REG - Silver Bullet Data - Interim Results
28/09/2023 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230928:nRSb9009Na&default-theme=true
RNS Number : 9009N Silver Bullet Data Services Grp PLC 28 September 2023
28 September 2023
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 2023.
Financial Highlights
Six months to June 2023 Six months to June 2022
Revenue £4.16m £2.33m
Gross Profit £3.34m £1.63m
EBITDA* (£1.19m) (£3.41m)
Reported Loss before tax £1.83m £3.79m
Earnings Per Share (£0.10) (£0.27)
*See note 3 of notes to the interim accounts
Operational Highlights
· For the six months to June 2023, Silverbullet experienced a period of strong
revenue growth, with revenue having increased by 79% to £4.16 million versus
H1 2022 (2022: £2.33m).
· Increased revenue driven by the expansion of services to established customer
base across the Group's three key markets of US, UK and APAC, alongside new
logo wins; notably, over 35% of Group revenue in the period was generated in
the US market.
· Revenue from '4D' Silverbullet's AI contextual data platform has grown by 122%
to £1.22m - driven predominantly by significant growth in the US market.
· Revenue from the Customer Experience Services unit has grown by 65% to £2.94m
- largely driven by growth with existing clients.
· Significantly reduced operating costs as a result of strong cost management
and the successful restructure of the 4D team in late 2022 as the platform
reached key milestones on the product development roadmap.
Ian James, Chief Executive, commented: "We are pleased with the continued
positioning and development of the Company and with our strong revenue growth
and the reduction in costs leading to a significantly improved overall
position in H1 2023.
We have strong visibility on full-year revenues and continue to carefully
manage our investment in talent and other operating costs. We are growing both
revenues and customer base in the US, where we believe there is significant
further potential, and look forward to increasing the proportion of total
revenue contribution in this market further in H2 2023. Whilst the demand by
companies for data and privacy services and products remains strong, we are
fully aware that the current global macro-economic environment remains
volatile and will run our business accordingly. At Silverbullet, we have
technology solutions that assist customers in achieving their marketing and
advertising objectives at lower cost and with higher returns and hence,
despite these challenging macro-economic conditions, we continue to see robust
demand from clients.
As the Company matures, we are steadily moving toward a position of positive
EBITDA in early FY24. As a result, the Board is optimistic about the outlook
and views 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 / Nick Lovering
IFC Advisory 020 3934 6630
Graham Herring / Tim Metcalfe / Florence Chandler 07793 839 024
Chief Executive Officer's Report
Silverbullet is pleased to report that it has delivered a strong set of
results for the first half of 2023 in line with management expectations,
delivering significant revenue growth whilst reducing its cost base when
compared to the six months to June 2022.
In the period, the Company achieved revenue growth of 79% versus H1 2022, with
revenues of £4.16 million. The Group has experienced growth across both
Customer Experience Services (CX) unit and 4D, its AI contextual data
platform. This growth has been achieved by expanding engagements with both new
and established clients across the Group's three key markets of US, UK and
APAC, as clients accelerate their data driven marketing transformations.
During the same period, whilst maintaining investment in key talent in the CX
Services division in order to deliver the revenue growth, the Company reduced
the overall operating costs by 8% to £4.98m. This has been achieved through
tight cost management and as a result of the successful restructure of the 4D
team in late 2022 in line with achieving product roadmap milestones.
As the business importance of customer data (accelerated by AI) continues to
increase, Silverbullet is well positioned as a leading Data-Driven Customer
Experience (CX) company. Silverbullet sits at the centre of the data ecosystem
to enable its clients such as Heineken, Mars, Sony and Omnicom to deliver
marketing transformation through unlocking the value of customer data,
marketing technology and AI driven advertising tools.
As consumer demand for data privacy increases, the Group enables its clients
to better communicate with their customers in a privacy first way whilst
maximising the marketing ROI from data and marketing technology.
The business is comprised of two divisions:
o Customer Experience (CX) Services: Professional services specialising in the
delivery of data transformations and customer journey orchestration on behalf
of global clients. Silverbullet's trusted data transformation experts enable
businesses to curate their CX strategies, utilising right data and marketing
technology in order to engage customers across a variety of digital marketing
channels (including owned and paid).
o 4D, AI contextual data Platform: The privacy-first AI contextual targeting and
insights platform that enables the delivery of display, video and CTV ad
campaigns in environments consumers trust. 4D brings together the most
advanced machine learning and AI technologies to help brands engage customers
at the right place, right time, and in the right moment - all the while
respecting their privacy and legal rights as consumers.
Customer Experience (CX) Services
Silverbullet's Customer Experience (CX) Services division achieved growth of
65% during the period with revenues growing to £2.94m. This has largely been
driven by securing additional contracts and increased scopes of work with
existing global clients. In particular, multi-brand international clients such
as Heineken, Sony and Mars continue to adopt more services from Silverbullet
as the Group expands its services offering, product suite and geographical
footprint.
Silverbullet's partnerships with a number of global enterprise-marketing
software companies, such as Salesforce and Snowflake, continue to thrive,
ensuring clients establish long-term transformational data infrastructures
which can be systematically replicated, with the help of Silvebullet CX
services, in additional geographical markets and new brands. This expansion,
in turn, provides Silverbullet with robust pipeline and services expansion
opportunities with new and established clients.
4D, AI contextual data platform
4D, Silverbullet's AI contextual data targeting and insights platform, has
delivered exceptional growth in the period, with revenues growing by 122%
versus H1 2022 to £1.22m. This has largely been driven by the managed service
offering in the US market. Having achieved maturity in the development of the
4D AI platform in late 2022, the Group is focusing its efforts and investment
on commercial growth opportunities as clients and their media agencies focus
on solutions for advertising privacy concerns whilst improving digital
advertising ROI.
Multiple clients regularly used the platform in the period, including a
leading insurance company, a global electronics manufacturer and a US
Government Body, providing a solid foundation for growth moving forward.
With the 4D AI contextual data platform, established management is now focused
on developing new client use-cases and partnerships, especially around Online
Video and Connected TV, opening up new revenue opportunities. In May 2023, the
Group announced its first 4D reseller contract with Silverpush Global Pte Ltd,
a global leader in cookieless and AI powered advertising solutions, with 18
offices worldwide. This partnership significantly increases 4Ds global sales
reach. A number of clients have started to test 4D via this partnership and a
pipeline of new clients is steadily building.
Outlook
We are pleased with the continued positioning and development of the Company
and with our strong revenue growth and the reduction in costs leading to a
significantly improved overall position in H1 2023.
We have strong visibility on full-year revenues and continue to carefully
manage our investment in talent and other operating costs. We are growing both
revenues and our customer base in the US, where we believe there is
significant growth potential, and look forward to increasing the proportion of
total revenue contribution in this market further in H2 2023. Whilst the
demand by companies for data and privacy services and products remain strong,
we are fully aware that the current global environment remains volatile and
will run our business accordingly. At Silverbullet, we have services and
technology solutions that assist customers in achieving their marketing and
advertising objectives at lower cost and with higher returns and hence,
despite these challenging macro-economic conditions, we continue to see robust
demand from clients.
As the Company matures, we are steadily moving toward a position of positive
EBITDA in early FY24. As a result, the Board is optimistic about the outlook
and views the future with confidence.
Ian James
Chief Executive Officer and Director
Consolidated Statement of Comprehensive Income
Note Six months ended 30 June 2023 Six months ended 30 June 2022
£ £
Revenue 3 4,163,247 2,331,391
Cost of sales (821,208) (704,336)
Gross profit 3,342,039 1,627,055
Other operating income - 23,587
Distribution costs (453,392) (372,669)
Administrative expenses (4,524,003) (5,051,431)
Operating loss (1,635,356) (3,773,458)
Finance expense (196,822) (19,776)
Loss before taxation (1,832,178) (3,793,234)
Taxation 167,331 146,173
Loss after taxation attributable to the equity shareholders of the company (1,664,847) (3,647,061)
Other comprehensive (loss) net of taxation
Currency translation differences (11,904) (32,966)
Total comprehensive loss for the year (1,676,751) (3,680,027)
Total comprehensive loss attributable to:
Shareholders of the company (1,680,718) (3,680,039)
Non-controlling interest 3,967 12
(1,676,751) (3,680,027)
Earnings per share
Basic earnings 5 (0.10) (0.27)
Diluted earnings 5 (0.10) (0.27)
Consolidated Statement of Financial Position
At 30 June 2023 At 31 December 2022 At 30 June 2022
Note £ £ £
Non-current assets
Goodwill 6 4,349,662 4,349,662 4,349,662
Intangible assets 6 2,226,359 2,544,739 2,501,680
Investments 4,999 4,999 -
Property, plant and equipment 46,230 53,809 53,616
Total non-current assets 6,627,250 6,953,209 6,904,958
Current assets
Trade and other receivables 3,109,469 2,487,844 2,836,163
Cash and cash equivalents 677,622 1,352,221 3,156,919
Total current assets 3,787,091 3,840,065 5,993,082
Total Assets 10,414,341 10,793,274 12,898,040
Current liabilities
Trade and other payables 2,547,803 2,311,754 2,475,649
Loans and other borrowings 372,462 41,227 36,237
Total current liabilities 2,920,265 2,352,981 2,511,886
Non-current liabilities
Loans and borrowings 2,324,121 1,797,992 1,633,751
Deferred tax liability 4 553,170 632,190 620,851
Total non-current liabilities 2,877,291 2,430,182 2,254,602
Total liabilities 5,797,556 4,783,163 4,766,488
Net assets 4,616,785 6,010,111 8,131,552
Equity
Share capital 8 159,367 159,367 159,167
Share premium 10,821,021 10,821,021 10,795,153
Share option reserve 9 2,570,666 2,396,396 1,671,767
Other reserves 440,695 398,954 -
Retained earnings (9,280,584) (7,679,183) (4,458,427)
Capital redemption reserve 50 50 50
Foreign exchange reserve (104,644) (92,741) (41,471)
Equity attributable to the equity shareholders of the company 4,606,571 6,003,864 8,126,239
Non-controlling interest 10,214 6,247 5,313
Total equity 4,616,785 6,010,111 8,131,552
Consolidated Statement of Cash Flows
Six months ended 30 June 2023 Six months ended 30 June 2022
£ £
Cash flows from operating activities
(Loss) after tax (1,664,847) (3,647,061)
Adjustments for:
Depreciation 15,200 14,891
Amortisation 431,668 353,307
Foreign exchange (11,903) (32,966)
Net finance expense 196,821 19,776
Taxation expense (167,331) (146,173)
Increase in trade and other receivables (621,625) (128,371)
(Decrease) / increase in trade and other payables 51,445 (388,215)
Share option charge 241,684 396,404
(Decrease) / increase in deferred tax liability (79,020) 72,959
Cash generated from operations (1,607,908) (3,485,449)
Taxation refunded 351,936 401,009
Net cash used in operating activities (1,255,972) (3,084,440)
Cash flows from investing activities
Purchase of property, plant and equipment (7,621) (26,391)
Purchase of intangible assets (113,288) (648,245)
Net cash used in investing activities (120,909) (674,636)
Cash flows from financing activities
Proceeds from borrowings 711,010 1,510,282
Repayments of borrowings (20,296) -
Equity in convertible loan notes issued 41,741 -
New equity issued (net of transaction costs) - 1,737,680
Interest paid (30,173) (19,776)
Net cash from financing activities 702,282 3,228,186
Net increase in cash and cash equivalents (674,599) (530,890)
Cash and cash equivalents at beginning of period 1,352,221 3,687,809
Cash and cash equivalents at end of period 677,622 3,156,919
Consolidated Statement of Changes in Equity attributable to the shareholders
Share Capital Share premium Share Option Reserve Other reserves Retained earnings Capital redemption reserve Foreign exchange reserve Total equity attributable to shareholders Non-controlling interest Total equity
£ £ £ £ £ £ £ £
As at 1 January 2022 134,227 8,639,593 1,275,363 - (811,354) 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 1,671,767 - (4,458,427) 50 (41,471) 8,126,239 5,313 8,131,552
Total comprehensive loss for the period - - - - (3,575,906) - (51,270) (3,627,176) 934 (3,626,242)
Convertible loan notes issued - - - 398,954 - - - 398,954 - 398,954
Share option charge - - 1,079,779 - - - - 1,079,779 - 1,079,779
Share options exercised 200 - (46,739) - 46,739 - - 200 - 200
Share options forfeited/lapsed - - (308,411) - 308,411 - - - - -
Shares issued during period (net of transaction costs) - 25,868 - - - - - 25,868 - 25,868
As at 31 December 2022 159,367 10,821,021 2,396,396 398,954 (7,679,183) 50 (92,741) 6,003,864 6,247 6,010,111
Total comprehensive loss for the period - - - - (1,668,815) - (11,903) (1,680,718) 3,967 (1,676,751)
Share option charge - - 241,684 - - - 241,684 - 241,684
Share options forfeited/lapsed - - (67,414) - 67,414 - - - - -
Convertible loan notes issued - - - 41,741 - - - 41,741 - 41,741
As at 30 June 2023 159,367 10,821,021 2,570,666 440,695 (9,280,584) 50 (104,644) 4,606,571 10,214 4,616,785
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 The Harley
Building, 77 New Cavendish Street, London, W1W 6XB.
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
UK adopted International Accounting Standards (IAS) 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.
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.
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 2025 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.
Whilst the directors have plans in place to manage any reasonably foreseeable
circumstances, they forecast there will be a need for additional funding in
the short-term. The directors are confident that the Group will be able to
raise any required funds to meet their strategic objectives however there is
an uncertainty over how much funding may be raised when required. However as
securing new funding cannot be assured, a material uncertainty exists related
to the group or company's ability to continue as a going concern.
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 or will be able to
secure 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 and
intangible assets.
REVENUE RECOGNITION
IFRS 15 - Revenue from Contracts with Customers has been applied for all
periods presented within the financial statements. The timing of all revenue
recognised by the Group during the reporting period was satisfied 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.
During the period under review the Group recognised revenue from the following
activities:
Customer Experience 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 contextual targeting and insights platform
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.
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.
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 the internally developed platform held by the
group which is 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 are incurred unevenly during the financial year are accrued or
deferred in the interim report only if it would be appropriate to do so at the
end of the financial year.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of these financial statements requires the Directors to make
estimates and judgements that affect the reported amounts of assets,
liabilities, costs and revenue in the financial statements. 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:
Amortisation
The assessment of the useful economic lives, residual values and the method of
depreciating or amortising intangible (excluding goodwill) fixed assets
requires judgement. Amortisation is 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.
Impairment of intangible fixed assets
Impairment tests have been undertaken in respect of goodwill and intangible
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.
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.
Critical accounting judgements:
Convertible loan note
The equity portion of the convertible loan notes in issue have been valued
using the Black-Scholes model. This gives equivalent discount rates on the
liability components ranging from 16% to 21%. The directors consider these
rates to be an approximation of the rate on a similar loan without the
conversion feature.
Going concern
As discussed more fully in the Directors' Report 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 two 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 2023 Six months ended 30 June 2022
Revenue Gross profit Revenue Gross profit/(loss)
£ £ £ £
Customer Experience Services 2,939,841 2,881,498 1,780,598 1,636,471
4D Platform 1,223,406 460,541 550,793 (9,416)
Total 4,163,247 3,342,039 2,331,391 1,627,055
EBITDA from continuing operations
Operating (loss) (1,635,356) (3,773,458)
Depreciation and amortisation 446,868 368,198
Total (1,188,488) (3,405,260)
4. 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 change 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 £98,064 (June 2022: £150,000) are held within other
receivables.
5. 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 2023 Six months ended 30 June 2022
£ £
Total losses after taxation attributable to shareholders 1,668,814 3,647,073
Number of shares
Weighted average number of ordinary shares 15,936,687 13,630,520
Dilutive effect of in-the-money share options 523,218 547,960
Diluted weighted average number of shares 16,459,905 14,178,480
Earnings per share
Basic earnings per share (0.10) (0.27)
Diluted earnings per share (0.10) (0.27)
As there is a loss for the year the options are antidilutive and therefore the
basic and the diluted EPS are the same.
6. Goodwill and intangible assets
Customer lists Development Costs Websites Goodwill Total
£ £ £ £ £
COST
At 1 January 2022 595,708 2,480,154 17,850 4,349,662 7,443,374
Additions - 643,100 5,145 - 648,245
At 30 June 2022 595,708 3,123,254 22,995 4,349,662 8,091,619
At 1 July 2022 595,708 3,123,254 22,995 4,349,662 8,091,619
Additions - 450,817 - - 450,817
At 31 December 2022 595,708 3,574,071 22,995 4,349,662 8,542,436
At 1 January 2023 595,708 3,574,071 22,995 4,349,662 8,542,436
Additions - 113,288 - - 113,288
At 30 June 2023 595,708 3,687,359 22,995 4,349,662 8,655,724
AMORTISATION
At 1 January 2022 362,790 521,502 2,678 - 886,970
Amortisation charge 74,464 276,801 2,042 - 353,307
At 30 June 2022 437,254 798,303 4,720 - 1,240,277
At 1 July 2022 437,254 798,303 4,720 - 1,240,277
Amortisation charge 74,463 330,996 2,299 - 407,758
At 31 December 2022 511,717 1,129,299 7,019 - 1,648,035
At 1 January 2023 511,717 1,129,299 7,019 - 1,648,035
Amortisation charge 74,464 354,904 2,300 - 431,668
At 30 June 2023 586,181 1,484,203 9,319 - 2,079,703
NET BOOK VALUE
At 30 June 2022 158,454 2,324,951 18,275 4,349,662 6,851,342
At 31 December 2022 83,991 2,444,772 15,976 4,349,662 6,894,401
At 30 June 2023 9,527 2,203,156 13,676 4,349,662 6,576,021
7. Loans and other borrowings
30 June 2023 31 December 2022 30 June 2022
£ £ £
Current liabilities
Bank loans 372,462 41,227 36,237
372,462 41,227 36,237
30 June 2023 31 December 2022 30 June 2022
£ £ £
Non-current liabilities
Convertible loan notes 2,237,569 1,687,697 1,507,000
Bank loans 86,552 110,295 126,750
2,324,121 1,797,992 1,633,750
As at 30 June 2023 the Group had two bank loans totalling £459,014 (June
2022: £151,522). One loan accrues interest at 1.95% per annum repayable over
six years to 2026, the other loan balance is payable in equal instalments over
a period of six months accruing annual interest rates ranging from 10.9% to
11.2%.
Convertible loan notes totalling £500,000 were issued during the reporting
period which are convertible into new ordinary shares at the price of £0.50
per new ordinary share at any point during the three-year term of the loan.
The loan notes attract interest at a rate of 12% per annum, which is payable
commencing on the date of issue either:
i) at the Company's option of 8% per annum paid
monthly plus 4% payable via the issue of additional Convertible Loan Notes as
payment in kind.
ii) 12% payable via the issue of additional
Convertible Loan Notes as payment in kind.
The loan notes may be redeemed in cash at the option of company at any point
at a premium equal to 15% of the principal amount of the Notes.
The equity element of the convertible loan note is recognised within other
reserves. Market interest rates of between 14% and 21% has been applied to
calculate the residual equity value of the financial instrument.
8. Share capital
During the six months ended 30 June 2023 no new shares were issued (six months
to June 2022: 2,494,000 shares at a share price of £1.00). Share capital in
issue during the current and comparative periods are listed below:
30 June 2023 31 December 2022 30 June 2022
Ordinary share capital No. £ No. £ No. £
Issued and fully paid
Ordinary 15,936,687 159,367 15,936,687 159,367 15,916,687 159,167
15,936,687 159,367 15,936,687 159,367 15,916,687 159,167
9. Share Option Reserve
30 June 2023 31 December 2022 30 June 2022
£ £ £
Share Option reserve 2,570,666 2,396,396 1,671,767
2,570,666 2,396,396 1,671,767
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 2023 31 December 2022 30 June 2022
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 1.49 1,569,620 1.56 1,679,607 1.56 1,679,607
Forfeited/expired during period 0.05 (26,760) 1.50 (198,987) - -
Granted during period - - 0.27 109,000 - -
Exercised during period - - 0.01 (20,000) - -
Outstanding at end of period 1.52 1,542,860 1.49 1,569,620 1.56 1,679,607
10. Related party transactions
Local Planet International Limited: is a related party to the group by virtue
of having Directors in common. Nigel Sharrocks, Ian James and Martyn Rattle
are directors of both companies.
Recharges for shared services totalling £49,384 (June 2022: £23,070) are
included in revenue for the six months ended 30 June 2023. Amounts outstanding
at the period end included in trade receivables totals £9,831 (June 2022:
£29,178).
Recharges for direct costs incurred were processed during the six months ended
30 June 2023 totalling £27,600 (June 2022: £31,664). Amounts outstanding at
the period end totalled £5,400 (June 2022: £35,395).
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 June 2023
totalling £nil (June 2022: £25,627). All amounts outstanding were settled
before the reporting date 30 June 2023 (June 2022: £nil).
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 (June 2022: £150,000).
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR SELFMWEDSEIURecent news on Silver Bullet Data Services
See all newsREG - Silver Bullet Data - Holding(s) in Company
AnnouncementREG - Silver Bullet Data - Trading Update
AnnouncementREG - Silver Bullet Data - 4D AI Integration with Global Demand-Side Platform
AnnouncementREG - Silver Bullet Data - New contract wins and positive trading EBITDA
AnnouncementREG - Silver Bullet Data - Acquisition
Announcement