REG - Silver Bullet Data - Preliminary Results
01/06/2023 07:00
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RNS Number : 2564B Silver Bullet Data Services Grp PLC 01 June 2023
1 June 2023
Silver Bullet Data Services Group plc
("Silverbullet" or the "Company", or, together with its subsidiaries, the
"Group")
Preliminary Results for the year ended 31 December 2022
Silverbullet (AIM: SBDS), a provider of digital transformation services and
products, is pleased to announce its unaudited preliminary results for the
year ended 31 December 2022.
FINANCIAL HIGHLIGHTS.
Year ended December 2022 Year ended December 2021
Revenue £5.82m £3.81m
Gross Profit £4.22m £2.79m
Headline Loss before tax* £6.10m £6.10m
Reported Loss before tax £7.54m £8.57m
Earnings Per Share (£0.49) (£0.73)
* Headline results are calculated before exceptional items and share option
charges, reconciliation per note 6 of the consolidated financial statements.
Operational Highlights:
· Revenue increased 53% to £5.82 million (2021: £3.81m)
· 16 new services client wins in the period, including Mars, Greene King and
Entain Group
· Consolidation of existing services clients as a result of additional contract
wins with Heineken, Sony and Salesforce.
· Focus on growth in key markets of UK, US and Australia
· '4D', Silverbullet's privacy-first contextual targeting and insights platform
was further enhanced and developed during the year achieving the product road
map and revenue targets set by management
· Management have successfully restructured the 4D team, having reached key
milestones on the product development roadmap, to align cost structure with
revenues and accelerate the path to profitability
Post Period End - Convertible Loan Note Issue
It is noted that the Company intends to complete a debt raise via a new
convertible loan note imminently following the publication of these results in
order to provide the Company with additional working capital to support the
significant growth in sales of 4D and its services offering.
Ian James, Chief Executive Officer of Silverbullet, commented:
"2022 was a year of considerable progress for Silverbullet. The Company has
seen significant growth based on the strong demand from existing and new
clients to transform their data and technology capabilities to improve
marketing ROI and deliver meaningful customer experiences. The period saw 16
new services client wins, including Mars, Greene King and Entain Group. To be
trusted by these multinational clients to spearhead their next phase of growth
is strong evidence that our strategy to accelerate our client's business
through the smart use of data in the privacy first era is well received. The
services division of our business continues to underpin the group with both
new clients and fast growth. Additionally, with our 4D product having reached
maturity, we are now able to focus all resources on sales and delivery of
client revenue. Strong 4D bookings have been secured, with a healthy pipeline
in place, and we expect the significant 4D revenue growth this year to
continue to accelerate, especially in the US.
"Silverbullet is highly encouraged by the developments being made and we are
confident of achieving our expectations for the current financial year. We
look forward to providing further updates to our shareholders throughout the
year ahead."
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
About Silverbullet
Silverbullet's proprietary 4D advertising solution is designed to help
advertisers target consumers in a "post cookie world". The product is a
natural extension to its existing services business which already serves a
blue-chip client base such as Heineken, Channel 4, Amazon and ITV amongst many
others. The removal of third-party cookies has already been implemented by web
browsers such as Firefox and Safari, with Google expected to phase out the use
of cookies in 2024.
Headquartered in London, the Group employs employees across five regions
across the globe, including, the UK, Italy, Australia, USA and Latin America.
The Group continues to look at other opportunities for expansion worldwide.
The Company has an established and growing services business with significant
accumulated industry experience and a proven track record of delivering
strategic projects and activation services to its clients. The majority of the
Board have held senior positions at global software companies and have
significant industry experience across data engineering, SAAS product
development and marketing.
The Group has close technical and commercial partnerships with multiple global
technology providers, all of which have existing sales channels and are
already delivering to clients.
The Group has established a strategic partnership and an entity with Local
Planet, a scaled network of over 60 agencies across the globe. Local Planet
Data Services Limited was established in December 2020 and presents a
significant opportunity to provide data services and the 4D product to the
Local Planet agency network.
CHAIRMAN'S STATEMENT.
It is my pleasure to present the annual results of Silverbullet Data Services
Group Plc. I am delighted with the progress made in in 2022, delivering
impressive revenue growth with a wide selection of blue-chip clients. The
development of 4D, our privacy-first contextual targeting and insights
platform, is largely complete and is now starting to deliver significant
revenue.
2022 was a challenging period for many companies in the media and technology
space. Whilst I am pleased with our top line growth, I am equally satisfied
with how the management team has controlled costs and restructured elements of
the business to ensure that the Group operates efficiently and is
appropriately set up for future growth.
Results.
Revenue for the year was £5.82m (2021: £3.81m), driven primarily by growth
in our data-driven transformation services business, providing data
consultancy advice to numerous clients across the world. Loss before tax was
£7.54m (2021: £8.57m) leading to a loss per share of 49p (2021: 73p). Cash
as at 31 December 2022 was £1.35m (2021: £3.69m).
People.
The excellent Board of Directors for the Group remained unchanged in 2022.
Keith Sadler and Steven Clarke are independent non-executive directors and are
members of both our Audit and Remuneration committees. Martyn Rattle has
significant experience in the Media and Technology space and provides
excellent insights and challenges to the Board. Keith Sadler resigned from his
position (post period end) on 9 March 2023 in order to focus on his other
business interests. I would like to thank Keith for his contributions to the
Group and wish him well in his future endeavours. We are currently undergoing
a search for a new independent non-executive director who will join Steven
Clarke on the Audit and Remuneration committees.
I am privileged to be working with our three executive directors, Ian James,
Chief Executive Officer, Umberto Torrielli, Chief Strategy Officer and Darren
Poynton, Chief Financial Officer. I would like to thank them for their focus
and commitment in leading the Group this year and driving the strategy of
business.
The Company's true strength is its people. We have expanded during the year
as well as restructured certain areas to drive focus. I would like to thank
all our employees across the world for their dedication, expertise and
commitment to generating such impressive growth and development.
Overview.
In a world where data and privacy are essential considerations for all
companies, I am extremely pleased with the services that the Group provides to
its clients. The prospect for growth and further development of the Group is
extremely strong. The Board will continue to work with the executive and
management teams in 2023 to deliver on our strategy and to create value for
our shareholders.
Nigel Sharrocks
Non-Executive Chairman
CHIEF EXECUTIVE'S STATEMENT.
Throughout 2022, Silverbullet has seen significant growth based on the strong
demands from existing and new clients to transform their data and technology
capabilities to improve marketing ROI and deliver meaningful customer
experiences.
Customer Experience Services Outlook:
Silverbullet's Customer Experience (CX) Services division delivered 19%
year-on-year growth, having won 16 new clients including Mars, Greene King and
Entain. Further, the business has renewed global services agreements with
Heineken and Sony. Most notably, our client base has substantially grown in
the Americas, having launched into the LATAM region with a central hub based
in Mexico. This new market opening, in combination with our North American
presence, has seen the business significantly expand its US client base.
Our strategy of 'land and expand' has been fruitful, and this can be seen
through the continued client relationships with our core flagship clients,
including Heineken, Mars and Sony. Silverbullet now works with Heineken in six
markets, including UK, US, Spain, Mexico, Brazil and Ireland. Our relationship
with Mars has expanded into the US and Australia, and with Sony we are working
in Europe, Singapore and Latin America.
Geographically, the business has focused on streamlining its regional hubs
into three key markets, the UK, the US and Australia. This geo-focus has
brought significant alignment throughout the organisation, having enabled the
regional leadership teams to focus on the expansion of our global clients,
which has consequently led to substantial margin improvement.
Silverbullet's partnerships with Salesforce and Treasure Data continue to
thrive, enabling a new business pipeline focused on the technical expertise
surrounding the leading customer data platforms and marketing automation
tools. For example, year-on-year Silverbullet has increased the volume of
managed services projects specifically related to data-driven marketing
activation based on the use of the technology and data infrastructure that we
deployed in 2021.
Further, as we look to support our clients in safeguarding them for future
challenges, Silverbullet is increasingly assessing how clients can enable
their first-party data to be deployed in media activation environments such as
programmatic video and Connected TV. This pivotal approach to unlocking
various compliant data sets for improved marketing and advertising is opening
the opportunity to cross-sell the 4D product to our global CX services client
base to form a combined offering.
The business continues to invest in new talent in the customer experience
services division, expanding our skillset and certifications across multiple
marketing technologies. Silverbullet maintains a clear focus on investing in
(and training) its talent pool which remains a key market differentiator.
4D Outlook:
Despite initial revenue headwinds in the first half of 2022, the 4D product in
the second half of the year began to build connections with key media agency
partners, seeing considerable revenue growth year-on-year. This revenue
momentum has been underpinned by media agencies requiring a more 'hands-on',
managed service approach to delivering smart contextual targeting and insights
across display and video advertising. This trend is set to continue, and we
expect to see revenue growth within this 'managed service' model, as well as
the original self-service approach.
Despite the further Google delay of the third-party cookie deprecation in
2022, we have seen a significant change in mindset from brands towards
improved advertising approaches, as consumer expectations and demands continue
to push for personalised experiences in a privacy-safe world. This change in
mindset has generated interest and bookings on the 4D platform that
accelerated in the second half of 2022 and has continued into 2023.
Having achieved maturity in the development of the 4D product, the Group
successfully completed a restructure of the 4D team during Q3 and Q4 2022.
This restructure reduced the headcount of the product and engineering team and
aligned the cost base with the commercial traction of the product. With a
mature 4D product and structure, the management will be able to make any
future investment decisions in line with the commercial growth and market
opportunities.
Outlook.
Revenues in Q1 2023 (post period end) were c.£2.0m, which represents a 107
per cent. increase on the previous year. During the quarter, we also secured
£1.8m of bookings with new or existing clients. These new bookings, together
with bookings of £3.4m in Q4 2022 is driving significant growth in 2023. This
growth has been achieved from a cost base that is 7% lower than the comparable
prior year period, evidencing the Company's cost management measures.
A notable feature of this strong growth in Q1 2023 is that over 30% of Group
revenue was generated in the US market. Management expects that this
momentum will continue and the percentage of overall revenue in the US to
increase, driven by expansion of our global client portfolio into this
significant market.
With our 4D product having reached maturity, the complete focus of the 4D
business is on sales and delivery. Strong 4D bookings have been secured and a
strong pipeline has been developed. 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.
The partnership significantly increases 4Ds global sales reach. Management is
also negotiating additional complementary commercial reseller partners. This
traction reinforces the belief that 4D is due to deliver significant growth in
2023 and beyond and confirms our view that the product will deliver excellent
long-term shareholder value.
Whilst we still have over half a year's trading to go and the macro-economic
climate remains uncertain, we are confident of achieving managements
expectations for the current financial year and look forward to providing
further updates to our shareholders throughout the year ahead.
Ian James
Chief Executive Officer
FINANCIAL REVIEW.
A year of great progress for the business in terms of performance, development
and structure.
Year ended Year ended
December 2022 December 2021
£ £
Revenue 5,818,255 3,809,255
Cost of sales (1,598,973) (1,024,221)
Gross Profit 4,219,282 2,785,034
Other operating Income - 38,328
Distribution costs (799,272) (522,306)
Administrative expenses (10,810,386) (9,988,875)
Exceptional Items 42,154 (861,085)
Operating Loss (7,348,222) (8,548,904)
Finance Expense (188,551) (18,928)
Loss before taxation (7,536,773) (8,567,832)
Tax 314,741 57,150
Loss after taxation (7,222,033) (8,510,682)
Currency translation differences (84,236) 36,495
Total Comprehensive Loss for the year (7,306,269) (8,474,187)
Revenue and Gross Profit.
Overall revenue of £5.82m represents growth of 53 per cent. compared to 2021.
During 2022, our customer experience services division added 16 new client
including significant agreements with Mars, Greene King and Entain Group. We
also renewed or extended agreements with several existing clients including
Heineken and Sony. Having laid the foundations and invested in 4D sales and
delivery teams in 2021 4D revenue has grown 633% to £1.52m in 2022.
Gross profit of £4.22m represents growth of 51 per cent. compared to 2021.
Gross profit margin has remained constant year on year at 73 per cent. The
increase in revenue in customer experience services would have helped to
improve the gross profit margin but the this is offset by increased 4D hosting
and media costs.
Operating Expenditure.
Total Adjusted Operating Expenditure (Adjusted to exclude depreciation,
amortisation, share option expenses, exceptional items) was £9.34m, which
represents an increase of 11 per cent. from 2021 (£8.40m).
Year ended Year ended
December 2022 December 2021
£ £
Operating Expenses 11,567,504 11,372,266
Less
Depreciation (29,208) (36,255)
Amortisation (761,065) (475,809)
Share option Charge (1,476,183) (1,602,025)
Exceptional items 42,154 (861,085)
Adjusted Operating Expenses (9,343,201) (8,397,092)
Staff costs of £6.88m (excluding share option expenses) continue to make up
the majority of the operating expenses, this is an increase of 27 per cent. on
2021 (£5.42m) largely driven by increased staff costs to deliver the customer
experience services and the sales and delivery teams working on the 4D growth.
Having developed the 4D product to a position relative maturity in the second
half of the 2022 the company reduced the headcount of the product and
engineering team. During the year average staff numbers have increased from 69
to 80.
Administrative expenses excluding staff costs have fallen to £2.72m from
£2.96m in 2021, this reflects management tightly controlling costs in 2022
whilst delivering significant revenue growth.
Taxation.
As a loss-making group, we do not currently incur corporation tax. We do
however benefit from a research and development tax relief related to the
development of 4D. The total tax relief for the year was £0.35m.
Balance Sheet and cashflow.
We have continued to develop and invest in 4D our privacy-first contextual
targeting and insights platform in 2022 and we are now in a position where we
believe the product is reaching development maturity. During the year £1.10m
has been added the development intangible asset account. Goodwill relates to
the acquisition of Silver Bullet Data Services Limited and Videobeet Italia
Srl. We have reviewed the carrying value of these investment and we are
comfortable that no impairment is required against these assets.
In June 2022, the Group announced it had successfully raised £4.6m. This
comprised of a £2.494m equity subscription at a price of £1 per ordinary
share and £2.106m of convertible loan notes (see note 19). At the year end
and at today's date a payment £186,000 relating to these convertible loan
notes remains outstanding from an individual. The Company has been informed
that this amount will be settled and is contact with the relevant subscriber,
however the timing of receipt remains uncertain.
Net cash flow used in operating activities was £5.14m (2021: £7.22m). The
decrease versus the prior year relates to the reduction in losses during the
period largely due to the increased corporate costs in 2021 as a result of
listing on the AIM market.
The Group's cash balance decreased by £2.34m to £1.35 million in 2022 (2021:
£3.69m).
The Company intends to complete a debt raise via a new convertible loan note
imminently following the publication of these results in order to provide the
Company with additional working capital to support the significant growth in
sales of 4D and its services offering.
Darren Poynton
Chief Financial Officer
Consolidated statement of comprehensive income
Year ended 31 December 2022
Group
Note 2022 2021
Continuing operations £ £
Revenue 3, 4 5,818,255 3,809,255
Cost of sales (1,598,973) (1,024,221)
Gross profit 4,219,282 2,785,034
Other operating income 5 - 38,328
Distribution costs (799,272) (522,306)
Administrative expenses (10,810,386) (9,988,875)
Exceptional items 6 42,154 (861,085)
Operating (loss) 7 (7,348,222) (8,548,904)
Finance expense 10 (188,551) (18,928)
(Loss) before taxation (7,536,773) (8,567,832)
Taxation 11 314,740 57,150
(Loss) after taxation (7,222,033) (8,510,682)
Other comprehensive income / (loss) net of taxation
Currency translation differences (84,236) 36,495
Total comprehensive (loss) for the year (7,306,269) (8,474,187)
Total comprehensive (loss) attributable to:
Equity shareholders of the company (7,307,215) (8,479,438)
Non-controlling interest 946 5,251
(7,306,269) (8,474,187)
(Loss) after taxation attributable to:
Equity shareholders of the company (7,222,979) (8,479,438)
Non-controlling interest 946 5,251
(7,222,033) (8,474,187)
Earnings per share
Basic earnings 26 (0.49) (0.73)
Diluted earnings 26 (0.49) (0.73)
Consolidated and company statement of financial position
Year ended 31 December 2022
Group Company
2022 2021 2022 2021
Note £ £ £ £
Non-current assets
Goodwill 12 4,349,662 4,349,662 - -
Intangible assets 12 2,544,739 2,206,742 - -
Investments 13 4,999 - 8,354,094 6,872,911
Tangible assets 14 53,809 42,115 - -
Total non-current assets 6,953,209 6,598,519 8,354,094 6,872,911
Current assets
Trade and other receivables 16 2,487,844 2,264,972 285,574 78,522
Cash and cash equivalents 17 1,352,221 3,687,809 8,572 60
Total current assets 3,840,065 5,952,781 294,146 78,582
Total Assets 10,793,274 12,551,300 8,648,240 6,951,493
Current liabilities
Trade and other payables 18 2,311,754 2,609,028 3,827,087 2,049,262
Loans and other borrowings 19 41,227 16,061 - -
Total current liabilities 2,352,981 2,625,089 3,827,087 2,049,262
Non-current liabilities
Loans and borrowings 19 1,797,992 143,644 1,687,697 -
Deferred tax liability 20 632,190 547,892 - -
Total non-current liabilities 2,430,182 691,536 1,687,697 -
Total liabilities 4,783,163 3,316,625 5,514,784 2,049,262
Net assets 6,010,111 9,234,675 3,133,456 4,902,231
Equity
Share capital 22 159,367 134,227 159,367 134,227
Share premium 10,821,021 8,639,593 10,821,023 8,639,592
Share option reserve 23 2,396,396 1,275,363 2,396,396 1,275,363
Other reserves 24 398,954 - 398,954 -
Retained Earnings (7,679,183) (811,354) (10,642,334) (5,147,001)
Capital redemption reserve 50 50 50 50
Foreign exchange reserve (92,741) (8,505) - -
Equity attributable to the equity shareholders of the company 6,003,864 9,229,374 3,133,456 4,902,231
Non-controlling interest 6,247 5,301 - -
Total equity 6,010,111 9,234,675 3,133,456 4,902,231
The total comprehensive loss for the company for the year was £5,850,480
(2021: £12,054,638).
Consolidated statement of cash flows
Year ended 31 December 2022
Group Company
2022 2021 2022 2021
Note £ £ £ £
Cash flows from operating activities
(Loss) after tax from continuing operations (7,222,033) (8,510,682) (5,850,480) (12,054,638)
Adjustments for:
Depreciation 14 29,209 36,255 - -
Amortisation 12 761,065 475,809 - -
Impairments 25 - - 5,450,737 11,815,479
Foreign exchange (84,236) 36,495 - -
Net finance expense 10 188,551 18,928 166,650 -
Share option charge 23 1,476,183 1,602,025 - -
Taxation expense 11 (314,740) (57,150) - -
(Increase) in trade and other receivables 16 (80,151) (541,692) (64,332) (78,522)
(Decrease) / increase in trade and other payables 18 (383,543) (841,335) (195,363) 317,741
Increase in deferred tax liability 20 84,298 323,971 - -
Cash used in operations (5,545,397) (7,457,376) (492,788) 60
Taxation refunded 401,008 235,412 - -
Net cash used in operating activities (5,144,389) (7,221,964) (492,788) 60
Cash flows from investing activities
Purchase of tangible assets 14 (40,903) (41,430) - -
Purchase of intangible assets 12 (1,099,062) (1,459,274) - -
Purchase of investments 13 (4,999) - (4,999) -
Acquisition of non-controlling interest - 50 - -
Net cash used in investing activities (1,144,964) (1,500,654) (4,999) -
Cash flows from financing activities
Proceeds from borrowings 19 1,516,126 - - -
Repayment of borrowings 19 (3,263) (28,865) - -
Equity in convertible loan notes issued 24 398,954 - - -
New equity issued (net of transaction costs) 22 2,063,848 11,803,428 - -
Intercompany transactions - - 506,299 -
Interest paid (21,900) (18,928) - -
Net cash from financing activities 3,953,765 11,755,635 506,299 -
Net increase / (decrease) in cash and cash equivalents (2,335,588) 3,033,017 8,512 60
Cash and cash equivalents at beginning of period 3,687,809 654,792 60 -
Cash and cash equivalents at end of period 1,352,221 3,687,809 8,572 60
Consolidated statement of changes in equity attributable to the shareholders
Group
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 2021 8,256 35,387,853 1,192,653 - (32,240,404) - (44,999) 4,303,359 - 4,303,359
Total comprehensive loss for the year - - - - (8,515,932) - 36,494 (8,479,438) 5,251 (8,474,187)
Non-controlling interest in subsidiary share capital - - - - - - - - 50 50
Share buyback and cancellation (50) - - - - 50 - - - -
Bonus issue of shares 87,255 (87,255) - - - - - - - -
Capital reduction - (38,425,667) - - 38,425,667 - - - - -
Share option charge - - 1,602,025 - - - - 1,602,025 - 1,602,025
Share options exercised 312 19,111 (469,533) - 469,533 - - 19,423 - 19,423
Share options forfeited/lapsed - - (1,049,782) - 1,049,782 - - - - -
Shares issued during period (net of transaction costs) 38,454 11,745,551 - - - - - 11,784,005 - 11,784,005
As at 31 December 2021 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 year - - - - (7,222,979) - (84,236) (7,307,215) 946 (7,306,269)
Convertible loan notes issued - - - 398,954 - - - 398,954 - 398,954
Share option charge - - 1,476,183 - - - - 1,476,183 - 1,476,183
Share option exercised 200 - (46,739) - 46,739 - - 200 - 200
Share options lapsed - - (308,411) - 308,411 - - - - -
Shares issued during period (net of transaction costs) 24,940 2,181,428 - - - - - 2,206,368 - 2,206,368
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
Company
Share Capital Share premium Share Option Reserve Other reserves Retained earnings Capital redemption reserve Total equity
£ £ £ £ £ £ £
As at 1 January 2021 8,256 35,387,855 1,192,653 - (33,037,348) - 3,551,416
Total comprehensive loss for the year - - - - (12,054,638) - (12,054,638)
Share buyback and cancellation (50) - - - - 50 -
Bonus issue of shares 87,255 (87,255) - - - - -
Capital reduction - (38,425,667) - - 38,425,667 - -
Share option charge - - 1,602,025 - - - 1,602,025
Share options exercised 312 19,111 (469,533) - 469,533 - 19,423
Share options forfeited/lapsed - - (1,049,782) - 1,049,782 - -
Shares issued during period (net of transaction costs) 38,454 11,745,551 - - - - 11,784,005
As at 31 December 2021 134,227 8,639,595 1,275,363 - (5,147,004) 50 4,902,231
Total comprehensive loss for the year - - - - (5,850,480) - (5,850,480)
Convertible loan notes issued - - - 398,954 - - 398,954
Share option charge - - 1,476,183 - - - 1,476,183
Share options exercised 200 - (46,739) - 46,739 - 200
Share options lapsed - - (308,411) - 308,411 - -
Shares issued during period (net of transaction costs) 24,940 2,181,428 - - - - 2,206,368
As at 31 December 2022 159,367 10,821,023 2,396,396 398,954 (10,642,334) 50 3,133,456
Notes to the financial statements
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 public limited 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, England, W1W 6XB.
SBDS is the ultimate parent company to the subsidiaries listed at Note 15,
together referred to as "the Group". The principal activity of the SBDS Group
is marketing services through the application of big data technologies to
reduce friction.
Silver Bullet Data Services Group PLC is registered with Companies House
(Company Number: 08525481).
BASIS OF PREPARATION
These financial statements have been prepared in accordance with UK-adopted
International Accounting Standards, interpretations issued by the
International Financial Reporting Standards Interpretations Committee
("IFRIC"), and the Companies Act 2006. The accounting policies have been
applied consistently throughout the period.
The Company has taken advantage of the exemption under S408 of the Companies
Act 2006 not to include a separate Statement of Comprehensive Income as group
statements have been prepared.
The consolidated financial statements have been prepared under the historical
cost convention. Historical cost is generally based on the fair value of the
consideration given in exchange for assets.
The presentational currency of the Group is GBP with functional currencies of
the subsidiaries disclosed at Note 15 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, there may be the 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 remains uncertainty
over how much funding may be raised when required.
Based on their enquiries and the information available to them and taking into
account the other risks and uncertainties set out herein, the directors have a
reasonable expectation that the company and the group has adequate resources
to continue operating for the foreseeable future. Thus, they continue to adopt
the going concern basis of accounting in preparing this financial information.
2. Significant accounting policies
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 reporting 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 reporting 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.
Subsidiaries using a functional currency other than the presentation currency
of the group are retranslated at each period end. Any translation differences
are held within the group foreign exchange reserve.
INTANGIBLE ASSETS AND GOODWILL
Goodwill
Goodwill is initially measured as 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 is estimated to be less than its
carrying amount, the carrying amount of the asset 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 4D Platform developed internally by the group
which are expected to generate future revenue streams.
FINANCIAL INSTRUMENTS
Silver Bullet Data Services Group PLC classifies financial instruments, or
their component parts, on initial recognition as a financial asset, a
financial liability or an equity instrument in accordance with the substance
of the contractual arrangement. Financial instruments are recognised on the
date when the Group becomes a party to the contractual provisions of the
instrument. Financial instruments are recognised initially at fair value plus,
in the case of a financial instrument not a fair value through profit and
loss, transaction costs that are directly attributable to the acquisition or
issue of the financial instrument. Financial instruments are derecognised on
the settlement date when the Group is no longer a party to the contractual
provisions of the instrument.
Non-derivative financial instruments comprise trade
and other receivables, cash and cash equivalents, loans and borrowings, and
trade and other payables.
Trade and other receivables and trade and other payables
Trade and other receivables are recognised initially at transaction price less
attributable transaction costs. Trade and other payables are recognised
initially at transaction price plus attributable transaction costs. Subsequent
to initial recognition they are measured at amortised cost using the effective
interest method, less any expected credit losses in the case of trade
receivables. Impairments of the trade receivable balances are based on a
review of individual receivable balances, their ageing and management's
assessment of realisation.
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.
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.
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.
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 assets below £1,000; 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 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.
EXCEPTIONAL ITEMS
Where items of income and expense included in the statement of comprehensive
income are considered to be material and exceptional in nature, separate
disclosure of their nature and amount is provided in the financial statements.
These items are classified as exceptional items. The Group considers the size
and nature of an item both individually and when aggregated with similar items
when considering whether it is material, for example impairment of intangible
assets or restructuring costs.
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.
ADOPTION OF NEW AND REVISED STANDARDS
The following standards and interpretations relevant to the Group are in issue
but are not yet effective and have not been applied in the financial
statements. In some cases, these standards and guidance have not been endorsed
for use in the United Kingdom.
· IAS 1 Presentation of liabilities as current or non-current
· IAS 1 Disclosure of accounting policies
· IAS 8 definition of accounting estimates
The above standards are not expected to materially impact the Group.
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. Impairments
of intangible assets are explained in more detail at note 12.
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:
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 Board of Directors is the chief operating
decision maker for the Group.
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.
The business monitors operating segment profitability using their Earnings (or
Profit) Before Interest, Tax, Depreciation and Amortisation (EBITDA). This is
used as a metric to represent operating cashflow generated by the business.
2022 2021
Revenue Gross profit Revenue Gross profit
£ £ £ £
Customer Experience Services 4,302,431 4,011,972 3,602,505 2,895,650
4D Platform 1,515,824 207,310 206,750 (110,616)
Total 5,818,255 4,219,282 3,809,255 2,785,034
EBITDA from continuing operations
Operating (loss) (7,348,222) (8,548,904)
Depreciation and amortisation 790,274 512,064
Total (6,557,948) (8,036,840)
4. Geographical analysis
Revenue analysed by geographical market:
2022 2021
£ £
United Kingdom 1,066,801 1,078,128
Rest of Europe 1,553,243 1,901,162
Rest of the world 3,198,211 829,965
5,818,255 3,809,255
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.
Two major customers are included within revenue totalling £1,512,875, each
representing 13% of total group revenue (2021: one major customer totalling
£497,717, being 13%).
Non-current assets analysed by geographical market:
2022 2021
£ £
United Kingdom 6,934,199 6,586,473
Rest of Europe 4,506 4,104
Rest of the world 14,504 7,942
6,953,209 6,598,519
5. Other operating income
Group
2022 2021
£ £
Grant income - 38,328
- 38,328
6. Exceptional items
Group
2022 2021
£ £
Professional fees on initial public offering - 520,180
Losses incurred / (recovered) as a result of fraud (42,154) 340,905
(42,154) 861,085
Reported loss before tax for the group is reconciled
to the headline loss before tax as follows:
Group
2022 2021
£ £
Reported (loss) before tax (7,536,773) (8,567,832)
Share option charges 1,476,183 1,602,025
Professional fees on initial public offering - 520,180
Losses incurred / (recovered) as a result of fraud (42,154) 340,905
Headline (loss) before tax (6,102,744) (6,104,722)
7. Operating (loss)
The operating loss is arrived at after
charging/(crediting):
Group
2022 2021
£ £
Depreciation of property plant and equipment 29,209 36,255
Amortisation of intangible assets 761,065 475,809
Short-term leases 237,388 214,972
Foreign exchange losses 24,334 80,005
Auditor's remuneration in respect of:
- audit of the consolidated financial statements 72,000 60,000
- other audit related assurance services 5,000 193,750
8. Staff costs
Group
2022 2021
£ £
Wages and salaries 5,859,808 4,523,434
Share-based payments 1,211,252 1,602,025
Social security costs 786,795 715,282
Pension costs - defined contribution 215,546 129,079
Termination payments 19,598 56,272
8,092,999 7,026,092
Average number of staff
Group Company
2022 2021 2022 2021
Customer Experience Services 36 34 - -
4D Platform 32 23 - -
Central 12 12 - -
80 69 - -
9. Directors' remuneration
Key management personnel are considered to be the
directors and their remuneration, employer's national insurance, and pension
contributions are disclosed below:
Group
2022 2021
£ £
Directors' remuneration 763,237 957,855
Share-based payments 446,077 376,994
Social security costs 79,133 97,494
Pension costs - defined contribution 20,526 19,589
Invoiced services 17,920 71,650
1,326,893 1,523,582
The directors are remunerated, in respect of their services to the Group,
through subsidiary companies. During the year three directors (2021: four)
were accruing benefits under the company defined contribution pension scheme.
Remuneration disclosed above includes the following amounts paid to the
highest paid director:
Group
2022 2021
£ £
Directors' remuneration 225,000 273,375
Share-based payments 148,894 104,901
Social security costs 29,744 36,507
Pension costs - defined contribution 6,750 5,438
Invoiced services - 30,000
10. Finance expenses
Group
2022 2021
£ £
On convertible loan notes 166,651 -
On bank overdrafts and loans 21,900 16,926
On other credit arrangements - 2,002
188,551 18,928
11. Income tax provision
A deferred tax asset in respect of the Group's losses
to date has not been recognised due to the uncertainty of the timing of future
loss relief.
Group
2022 2021
Current tax £ £
UK corporation tax credits for R&D from prior years (41,009) (21,121)
UK corporation tax credits for R&D for current year (360,000) (360,000)
Foreign taxation 1,971 -
Total current tax (399,038) (381,121)
Deferred tax 84,298 323,971
Total tax credit (314,740) (57,150)
Reconciliation of tax expense
The tax assessed on the loss on ordinary activities for the year is lower than
the standard rate of corporation tax in the UK of 19% (2021: 19%).
Group
2022 2021
£ £
Loss on ordinary activities before taxation (7,512,440) (8,567,832)
Loss on ordinary activities by rate of tax (1,427,364) (1,627,888)
Non-allowable expenses 150,152 139,632
Enhanced R&D expenditure (360,000) (360,000)
Change in deferred tax rate applied - 131,494
Deferred tax movement on intangible assets 84,298 323,971
Movement in deferred tax not recognised 1,277,212 1,356,762
Adjustments in respect of prior periods (41,009) (21,121)
Foreign taxation 1,971 -
Tax on loss (314,740) (57,150)
Deferred tax assets have not been recognised on cumulative losses for the
group totalling £40,012,779 (2021: 34,655,101).
12. Goodwill and intangible assets
Customer lists Development Costs Goodwill Total
£ £ £ £
COST
At 1 January 2021 595,708 1,058,170 4,330,222 5,984,100
Additions - 1,439,834 19,440 1,459,274
At 31 December 2021 595,708 2,498,004 4,349,662 7,443,374
At 1 January 2022 595,708 2,498,004 4,349,662 7,443,374
Additions - 1,099,062 - 1,099,062
At 31 December 2022 595,708 3,597,066 4,349,662 8,542,436
AMORTISATION
At 1 January 2021 213,863 197,298 - 411,161
Amortisation charge 148,927 326,882 - 475,809
Write off - - - -
At 31 December 2021 362,790 524,180 - 886,970
At 1 January 2022 362,790 524,180 - 886,970
Amortisation charge 148,927 612,138 - 761,065
At 31 December 2022 511,717 1,136,318 - 1,648,035
NET BOOK VALUE
At 31 December 2021 232,918 1,973,824 4,349,662 6,556,404
At 31 December 2022 83,991 2,460,748 4,349,662 6,894,401
Amortisation is charged within administrative
expenses in the Statement of Comprehensive Income.
13. Investments
All investments held by the group relate to
investments in trading companies as detailed in Note 15.
COST Group Company
At 1 January 2021 - 5,270,836
Additions - 1,602,075
At 31 December 2021 - 6,872,911
At 1 January 2022 - 6,872,911
Additions 4,999 1,481,183
At 31 December 2022 4,999 8,354,094
14. Tangible assets
Fixtures, fittings and equipment Computer equipment Total
£ £ £
COST
At 1 January 2021 13,672 103,065 116,737
Additions 1,770 39,660 41,430
Disposals (7,145) - (7,145)
At 31 December 2021 8,297 142,725 151,022
At 1 January 2022 8,297 142,725 151,022
Additions 11,814 29,089 40,903
Disposals - - -
At 31 December 2022 20,111 171,814 191,925
DEPRECIATION
At 1 January 2021 10,684 69,113 79,797
Charge for the period 1,434 34,821 36,255
Disposals (7,145) - (7,145)
At 31 December 2021 4,973 103,934 108,907
At 1 January 2022 4,973 103,934 108,907
Charge for the period 4,237 24,972 29,209
Disposals - - -
At 31 December 2022 9,210 128,906 138,116
NET BOOK VALUE
At 31 December 2021 3,324 38,791 42,115
At 31 December 2022 10,901 42,908 53,809
Depreciation is charged to administrative expenses within the Statement of
Comprehensive Income.
15. Investments in subsidiaries
As at 31 December 2022 Silver Bullet Data Services Group PLC owned an interest
in the ordinary share capital of the companies below.
All companies are 100% owned with the exceptions of joint ventures Local
Planet Data Services Ltd (51% owned) and Silver Bullet Data Science Limited
(49.99% owned).
Silver Bullet Data Science Limited has not been consolidated into these
financial statements as the Group does not exercise control over the company's
activities.
Subsidiary undertaking Country of incorporation Registered office Principal activity
Silver Bullet Media Services Limited England and Wales The Harley Building, 77 New Cavendish Street, London, W1W 6XB Marketing services and data technologies
IOTEC Native Limited England and Wales The Harley Building, 77 New Cavendish Street, London, W1W 6XB Dormant
Silver Bullet Data Services Limited England and Wales The Harley Building, 77 New Cavendish Street, London, W1W 6XB Marketing services and data technologies
Silver Bullet Data Services GmbH Germany Herzogspitalstraße 24, 80331, Munich Marketing services and data technologies
Silver Bullet Data Services Pty Ltd Australia 452 Flinders St, Melbourne, 3000, Victoria Marketing services and data technologies
Silver Bullet Data Services S.r.l Italy 20161, Via Gian Rinaldo, Carli n. 47, Milan Marketing services and data technologies
Technobeet S.r.l. Italy 20161, Via Gian Rinaldo, Carli n. 47, Milan Dormant
Silver Bullet USA Inc. United States of America 1250 Broadway, 36th Floor, New York, New York, 10001 Marketing services and data technologies
Local Planet Data Services Ltd England and Wales The Harley Building, 77 New Cavendish Street, London, W1W 6XB Marketing services and data technologies
16. Trade and other receivables
Group Company
2022 2021 2022 2021
£ £ £ £
Trade receivables 1,307,790 1,333,272 - -
Other receivables 448,798 202,623 227,439 75,965
Prepayments 225,537 151,749 58,135 2,557
Contract assets 170,855 217,328 - -
Corporation tax receivable 334,864 360,000 - -
2,487,844 2,264,972 285,574 78,522
In determining the recoverability of accounts receivable, the Group considers
any changes in the credit quality of the accounts receivable from the date
credit was initially granted up to the reporting date.
Those receivable balances that are passed due have been assessed by management
on an individual basis and provisions for bad debts has been made as
necessary.
Contract assets represent agreements with customers against which revenue has
been recognised but not yet invoiced in accordance with the contract terms.
All accrued revenue at each period end has been invoiced within a maximum of
three months of the reporting period.
17. Cash and cash equivalents
Group Company
2022 2021 2022 2021
£ £ £ £
Cash at bank 1,352,221 3,687,809 8,572 60
1,352,221 3,687,809 8,572 60
Cash at bank earns interest at floating rates based on daily bank deposit
rates.
18. Trade and other payables
Group Company
2022 2021 2022 2021
£ £ £ £
Trade payables 530,257 525,267 34,448 35,129
Tax and social security 497,631 558,799 20,613 20,613
Other payables 345,496 317,018 5,050 50
Accruals 647,382 1,007,845 4,609 10,467
Contract liabilities 290,988 200,099 - -
Amounts owed to group undertakings - - 3,762,367 1,983,003
2,311,754 2,609,028 3,827,087 2,049,262
The fair value of trade and other payables approximates to book value at each
year-end. Trade payables are non-interest bearing and are normally settled
monthly.
Contract liabilities represent agreements with customers against which revenue
has not yet been recognised for invoices raised during the report period. All
such deferred revenue at each period end has been released to the Statement of
Comprehensive Income within a maximum of three months of the reporting period.
19. Loans and borrowings
Group Company
2022 2021 2022 2021
£ £ £ £
Current liabilities
Bank loans 41,227 16,061 - -
41,227 16,061 - -
2022 2021 2022 2021
£ £ £ £
Non-current liabilities
Convertible loan notes 1,687,697 - 1,687,697 -
Bank loans 110,295 143,644 - -
1,797,992 143,644 1,687,697 -
As at 31 December 2022 the Group had bank loans of £151,522 (2021: £177,104)
accruing interest at 1.95% repayable over six years to 2026, with repayments
due from 31(st) August 2022.
Convertible loan notes were issued during the reporting period which are
convertible into new ordinary shares at the price of £1.10 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 (see Note 24). A market interest rate of 21% has been applied to
calculate the residual equity value of the financial instrument.
20. Deferred tax liability
Group Company
2022 2021 2022 2021
£ £ £ £
Movements in the year:
Liability brought forward 547,892 223,921 - -
Charge to profit or loss 84,298 323,971 - -
Liability carried forward 632,190 547,892 - -
All deferred tax liabilities are recognised in respect of intangible and
tangible asset timing differences. No deferred tax assets have been recognised
by the Group.
21. FINANCIAL INSTRUMENTS
Financial instruments and risk management
The Group's financial instruments may be analysed as follows:
Group Company
2022 2021 2022 2021
£ £ £ £
Financial assets measured at amortised cost
Cash and cash equivalents 1,352,221 3,687,809 8,571 60
Trade receivables 1,307,790 1,333,272 - -
Other receivables 448,798 202,623 227,439 75,965
3,108,809 5,223,704 236,010 76,025
Financial liabilities measured at amortised cost
Trade payables 530,257 525,267 34,448 35,129
Accruals 647,382 1,007,845 4,610 10,468
Other payables 345,496 875,812 3,767,417 2,014,133
Loans 1,839,219 159,705 1,687,697 -
3,362,354 2,568,629 5,494,172 2,059,729
Financial assets measured at amortised cost comprise cash, trade receivables
and other receivables.
Financial liabilities measured at amortised cost comprise bank loans and
overdrafts, other loans, trade payables, convertible loan notes and other
payables.
The debt instruments were initially recognised at fair value, and subsequently
they were measured at amortised cost using the effective interest rate method,
whereby the fair value of the debt approximates their carrying value.
The Group is exposed to a variety of financial risks through its use of
financial instruments which result from its operating activities. All of the
Group's financial instruments are classified as loans and receivables.
The Group does not actively engage in the trading of financial assets for
speculative purposes. The most significant financial risks to which the Group
is exposed are described below:
Credit risk
Generally, the Group's maximum exposure to credit risk is limited to the
carrying amount of the financial assets recognised at the reporting date, as
summarised above.
Credit default risk is the financial risk to the Group if a counter party to a
financial instrument fails to meet its contractual obligation. The nature of
the Group's receivable balances, the time taken for payment by entities and
the associated credit risk are dependent on the type of engagement.
Credit risk is minimised substantially by ensuring the credit worthiness of
the entities with which it carries on business. Credit terms are provided on a
case-by-case basis. The Group's trade and other receivables are actively
monitored. The Group has not experienced any significant instances of
non-payment from its customers.
Unbilled revenue is recognised by the Group only when all conditions for
revenue recognition have been met in line with IFRS 15.
Liquidity risk
Liquidity risk represents the contingency that the Group is unable to gather
the funds required with respect to its financial obligations at the
appropriate time and under reasonable conditions in order to meet their
current obligations. The Group attempts to manage this risk so as to ensure
that it has sufficient liquidity at all times to be able to honour its current
and future financial obligations under normal conditions and in exceptional
circumstances. Financing strategies to ensure the management of this risk
include the issuance of equity or debt securities as deemed necessary.
All of the Group's financial liabilities mature within twelve months of both
reporting periods, with the exception of non-current liabilities disclosed at
note 19. In each of these cases, the financial liabilities matured within five
years of the reporting date.
Foreign currency risk
The Group operates internationally and is exposed to foreign exchange risk
arising from various currency exposures, primarily Australian Dollars, United
States Dollars and Euros. The Group monitors exchange rate movements closely
and ensures adequate funds are maintained in appropriate currencies to meet
known liabilities.
The Group's exposure to foreign currency risk at the end of the respective
reporting periods were as follows:
2022 2021
AUD USD EUR AUD USD EUR
Assets and liabilities 299,236 244,995 (515,938) 121,403 128,932 302,200
Assets and liabilities include the monetary assets and liabilities of
subsidiaries denominated in foreign currency.
The Group is exposed to foreign currency risk on the relationship between its
functional currencies and other currencies in which the Group's material
assets and liabilities are denominated. The table below summaries the effect
on reserves had the functional currencies of the Group weakened or
strengthened against these other currencies, with all other variables held
constant.
Group Company
2022 2021 2022 2021
£ £ £ £
10% weakening of functional currency (7,876) 34,124 - -
10% strengthening of functional currency 16,539 (71,661) - -
The impact of a change of 10% has been selected as this has been considered
reasonable given the current level of exchange rates and the volatility
observed both on a historical basis and market expectations for future
movements.
22. Share capital and premium
Ordinary share capital
Issued and fully paid No. £
As at 1 Jan 2022 13,422,687 134,227
Shares issued 2,514,000 25,140
As at 31 Dec 2022 15,936,687 159,367
In June 2022 investment funding was raised for 2,494,000 new shares issued at
£1.00. At the reporting date deferred share subscriptions were outstanding of
£142,720 (2021: £nil) and are held within other receivables. 20,000 share
options were also exercised during the financial year at nominal value of
£0.01.
23. Share Option Reserve
The Group operates a programme for employees of its subsidiaries to acquire
shares in the company under an EMI scheme. All options are settled by the
physical delivery of shares once the options have vested and are exercised.
The number and weighted average exercise price of share options during the
year were as follows:
2022 2021
Weighted average exercise price Share options Weighted average exercise price Share options
£ No. £ No.
Outstanding at start of period 1.56 1,679,607 3.05 250,153
Forfeited/expired during period 1.50 (198,987) (1.27) (244,767)
Granted during period 0.27 109,000 1.27 1,705,682
Exercised during period 0.01 (20,000) (0.30) (31,461)
Outstanding at end of period 1.49 1,569,620 1.56 1,679,607
Share options have been valued at grant date based on the Black Scholes
valuation model using an estimated volatility of 40%. Options vest over
varying terms according to individual option agreements from vesting in full
on grant date to a period of three years.
All options expire after seven years and an expected take-up rate of 100% has
been applied. A dividend yield of 0% has been applied to option valuation
models as the Group focuses on capital growth through this period. Risk-free
rates have been applied ranging from 0.26% to 3.62% based on UK 10-year gilt
rates since 2014.
Other key inputs applied to Black Scholes valuation models are as follows:
Tranche date Options outstanding Share price Average exercise price
No. £ £
01 October 2014 1,325 22.21 0.001
12 January 2015 94 22.21 0.001
15 July 2015 281 24.63 0.001
18 July 2016 2,703 24.63 9.837
12 October 2016 10,000 24.63 24.633
26 January 2018 9,099 8.55 15.462
21 May 2020 21,750 3.64 0.810
09 July 2020 625 3.64 0.810
17 July 2020 2,125 1.96 0.810
24 July 2020 5,000 1.96 0.810
01 October 2020 625 1.96 0.810
21 May 2020 751 1.96 0.810
21 May 2020 998 1.96 0.810
06 July 2020 4,360 1.96 0.810
02 June 2021 716,021 2.57 0.415
25 June 2021 689,863 2.57 2.286
11 August 2022 104,000 0.90 0.277
1,569,620
The movement in option valuation during the year ended 31 December 2022
resulted in a staffing cost being recognised by the Group of £1,476,183
(2021: £1,602,025), with a corresponding increase in the Group's equity.
The valuation of options exercised, lapsed, and forfeited during the year
totalled £355,150 (2021: £1,519,315) which has been transferred to Retained
Earnings.
The contractual life for outstanding options runs for a number of periods, the
latest of which being to 11(th) August 2029.
The total number of exercisable options at the period end was 1,569,620 (2021:
1,679,607), with an average exercise price of £1.49 (2021: £1.56).
24. Other reserves
2022 2021
£ £
Convertible loan notes 398,954 -
398,954 -
Loan notes were issued during the reporting period which are convertible into
new ordinary shares at the price of £1.10 per new ordinary share at any point
during the three year term of the loan.
The equity element of the convertible loan note is recognised within other
reserves. A market interest rate of 21% has been applied to calculate the
residual equity value of the financial instrument.
25. Related party transactions
Key management personnel and directors' remuneration is detailed at note 9.
Local Planet International Limited: is a related party to the group by virtue
of having Directors in common. Ian James, Martyn Rattle and Nigel Sharrocks
are directors of both companies.
Recharges for shared services totalling £146,293 (2021: £107,131) are
included in revenue for the year ended 31 December 2022. Amounts outstanding
at the year-end included in trade receivables totals £29,611 (2021:
£37,758).
Recharges for direct costs incurred were processed during the year ended 31
December 2022 totalling £114,009 (2021: £56,000). Amounts outstanding at 31
December 2022 totalled £32,400 (2021: £5,574).
Fluency Media Limited: is a related party to the group by virtue of having
Directors in common. Ian James is a director of both companies. Consultancy
services were provided during the year ended 31 December 2022 totalling £nil
(2021: £90,000). All of these services were provided prior to listing in June
2021 and were settled by the reporting date.
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 year ended 31 December 2022
totalling £17,920 (2021: £56,673). Amounts outstanding at 31 December 2022
totalled £nil (2021: £nil).
Educated Solutions Limited: is a related party to the group by virtue of
having Directors in common. Ian James and Martyn Rattle are directors of both
companies. Revenue was recognised for services provided to the company during
the year ended 31 December 2022 totalling £nil (2021: £13,800). Costs of
£3,462 (2021: £nil) were also recognised in respect of a profit share
agreement. Revenue outstanding at 31 December 2022 totalled £nil (2021:
£16,560) and are included within trade receivables.
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 (2021: £150,000).
Transactions with group companies
As holding company for the subsidiaries listed at Note 15, all funds raised
are distributed to subsidiary companies as required. A summary of balances
outstanding at the period end are provided below. All balances are repayable
on demand and are lent without security or accruing any interest.
A provision for bad debts has been included in the Company financial
statements for all amounts receivable from subsidiaries in both the current
and previous year.
Amounts owed to subsidiary companies 2022 2021
£ £
Silver Bullet Media Services Limited 2,960,236 1,180,872
Iotec Native Limited 802,131 802,131
3,762,367 1,983,003
26. 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.
2022 2021
£ £
Loss after taxation (7,222,033) (8,510,682)
Number of shares
Weighted average number of ordinary shares in issue 14,889,187 11,684,142
Dilutive effect of in-the-money share options 589,590 792,028
Diluted weighted average number of shares 15,478,777 12,476,170
Earnings per share
Basic earnings per share (0.49) (0.73)
Diluted earnings per share (0.49) (0.73)
As there is a loss for the year the options are antidilutive and therefore the
basic and the diluted EPS are the same.
27. Other financial commitments
The Company has provided a guarantee in respect of
the outstanding liabilities of the subsidiary companies listed below in
accordance with Sections 479A - 479C of the Companies Act 2006, as these
subsidiary companies of the Group are exempt from the requirements of the
Companies Act 2006 relating to the audit of the accounts by virtue of Section
479A of this Act.
Silver Bullet Media Services Limited (06216702)
IOTEC Native Limited (08286180)
Silver Bullet Data Services Limited (10081847)
Local Planet Data Services Ltd (13123941)
Silver Bullet Data Science Limited (14086726)
28. Ultimate controlling party
Management considers there is no ultimate controlling part of the Group.
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulation
(EU) No. 596/2014 ("MAR") as it forms part of United Kingdom domestic law by
virtue of the European Union (Withdrawal) Act 2018, as amended by virtue of
the Market Abuse (Amendment) (EU Exit) Regulations 2019.
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