REG - Silver Bullet Data - Interim Results
11/09/2024 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:20240911:nRSK6360Da&default-theme=true
RNS Number : 6360D Silver Bullet Data Services Grp PLC 11 September 2024
11 September 2024
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 AI driven digital transformation
services and products, is pleased to announce interim results for the six
months to 30 June 2024.
Cash generated from operations, current record bookings and committed revenue,
on target to achieve an EBITDA positive run rate from October onwards.
Financial Highlights
Six months to June 2024 Six months to June 2023
Revenue £4.4m £4.2m
Gross Profit £3.3m £3.3m
EBITDA* (£0.9m) (£1.2m)
Reported Loss before tax (£1.6m) (£1.8m)
Earnings Per Share -0.08p -0.10p
*See note 3 of notes to the interim accounts
Highlights
· Confident of achieving an EBITDA positive run rate from October
onwards
· Continued strong revenue growth over 2023, excluding one-time
discontinued business
· Repeatable services business up 32% for H1 24 versus H1 23
· 4D AI revenues up 17% for H1 24 versus H1 23
· 4D AI integrations into other platforms expected to drive further
strong growth in H2 24
· Global and US Client revenues increased to 57% versus 47% in H1
23
· Cash generated from operations of £0.2m in H1 24 (-£1.3m H1 23)
· Narrowing EBITDA loss
· Total bookings and committed revenues as of 31 August 2024 are
£8.6m (versus £7.1m in the period to 31 August 2023, 21% increase)
year-on-year being greater than last year's full-year revenue of £8.3m
Ian James, Chief Executive, commented:
"We are delighted with the continued progress and positioning of the Company,
as well as our strong revenue growth entering the second half of the year.
With the objective of achieving a consistent positive EBITDA run rate, the
Board took the decision in the first half to focus on higher margin long-term
repeatable business and decided to discontinue previous lower margin projects.
The second half of the year started particularly strongly with new global
contracts and, as a result, we have strong visibility on full-year revenues,
having already surpassed the total revenue for FY23 by the end of August FY24.
At the same time, we continue to carefully manage our investments in talent
and operational costs.
"With the Company reporting a positive cash flow position in the first half of
FY24 and confident of achieving an EBITDA positive run rate from October
onwards, the Board remains particularly optimistic about the future of the
business."
For further information please contact:
Silverbullet via IFC
Ian James (CEO) / Chris Ellis (CFO)
Strand Hanson Limited - Financial and Nominated Adviser 0207 409 3494
James Spinney / James Bellman / Robert Collins
Zeus Capital Limited - Joint Broker 0203 829 5000
Simon Johnson / Jake Walker
CMC Markets - Joint Broker 0203 003 8632
Douglas Crippen
IFC Advisory 020 3934 6630
Graham Herring / Tim Metcalfe / Florence Chandler 07793 839 024
Chief Executive Officer's Report
Silverbullet is pleased to announce a positive performance for the first half
of 2024, meeting management's expectations for the period combined with a
particularly strong start to the second half. Alongside revenue growth, the
Company has achieved key milestones, including reaching positive operating
cash flow in the first half and total bookings of £8.6 million by the end of
August which already surpasses the total revenue recorded for the entire FY23
whilst maintaining a consistent cost base.
The Company's growth and key milestones demonstrate its focus on building
long-term, repeatable business, particularly with global and US clients.
Notably, revenue contributions from these regions increased to 57%, compared
to 47% during the same period in FY23. This strategy is driving robust growth
by expanding the scope of work with existing clients and securing over 20 new
scalable, long-term client engagements in the first half of the year.
During this period, the Company achieved overall revenue growth of 5.1%
compared to H1 2023, reaching £4.4 million. With a focus on achieving a
positive EBITDA run rate, the Board took the decision to focus on higher
margin long-term repeatable business and decided to discontinue previous lower
margin projects. As a result, after discontinuing several one-off clients from
the previous year, who were not deemed repeatable, the Company saw a
like-for-like growth of 32% in its CX services business and 17% in its 4D AI
division, compared to the first half of FY23. This success stems from
deepening engagements with both new and existing clients across its three key
markets: the US, UK, and APAC, as companies accelerate their data-driven
marketing transformations.
In February, the Company announced an extended contract with Mars Petcare US
("Mars"), which provides pet nutrition, health, and veterinary services as
part of Mars, Incorporated. Silverbullet extended its partnership with Mars
for the third consecutive year, from January to December 2024. In this
extended collaboration, the Company will be broadening its support to Mars
across three primary workstreams, specifically dedicated to the implementation
of AI driven first party customer data intelligence.
In March, Silverbullet announced new contract wins and renewals worth, in
aggregate, £1.7 million. It secured a renewed contract with Heineken, a
Global Dutch multinational brewing company with a presence in over 70
countries and ownership of 165 breweries. As Heineken's trusted data services
partner, Silverbullet will serve as a multi-regional resource for first-party
data services, overseeing the implementation of a comprehensive first-party
customer data strategy and implementation. In addition, Silverbullet
successfully renewed its 2023 contract and secured a new contract with a
leading pub retailer and brewer in the UK. Silverbullet is collaborating
closely to deliver transformative solutions, leveraging AI and digital
strategies to enhance their operations.
As customer data, enhanced by AI, becomes increasingly vital to businesses,
Silverbullet is well-positioned as a leading Data-Driven Customer Experience
(CX) company. Operating at the heart of the data ecosystem, Silverbullet
enables clients like Heineken, Mars, Sony, and Omnicom to drive marketing
transformation by unlocking the value of first-party customer data, marketing
technology, and AI-powered advertising tools.
With growing consumer demand for data privacy, Silverbullet helps its clients
communicate with their customers in a privacy-first manner, while maximising
marketing ROI through optimised use of data and marketing technology.
The business is comprised of two divisions:
Customer Experience (CX) Services Suite
Strategic Consultancy & Managed Services
· Our strategic consultants combine key digital capabilities with
industry expertise, bridging the gap between marketing data and technology in
complex client environments.
Customer Experience (CX) Product Studio
4D AI & Silverbullet Cloud
· Rooted in privacy and driven by powerful AI and the industry's
most robust data, the Silverbullet Cloud is made up of a portfolio of owned
and operated data tools and platforms which empower global brands to
personalize every single customer journey, driving better ROI for digital
marketing spend.
CX Services:
Silverbullet's Customer Experience (CX) Services division achieved impressive
growth of 32% (excluding discontinued one-off clients) during the period, with
revenues increasing to £2.9 million. This growth was driven by securing
additional contracts, expanding the scope of work with existing global and US
clients, and winning 20 new clients. Notably, multi-brand international
clients like Heineken, Mars, and Omnicom Group continue to adopt more services
from Silverbullet, benefiting from the Group's expanding service offerings,
product suite, and growing geographical footprint.
Compared to the same period last year, the Company's top three clients
experienced revenue growth of 19%, 41%, and 60%, respectively. Additionally,
Silverbullet secured a major contract with a global confectionery company,
granting the company a worldwide mandate to lead its data transformation
strategy.
Silverbullet's partnerships with global enterprise marketing software
companies such as Salesforce, Treasure Data, and Braze continue to thrive.
These partnerships enable clients to build long-term, transformational data
infrastructures that can be systematically replicated with the support of
Silverbullet's CX services and Cloud data products across new geographical
markets and brands. This expansion, in turn, provides Silverbullet with a
robust pipeline and significant opportunities to further grow services with
both new and existing clients.
4D, AI Contextual Data Platform and Silverbullet Cloud
4D, Silverbullet's AI contextual data targeting and insights platform, has
delivered continued growth in the period, with revenues growing by 17% versus
H1 2023 to £1.5m, with bookings by the end of August exceeding the total
revenue booked in whole of FY 23. This has been driven by a combination of the
managed service offering in the US market, and the increasing recurring
revenue generated by 4D integrations in partner technology platforms. These 4D
data revenues from partner integrations increased 33% year on year and have
established a strong platform for scaling in second half of the year and into
FY25. During the period the company secured seven data integrations with
scaled partners in the digital advertising space.
Multiple clients regularly used the platform in the period, including Coca
Cola, Marriott, Disney, Sunkist and Burger King providing a solid foundation
for growth moving forward.
Board Changes
In April, Chris Ellis joined Silverbullet as Group CFO and Company
Secretary. Chris Ellis is a qualified chartered accountant and an
accomplished, target-driven senior executive with extensive experience gained
from leading complex global private equity and publicly owned businesses. His
industry expertise spans Financial Services, Healthcare, Technology/SAAS, and
Oil & Gas sectors, ranging from enterprises with turnover exceeding $1.5
billion and 2,500 employees to smaller businesses with turnovers less than
$100 million and 50 employees.
AnnaMaria Khan-Rubalcaba was also appointed as a new Non-Executive Director,
who brings extensive senior-level experience in marketing technology and AI
services. AnnaMaria serves as Chief Executive of HYD, an Omnicom Group Digital
Product Agency, for over five years, from January 2019 to the present. Prior
to her role as Chief Executive, she held the position of Managing Director,
where she contributed to the operational and managerial aspects of the agency.
Her insights have already proved invaluable to Silverbullet's progress in AI
and further development of its 4D data platform.
Outlook
We are pleased with the continued progress and positioning of the Company, as
well as our strong revenue growth, driven by a focus on long-term, repeatable
engagements with global and US clients. As privacy regulations tighten, with
75% (https://iapp.org/news/a/identifying-global-privacy-laws-relevant-dpas)
(1) of the world's population now covered by privacy-first legislation, we are
seeing increasing global demand for Silverbullet's data products and CX
services.
The Company remains committed to delivering world-class value to both current
and new clients through data-driven business transformation. We will also
continue to expand our integrations with partner technology platforms and grow
the licensing of our 4D AI data offering. In August, we secured a significant
contract for 4D AI integration with one of the world's largest programmatic
self-service advertising platforms, which handles US$9.6 billion in annual
transactions.
We have strong visibility on full-year revenues, having already surpassed the
total revenue for FY23 by the end of August FY24. At the same time, we
continue to carefully manage our investments in talent and operational costs.
With the Company reporting a positive cash flow position in the first half of
FY24 and confident of achieving an EBITDA positive run rate from October
onwards, the Board remains optimistic about the future of the business.
Source: 1) IAPP Global Privacy Laws Analysis
(https://iapp.org/news/a/identifying-global-privacy-laws-relevant-dpas)
Consolidated Statement of Comprehensive Income
Note Six months ended 30 June 2024 Six months ended 30 June 2023
£ £
Revenue 3 4,373,521 4,163,247
Cost of sales (1,027,854) (821,208)
Gross profit 3,345,667 3,342,039
Personnel costs (2,793,256) (3,298,230)
Depreciation and amortisation (380,664) (453,392)
Other operating expenditure (1,443,671) (1,225,773)
Operating loss (1,271,924) (1,635,356)
Finance expense (288,854) (196,822)
Loss before taxation (1,560,778) (1,832,178)
Taxation 126,991 167,331
Loss after taxation attributable to the equity shareholders of the company (1,433,787) (1,664,847)
Other comprehensive (loss) net of taxation
Currency translation differences 51,200 (11,904)
Total comprehensive loss for the year (1,382,587) (1,676,751)
Total comprehensive loss attributable to:
Shareholders of the company (1,381,306) (1,680,718)
Non-controlling interest (1,281) 3,967
(1,382,587) (1,676,751)
Earnings per share
Basic earnings 5 (0.08) (0.10)
Diluted earnings 5 (0.08) (0.10)
Consolidated Statement of Financial Position
At 30 June 2024 At 31 December 2023 At 30 June 2023
Non-current assets Note £ £ £
Goodwill 6 4,349,662 4,349,662 4,349,662
Intangible assets 6 1,681,416 1,963,343 2,226,359
Investments 4,999 4,999 4,999
Property, plant and equipment 36,242 35,269 46,230
Total non-current assets 6,072,319 6,353,273 6,627,250
Current assets
Trade and other receivables 3,126,984 3,333,562 3,109,469
Cash and cash equivalents 803,014 677,855 677,622
Total current assets 3,929,998 4,011,417 3,787,091
Total Assets 10,002,317 10,364,690 10,414,341
Current liabilities
Trade and other payables 3,489,126 2,833,856 2,547,803
Loans and other borrowings 7 390,563 425,002 372,462
Total current liabilities 3,879,689 3,258,858 2,920,265
Non-current liabilities
Loans and borrowings 7 2,967,448 2,621,472 2,324,121
Deferred tax liability 4 420,353 487,991 553,170
Total non-current liabilities 3,387,801 3,109,463 2,877,291
Total liabilities 7,267,490 6,368,321 5,797,556
Net assets 2,734,828 3,996,369 4,616,785
Equity
Share capital 8 174,754 173,908 159,367
Share premium 11,776,216 11,742,897 10,821,021
Share option reserve 9 2,405,747 2,433,195 2,570,666
Other reserves 454,246 451,432 440,695
Retained earnings (11,988,204) (10,667,211) (9,280,584)
Capital redemption reserve 50 50 50
Foreign exchange reserve (90,414) (141,615) (104,644)
Equity attributable to the equity shareholders of the company 2,732,395 3,992,656 4,606,571
Non-controlling interest 2,433 3,713 10,214
Total equity 2,734,828 3,996,369 4,616,785
Consolidated Statement of Cash Flows
Six months ended 30 June 2024 Six months ended 30 June 2023
£ £
Cash flows from operating activities
Total comprehensive loss for the year (1,382,587) (1,676,751)
Adjustments for:
Depreciation 11,516 15,200
Amortisation 369,148 431,668
Net finance expense 288,855 196,821
Taxation expense (126,991) (167,331)
Currency translation differences (51,200) 11,904
Increase in trade and other receivables 189,895 (621,625)
(Decrease) / increase in trade and other payables 706,468 39,542
Share option charge 84,066 241,684
(Decrease) / increase in deferred tax liability (67,638) (79,020)
Cash generated from operations 21,532 (1,607,908)
Taxation refunded 143,675 351,936
Net cash used in operating activities 165,207 (1,255,972)
Cash flows from investing activities
Purchase of property, plant and equipment (12,490) (7,621)
Purchase of intangible assets (87,220) (113,288)
Net cash used in investing activities (99,710) (120,909)
Cash flows from financing activities
Proceeds from borrowings 110,937 711,010
Repayments of borrowings (56,394) (20,296)
Share options exercised 34,166 -
Equity in convertible loan notes issued 2,814 41,741
Interest paid (31,861) (30,173)
Net cash from financing activities 59,662 702,282
Net increase in cash and cash equivalents 125,159 (674,599)
Cash and cash equivalents at beginning of period 677,855 1,352,221
Cash and cash equivalents at end of period 803,014 677,622
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 2023 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)
Convertible loan notes issued - - - 41,741 - - - 41,741 - 41,741
Share option charge - - 241,684 - - - 241,684 - 241,684
Share options forfeited/lapsed - - (67,414) - 67,414 - - - - -
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
Total comprehensive loss for the year - - - - (1,500,335) - (36,971) (1,537,306) (6,501) (1,543,807)
Convertible loan notes issued - - - 10,737 - - - 10,737 - 10,737
Share option charge - - (23,763) - - - - (23,763) - (23,763)
Share option exercised 255 - (65,316) - 65,316 - - 255 - 255
Share options lapsed - - (48,392) - 48,392 - - - - -
Shares issued during period (net of transaction costs) 14,286 921,876 - - - - - 936,162 - 936,162
As at 31 December 2023 173,908 11,742,897 2,433,195 451,432 (10,667,211) 50 (141,615) 3,992,656 3,713 3,996,369
Total comprehensive loss for the period - - - - (1,432,507) - 51,200 (1,381,307) (1,280) (1,382,587)
Convertible loan notes issued - - - 2,814 - - - 2,814 - 2,814
Share option charge - - 84,066 - - - 84,066 - 84,066
Share option exercised 846 33,320 - - - - - 34,166 - 34,166
Share options forfeited/lapsed - - (111,514) - 111,514 - - - - -
As at 30 June 2024 174,754 11,776,217 2,405,747 454,246 (11,988,204) 50 (90,415) 2,732,395 2,433 2,734,828
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 2026 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.
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.
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
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.
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.
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:
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 to 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.
Critical accounting judgements:
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.
Convertible loan notes
The equity portion of the convertible loan notes have been valued using the
Black-Scholes model. This gives equivalent discount rates on the liability
components ranging from 14% to 21%. The directors consider this rate to be an
approximation of the rate on a similar loan without the conversion feature.
The directors consider this method is used as a practical measure to estimate
the value of the debt.
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 2024 Six months ended 30 June 2023
Revenue Gross profit Revenue Gross profit/(loss)
£ £ £ £
Customer Experience Services 2,946,459 2,929,032 2,939,841 2,881,498
4D Platform 1,427,062 416,635 1,223,406 460,541
Total 4,373,521 3,345,667 4,163,247 3,342,039
EBITDA
Operating (loss) (1,271,924) (1,635,356)
Depreciation and amortisation 380,664 453,392
Total (891,260) (1,181,964)
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 £60,000 (June 2023: £98,064) 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 2024 Six months ended 30 June 2023
£ £
Total comprehensive loss attributable to shareholders (1,381,306) (1,680,718)
Number of shares
Weighted average number of ordinary shares 17,413,830 15,936,687
Dilutive effect of in-the-money share options 547,654 523,218
Diluted weighted average number of shares 17,961,484 16,459,905
Earnings per share
Basic earnings per share (0.08) (0.10)
Diluted earnings per share (0.08) (0.10)
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 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
At 1 July 2023 595,708 3,687,359 22,995 4,349,662 8,655,724
Additions - 113,603 - - 113,603
At 31 December 2023 595,708 3,800,962 22,995 4,349,662 8,769,327
At 1 January 2024 595,708 3,800,962 22,995 4,349,662 8,769,327
Additions - 87,221 - - 87,221
At 30 June 2024 595,708 3,888,183 22,995 4,349,662 8,856,548
AMORTISATION
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
At 1 July 2023 586,181 1,484,203 9,319 - 2,079,703
Amortisation charge 9,527 364,793 2,300 - 376,620
At 31 December 2023 595,708 1,848,996 11,619 - 2,456,323
At 1 January 2024 595,708 1,848,996 11,619 - 2,456,323
Amortisation charge - 366,848 2,300 - 369,148
At 30 June 2024 595,708 2,215,844 13,919 - 2,825,471
NET BOOK VALUE
At 30 June 2023 9,528 2,203,155 13,676 4,349,662 6,576,021
At 31 December 2023 - 1,951,966 11,377 4,349,662 6,313,005
At 30 June 2024 - 1,672,339 9,077 4,349,662 6,031,078
7. Loans and other borrowings
30 June 2024 31 December 2023 30 June 2023
£ £ £
Current liabilities
Bank loans 40,563 75,002 372,462
Term loans 350,000 350,000 -
390,563 425,002 372,462
30 June 2024 31 December 2023 30 June 2023
£ £ £
Non-current liabilities
Convertible loan notes 2,922,603 2,554,672 2,237,569
Bank loans 44,845 66,800 86,552
2,967,448 2,621,472 2,324,121
As at 30 June 2024 the Group had one bank loan of £85,408 (June 2023: two
loans at £459,014). One loan accrues interest at 1.95% repayable over six
years to 2026.
As at 30 June 2024 the group had two short-term loan facilities totalling
£350,000 (June 2023: £nil). The loans were lent without security and accrue
interest at rates of 8.5% and 12%.
Convertible loan notes are in issue which are convertible by the option holder
into new ordinary shares at any point during the three-year term of the loan,
the latest of which expires 31 May 2026. Conversion prices are fixed at £1.10
for the June 2022 convertible loan note instruments and £0.50 for the May
2023 convertible loan note instrument.
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.
Market interest rates of between 14% and 21% have been applied to calculate
the residual equity value of the financial instrument.
8. Share capital
During the six months ended 30 June 2024 84,649 new shares were issued as a
result of options exercised (six months to June 2023: none). Share capital in
issue during the current and comparative periods are listed below:
30 June 2024 31 December 2023 30 June 2023
Ordinary share capital No. £ No. £ No. £
issued and fully paid
Ordinary 17,475,417 174,754 17,390,768 173,908 15,936,687 159,367
17,475,417 174,754 17,390,768 173,908 15,936,687 159,367
9. Share Option Reserve
30 June 2024 31 December 2023 30 June 2023
£ £ £
Share Option reserve 2,405,747 2,433,195 2,570,666
2,405,747 2,433,195 2,570,666
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 2024 31 December 2023 30 June 2023
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 1,458,484 1.56 1,542,860 1.49 1,569,620
Forfeited/expired during period 1.27 (24,125) 1.40 (169,866) 0.05 (26,760)
Granted during period - - 0.04 111,000 - -
Exercised during period 0.41 (84,649) 0.01 (25,510) - -
Outstanding at end of period 1.56 1,349,710 1.49 1,458,484 1.56 1,542,860
10. Related party transactions
Local Planet International Limited: is a related party to the group by virtue
of having Directors in common. Ian James, Nigel Sharrocks and Martyn Rattle
are directors of both companies.
Recharges for shared services totalling £50,038 (June 2023: £49,384) are
included in revenue for the six months ended 30 June 2024. Amounts outstanding
at the period end included in trade receivables totals £62,902 (June 2023:
£9,831).
Recharges for direct costs incurred were processed during the six months ended
30 June 2024 totalling £42,550 (June 2023: £27,600). Amounts outstanding at
the period end totalled £24,860 (June 2023: £5,400).
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 £155,958 which is held within other debtors at the end
of the reporting period (June 2023: £150,000). The loan is repayable within
12 months and attracts interest at the Bank of England interest rate.
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 SFIFISELSELURecent 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