REG - Mirriad Advertising - Unaudited interim results
22/08/2023 07:00
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RNS Number : 9791J Mirriad Advertising PLC 22 August 2023
22 August 2023
Mirriad Advertising plc
("Mirriad" or the "Company")
Unaudited interim results
Mirriad, the leading in-content advertising company, today announces unaudited
interim results for the six months ended 30 June 2023 (the "Period" or "H1").
H1 results webinar
The Company will host a webinar for analysts and investors at 14:00 BST on 22
August 2023 following which the presentation will be made available on the
Company's website. If you would like to attend, please
email mirriad@charlottestreetpartners.com
(mailto:mirriad@charlottestreetpartners.com) to register for dial-in
details.
H1 2023 highlights:
Strategic developments
· The Company completed a strategic review during the Period,
concluding that a restructuring to significantly reduce net cash burn
alongside an equity capital raise was the most appropriate route forward
· Continued development of the Company's proprietary platform to
deliver fully programmatic advertising sales, initially focused on the US
market, with expectation of first recurring programmatic revenues in 2024
· Continued development and penetration of the US supply-side customer
base with strong focus on the major entertainment and connected TV players
resulting in an expectation of contracting for a programmatic service with at
least one of these US tier 1 customers by the end of 2023
· Continued development and penetration of the US demand-side with
strong focus on the top 20 advertisers by spend, significantly increased
number of repeat buyers across key industry categories
· Technology collaboration with Microsoft announced, targeting joint
market activity and accelerated roadmap advancement including integration of
advanced AI capabilities
· New partner signed in the Middle East boosting revenue in the EMEA
region
Financial headlines
· Revenue for H1 of £592k (H1 2022: £577k) despite market headwinds
in the US. Due to seasonal nature of key advertising markets and the sales
pipeline, higher revenues are expected in H2 2023
· Gross proceeds from Placing and Open Offer in May 2023 of £6.3m
(£5.7m net)
· Restructuring programme completed with cost of change of £186k
recognised in the Period and Company on track to reduce net cash burn by
approximately 35% from £1.1m in the 12 months to June 2023 to around £700k
per month for the 12 months to June 2024
· Final closure of Chinese operations at the end of Q1 2023
· Closing cash at the end of June 2023 of £9.8m (30 June 2022:
£17.7m) and no debt give a forecast runway to end August 2024
· Marginal increase in cash consumption in the Period to £7.0m (H1
2022: £6.7m) due to a number of one-off receipts in the prior Period
· Operating loss for the Period reduced to £7.5m (H1 2022: loss of
£8.5m) as a result of cost reductions announced in 2022
· Loss per share 2p (H1 2022: loss 3p)
KPIs - continuing operations*
KPI H1 2023 H1 2022 Change
Supply side
1. Active supply partnerships 18 17 +6%
2. Supply partners represented 68 60 +13%
3. Seconds of content available 410,808 337,862 +22%
Demand side
1. Active agency relationships 18 9 +100%
2. Number of advertisers who have run campaigns 31 18 +72%
3. Strategic and commercial partnership agreements with advertisers and
agencies
1 2 -50%
* data restated to exclude Chinese operations in H1 2022 comparatives
Stephan Beringer, CEO of Mirriad, said: "Our growing momentum with the biggest
entertainment companies in the US and Europe shows Mirriad is now leading the
in-content advertising category and that the overall market environment is
turning in our direction because of the pressing need for new revenue
streams. Our collaboration with Microsoft, which we announced in May 2023,
has accelerated the development of our platform as an enterprise level
solution that is ready for programmatically sold inventory - a key building
block for tier 1 partnerships and prerequisite for the increased scale we've
been working towards.
"On the demand side, the Company is focusing on a key account strategy for
advertisers. Even before enabling programmatic trading, we already work with
nine of the top twenty US advertisers, which account for over ten billion
dollars in total combined annual advertising spend. We are also pleased to
see an increase in repeat bookings in H1 from large customers in the
automotive, retail, FMCG, food & beverage, healthcare and financial
services industries.
"We are now moving from market building to growth phase, which we expect to
kick in with programmatic revenues in 2024. This will move the Company from
its current manual sales process to an automated sales process, facilitating
scale. So far in 2023 we've seen improvements across the majority of our KPIs,
despite continuing advertising market headwinds in the US and the fact that
this is our first year without meaningful revenue from China.
"We expect materially higher revenues in H2 based on the seasonality of the
advertising business. The recent cost-cutting measures required some difficult
decisions but, following a successful equity fundraise and the strong focus on
platform, programmatic and partnerships, we are confident the business is now
on a strong footing moving into H2 and beyond."
ENDS
For further information please visit www.mirriad.com (http://www.mirriad.com)
or contact:
Mirriad Advertising plc Tel: +44 (0)207 884 2530
Stephan Beringer, Chief Executive Officer
David Dorans, Chief Financial Officer
Nominated Adviser & Broker: Tel: +44 (0)20 7886 2500
Panmure Gordon
James Sinclair-Ford/Daphne Zhang (Corporate Advisory)
Rupert Dearden (Corporate Broking)
Financial Communications:
Charlotte Street Partners
Tom Gillingham Tel: +44 (0) 7741 659021
Fergus Tel: +44 (0) 7590 049023
McGowan
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.
About Mirriad
Mirriad's award-winning solution unleashes new revenue for content producers
and distributors by creating new advertising inventory in content. Our
patented, AI and computer vision technology dynamically inserts products and
innovative signage formats after content is produced. Mirriad's market-first
solution seamlessly integrates with existing subscription and advertising
models, and dramatically improves the viewer experience by limiting commercial
interruptions.
Mirriad currently operates in the US, Europe and the Middle East.
Chairman's Statement
We have now completed the detailed strategic review and closed a successful
equity fundraising round which gives us important clarity to now deliver on
the agreed outcomes.
As has been widely reported, the macro-economic climate we operate in has not
become any easier, but the decisions the Company has taken are intended to
ensure Mirriad can ride out the current advertising market softness and
effectively deploy what is an effective and scalable solution against global
audience fatigue and shrinking volumes of available inventory.
The restructuring that resulted from the strategic review was not an easy
process, and it's always challenging when a business has to say goodbye to
colleagues. We wish those who have left the business the best for the next
steps in their careers. Throughout the process we have focused on retaining a
motivated workforce and I'm pleased to say morale is high and we have strong
internal alignment as we drive the business forward.
As part of the strategic review, we have also changed the composition of our
board. Alastair Kilgour and Lois Day have stepped down and I would like to
personally thank them for their contribution to the business and their
strategic insight during the recent period in particular.
We now look forward to further development in programmatic delivery, which is
the key route to scale for the Company, particularly in the important US
market. As we have indicated, we anticipate 2024 will be a key year for US
revenues stemming from this transition.
At the same time, we are already starting to realise cost savings as a result
of the steps taken during the strategic review, and continuing to drive these
efficiencies will be a priority as we deliver on objectives. I have said
previously, we will focus our spend in the areas which will have most impact
whilst reducing and reprioritising expenditure away from areas with less
immediate revenue generating potential, and this remains true today.
H2 is traditionally a busier period for ad campaign booking and we have a
high-quality pipeline. I would like to again thank our shareholders for their
continued engagement and patience during the strategic review. Management and
the whole team are now hard at work converting the pipeline and preparing the
Company for the transition to programmatic delivery which is the key enabler
of Mirriad's future growth.
John Pearson
Non-executive Chairman
22 August 2023
Chief Executive Officer's Statement
Overview
We recorded a modest increase in overall H1 revenue in 2023 compared to H1
2022, as the Company still operates within its pre-programmatic sales model.
This is set against a backdrop of significant and ongoing US advertising
market pressure, which can be tracked back to Q4 2022.
It is pleasing to see our ability to make relative revenue progress in the EU
and the Middle East while conditions are less favourable in the US, but the
latter has by far the most potential and will remain our focus ahead of
advertising market confidence returning.
We have seen improvement across most of the KPIs we regularly report against,
and we expect to see further progress in the areas that have stayed broadly
stable in this most recent reporting period.
Mirriad's future success will be driven by platform, programmatic and
partnerships. All the work undertaken so far is to initiate Mirriad's
transition to automated programmatic selling at scale, and with the key
building blocks for this now falling into place, we are confident that the
rewards will follow soon. The collaboration with Microsoft has accelerated
our development, and there is more to come especially as we increasingly
leverage Microsoft's leading AI capabilities in our platform.
Campaigns update
In terms of campaigns delivered in H1 2023, there were notable achievements
with over 20 tier 1 brands across multiple categories including FMCG,
automotive, retail, food & beverages, telco and alcohol. The number of
advertisers who have run campaigns has increased by 72% since the comparative
period in 2022, and now sits at 31 in total for H1 2023.
The performance of Mirriad campaigns has improved even further, with recent
research results showing brand affinity up by 96%, purchase intent up by 54%
and our format preferred more than eight times versus traditional TV spot
advertising. These results clearly underline the superiority of our in-content
format, as a growing number of advertisers renew their investments with us.
This month we released a white paper together with Kantar, the global leader
in audience and media research. Our joint study found that a substantial 86%
of all viewers take actions to avoid interruptive video advertising across
broadcast and network TV, streaming, and online video. In contrast, viewers
feel much more positive about in-content advertising from Mirriad and take no
steps to avoid this integrated ad format. The research adds further evidence
to the value of Mirriad's ad format for the entire industry across all
distribution models including SVOD.
The same Kantar study also found that a viewer's negative perception of an ad
format leads to lower purchase activity. Viewers are so over-saturated by TV
and video advertising that, if they do see the ads, they purchase the
advertised products and services at a lower rate. Mirriad's virtual in-content
format compares very favourably due to its non-intrusive and natural nature.
It is liked by viewers and, therefore, the research indicates that it is able
to drive 35% more sales.
Pipeline and partners update
Our KPIs show a steep increase in the number of active agency relationships,
as well as a rising number of advertisers who have run campaigns. We also saw
an increase in repeat customers in H1 with a total of 14 repeat brands
advertising in H1 2023 versus 4 in the same period in 2022. While we don't
intend to advance the headline number of supply-side partnerships as rapidly
going forward, we do expect the depth and breadth of the engagements with top
10 players in the US we're now focusing on, to take our business to its next
level thanks to enterprise-level integrations, including the enablement of
programmatically transacted inventory. Our expectation is to sign our first
programmatic agreement with a major US entertainment content company by the
end of this year.
Technology update
To date our revenue profile has been based on a labour-intensive manual sales
process, and 2023 is the year we initiate the transition from this first
market building and adoption phase to programmatic selling, which is expected
to open up increased volumes, far shorter lead times, automated transactions
and true scale. We anticipate this form of revenue building in the US market
in particular in 2024.
Outlook
Now that we have completed the strategic review and the equity fundraising
plan, we have a cash runway to the end of August 2024, which we expect to give
us headroom to unlock the significant opportunity that exists with
programmatic selling in 2024 in the US in particular.
Our pipeline is strong, with interest from the top players in the industry,
thanks to the progress we have made technologically and by proving the unique
performance of our solution with some of the biggest networks, advertisers and
content owners as a true differentiator in what is a saturated and constrained
global ad market.
This approach is our route to scaling the Company in line with its full
potential in highly challenged multibillion dollar media and marketing
industries, and to creating long-term shareholder value. Everyone at Mirriad
is laser-focused on this objective, and I have every confidence in our
re-shaped, highly motivated team's ability to deliver.
Stephan Beringer
Chief Executive
22 August 2023
Chief Financial Officer's Statement
Interim results
In H1 2023 revenues were modestly higher than the same period in 2022 even
though this was the first year without material revenues from China.
Revenues for the Period were £592k (H1 2022: £577k) an increase of 3%.
Looking specifically at continuing operations results were more impressive
with revenues for the Period increasing by 26% to £576k (H1 2022: £458k).
Within this US revenues continued to be impacted by the overall slowdown in
the US advertising market, an industry wide phenomenon that started in Q4
2022. This meant that US revenues declined Period on Period to £313k (H1
2022: £418k).
Conversely Europe & the Middle East ("EMEA") saw a significant growth in
revenue, albeit from a modest base to £261k (H1 2022: £40k). This was a
result of the sale of regular campaigns on both RTL Deutschland and ProSieben
in Germany and a new Middle Eastern partner, MBC.
Gross profit for the Period increased modestly to £433k (H1 2022: £430k).
The increase in Gross profit was slightly lower than the increase in revenue
as a result of inflationary increases in the cost of sales. As previously
stated, cost of sales is principally expenditure on staff as the increase was
due to salary inflation.
The Group's operating loss decreased by 11% during the Period to £7.5m (H1
2022: £8.5m) because of a reduction in administrative expenses following the
exit from our Chinese business and other cost saving measures instigated in H2
2022. The Company had previously flagged that the exit from China would lead
to annualised savings of £1m and that other cost savings measures would lead
to an incremental reduction in operating expenditure of around £1.5m on an
annualised basis with an overall reduction of £2.5m anticipated on an
annualised basis. This is before the impact of the restructuring announced
in the Period. In total administrative expenses in the Period decreased by
10% to £8.0m (H1 2022: £8.9m). Headcount as at 30 June 2023 was 91 (30 June
2022: 109).
At the half year end, we have again reviewed our compliance with IAS 38 and we
continue to believe that the inherent uncertainty of future revenue generation
means that it is not appropriate to capitalise any of our development cost in
the first six months of the year.
The Group continues to prioritise expenditure on research and development as
it builds programmatic capability. Nevertheless, the Company chose to make
some tactical reductions in its technology function in line with the wider
business restructuring with a view to focusing spend on the transition to
programmatic sales. For the period ending June 2023 total expenditure on
research and development was broadly flat at £1.9m (H1 2022: £2.0m).
The loss for the period before tax decreased by 12% to £7.5m (H1 2022:
£8.4m) in line with the decrease in operating loss noted above.
Tax
The Group has not recognised any tax assets in respect of trading losses
arising in the current financial period or accumulated losses in previous
financial years. The tax credit recognised in the current and previous period
arises from the receipt of R&D tax credits in the UK. The amount
receivable for the Period ended 30 June 2023 is £292k (H1 2022: £293k).
Earnings per share
The company recorded a loss of 2 pence per share (H1 2022: loss of 3 pence per
share) mainly as a result of the reduced losses. This calculation is based on
the weighted average number of shares in issue during the period and so the
shares issued following the placing and open offer in June 2023 had a
relatively small impact on the calculation.
Dividend
No dividend has been proposed for the Period ended 30 June 2023 (H1 2022:
£nil).
Cash flow
Net cash used in operations (defined as the sum of net cash used in operating
activities and the net cash used in investing activities) during the Period
increased marginally to £7.0m (H1 2022: £6.7m). There are a number of one
off items which explain the divergence between operating loss and cashflow:
final cash closure costs for our China operations were incurred in the Period
whereas the charge was incurred in H2 2022; H1 2022 included a rent free
period on the renegotiated London office lease; and H1 2022 included the
receipt for the 2019 restated R&D tax credit whereas there was no matching
receipt in H1 2023. During the period no development costs were capitalised
(H1 2021: £nil). The Group also incurred £8k (H1 2022: £42k) of capital
expenditure on tangible assets.
210,128,596 Ordinary Shares were issued in the Period (H1 2022: Nil) as a
result of the successful placing and open offer which closed in May 2023.
Balance sheet
The Group has a debt-free balance sheet. Net assets decreased by 43% to
£10.3m (30 June 2022: £17.9m) as the Company used cash balances to fund the
Group's ongoing operations balanced by the funds raised from the placing and
open offer of £5.7m. Cash and cash equivalents at 30 June 2023 were £9.8m
(30 June 2022: £17.7m).
Accounting policies
These condensed consolidated interim financial statements for the half-year
reporting period ended 30 June 2023 have been prepared in accordance with the
UK-adopted International Accounting Standard (IAS) 34, 'Interim Financial
Reporting'.
David Dorans
Chief Financial Officer
22 August 2023
Company Information
Directors Independent Auditors
John Pearson PricewaterhouseCoopers LLP
Chairman 7 More London Riverside
Stephan Beringer London
Chief Executive Officer SE1 2RT
David Dorans
Chief Financial Officer Solicitors
Bob Head Osborne Clarke LLP
Non-Executive Director 6th Floor
Nicole McCormack One London Wall
Non-Executive Director London
JoAnna Foyle EC2Y 5EB
Non-Executive Director
Company registration number Company Secretary
09550311 Jamie Allen
Registered Office Nominated Adviser & Broker
6(th) Floor Panmure Gordon (UK) Limited
One London Wall 40 Gracechurch St
London London
EC2Y 5EB EC3V 0BT
Company website Financial PR
www.mirriad.com Charlotte Street Partners Limited
Prospect House
5 Thistle Street
Edinburgh
EH12 1DF
Registrars
Computershare Investor Services plc
The Pavilions
Bridgwater Road
Bristol
BS99 6ZZ
Condensed consolidated statement of profit or loss and condensed statement of
comprehensive income for the six months ended 30 June 2023
Six months ended 30 June 2022
(unaudited)
£
Note Six months ended 30 June 2023 Year ended
(unaudited) 31 December
£ 2022
(audited)
£
Revenue 5 591,883 577,436 1,507,257
Cost of Sales (158,977) (147,154) (286,316)
Gross Profit 432,906 430,282 1,220,941
Administrative expenses (7,960,508) (8,880,678) (16,863,015)
Other operating Income - - -
Operating Loss (7,527,602) (8,450,396) (15,642,074)
Finance Income 80,122 23,093 71,875
Finance costs (5,501) (18,622) (22,512)
Finance income / (costs) net 74,621 4,471 49,363
Loss before income tax (7,452,981) (8,445,925) (15,592,711)
Income tax credit 291,984 293,300 491,888
Loss for the period / year (7,160,997) (8,152,625) (15,100,823)
Loss per ordinary share - basic (2p) (3p) (5p)
6
All activities are classified as continuing.
Six months ended 30 June 2023 Six months ended 30 June 2022 Year ended
(unaudited) (unaudited) 31 December
£ £ 2022
(audited)
£
Loss for the financial period / year (7,160,997) (8,152,625) (15,100,823)
Other comprehensive income
Items that may be reclassified to profit or loss:
Exchange differences on translation of foreign operations 46,903 276,856 43,782
Total comprehensive loss for the period / year (7,114,094) (7,875,769) (15,057,041)
Condensed consolidated balance sheet
At 30 June 2023
Note As at 30 June 2023 As at 30 June 2022 As at 31 December
(unaudited) (unaudited) 2022
£ £ (audited)
£
Assets
Non-current assets:
Property, plant and equipment 380,557 704,104 544,242
Trade and other receivables 186,826 188,795 187,657
567,383 892,899 731,899
Current assets
Trade and other receivables 1,511,862 1,307,677 2,221,091
Other current assets 821,361 1,135,286 529,377
Cash and cash equivalents 9,791,488 17,714,189 11,289,123
12,124,711 20,157,152 14,039,591
Total assets 12,692,094 21,050,051 14,771,490
Liabilities
Non-current liabilities
Lease liabilities 110,107 357,912 206,988
110,107 357,912 206,988
Current liabilities
Trade and other payables 1,997,476 2,419,427 2,904,311
Provisions 40,743 - 198,199
Current tax liabilities 14,330 - 14,330
Lease liabilities 264,109 345,196 322,401
2,316,658 2,764,623 3,439,241
Total liabilities 2,426,765 3,122,535 3,646,229
Net Assets 10,265,329 17,927,516 11,125,261
Equity and Liabilities
Equity attributable to owners of the parent
Share capital 7 54,791 52,690 52,690
Share premium 71,406,966 65,754,666 65,754,666
Share based payment reserve 5,506,616 4,527,838 4,906,855
Retranslation reserve (269,369) (83,198) (316,272)
Accumulated losses (66,433,675) (52,324,480) (59,272,678)
Total equity 10,265,329 17,927,516 11,125,261
Condensed consolidated statement of changes in equity
For the six months ended 30 June 2023
Six months ended 30 June 2022
Note Share Capital Share Premium Share based payment reserve Retranslation reserve Accumulated Losses Total Equity
£ £ £ £ £ £
Balance as at 1 January 2022 52,690 65,754,666 3,665,525 (360,054) (44,171,855) 24,940,972
Loss for the period - - - - (8,152,625) (8,152,625)
Other comprehensive income for the period - - - 276,856 - 276,856
Total comprehensive loss for the period - - - 276,856 (8,152,625) (7,875,769)
Share based payments recognised as expense - - 862,313 - - 862,313
Total transactions with shareholders recognised directly in equity - - 862,313 - - 862,313
Balance as at 30 June 2022 52,690 65,754,666 4,527,838 (83,198) (52,324,480) 17,927,516
Year ended 31 December 2022 (audited)
Share Capital Share Premium Share based payment reserve Retranslation reserve Accumulated Losses Total Equity
£ £ £ £ £ £
Balance at 1 January 2022 52,690 65,754,666 3,665,525 (360,054) (44,171,855) 24,940,972
Loss for the financial year - - - - (15,100,823) (15,100,823)
Other comprehensive income for the year - - - 43,782 - 43,782
Total comprehensive loss for the year - - - 43,782 (15,100,823) (15,057,041)
Share based payments recognised as expense - - 1,241,330 - - 1,241,330
Total transactions with shareholders recognised directly in equity - - 1,241,330 - - 1,241,330
Balance as at 31 December 2022 52,690 65,754,666 4,906,855 (316,272) (59,272,678) 11,125,261
Six months ended 30 June 2023
Note Share Capital Share Premium Share based payment reserve Retranslation reserve Accumulated Losses Total Equity
£ £ £ £ £ £
Balance as at 1 January 2023 52,690 65,754,666 4,906,855 (316,272) (59,272,678) 11,125,261
Loss for the period - - - - (7,160,997) (7,160,997)
Other comprehensive income for the period - - - 46,903 - 46,903
Total comprehensive loss for the period - - - 46,903 (7,160,997) (7,114,094)
Proceeds from shares issued 2,101 6,301,757 - - - 6,303,858
Share issue costs - (649,457) - - - (649,457)
Share based payments recognised as expense - - 599,761 - - 599,761
Total transactions with shareholders recognised directly in equity 2,101 5,652,300 599,761 - - 6,254,162
Balance as at 30 June 2023 54,791 71,406,966 5,506,616 (269,369) (66,433,675) 10,265,329
Condensed consolidated statement of cash flows for the six months ended 30
June 2023
Note Six months ended 30 June 2023 Six months ended 30 June 2022 Year ended
(unaudited) (unaudited) 31 December
£ £ 2022
(audited)
£
Cash flow used in operating activities 8 (7,052,411) (6,941,442) (14,017,146)
Tax credit received - 274,335 1,116,320
Taxation paid (10,848) (14,291) (39,829)
Interest received 80,122 23,093 71,875
Lease interest paid (5,501) (18,622) (22,512)
Net cash used in operating activities (6,988,638) (6,676,927) (12,891,292)
Cash flow from investing activities
Purchase of tangible assets (8,225) (42,462) (75,647)
Proceeds from disposal of tangible assets - - -
Net cash used in investing activities (8,225) (42,462) (75,647)
Cash flow from financing activities
Proceeds from issue of ordinary share capital (net of costs of issue) 5,654,401 - -
Payment of lease liabilities (155,173) (67,636) (245,152)
Net cash used in financing activities 5,499,228 (67,636) (245,152)
Net decrease in cash and cash equivalents (1,497,635) (6,787,025) (13,212,091)
Cash and cash equivalents at the beginning of the period / year 11,289,123 24,501,214 24,501,214
Cash and cash equivalents at the end of the period / year 9,791,488 17,714,189 11,289,123
Cash and cash equivalents consists of
Cash at bank and in hand 9,791,488 17,714,189 11,289,123
Cash and cash equivalents 9,791,488 17,714,189 11,289,123
1 Basis of preparation
These condensed consolidated interim financial statements for the half-year
reporting period ended 30 June 2023 have been prepared in accordance with the
UK-adopted International Accounting Standard (IAS) 34, 'Interim Financial
Reporting'.
The interim report does not include all of the notes of the type normally
included in an annual financial report. Accordingly, this report is to be read
in conjunction with the annual report for the year ended 31 December 2022,
which has been prepared in accordance with UK-adopted international accounting
Standards and with the requirements of the Companies Act 2006 as applicable to
companies reporting under those standards.
These condensed interim consolidated financial statements for the six months
ended 30 June 2023 and for the six months ended 30 June 2022 do not constitute
statutory accounts as defined in Section 434 of the Companies Act and are
unaudited. The financial information for the six months ended 30 June 2023
presents financial information for the consolidated Group, including the
financial results of the Company's wholly owned subsidiaries Mirriad
Advertising Private Limited, Mirriad Inc, Mirriad Software Science and
Technology (Shanghai) Co. Ltd, and Mirriad Limited (dormant). Comparative
figures in the condensed interim financial statements for the year ending 31
December 2022 have been taken from the Group's audited financial statements on
which the Group's auditors, Pricewaterhouse Coopers LLP, expressed an
unqualified opinion.
The Board approved these interim financial statements on 22 August 2023.
1.1 Going concern
These condensed interim financial statements have been prepared on the going
concern basis, notwithstanding the Group having made a loss for the period of
£7.16 million (June 2022: £8.15 million). The going concern basis assumes
that the Group and Company will have sufficient funds available to continue to
trade for the foreseeable future and not less than 12 months from the end of
the financial period being reported.
The Group's cash balance was £9.8 million at the period end and the Group
remains debt free with no external borrowing.
The Company announced a successful placing and open offer that raised a total
of £6.3 million, before costs on 2(nd) June 2023. This amounts to £5.65
million after fees and related costs. After making enquiries and producing
cash flow forecasts for the period up to 31 December 2025, the Directors have
reasonable expectations, as at the date of approving the financial statements,
that the Company and the Group will have adequate resources to fund the
activities of the Company and the Group for the next 12 months from the date
of the financial period being reported. The Group and Company's base case
forecast suggests that the Group will require additional external funding in
August 2024 to be able to continue as a going concern. However, in a severe
but plausible downside scenario, if either the revenue growth forecasts or
cost saving initiatives fall below expectation, additional funding may be
required, within 12 months of approving these condensed interim financial
statements which is not currently committed.
While these condensed interim financial statements are prepared on a going
concern basis, under a severe but plausible downside scenario the future of
the Group and Company is dependent on raising additional external funds from
new equity, debt or customer contracts within 12 months from the date of
signing these financial statements.
As such these conditions indicate the existence of a material uncertainty
which may cast significant doubt about the Group's and the Company's ability
to continue as a going concern. These condensed interim financial statements
do not include the adjustments that would arise if the Group or Company were
unable to continue as a going concern.
2 Accounting Policies
The accounting policies applied are consistent with those of the annual report
and accounts for the year ended 31 December 2022, as described in those
financial statements other than standards, amendments and interpretations
which became effective after 1 January 2023 and were adopted by the Group.
These have had no significant impact on the Group's loss for the period or
equity.
Seasonality of Operations
Due to the seasonal nature of the US and UK advertising markets higher
revenues are usually expected in the second half of the year than the first
six months. In the financial year ended 31 December 2022, 35% of US revenues
accumulated in the first half of the year, with 65% accumulating in the second
half. For the UK Company 22% of revenues accumulated in the first half of 2022
and 78% in the second half.
There are no items affecting assets, liabilities, equity, net income or cash
flows that are unusual because of their nature, size or incidence which are
required to be disclosed under IAS 34 para 16A(c).
There are no events after the interim reporting period which are required to
be reported under IAS 34 para 16A(h).
There are no financial instruments being measured at fair value which require
disclosure under IAS 34 para 16A(j)
3 Group financial risk factors
The condensed interim financial statements do not contain all financial risk
management information and disclosures required in annual financial
statements; the information should be read in conjunction with the financial
information, as at 31 December 2022, summarized in the 2022 annual report and
accounts. There have been no significant changes in any risk management
policies since 31 December 2022.
4 Critical accounting estimates and judgements
The preparation of interim financial statements requires management to make
judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets and liabilities, income
and expense. Actual results might differ from these estimates. IAS34(16A)(d)
In preparing these condensed interim financial statements, the significant
judgements made by management in applying the Group's accounting policies and
the key sources of estimation uncertainty were the same as those that applied
to the consolidated financial statements for the year ended 31 December 2022.
There are no changes in estimates of amounts reported in prior financial
years.
5 Segment information
Management mainly considers the business from a geographic perspective since
the same services are effectively being sold in every Group entity. Therefore,
regions considered for segmental reporting are where the Company and
subsidiaries are based, namely the UK, the USA, India and China. The revenue
is classified by where the sales were booked not by the geographic location of
the customer.
In the current and prior reporting period there is no income outside of the
primary business activity.
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision-maker. The chief operating
decision-maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the steering
committee that makes strategic decisions. The steering committee is made up of
the Board of Directors. There are no sales between segments. The revenue from
external parties reported to the strategic steering committee is measured in a
manner consistent with that in the income statement.
The Parent company is domiciled in the United Kingdom. The amount of revenue
from external customers by location of the Group billing entity is shown in
the tables below.
Revenue
Six months ended Six months ended Year ended
30 June 2023 30 June 2022 31 December
(unaudited) (unaudited) 2022
£ £ (audited)
£
Turnover by geography
USA 313,425 418,035 1,180,798
UK 261,321 39,654 178,476
China 17,137 119,747 147,983
Total 591,883 577,436 1,507,257
Loss before tax
The EBITDA is the loss for the year before depreciation, amortisation,
interest and tax. The loss before tax is broken down by segment as follows:
Six months ended Six months ended Year ended
30 June 2023 30 June 2022 31 December
(unaudited) (unaudited) 2022
£ £ (audited)
£
UK (7,021,637) (7,436,070) (13,483,196)
USA 105,213 (129,500) (253,219)
India (416,438) (321,693) (770,084)
China (30,041) (312,332) (695,848)
Total EBITDA (7,362,903) (8,199,595) (15,202,347)
Depreciation (164,699) (250,801) (439,727)
Finance income / (costs) net 74,621 4,471 49,363
Loss before tax (7,452,981) (8,445,925) (15,592,711)
6 Loss per share
(a) Basic
Basic loss per share is calculated by dividing the loss for the period / year
by the weighted average number of ordinary shares in issue during the period /
year. Potential ordinary shares are not treated as dilutive as the Group is
loss making and such shares would be anti-dilutive.
Group Six months ended Six months ended Year ended
30 June 30 June 31 December
2023 2022 2022
Loss attributable to owners of the parent (£) (7,160,997) (8,152,625) (15,100,823)
Weighted average number of ordinary shares in issue Number 309,365,026 279,180,808 279,180,808
The loss per share for the period was 2p (six months to 30 June 2022: 3p; year
ended 31 December 2022: 5p).
No dividends were paid during the period (six months to 30 June 2022: £nil;
year ended 31 December 2022: £nil).
(b) Diluted
Potential ordinary shares are not treated as dilutive as the Group is loss
making and such shares would be anti-dilutive
7 Share capital
Ordinary shares of £0.00001 each
Allotted and fully paid Number
At 1 January 2023 279,180,808
Issued during the period 210,128,596
At 30 June 2023 489,309,404
On 5 June 2023 210,128,596 Ordinary Shares were issued for 3p per share as
part of a £6.3 million fundraise from new and existing shareholders. This was
split as follows:
· 191,666,667 Ordinary Shares issued on 5 June 2023 from the placing
exercise;
· 18,461,929 Ordinary Shares issued on 5 June 2023 from an open offer
to existing shareholders on the basis of 5 new shares for every 21 existing
Ordinary Shares held.
8 Net cash flows used in operating activities
Six months ended Six months ended Year ended
30 June 2023 30 June 2022 31 December
(unaudited) (unaudited) 2022
£ £ (audited)
£
Loss for the financial period / year (7,160,997) (8,152,625) (15,100,823)
Adjustments for:
Tax on loss on ordinary activities (291,984) (293,300) (491,888)
Interest income (80,122) (23,093) (71,875)
Lease interest costs 5,501 18,622 22,512
Operating loss: (7,527,602) (8,450,396) (15,642,074)
Amortisation of right-of-use assets 128,446 163,550 302,804
Depreciation of tangible assets 36,253 87,251 136,923
(Profit) / loss on disposal of disposal of tangible assets 3,392 - -
Bad debts (reversed) / written off (721) (3,732) (890)
Share based payment charge 599,761 862,313 1,241,330
Adjustment to tax credit in respect of previous periods - - 2,041
Foreign exchange variance 46,903 276,857 43,782
Movement in provisions (157,456) - 198,199
- Decrease / (increase) in debtors 710,781 562,374 (336,799)
- (Decrease) / increase in creditors (892,168) (439,659) 37,538
Cash flow used in operating activities (7,052,411) (6,941,442) (14,017,146)
9 Related party transactions
The Group is owned by a number of investors the largest being M&G
Investment Management, which owns approximately 14% of the share capital of
the Company. Accordingly there is no ultimate controlling party.
During the period the Company had the following related party transactions. No
guarantees were given or received for any of these transactions.
IP2IPO Limited - a company which shares a parent company with IP2IPO Portfolio
(GP) Limited, a major shareholder in the Group, and which also appoints a
Director of the Group charged Mirriad Advertising plc for the following
transactions during the period: (1) £10,000 for the services of Lois Day as a
Director from 1 January 2023 until 30 June 2023. Of this amount £1,667 was
accrued and unpaid as at 30 June 2023.
Parkwalk Advisors Limited - a company which shares a parent company with
IP2IPO Portfolio (GP) Limited, a major shareholder in the Group, and which
also appoints a Director of the Group charged Mirriad Advertising plc for the
following transactions during the period: (1) £10,000 for the services of
Alastair Kilgour as a Director from 1 January 2023 until 30 June 2023. £3,333
of this amount was invoiced and unpaid as at 30 June 2023, and subsequently
paid on 12 July 2023. £1,667 of this amount was accrued and unpaid as at 30
June 2023.
All the related party transactions disclosed above were settled by 30 June
2023 except where stated.
10 Availability of Interim Report
Electronic copies of this interim financial report will be available on the
Company's website at www.mirriadplc.com/investor-relations
(http://www.mirriadplc.com/investor-relations) .
ENDS
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