REG - Silver Bullet Data - Interim Results
27/09/2022 07:00
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RNS Number : 7073A Silver Bullet Data Services Grp PLC 27 September 2022
27 September 2022
Silver Bullet Data Services Group plc
("Silverbullet" or the "Company", or, together with its subsidiaries, the
"Group")
Interim Results
Silverbullet (AIM: SBDS), a provider of digital transformation services and
products, is pleased to announce interim results for the six months to 30
June 2022.
Financial Highlights
Six months to June 2022 Six months to June 2021
Revenue £2.33m £1.67m
Gross Profit £1.63m £1.24m
Headline Loss before tax* £3.40m £2.97m
Reported Loss before tax £3.79m £3.93m
Earnings Per Share (£0.27) (£0.44)
*Headline results are calculated before exceptional items and share option
charges
Operational Highlights
· Revenue of £2.33 million, with revenue growth up by 40 per cent
compared to H1 2021 and in line with management expectations.
· 12 new multi-market services client wins in the period including
Mars, Britbox and Entain Group.
· Further consolidation of existing services clients with additional
contract wins from Heineken, ITV and Channel 4.
· Continued technical development and enhancement of '4D',
Silverbullet's contextual insights and targeting platform, including
enhancements of the programmatic video and YouTube offering in line with
market demand.
· Despite previous reported headwinds resulting from Google's
continued delays on cookie deprecation, 4D revenue growth is in line with
management expectations and is driven by evolving client demands around
consumer data privacy. Contextual managed services for 4D are in increasing
demand to meet more complex data privacy client requirements.
· Launch of a strategic partnership and entity with Making Science
Group S.A., enabling access to new clients, services and Google ad tech and
data products such as YouTube and DV360.
· In June 2022 the Group secured additional funding of £4.6 million
in order to bolster its balance sheet and support the growth of Silverbullet's
4D product and sales.
Ian James, Chief Executive, commented: "I am very pleased to report
that Silverbullet has delivered solid results for the period, delivering
significant revenue growth, adding substantial new clients, expanding further
into the US and LatAm and continuing development of our 4D product and revenue
streams. The privacy first data transformation market is continuing to
mature and accelerate which is presenting the Company with additional
opportunities to expand our client base. We continue to perform in line with
management expectations and look forward to the future with confidence."
For further information please contact:
Silverbullet via IFC
Ian James (CEO)
Strand Hanson Limited - Financial and Nominated Adviser 0207 409 3494
James Spinney / James Bellman / Robert Collins
Oberon Capital - Broker 0203 179 5344
Mike Seabrook / Chris Crawford
IFC Advisory 020 3934 6630
Graham Herring / Tim Metcalfe / Florence Chandler 07793 839 024
About Silverbullet
Silverbullet's proprietary 4D advertising solution is designed to help
advertisers target consumers in a "post cookie world". The product is a
natural extension to its existing services business which already serves a
blue-chip client base such as Heineken, Channel 4, Amazon and ITV amongst many
others. The removal of third-party cookies has already been implemented by web
browsers such as Firefox and Safari, with Google expected to phase out the use
of cookies in 2023.
Headquartered in London, the Group employs 74 employees across five regions
across the globe, including, the UK, Italy, Germany, Australia and the US. The
Group continues to look at other opportunities for expansion worldwide.
The Company has an established and growing services business with significant
accumulated industry experience and a proven track record of delivering
strategic projects and activation services to its clients. The majority of the
Board have held senior positions at global software companies and have
significant industry experience across data engineering, SAAS product
development and marketing.
The Group has close technical and commercial partnerships with Salesforce,
Oracle and Adobe, all of which have existing sales channels and are already
delivering to clients.
The Group has established a strategic partnership and an entity with Local
Planet, a scaled network of over 60 agencies across the globe. Local Planet
Data Services Limited was established in December 2020 and presents a
significant opportunity to provide data services and the 4D product to the
Local Planet agency network.
Chief Executive Officer's Report
Silverbullet (the "Company", or, together with its subsidiaries, the "Group")
has delivered solid results for the first half of 2022, delivering significant
revenue growth, adding substantial new clients and continuing development of
our 4D product and revenue streams. The performance is in line with management
expectations, despite Google announcing a delay in cookie deprecation by 12
months, which we believe had a detrimental impact on the speed of uptake of
the 4D contextual advertising product by media agencies.
Silverbullet is a data and digital transformation company that seeks to
deliver future-proofed solutions for the privacy-first, first-party data era
in marketing and digital advertising. The Group operates two business units
serving clients, technology partners and media agency networks globally.
· Data-driven transformation services business: our expert services
help clients deliver data privacy-first, customer-centric marketing. This
includes first-party data strategy and customer journey advisory services,
marketing technology implementation and integration engineering, ongoing
Martech and data managed services.
· '4D' proprietary contextual data product business: a contextual
insights and targeting platform designed to help clients meet the challenges
posed by the privacy-first post-cookie era. 4D enables improved contextual
targeting in a fully data privacy compliant way and is integrated into the
programmatic ecosystem with a strong focus on online video (including
YouTube). 4D is available in both a self-serve and managed service capacity to
clients and their media agencies.
The Group has delivered solid revenue growth, up by 40 per cent. compared to
H1 2021.
The growth is derived from both our data driven transformation services
business and our 4D contextual platform. In our data driven transformation
services business, we have continued to add new clients, consolidate existing
clients and expand geographically during the period.
4D has contributed well to the overall revenue growth, as the market shifts to
contextual and first-party ID solutions an increase in media agency (a key
channel to market) testing and usage has occurred. Media agencies have
increasingly required the provision of a contextual managed service, which we
are able to provide utilising our existing capability. We continue to
integrate 4D into other technology platforms which provides a growing
"passive" revenue stream.
Data transformation services.
During H1 2022, we have secured 12 new client wins. We have also consolidated
and extended contracts with a number of our key existing clients including ITV
and Channel 4. These new wins, and the current visible pipeline and forward
bookings, gives us confidence for H2 2022, but we remain aware that the
worsening macro-economic environment in which our clients are operating could
negatively affect this.
One of the most significant wins was Mars Inc., where Silverbullet became a
key global partner for first‐party data services, including the
implementation of first‐party data strategy working closely with Salesforce
Marketing cloud. Heineken continues to be an important customer for the Group,
and we secured expanded renewals with all our key regional Heineken
partnerships across EMEA, North America and LatAm.
Our continued key partnership with Salesforce and Treasure Data provides
market leading technology collaboration, enabling us to grow existing clients,
and win new clients. In H1 2022 we successfully leveraged these partnerships
and our current global client footprint to open the US and Latin American
Services office based in New York City. Our services offering now sits
alongside our US and Latin American operations for 4D, positioning us well for
future client growth in this significant region.
4D - Proprietary contextual data product.
4D is Silverbullet's emerging proprietary contextual data product. After
successful testing in 2021, 4D is gaining traction in the market with multiple
clients and agencies, and despite initial headwinds revenues are in line with
management expectations. Scaled global clients and media agency networks are
using 4D in two key ways: insight generation on consumer online behaviour, and
contextual targeting for video and display programmatic advertising; all
executed in a consumer privacy-first non-cookie based way.
4D has established three key routes to market:
1) technology partners such as demand-side and supply-side platforms
(DSPs and SSPs);
2) a strategic partnership and entity with Local Planet, a global
independent media agency network of over 60 agencies; and
3) direct sales to global network media agencies (e.g. Publicis and WPP)
and global clients.
These channels to market provide a solid foundation for scaling what is now a
multi-geography and multi-language product which solves the key problem of
consumer insight and digital advertising targeting in the privacy-first,
post-cookie era.
In H1 2022, we successfully launched 4D for YouTube. As the world's largest
video platform, YouTube now opens new potential 4D spends as brands continue
to shift traditional TV investment into online video. 4D is now available for
advertising spend across programmatic display, video, and YouTube as a managed
service (as well as the original self-serve platform). This managed service
offering is attractive to media agencies who are increasingly under pressure
to deliver more complex data privacy compliant solutions using contextual data
for their clients.
Outlook
The board is pleased with the solid start to the year and with our performance
and continued development of the Group during H1 2022.
We have material visibility on full-year revenues and continue to carefully
manage our investment in talent and other operating costs so that we can
achieve our EBITDA targets. We are however not immune to the challenging
macro-economic environment which may have a negative impact on marketing
investment in H2 2022 and into 2023. The management team remain optimistic
that any such negative correction in overall marketing investment would only
engender further investment in data driven transformation initiatives for
significant marketers to the benefit of the Group's business model.
I would like to thank all of our staff and management for their continued
dedication and successes over H1 2022. I look forward with optimism as to what
we can achieve during the rest of this year and into 2023.
Ian James
Chief Executive Officer and Director
Consolidated Statement of Comprehensive Income
Note Six months ended 30 June 2022 Six months ended 30 June 2021
£ £
Revenue 3 2,331,391 1,668,894
Cost of sales (704,336) (424,093)
Gross profit 1,627,055 1,244,801
Other operating income 23,587 4,006
Distribution costs (372,669) (227,729)
Administrative expenses (5,051,431) (4,412,008)
Exceptional items 4 - (508,821)
Operating loss (3,773,458) (3,899,751)
Finance expense (19,776) (33,777)
Loss before taxation (3,793,234) (3,933,528)
Taxation 146,173 145,085
Loss after taxation attributable to the equity shareholders of the company (3,647,061) (3,788,443)
Other comprehensive income / (loss) net of taxation
Currency translation differences (32,966) (78,109)
Total comprehensive loss for the year (3,680,027) (3,866,552)
Total comprehensive loss attributable to:
Shareholders of the company (3,680,039) (3,866,552)
Non-controlling interest 12 -
(3,680,027) (3,866,552)
Earnings per share
Basic earnings 6 (0.27) (0.44)
Diluted earnings 6 (0.27) (0.44)
Consolidated Statement of Financial Position
At 30 June 2022 At 31 December 2021 At 30 June 2021
Note £ £ £
Non-current assets
Goodwill 7 4,349,662 4,349,662 4,330,222
Intangible assets 7 2,501,680 2,206,742 1,675,821
Property, plant and equipment 53,616 42,115 56,953
Total non-current assets 6,904,958 6,598,519 6,062,996
Current assets
Trade and other receivables 2,836,163 2,264,972 1,787,809
Cash and cash equivalents 3,156,919 3,687,809 8,649,818
Total current assets 5,993,082 5,952,781 10,437,627
Total Assets 12,898,040 12,551,300 16,500,623
Current liabilities
Trade and other payables 2,475,649 2,609,028 3,287,249
Loans and other borrowings 36,237 16,061 -
Total current liabilities 2,511,886 2,625,089 3,287,249
Non-current liabilities
Loans and borrowings 1,633,751 143,644 194,216
Deferred tax liability 5 620,851 547,892 318,406
Total non-current liabilities 2,254,602 691,536 512,622
Total liabilities 4,766,488 3,316,625 3,799,871
Net assets 8,131,552 9,234,675 12,700,752
Equity
Share capital 9 159,167 134,227 134,190
Share premium 10,795,153 8,639,593 8,642,511
Share option reserve 10 1,671,767 1,275,363 812,332
Retained earnings (4,458,427) (811,354) 3,134,556
Capital redemption reserve 50 50 50
Foreign exchange reserve (41,471) (8,505) (22,887)
Equity attributable to the equity shareholders of the company 8,126,239 9,229,374 12,700,752
Non-controlling interest 5,313 5,301 -
Total equity 8,131,552 9,234,675 12,700,752
Consolidated Statement of Cash Flows
Six months ended 30 June 2022 Six months ended 30 June 2021
£ £
Cash flows from operating activities
(Loss) after tax from continuing operations (3,647,061) (3,788,443)
Adjustments for:
Depreciation 14,891 21,056
Amortisation 353,307 201,982
Foreign exchange (32,966) (78,109)
Net finance expense 19,776 33,777
Taxation expense (146,173) (145,085)
Increase in trade and other receivables (128,371) (64,529)
(Decrease) / increase in trade and other payables (388,215) (64,874)
Share option charge 396,404 457,636
Increase in deferred tax liability 72,959 94,485
Cash generated from operations (3,485,449) (3,332,104)
Taxation refunded 401,009 225,106
Net cash used in operating activities (3,084,440) (3,106,998)
Cash flows from investing activities
Purchase of property, plant and equipment (26,391) (41,069)
Purchase of intangible assets (648,245) (635,086)
Net cash used in investing activities (674,636) (676,155)
Cash flows from financing activities
Proceeds from borrowings 1,510,282 5,646
New equity issued (net of transaction costs) 1,737,680 11,806,310
Interest paid (19,776) (33,777)
Net cash from financing activities 3,228,186 11,778,179
Net increase in cash and cash equivalents (530,890) 7,995,026
Cash and cash equivalents at beginning of period 3,687,809 654,792
Cash and cash equivalents at end of period 3,156,919 8,649,818
Consolidated Statement of Changes in Equity attributable to the shareholders
Share Capital Share premium Retained earnings Share Option Reserve Capital redemption reserve Foreign exchange reserve Total equity attributable to shareholders Non-controlling interest Total equity
£ £ £ £ £ £ £
As at 1 January 2021 8,256 35,387,853 (32,240,404) 1,192,653 - (44,999) 4,303,359 - 4,303,359
Total comprehensive loss for the period - - (3,888,664) - - 22,112 (3,866,552) - (3,866,552)
Share buyback and cancellation (50) - - - 50 - - - -
Bonus issue of shares 87,255 (87,255) - - - - - - -
Capital reduction - (38,425,667) 38,425,667 - - - - - -
Share option charge - - 457,636 - - 457,636 - 457,636
Share options exercised 275 1,700 470,983 (470,983) - - 1,975 - 1,975
Share options forfeited - - 366,974 (366,974) - - - - -
Shares issued during the period (net of transaction costs) 38,454 11,765,880 - - - - 11,804,334 - 11,804,334
As at 30 June 2021 134,190 8,642,511 3,134,556 812,332 50 (22,887) 12,700,752 - 12,700,752
Total comprehensive loss for the period - - (4,627,268) - - 14,382 (4,612,886) 5,251 (4,607,635)
Non-controlling interest in subsidiary - - - - - - - 50 50
Share option charge - - - 1,144,389 - - 1,144,389 - 1,144,389
Share options exercised 37 17,411 (1,450) 1,450 - - 17,448 - 17,448
Share options forfeited/lapsed - - 682,808 (682,808) - - - - -
Shares issued during period (net of transaction costs) - (20,329) - - - - (20,329) - (20,329)
As at 31 December 2021 134,227 8,639,593 (811,354) 1,275,363 50 (8,505) 9,229,374 5,301 9,234,675
Total comprehensive loss for the period - - (3,647,073) - - (32,966) (3,680,039) 12 (3,680,027)
Share option charge - - - 396,404 - - 396,404 - 396,404
Shares issued during period (net of transaction costs) 24,940 2,155,560 - - - - 2,180,500 - 2,180,500
As at 30 June 2022 159,167 10,795,153 (4,458,427) 1,671,767 50 (41,471) 8,126,239 5,313 8,131,552
Notes to the interim accounts
1. Description of business, basis of preparation and going
concern
GENERAL INFORMATION
Silver Bullet Data Services Group PLC ("SBDS") was incorporated on 13 May
2013. SBDS is a limited liability company incorporated in England and Wales
and domiciled in the UK. The address of the registered office is Studio 44
The Finsbury Business Centre, 40 Bowling Green Lane, London, EC1R 0NE.
The principal activity of the SBDS Group is marketing services through the
application of big data technologies to reduce friction.
BASIS OF PREPARATION
The interim consolidated financial statements have been prepared in accordance
with International Accounting Standard (IAS) 34, Interim Financial Reporting.
These interim financial statements have been prepared in accordance with those
International Accounting Standards in conformity with the requirements of the
Companies Act 2006 and IFRIC interpretations issued and effective or issued
and early adopted as at the time of preparing these statements (July 2022).
These consolidated interim financial statements have been prepared in
accordance with the accounting policies set out below, which have been
consistently applied to all the periods presented. These accounting policies
comply with applicable International Accounting Standards in conformity with
the requirements of the Companies Act 2006 and IFRIC interpretations issued
and effective at the time of preparing these statements.
The preparation of these interim financial statements in accordance with
International Accounting Standards in conformity with the requirements of the
Companies Act 2006 requires the use of certain accounting estimates. It also
requires management to exercise judgement in the process of applying the
Group's accounting policies. The areas involving a high degree of judgement or
complexity, or areas where the assumptions and estimates are significant to
the consolidated interim financial statements are disclosed in Note 2.
The financial information contained in this report, which has not been
audited, does not constitute statutory accounts as defined by Section 434 of
the Companies Act 2006.
The presentational currency of the Group is GBP with functional currencies of
the subsidiaries being GBP, EUR, AUD, and USD.
GOING CONCERN
The directors have prepared detailed budgets and forecasts covering the period
to 31 December 2024 which are based on the strategic business plan. These take
into account all reasonably foreseeable circumstances and include
consideration of trading results, cash flows and the level of facilities the
group requires on a month-by-month basis.
On 20 June 2022 the company secured additional funding of £4.6m in order to
bolster its balance sheet and support the growth of Silverbullet's 4D product
sales during 2022. The funding was comprised of £2,494,000 of equity at a
price of £1 per share and £2,106,000 of convertible loan notes with an
interest rate of 12%. The successful funding was a key element of the
strategic business plan.
Based on their enquiries and the information available to them and taking into
account the other risks and uncertainties set out herein, the directors have a
reasonable expectation that the company and the group has adequate resources
to continue operating for the foreseeable future. Thus, they continue to adopt
the going concern basis of accounting in preparing this financial information.
2. Significant accounting policies
SIGNIFICANT ACCOUNTING ESTIMATES AND ASSUMPTIONS
The preparation of the interim financial statements in accordance with IFRS
requires the use of estimates and assumptions to be made in applying the
accounting policies that affect the reported amounts of assets, liabilities,
revenue and expenses and the disclosure of contingent assets and
liabilities. The estimates and related assumptions are based on previous
experiences and other factors considered reasonable under the circumstances,
the results of which form the basis for making the assumptions about the
carrying values of assets and liabilities that are not readily apparent from
other sources.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period or in the period
of the revision and future periods if the revision affects both current and
future periods.
Significant accounts that require estimates as the basis for determining the
stated amounts include performance obligations surrounding revenue recognition
and the valuation assumptions in calculating the impairment of goodwill.
REVENUE RECOGNITION
IFRS 15 - Revenue from Contracts with Customers has been applied for all
periods presented within the historical financial information. The timing of
all revenue recognised by the Group during the reporting period was
transferred over time in accordance with IFRS 15 recognition criteria. None of
the Group's activities result in the transfer of control of a product at a
point in time for revenue recognition purposes.
No individual customer accounted for more than 10% of revenue.
During the period under review the Group recognised revenue from the following
activities:
Data transformation services
Revenue relating to service contracts is invoiced according to milestones
defined within each contract, the terms of which vary on a case-by-case basis.
In all cases the revenue is recognised in line with the provision of the
services or, where the quantum and timing of the services cannot be reliably
predicted, rateable over the period of the agreement.
Invoices against services contracts are raised on a monthly basis with
adjustments for accrued or deferred income where the agreed invoicing
timescale does not match the valuation of provision of services.
4D outcomes engine
Amounts received or receivable for campaigns, typically invoiced on a monthly
basis, recognise revenue in proportion to the quantum of advertising units
delivered according to the contracted service. Units and metrics deliverable
under each contracted services will vary on a case-by-case basis.
BUSINESS COMBINATIONS
Silver Bullet Data Services Group PLC applies the acquisition method of
accounting to account for business combinations in accordance with IFRS 3,
'Business Combinations'.
The consideration transferred for the acquisition of a subsidiary is the fair
values of the assets transferred, the liabilities incurred and the equity
interests issued by Silver Bullet Data Services Group PLC. The consideration
transferred includes the fair value of any asset or liability resulting from a
contingent consideration arrangement. Identifiable assets acquired and
liabilities and contingent liabilities assumed in a business combination are
measured initially at their fair values at the acquisition date. The excess of
the consideration transferred over the fair value of Silver Bullet Data
Services Group PLC's share of the identifiable net assets acquired is recorded
as goodwill. All transaction related costs are expensed in the period they are
incurred as exceptional operating expenses.
TAXES
Corporation tax, where payable, is provided on taxable profits at the current
rate.
Deferred tax is provided on all temporary differences at the reporting date
between the tax bases of assets and liabilities and their carrying amounts for
financial reporting purposes.
Deferred tax assets are recognised for all deductible temporary differences,
carry-forward of unused tax assets and unused tax losses, to the extent that
it is probable that taxable profit will be available against which the
deductible temporary differences, and the carry-forward of unused tax assets
and unused tax losses can be utilised. The carrying amount of deferred tax
assets is reviewed at each balance sheet date and reduced to the extent that
it is no longer probable that sufficient taxable profit will be available to
allow all or part of the deferred tax asset to be utilised.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to offset current tax assets against current tax
liabilities, and when the deferred tax assets and liabilities relate to taxes
levied by the same taxation authority on either the taxable entity or
different taxable entities where there is an intention to settle the balances
on a net basis.
Deferred tax assets and liabilities are measured at the tax rates that are
expected to apply to the year when the asset is realised or the liability is
settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the balance sheet date.
FOREIGN CURRENCY TRANSLATION
Transactions in currencies other than the functional currency (foreign
currencies) are initially recorded at the exchange rate prevailing on the date
of the transaction.
Monetary assets and liabilities denominated in foreign currencies are
translated at the rate of exchange ruling at the reporting date. Non-monetary
assets and liabilities denominated in foreign currencies are translated at the
rate ruling at the date of the transaction, or, if the asset or liability is
measured at fair value, the rate when that fair value was determined.
All translation differences are taken to profit or loss, except to the extent
that they relate to gains or losses on non-monetary items recognised in other
comprehensive income, when the related translation gain or loss is also
recognised in other comprehensive income.
INTANGIBLE ASSETS AND GOODWILL
Goodwill
Goodwill is initially measured at fair value, being the excess of the
aggregate of the consideration transferred over the fair value of the net
assets acquired, and any previous interest held over the net identifiable
assets acquired and liabilities assumed. After initial recognition, goodwill
is measured at cost less any accumulated impairment losses. The goodwill is
tested annually for impairment irrespective of whether there is an indication
of impairment.
For the purposes of impairment testing, goodwill is allocated to the
cash-generating units expected to benefit from the acquisition.
Cash-generating units to which goodwill has been allocated are tested for
impairment at least annually, or more frequently when there is an indication
that the unit may be impaired. If the recoverable amount of the
cash-generating unit is less than the carrying amount of the unit, the
impairment loss is allocated first to reduce the carrying amount of any
goodwill allocated to the unit and then to the other assets of the unit
pro-rata on the basis of the carrying amount of each asset in the unit.
Intangible assets (other than goodwill)
Intangible assets acquired separately from a business are recognised at cost
and are subsequently measured at cost less accumulated amortisation and
accumulated impairment losses. Intangible assets acquired on business
combinations are recognised separately from goodwill at the acquisition date
if the fair value can be measured reliably.
Amortisation is recognised so as to write off the cost or valuation of assets
less their residual values over their useful lives on the following bases:
Development costs - Straight line basis over 5 years
Customer lists - Straight line basis over 4 years
PROPERTY PLANT AND EQUIPMENT
Property, plant and equipment are stated at cost net of accumulated
depreciation and accumulated impairment losses. Cost comprises purchase cost
together with any incidental costs of acquisition.
Depreciation is provided to write down the cost less the estimated residual
value of all tangible fixed assets by equal instalments over their estimated
useful economic lives on a straight-line basis. The following rates are
applied:
Computer equipment - Straight line over 3 years
Fixtures, fittings and equipment - Reducing balance over 4 years
IMPAIRMENT OF NON-CURRENT ASSETS
At each reporting period end date, the Group reviews the carrying amounts of
its tangible and intangible assets to determine whether there is any
indication that those assets have suffered an impairment loss. If any such
indication exists, the recoverable amount of the asset is estimated in order
to determine the extent of the impairment loss (if any). Where it is not
possible to estimate the recoverable amount of an individual asset, the
company estimates the recoverable amount of the cash-generating unit to which
the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in
use. In assessing value in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the
asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated
to be less than its carrying amount, the carrying amount of the asset (or
cash-generating unit) is reduced to its recoverable amount. An impairment loss
is recognised immediately in the statement of comprehensive income.
Recognised impairment losses are reversed if, and only if, the reasons for the
impairment loss have ceased to apply. Where an impairment loss subsequently
reverses, the carrying amount of the asset (or cash-generating unit) is
increased to the revised estimate of its recoverable amount, but so that the
increased carrying amount does not exceed the carrying amount that would have
been determined had no impairment loss been recognised for the asset (or
cash-generating unit) in prior years. A reversal of an impairment loss is
recognised immediately in profit or loss.
RESEARCH AND DEVELOPMENT EXPENDITURE
Research expenditure is written off against profits in the year in which it is
incurred. Identifiable development expenditure is capitalised to the extent
that the technical, commercial and financial feasibility can be demonstrated.
Development costs relate to a number of platforms developed internally by the
group which are expected to generate future revenue streams.
FINANCIAL INSTRUMENTS
Silver Bullet Data Services Group PLC classifies financial instruments, or
their component parts, on initial recognition as a financial asset, a
financial liability or an equity instrument in accordance with the substance
of the contractual arrangement. Financial instruments are recognised on the
date when the Group becomes a party to the contractual provisions of the
instrument. Financial instruments are recognised initially at fair value plus,
in the case of a financial instrument not a fair value through profit and
loss, transaction costs that are directly attributable to the acquisition or
issue of the financial instrument. Financial instruments are derecognised on
the settlement date when the Group is no longer a party to the contractual
provisions of the instrument.
Non-derivative financial instruments comprise trade
and other receivables, cash and cash equivalents, loans and borrowings, and
trade and other payables.
Trade and other receivables and trade and other payables
Trade and other receivables are recognised initially at transaction price less
attributable transaction costs. Trade and other payables are recognised
initially at transaction price plus attributable transaction costs. Subsequent
to initial recognition they are measured at amortised cost using the effective
interest method, less any expected credit losses in the case of trade
receivables. If the arrangement constitutes a financing transaction, for
example if payment is deferred beyond normal business terms, then it is
measured at the present value of future payments discounted at a market rate
of interest for a similar debt instrument.
Contract assets
Contract assets are recognised when revenue is recognised but payment is
conditional on a basis other than the passage of time. Contract assets are
included in trade and other receivables.
Contract liabilities
Contract liabilities are recognised when payment from a customer is received
in advance of performance obligations being satisfied. Contract liabilities
are recognised in trade and other payables.
Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at the present value of
future payments discounted at a market rate of interest. Subsequent to initial
recognition, interest-bearing borrowings are stated at amortised costs using
the effective interest method, less any impairment losses.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits. Bank
overdrafts that are repayable on demand form an integral part of the Group's
cash management and are included as a component of cash and cash equivalents
for the purpose only on the cash flow statement.
Convertible loan notes
Liability instruments that are convertible into equity shares either
mandatorily or at the option of the holder, are split into liability and
equity components. The liability element is determined by the fair value of
the cash flows excluding any equity component; with the residual assigned to
equity.
PROVISIONS
A provision is recognised in the statement of financial position when the
Group has a present legal or constructive obligation as a result of a past
event, that can be reliably measured and it is probable that an outflow of
economic benefits will be required to settle the obligation. Provisions are
determined by discounting the expected future cash flows at a pre-tax rate
that reflects risks specific to the liability. Where the effect of the time
value of money is material, the amount expected to be required to settle the
obligation is recognised at present value. When a provision is measured at
present value, the unwinding of the discount is recognised as a finance cost
in profit or loss in the period in which it arises.
EMPLOYEE BENEFITS
During the period the Group operated a defined contribution money purchase
pension scheme under which it pays contributions based upon a percentage of
the members' basic salary. The Group also paid other employee benefits
including medical insurance.
All employee benefits are charged to the Statement of Comprehensive Income and
differences between contributions payable in the year and contributions
actually paid are shown as either accruals or prepayments.
LEASES
The Group leases a number of properties in various locations in Europe,
Australia, USA, and the UK from which it operates.
All leases are accounted for by recognising a right-of-use asset and a lease
liability except for:
- Leases of low value assets; and
- Leases with a duration of twelve months or less.
All leases signed by the Group during the reporting period were for a period
of less than twelve months so no right-of-use assets have been recognised.
GRANT INCOME
Grant income is recognised where there is reasonable assurance that the grant
will be received, and all attached conditions will be complied with. When the
grant relates to an expense item, it is recognised as income on a systematic
basis over the periods that the related costs, for which it is intended to
compensate, are expensed. When the grant relates to an asset, it is recognised
as income in equal amounts over the expected useful life of the related asset.
SHARE-BASED PAYMENTS
The Group operates a share option programme which allows employees of the
subsidiary companies to be granted options to purchase shares in this company.
The fair value of options granted is recognised as an employment expense with
a corresponding increase in equity.
The particular terms of the share options state that they can only be
exercised by employees in the event of an exit where the company is either
sold to a third party, wound up or floated on a public stock exchange. The
fair value of the options is measured at the grant date and spread over the
vesting period. The fair value is measured based on an option pricing model
taking into account the terms and conditions upon which the instruments were
granted.
Vesting periods in each share option agreement vary from vesting immediately
on grant date to vesting over a period of four years.
FINANCE INCOME AND EXPENSES
Finance expenses comprise interest payable and leases liabilities recognised
in the statement of comprehensive income using the effective interest method,
and unwinding of the discount on provisions.
Interest income and interest payable are recognised in the statement of
comprehensive income as they accrue, using the effective interest method.
INTERIM MEASUREMENT
Costs that incur unevenly during the financial year are anticipated or
deferred in the interim report only if it would also be appropriate to
anticipate or defer such costs at the end of the financial year.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of the historical financial information requires the Directors
to make estimates and judgements that affect the reported amounts of assets,
liabilities, costs and revenue in the historical financial information. Actual
results could differ from these estimates. The judgements, estimates and
associated assumptions are based on historical experience and other factors
that are considered to be relevant.
Key sources of estimation uncertainty that could cause an adjustment to be
required to the carrying amount of assets or liabilities within the next
accounting period are:
Critical accounting estimates:
Depreciation and amortisation
The assessment of the useful economic lives, residual values and the method of
depreciating or amortising tangible and intangible (excluding goodwill) fixed
assets requires judgement. Depreciation and amortisation are charged to profit
or loss based on the useful economic life selected, which requires an
estimation of the period and profile over which the group expects to consume
the future economic benefits embodied in the assets. Useful economic lives and
residual values are re-assessed, and amended as necessary, when changes in
their circumstances are identified.
Capitalised development costs
Development costs incurred in building the Group's key platform for future
expansion have been capitalised in accordance with the requirements of IAS38.
The majority of these costs consist of salary expenses to which an estimated
proportion of development time has been applied.
Critical accounting judgements:
Impairment of trade receivables
The Group's policy on recognising an impairment of the trade receivables
balance is based on a review of individual receivable balances, their ageing
and management's assessment of realisation. This review and assessment is
conducted on a continuing basis and any material change in management's
assessment of trade receivable impairment is reflected in the carrying value
of the asset.
Impairment of intangible and tangible fixed assets
Impairment tests have been undertaken in respect of goodwill, intangible and
tangible fixed assets using an assessment of the value in use of the
respective cash generating units (CGUs). This assessment requires a number of
assumptions and estimates to be made including the allocation of assets of
CGUs, the expected future cash flows from each CGU and also the selection of a
suitable discount rate in order to calculate the present value of those cash
flows. Impairments of intangible assets are explained in more detail at note
12.
Going concern
These financial statements have been prepared on the going concern basis. This
treatment is based on management's judgement that cashflow requirements for
the continued development can be achieved through operating activities and
through additional fundraising if required.
3. Operating segments
IFRS 8 requires that operating segments be identified on the basis of internal
reporting and decision-making. The Group has three key business segments
outlined below. The business analyses these streams by revenue and gross
margin. Overheads, assets and liabilities are not separately allocated
across the business streams.
Six months ended 30 June 2022 Six months ended 30 June 2021
Revenue Gross profit/(loss) Revenue Gross profit/(loss)
£ £ £ £
Data transformation services 1,780,598 1,636,471 1,656,110 1,385,646
4D outcomes engine 550,793 (9,416) 12,784 (140,845)
Total 2,331,391 1,627,055 1,668,894 1,244,801
EBITDA from continuing operations
Operating (loss) (3,773,458) (3,899,751)
Depreciation and amortisation 368,198 223,038
Total (3,405,260) (3,676,713)
4. Exceptional items
Six months ended 30 June 2022 Six months ended 30 June 2021
£ £
Professional fees relating to the IPO - 508,821
- 508,821
5. Income tax
A deferred tax asset in respect of the Group's
cumulative losses to date has not been recognised due to the uncertainty of
the timing of future loss relief. Deferred tax movements during the period
relate solely to the increase in value of internally generated intangible
fixed assets.
Research and development tax relief claims under the SME scheme are submitted
at each financial year end. Anticipated tax credits for the period under
review totalling £180,000 are held within other debtors.
6. Earnings per share
Earnings per share (EPS) is calculated on the basis of profit attributable to
equity shareholders divided by the weighted average number of shares in issue
for the year. The diluted EPS is calculated on the treasury stock method and
the assumption that the weighted average EMI share options outstanding during
the period are exercised.
Six months ended 30 June 2022 Six months ended 30 June 2021
£ £
Total losses after taxation attributable to shareholders 3,647,061 3,788,443
Number of shares
Weighted average number of ordinary shares 13,630,520 8,516,470
Dilutive effect of in-the-money share options 547,960 1,624,517
Diluted weighted average number of shares 14,178,480 10,140,987
Earnings per share
Basic earnings per share (0.27) (0.44)
Diluted earnings per share (0.27) (0.44)
As the group is loss making options are not dilutive and therefore the diluted
EPS is the same as the basic EPS.
7. Goodwill and intangible assets
Customer lists Development Costs Goodwill Total
£ £ £ £
COST
At 1 January 2021 595,708 1,058,170 4,330,222 5,984,100
Additions - 635,086 - 635,086
At 30 June 2021 595,708 1,693,256 4,330,222 6,619,186
At 1 July 2021 595,708 1,693,256 4,330,222 6,619,186
Additions - 804,748 19,440 824,188
At 31 December 2021 595,708 2,498,004 4,349,662 7,443,374
At 1 January 2022 595,708 2,498,004 4,349,662 7,443,374
Additions - 648,245 - 648,245
At 30 June 2022 595,708 3,146,249 4,349,662 8,091,619
AMORTISATION
At 1 January 2021 213,863 197,298 - 411,161
Amortisation charge 74,464 127,518 - 201,982
At 30 June 2021 288,327 324,816 - 613,143
At 1 July 2021 288,327 324,816 - 613,143
Amortisation charge 74,463 199,364 - 273,827
At 31 December 2021 362,790 524,180 - 886,970
At 1 January 2022 362,790 524,180 - 886,970
Amortisation charge 74,464 278,843 - 353,307
At 30 June 2022 437,254 803,023 - 1,240,277
NET BOOK VALUE
At 30 June 2021 307,381 1,368,440 4,330,222 6,006,043
At 31 December 2021 232,918 1,973,824 4,349,662 6,556,404
At 30 June 2022 158,454 2,343,226 4,349,662 6,851,342
8. Loans and other borrowings
During the period ended 30 June 2022 the Group issued convertible loan notes
totalling £1,507,000. Loan notes are convertible to ordinary shares by the
note holder at any point and may be converted by the Group on a sale. The loan
notes are repayable after three years and interest accrues on these loan notes
at a rate of 12%.
30 June 2022 31 December 2021 30 June 2021
£ £ £
Current liabilities
Bank loans 36,237 16,061 -
36,237 16,061 -
30 June 2022 31 December 2021 30 June 2021
£ £ £
Non-current liabilities
Bank loans 126,750 143,644 194,216
Convertible loan notes 1,507,000 - -
1,633,750 143,644 194,216
9. Share capital
During the six months ended 30 June 2022 2,494,000 new shares were issued at a
share price of £1.00. Share capital in issue during the current and
comparative periods are listed below:
30 June 2022 31 December 2021 30 June 2021
Ordinary share capital No. £ No. £ No. £
Issued and fully paid
Ordinary 15,916,687 159,167 13,422,687 134,227 13,418,982 134,190
15,916,687 159,167 13,422,687 134,227 13,418,982 134,190
10. Share Option Reserve
30 June 2022 31 December 2021 30 June 2021
£ £ £
Share Option reserve 1,671,767 1,275,363 812,332
1,671,767 1,275,363 812,332
Silver Bullet Data Services Group PLC operates a programme for employees of
its subsidiaries to acquire shares in the company under an EMI scheme.
The number and weighted average exercise price of share options during the
year were as follows:
30 June 2022 31 December 2021 30 June 2021
Weighted average exercise price Share options Weighted average exercise price Share options Weighted average exercise price Share options
£ No. £ No. £ No.
Outstanding at start of period 1.56 1,679,607 1.65 1,709,984 3.05 250,153
Forfeited/expired during period - - (1.27) (116,006) (0.89) (128,761)
Granted during period - - 1.27 87,186 1.34 1,618,496
Exercised during period - - (0.30) (1,557) (0.37) (29,904)
Outstanding at end of period 1.56 1,679,607 1.56 1,679,607 1.65 1,709,984
11. Related party transactions
Local Planet International Limited: is a related party to the group by virtue
of having Directors in common. Ian James, Martyn Rattle and Nigel Sharrocks
are directors of both companies.
Recharges for shared services totalling £23,070 (six months to 30 June 2021:
£nil) are included in revenue for the six months ended 30 June 2022. Amounts
outstanding at the period end included in trade receivables totals £29,178
(six months to 30 June 2021: £nil).
Recharges for direct costs incurred were processed during the six months ended
30 June 2022 totalling £31,664 (six months to 30 June 2021: £nil). Amounts
outstanding at the period end totalled £35,395 (six months to 30 June 2021:
£nil).
Fluency Media Limited: is a related party to the group by virtue of having
Directors in common. Ian James is a director of both companies. Consultancy
services were provided during the six months ended 30 June 2022 totalling
£nil (six months to 30 June 2021: £90,000). There were no amounts
outstanding at the reporting date (six months to 30 2021: £nil). All of these
services were provided prior to listing in June 2021.
Marmalade Consultants Limited: is a related party to the group by virtue of
having Directors in common. Martyn Rattle is a director of both companies.
Consultancy services were provided during the six months ended 30 June 2022
totalling £25,627 (six months to 30 June 2021: £17,920). Amounts outstanding
as at 30 June 2022 totalled £nil (six months to 30 June 2021: £10,752).
Educated Solutions Limited: is a related party to the group by virtue of
having Directors in common. Ian James and Martyn Rattle are directors of both
companies. Revenue recognised for services provided to the company during the
six months ended 30 June 2022 totalled £nil (six months to 30 June 2021:
£10,800). Expenses were also recognised in respect of services provided
totalling £3,462 (six months to 30 June 2021: £nil). All amounts outstanding
were paid in full by the reporting date.
Umberto Torrielli: A director of the Group company relocated to the USA in
order to establish a new presence in this territory in 2020. For this purpose
a loan was issued of £150,000 which is held within other debtors at the end
of the reporting period (six months to 30 June 2021: £150,000).
Made by Brittan Limited: was a related party to the group by to the group by
virtue of having Directors in common. Jeff Thomas was a director of both
companies, this relationship ceased in April 2021 following the related
Director's resignation from Silver Bullet Data Services Group Plc. Consultancy
services were provided during the six months ended 30 June 2021 totalling
£22,800. All amounts outstanding were paid by the reporting date.
Purple Lime Accountancy Limited: was a related party to the group by virtue of
having Directors closely related to Jeff Thomas, a former Director of the
Group. This relationship ceased in April 2021 following the related Director's
resignation from Silver Bullet Data Services Group Plc. Accountancy and
finance services continued to be provided and during the six months ended 30
June 2021 these services totalled £69,559. Amounts outstanding as at 30 June
2021 totalled £7,177.
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