REG - SEEEN PLC - Interim results and other matters
30/09/2024 07:00
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RNS Number : 1630G SEEEN PLC 30 September 2024
SEEEN plc
("SEEEN", "Group", or the "Company")
Interim Results for the six months ended 30 June 2024 - 60% Increase In Gross
Profits versus 2H23
Management and Adviser Change
SEEEN plc (AIM: SEEN), the global media and technology platform that delivers
Key Video Moments and Video Commerce to transform its clients' video
profitability, is pleased to release its unaudited Interim Results for the six
months ended 30 June 2024 ("1H24") and an update on current trading and the
outlook for the Group.
During the first half of 2024, the Group continued its transition towards a
higher-margin, technology driven business with larger technology sales,
reflected by the increased gross margin of the business. The Group has
momentum with sequential growth in the half year, which also has carried into
3Q.
Revenue for the 1H24 increased 19% against 2H23, together with a 60%
improvement in gross profit. During the period, the Group also concluded a
successful fundraising of approximately £0.8 million primarily to drive
further investment in the direct sales team for its current offerings and for
an exciting extension of the Group's Video Moment technology into the high
demand training / skills market. As part of this extension, the Group has
produced strong results in a pilot for speeding the training of skilled
technicians for American Leak Detection. Examples of such accelerated
training will be released after the American Leak Detection Convention October
16-19.
Momentum has continued from 1H to the third quarter ("3Q24"). The Group's
sales momentum has accelerated as revenues are currently at an annualised
run-rate* of approximately $4.5 million driven by both technology product
sales and a return to growth in our Creator Service Partner ("CSP") business.
The annualised run-rate is more than 100% greater than the Group's revenues
last year. Building on this momentum, the Group's next milestone is monthly
cash flow breakeven during the next six months.
Adrian Hargrave, CEO of SEEEN, commented:
"We have strong sequential momentum: 1H 2024 vs. 2H 2023 and 3Q 2024 vs. 2Q
2024. Underpinning this momentum was a successful capital raise despite
market headwinds.
During 2024, we have accelerated the sales and gross profits of the Group.
We are focused on driving sales as we leverage the strong data that we have
from existing customer implementations. We have aligned the cost base
accordingly to ensure that we deliver on both the market opportunity as a
technology product company and a services-led marketing consulting business
using Video Moments.
We want to thank all of our shareholders for their support and we look forward
to the rest of the year with confidence. We will continue to execute our
strong and growing pipeline of opportunities both in the US and the UK. With
more case studies and ROI data to show for both our technology and CSP
offerings, we expect to continue to accelerate our market capture through both
direct and partnership sales, driving the Group through to cash flow
breakeven."
Overview
· Continued progress against the Group's core technology sales Key
Performance Indicators (KPIs). As at 30 June 2024, the Group had the following
technology customer breakdown:
o 31 vertical market customers in the financial publishing, sports and
retail & services markets
o 6 strategic customers in the publishing industry
o 11 e-commerce led customers
· CSP returning to growth, whilst maintaining increased
profitability
· Accelerating sales momentum since the start of 2Q24 has delivered
current annualised revenue run-rate* of approximately $4.5 million, including
more than $2 million from new customers across the Group's technology and CSP
businesses
· Completed fundraising of approximately £0.8 million (before
expenses) across June and July 2024, principally to fund continued sales
momentum and further develop IP in the training market
1H24 Financial Highlights
Profitability
● Gross profit of $0.3 million, 18% higher than 1H23 driven by
improved gross margin of 29.8% (1H23: 24.6%), reflecting an increasing
technology led sales mix, as well as ongoing improved margins at the Group's
CSP business
● Adjusted Group EBITDA(**) loss of $0.3m (1H23: loss of $0.3m),
reflecting continued investment in sales team, offset by increased
profitability from technology business
Revenues
● Improving sales mix reflecting proprietary technology
commercialisation
● Revenues from customers using CreatorSuite, the Group's primary
technology product, of approximately $550K, now representing 50% of the
Group's revenue (1H23: 40%)
o Recurring technology revenues of approximately $125,000 (1H23: $85,000)
● Total Group revenues of $1.1m in line with previous year (1H23:
$1.1m), but a 19% increase on 2H23 revenues, reflecting new customer additions
across all business lines, as well as cross-selling of SEEEN's offerings
Balance Sheet
● Cash as at 30 June 2024 of $1.2m; the Board believes that the
Group has sufficient resources to reach profitability by executing on its
sales strategy to drive both technology and CSP sales
Year To Date New Customer Wins and Implementation Success
● Total new business won since start of 2Q24 currently worth more
than $2 million in annualised revenues*
● Continued progress with selling the Group's technology products
across different verticals with announced transactions for London Broncos and
A7FL to supply video-led website and commerce
● Further traction in the sports vertical for technology products,
including first customer in the Scottish Premier League, the first UK
paralympic sport and being named as official interactive video partner for
sporting conferences
o Average 9% clickthrough rates, linked to sales, within customer videos is
driving 100%+ ROI for key customers
● Sales of technology to American Leak Detection for video commerce,
training and digital marketing
o Since implementation, SEEEN has helped ALD territories drive a 15%
improvement in Google Business Profile rankings, with 10% increases in number
of leads through that channel
● New publisher sign ups in UK and US, for both technology and CSP
offering
● Upsells of technology services to CSP customers, which has driven
up to 25% increases in the revenues of key customers
2024 and 2025 Outlook
● Strong customer and reseller sales pipeline, driven by new
technology products and sales team
o Significant large opportunities with sports clubs, sports leagues and
major publishers
o Reseller opportunities with digital marketing agencies for both video
commerce
o Sales to companies of Video Moment technology to accelerate skills
training and compliance
Management change
The Company announces that Carmel Warren has now left SEEEN to focus on her
new non-executive appointments. Adrian Hargrave has assumed day to day
responsibility for the Company's finance function and is supported by the
existing accounting team. Whilst the Company remains focused on sales momentum
and achieving profitability, it expects to appoint an outsourced CFO that will
best support the growth strategy of the business ahead of a permanent CFO when
the Group has scaled to profitability.
Change of Adviser
As part of the Group's plan to reduce duplicative costs, the Company announces
that Allenby Capital Limited has ceased to act as Joint Broker to the Company
with effect from 27 September 2024. Allenby Capital Limited remains the
Company's AIM Nominated Adviser. Dowgate Capital Limited and Capital Plus
Partners Limited remain as SEEEN's Joint Brokers.
Notes:
* Annualised revenues assumes a run rate of revenues combining (i) technology
based SaaS sales and (ii) current levels of YouTube advertising income from
channel partners, which can be more volatile
** See Note 5 to the accounts for a full reconciliation of adjustments between
reported and adjusted figures.
For further information please contact:
SEEEN plc Tel: +44 (0)7775 701 838
Adrian Hargrave, CEO Website: seeen.com (http://www.seeen.com)
Allenby Capital Limited Tel: +44 (0)20 3328 5656
(Nominated Adviser)
Alex Brearley / George Payne (Corporate Finance)
Dowgate Capital Limited (Joint Broker) Tel: +44(0)20 3903 7721
Stephen Norcross
Capital Plus Partners Limited (Joint Broker) Tel: +44(0)20 3821 6167
Jonathan Critchley
focusIR (Investor Relations) Tel: +44(0) 07866 384 707
Paul Cornelius / Kat Perez seeen@focusir.com (mailto:seeen@focusir.com)
This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 as it forms part of UK domestic law by virtue of
the European Union (Withdrawal) Act 2018 ("MAR").
CEO's Statement
Overview
During 1H 2024 and since then, we have continued to execute against our core
focus of selling our technology products and associated services to customers
in our core target markets. This has been reflected in 1H24 in a 19% increase
in sales and 60% increase in gross profit against 2H23. In addition to
continuing to win new customers, we have also made larger technology sales,
where we have worked with entire sports leagues, as well as managed the entire
website for individual sports clubs to drive a video-led strategy, importantly
including video commerce. Significant examples in 1H24 include Rugby League
Super League side London Broncos, as well as A7FL, a second-tier nationwide
American Football league in the USA.
We have also moved successfully into the video training market, where we
established our first sale with American Leak Detection. We have both prepared
Key Video Moments for technicians to be delivered via Salesforce, as well as
training and implementing Google Business Profiles for more than 40
territories, a key driver of leads for services businesses all across the
world.
Furthermore, we have increasingly demonstrated the value of our technology
within our existing CSP customer base, with upsells to several of our CSP
customers to use our technology to leverage their back catalogue and increase
the efficiency of clipping and re-mixing their video content across all social
video platforms. In some cases, we have also sold our video commerce
functionality to enable them to drive extra revenues from their website.
We continue to have several valuable case studies from our successful
implementations. In video commerce, we continue to see increases in organic
search traffic to our customer's video pages of between 50% and 500%, as well
as an average of 9% clickthrough rates within sports videos, driving
substantial ROI through increased sales and subscriptions, without accounting
for the additional data that our customers are receiving about the efficacy of
their videos in converting viewers into customers.
For training and Google Business Profile implementation, including placing
short form videos onto Google Business Profile pages, we have seen an average
increase in local search rankings of approximately 15%, which has generated an
increase in leads directly from Google Business Profiles during that
timeframe.
Where we have upsold our technology into CSP clients, we have seen some of our
customers drive 25% more revenue utilising their existing catalogue of videos,
through clipping of content and re-mixing videos with related Key Video
Moments to drive more interest for both viewers and the social media
algorithms for their videos.
Crucially, we have now established repeatable sales patterns within industries
using case study data from our existing implementations, which is driving
further adoption by customers. This has also accelerated sales opportunities
for converting larger customers and larger deals, which we expect will drive
further acceleration in sales during 4Q24 and FY25. We are also seeing
increased levels of interest from digital marketing agencies to act as
strategic partners, as we offer a proprietary technology solution for their
clients that we consider neither they nor their competitors can offer.
Our fundraising in June 2024, has helped us to continue to invest in the team
and certain functionality to integrate our solutions into training and CRM
systems. We are grateful to all the shareholders who have supported us at each
stage of the Group's journey.
Outlook
The first three quarters of 2024 have demonstrated that our solutions meet a
growing market need, by delivering both increased yield from videos and the
ability to generate "new" content from existing video libraries. Our next
milestone is to achieve monthly cash flow breakeven, as well as creating
significant shareholder value by continuing to execute our plan and
capitalising on the market opportunity available for us.
Adrian Hargrave, CEO
September 30, 2024
Interim Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2024
Six months Six months Year ended
ended ended 31 December
30 June 2024 30 June 2023 2023
$ $ $
Unaudited Unaudited Audited
Revenue 1,099,375 1,129,508 2,051,384
Cost of sales (771,430) (851,376) (1,571,054)
Gross profit 327,945 278,132 480,330
Administrative expenses
- Share-based payments (55,571) (55,007) (109,924)
- Amortisation of intangibles (554,336) (1,073,459) (2,416,146)
- Impairment of goodwill - - (2,090,132)
- Other administrative costs (714,113) (684,087) (1,139,895)
Total administrative expenses (1,324,020) (1,812,553) (5,756,097)
Operating loss (996,075) (1,534,421) (5,275,767)
Other income - - -
Finance (expense) / income - - 5,728
Loss before tax (996,075) (1,534,421) (5,270,039)
Taxation - 99,382 129,584
Loss for the period (996,075) (1,435,039) (5,140,455)
Other comprehensive income
Exchange differences arising on translation of foreign operations (123,262) (86,966) (15,544)
Total comprehensive loss for the period (1,119,337) (5,124,911)
(1,522,005)
Earnings per share Cents Cents Cents
Basic (1.03) (1.50) (5.51)
Diluted (1.03) (1.50) (5.51)
Consolidated Statement of Financial Position as at 30 June 2024
At At At
30 June 30 June 31 December
2024 2023 2023
$ $ $
Unaudited Unaudited Audited
ASSETS
Non-current assets
Goodwill - 2,090,132 -
Other intangible assets 2,261,821 3,525,917 2,357,931
Other receivables 1,800 1,800 1,800
2,263,621 5,617,849 2,359,731
Current assets
Trade and other receivables 743,166 1,029,951 947,132
Cash and cash equivalents 1,152,380 2,070,824 1,060,864
1,895,546 3,100,775 2,007,996
TOTAL ASSETS 4,159,167 8,718,624 4,367,727
EQUITY AND LIABILITIES
Equity attributable to holders of the parent
Share capital 7,491,432 7,454,052 7,454,052
Share premium 10,865,584 10,180,736 10,180,736
Merger reserve 8,989,501 8,989,501 8,989,501
Share based payment reserve 1,400,224 1,288,600 1,343,517
Foreign exchange reserve (104,027) (83,275) 19,235
Retained profit (25,733,075) (21,031,583) (24,737,000)
Total Shareholders' Equity 2,909,639 6,796,031 3,250,041
Non-current liabilities
Deferred tax liability 17,408 47,611 17,408
17,408 47,611 17,408
Current liabilities
Trade and other payables 1,232,120 1,874,982 1,100,278
1,232,120 1,872,982 1,100,278
TOTAL EQUITY AND LIABILITIES 4,159,167 8,718,624 4,367,727
Interim Consolidated Statement of Changes in Equity
For the six months ended 30 June 2024
Share Share Merger Share based payment Reserve Foreign Exchange Reserve Retained Total
Capital Premium Reserve Profit
$ $ $ $ $ $ $
As at 31 December 2022 7,454,052 10,180,736 8,989,501 1,233,593 3,691 (19,596,545) 8,265,028
Share-based payment expense - - - 109,924 - - 109,924
Loss for the period - - - - - (5,140,455) (5,140,455)
Issuance of shares - - - - - - -
Other comprehensive income - - - - 15,544 - (3,445)
As at 31 December 2023 7,454,052 10,180,736 8,989,501 1,343,517 19,235 (24,737,000) 3,250,041
Share-based payment expense - - - 56,707 - - 56,707
Loss for the period - - - - - (996,075) (996,075)
Issuance of shares 37,380 684,848 - - - - 722,228
Other comprehensive income - - - - (124,062) - (124,062)
As at 30 June 2024 7,491,432 10,865,584 8,989,501 1,400,224 (104,027) (25,733,075) 2,909,639
Interim Consolidated Statement of Cash Flows
For the six months ended 30 June 2024
Six months Six months Year ended
ended ended 31 December 2023
30 June 2024 30 June 2023
$ $ $
Unaudited Unaudited Audited
Cash flows from operating activities
Loss before tax (996,075) (1,534,421) (5,270,039))
Adjustments for non-cash/non-operating items:
Amortisation of intangible assets 554,336 1,073,459 2,416,146
Impairment of goodwill - - 2,090,132
Share based payments 55,571 55,007 109,924
Interest paid / (received) - (5,728)
Operating cash flows before movements in working capital (386,168) (405,955) (659,565)
(Increase) / decrease in trade and other receivables 203,966 (216,823) (134,005)
(Decrease) / increase in trade and other payables 131,842 126,518 (646,191)
Cash generated by operations 335,808 (496,260) (1,439,761)
Income taxes paid - - -
Net cash used in operating activities (50,360) (496,260) (1,439,761)
Cash flows from investing activities
Purchase of intangibles (458,226) (675,060) (849,760)
Net cash used in investing activities (458,226) (675,060) (849,760)
Cash flows from financing activities
Proceeds from issue of shares 661,630 2,092,449 2,092,449
Interest received / (paid) - - -
Net cash generated by/(used in) financing activities 661,630 2,092,449 (197,072)
Net (decrease)/increase in cash and cash equivalents 153,044 921,129 (197,072)
Effect of exchange rates on cash (61,528) (86,968) 21,272
Cash and cash equivalents at the beginning of period 1,060,864 1,236,664 1,236,664
Cash and cash equivalents at end of period 1,152,380 2,070,824 1,060,864
Notes to the Interim Consolidated Financial Information
for the six months ended 30 June 2024
1 General information
The Group is a global media and technology platform that delivers Key Video
Moments and Video Commerce to transform its clients' video profitability.
The Company is a public limited company domiciled in the United Kingdom and
incorporated under registered number 10621059 in England and Wales. The
Company's registered office is 27-28 Eastcastle Street, London W1W 8DH.
2 Significant accounting policies
Basis of preparation and changes to the Group's accounting policies
The accounting policies adopted in the preparation of the interim consolidated
financial information are consistent with those of the preparation of the
Group's annual consolidated financial statements for the period ended 31
December 2023. No new IFRS standards, amendments or interpretations became
effective in the six months to 30 June 2024.
Statement of compliance
This interim consolidated financial information for the six months ended 30
June 2024 has been prepared in accordance with UK adopted International
Accounting Standards ("Adopted IFRSs"). This interim consolidated financial
information is not the Group's statutory financial statements and should be
read in conjunction with the annual financial statements for the period ended
31 December 2023, which have been prepared in accordance with Adopted IFRS and
have been delivered to the Registrar of Companies. The auditors have reported
on those accounts; their report was unqualified, although did include
references to the auditors drawing attention to a material uncertainty related
to going concern without qualifying their report and did not contain
statements under section 498(2) or (3) of the Companies Act 2006.
The interim consolidated financial information for the six months ended 30
June 2024 is unaudited. In the opinion of the Directors, the interim
consolidated financial information presents fairly the financial position, and
results from operations and cash flows for the period. Comparative numbers for
the six months ended 30 June 2023 are unaudited.
This interim consolidated financial information is presented in US Dollars
($), rounded to the nearest dollar.
Foreign currencies
Functional and presentational currency
Items included in this interim consolidated financial information are measured
using the currency of the primary economic environment in which each entity
operates which is considered by the Directors to be Pounds Sterling (£) for
the Parent Company and US Dollars ($) for all the Company's subsidiaries. This
interim consolidated financial information has been presented in US Dollars
which represents the dominant economic environment in which represents the
dominant economic environment in which the Group operates. The effective
exchange rate at 30 June 2024 was £1 = US$1.2664 (30 June 2023: £1 =
US$1.2714 and 31 December 2023: £1 = US$1.2747).
Critical accounting estimates and judgments
The preparation of interim consolidated financial information requires
management to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets and
liabilities and the reported amounts of income and expenses during the
reporting period. Although these estimates are based on management's best
knowledge of current events and actions, the resulting accounting estimates
will, by definition, seldom equal the related actual results.
In preparing this interim consolidated financial information, 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 2023,
together with the recognition of development expenditure, described below.
Development expenditure
The Group recognises costs incurred on development projects as an intangible
asset which satisfies the requirements of IAS 38. The calculation of the costs
incurred includes the percentage of time spent by certain employees and
contractors on relevant development projects. The decision whether to
capitalise and how to determine the period of economic benefit of development
projects requires an assessment of the commercial viability of the projects
and the prospect of selling the project to new or existing customers. During
the six months ended 30 June 2024, the Group capitalized $0.5 million of
development expenditure.
Going Concern
The directors have a reasonable expectation that the Group has adequate
resources to continue operating for the foreseeable future, and for this
reason they have adopted the going concern basis of preparation in the
consolidated interim financial statements.
3 Trade Payable and Receivables
The majority of trade payables and receivables relate to receivables from
YouTube and payables to creator partners. In addition, trade and other
payables includes accruals for expenses to be accrued during the year,
payments to consultants who are paid monthly in arrears and historic
liabilities of the acquired businesses that relate to payables more than two
years ago and the Group does not expect to need to pay.
4 Loss per share
The loss per share has been calculated using the loss for the period and the
weighted average number of ordinary shares outstanding during the period, as
follows:
Six months ended Six months ended Year ended
30 June 2024 30 June 2023 31 December
2023
Unaudited Unaudited Audited
Earnings attributable to shareholders of the Company ($)
(996,075) (1,435,039) (5,140,455)
Weighted average number of ordinary shares 95,451,309 93,345,815 93,345,815
Diluted weighted average number of ordinary shares 95,451,309 93,345,815 93,345,815
Loss per share (cents) (1.0) (1.5) (5.5)
Diluted loss per share (cents) (1.0) (1.5) (5.5)
5 Summary of Adjustments between Reported and Adjusted EBITDA and
Operating Profit
$ in 000s 1H24 Reported Adjustment 1H24 Adjusted
Revenues 1,099 - 1,099
Cost of Sales (771) - (771)
Gross Profit 328 - 328
Operating expenses (1,324) - (1,324)
Share based payments - 56 56
Other adjustments - 50 50
Operating Profit (996) 116 (880)
Amortisation - Development cost 554 - 554
EBITDA (442) - (326)
6 Publication of announcement and the Interim Results
A copy of this announcement will be available at the Company's registered
office (27-28 Eastcastle Street, London, W1W 8DH) from the date of this
announcement and on its website - seeen.com (http://www.seeen.com) . This
announcement is not being sent to shareholders.
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