: £nil, 30 June 2023: £nil).
2) In 2022, the Group agreed to pay a £224k PAYE liability relating to an
undisclosed benefit in kind. In 2023, after an agreement with HMRC, the
liability was reduced by £67k and fully settled within the 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. 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:
Web sessions Web sessions are unique interactions with our website in the six months to the
end of June 2024.
Organic Growth Organic growth excludes the impact of the Betches acquisition.
Global audience Includes global social media platform followers, unique podcast listeners and
global monthly online users to LBG Media websites.
Repeat client revenue Repeat client revenue represents percentage of HY24 Direct revenue from
clients that ran campaigns with us in 2022 and 2023.
AIM The Alternative Investment Market (AIM) is a sub-market of the London Stock
Exchange.
Bookings Bookings represents year-on-year movement in future value of contracts won
Multi-channel Refers to the Group's portfolio of brands.
Reach Reach is the total number of people who viewed our content within a particular
time period.
Engagements The measurement of a like, share or comment on social media platforms.
Web yield Daily web sessions reflect unique individual interactions with our website.
Yield per session is per 1,000 sessions.
Cash conversion Cash conversion is calculated as operating cash flow divided by adjusted
EBITDA.
ANZ Refers to the Group's operations in Australia and New Zealand.
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