22 August 2023
Mirriad Advertising plc
("Mirriad" or the "Company")
Unaudited interim results
Mirriad, the leading in-content advertising company, today announces unaudited interim results for the six months ended 30 June 2023 (the "Period" or "H1").
H1 results webinar
The Company will host a webinar for analysts and investors at 14:00 BST on 22 August 2023 following which the presentation will be made available on the Company's website. If you would like to attend, please email mirriad@charlottestreetpartners.com to register for dial-in details.
H1 2023 highlights:
Strategic developments
· The Company completed a strategic review during the Period, concluding that a restructuring to significantly reduce net cash burn alongside an equity capital raise was the most appropriate route forward
· Continued development of the Company's proprietary platform to deliver fully programmatic advertising sales, initially focused on the US market, with expectation of first recurring programmatic revenues in 2024
· Continued development and penetration of the US supply-side customer base with strong focus on the major entertainment and connected TV players resulting in an expectation of contracting for a programmatic service with at least one of these US tier 1 customers by the end of 2023
· Continued development and penetration of the US demand-side with strong focus on the top 20 advertisers by spend, significantly increased number of repeat buyers across key industry categories
· Technology collaboration with Microsoft announced, targeting joint market activity and accelerated roadmap advancement including integration of advanced AI capabilities
· New partner signed in the Middle East boosting revenue in the EMEA region
Financial headlines
· Revenue for H1 of £592k (H1 2022: £577k) despite market headwinds in the US. Due to seasonal nature of key advertising markets and the sales pipeline, higher revenues are expected in H2 2023
· Gross proceeds from Placing and Open Offer in May 2023 of £6.3m (£5.7m net)
· Restructuring programme completed with cost of change of £186k recognised in the Period and Company on track to reduce net cash burn by approximately 35% from £1.1m in the 12 months to June 2023 to around £700k per month for the 12 months to June 2024
· Final closure of Chinese operations at the end of Q1 2023
· Closing cash at the end of June 2023 of £9.8m (30 June 2022: £17.7m) and no debt give a forecast runway to end August 2024
· Marginal increase in cash consumption in the Period to £7.0m (H1 2022: £6.7m) due to a number of one-off receipts in the prior Period
· Operating loss for the Period reduced to £7.5m (H1 2022: loss of £8.5m) as a result of cost reductions announced in 2022
· Loss per share 2p (H1 2022: loss 3p)
KPIs - continuing operations*
| KPI | H1 2023 | H1 2022 | Change |
| Supply side 1. Active supply partnerships 2. Supply partners represented 3. Seconds of content available |
18 68 410,808 |
17 60 337,862 |
+6% +13% +22% |
| Demand side 1. Active agency relationships 2. Number of advertisers who have run campaigns 3. Strategic and commercial partnership agreements with advertisers and agencies |
18 31
1 |
9 18
2 |
+100% +72%
-50% |
* data restated to exclude Chinese operations in H1 2022 comparatives
Stephan Beringer, CEO of Mirriad, said: "Our growing momentum with the biggest entertainment companies in the US and Europe shows Mirriad is now leading the in-content advertising category and that the overall market environment is turning in our direction because of the pressing need for new revenue streams. Our collaboration with Microsoft, which we announced in May 2023, has accelerated the development of our platform as an enterprise level solution that is ready for programmatically sold inventory - a key building block for tier 1 partnerships and prerequisite for the increased scale we've been working towards.
"On the demand side, the Company is focusing on a key account strategy for advertisers. Even before enabling programmatic trading, we already work with nine of the top twenty US advertisers, which account for over ten billion dollars in total combined annual advertising spend. We are also pleased to see an increase in repeat bookings in H1 from large customers in the automotive, retail, FMCG, food & beverage, healthcare and financial services industries.
"We are now moving from market building to growth phase, which we expect to kick in with programmatic revenues in 2024. This will move the Company from its current manual sales process to an automated sales process, facilitating scale. So far in 2023 we've seen improvements across the majority of our KPIs, despite continuing advertising market headwinds in the US and the fact that this is our first year without meaningful revenue from China.
"We expect materially higher revenues in H2 based on the seasonality of the advertising business. The recent cost-cutting measures required some difficult decisions but, following a successful equity fundraise and the strong focus on platform, programmatic and partnerships, we are confident the business is now on a strong footing moving into H2 and beyond."
ENDS
For further information please visit www.mirriad.com or contact:
| Mirriad Advertising plc Stephan Beringer, Chief Executive Officer David Dorans, Chief Financial Officer
| Tel: +44 (0)207 884 2530 |
| Nominated Adviser & Broker: Panmure Gordon James Sinclair-Ford/Daphne Zhang (Corporate Advisory) Rupert Dearden (Corporate Broking) | Tel: +44 (0)20 7886 2500
|
| Financial Communications: Charlotte Street Partners Tom Gillingham Fergus McGowan |
Tel: +44 (0) 7741 659021 Tel: +44 (0) 7590 049023 |
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the company's obligations under Article 17 of MAR.
About Mirriad
Mirriad's award-winning solution unleashes new revenue for content producers and distributors by creating new advertising inventory in content. Our patented, AI and computer vision technology dynamically inserts products and innovative signage formats after content is produced. Mirriad's market-first solution seamlessly integrates with existing subscription and advertising models, and dramatically improves the viewer experience by limiting commercial interruptions.
Mirriad currently operates in the US, Europe and the Middle East.
Chairman's Statement
We have now completed the detailed strategic review and closed a successful equity fundraising round which gives us important clarity to now deliver on the agreed outcomes.
As has been widely reported, the macro-economic climate we operate in has not become any easier, but the decisions the Company has taken are intended to ensure Mirriad can ride out the current advertising market softness and effectively deploy what is an effective and scalable solution against global audience fatigue and shrinking volumes of available inventory.
The restructuring that resulted from the strategic review was not an easy process, and it's always challenging when a business has to say goodbye to colleagues. We wish those who have left the business the best for the next steps in their careers. Throughout the process we have focused on retaining a motivated workforce and I'm pleased to say morale is high and we have strong internal alignment as we drive the business forward.
As part of the strategic review, we have also changed the composition of our board. Alastair Kilgour and Lois Day have stepped down and I would like to personally thank them for their contribution to the business and their strategic insight during the recent period in particular.
We now look forward to further development in programmatic delivery, which is the key route to scale for the Company, particularly in the important US market. As we have indicated, we anticipate 2024 will be a key year for US revenues stemming from this transition.
At the same time, we are already starting to realise cost savings as a result of the steps taken during the strategic review, and continuing to drive these efficiencies will be a priority as we deliver on objectives. I have said previously, we will focus our spend in the areas which will have most impact whilst reducing and reprioritising expenditure away from areas with less immediate revenue generating potential, and this remains true today.
H2 is traditionally a busier period for ad campaign booking and we have a high-quality pipeline. I would like to again thank our shareholders for their continued engagement and patience during the strategic review. Management and the whole team are now hard at work converting the pipeline and preparing the Company for the transition to programmatic delivery which is the key enabler of Mirriad's future growth.
John Pearson
Non-executive Chairman
22 August 2023
Chief Executive Officer's Statement
Overview
We recorded a modest increase in overall H1 revenue in 2023 compared to H1 2022, as the Company still operates within its pre-programmatic sales model. This is set against a backdrop of significant and ongoing US advertising market pressure, which can be tracked back to Q4 2022.
It is pleasing to see our ability to make relative revenue progress in the EU and the Middle East while conditions are less favourable in the US, but the latter has by far the most potential and will remain our focus ahead of advertising market confidence returning.
We have seen improvement across most of the KPIs we regularly report against, and we expect to see further progress in the areas that have stayed broadly stable in this most recent reporting period.
Mirriad's future success will be driven by platform, programmatic and partnerships. All the work undertaken so far is to initiate Mirriad's transition to automated programmatic selling at scale, and with the key building blocks for this now falling into place, we are confident that the rewards will follow soon. The collaboration with Microsoft has accelerated our development, and there is more to come especially as we increasingly leverage Microsoft's leading AI capabilities in our platform.
Campaigns update
In terms of campaigns delivered in H1 2023, there were notable achievements with over 20 tier 1 brands across multiple categories including FMCG, automotive, retail, food & beverages, telco and alcohol. The number of advertisers who have run campaigns has increased by 72% since the comparative period in 2022, and now sits at 31 in total for H1 2023.
The performance of Mirriad campaigns has improved even further, with recent research results showing brand affinity up by 96%, purchase intent up by 54% and our format preferred more than eight times versus traditional TV spot advertising. These results clearly underline the superiority of our in-content format, as a growing number of advertisers renew their investments with us.
This month we released a white paper together with Kantar, the global leader in audience and media research. Our joint study found that a substantial 86% of all viewers take actions to avoid interruptive video advertising across broadcast and network TV, streaming, and online video. In contrast, viewers feel much more positive about in-content advertising from Mirriad and take no steps to avoid this integrated ad format. The research adds further evidence to the value of Mirriad's ad format for the entire industry across all distribution models including SVOD.
The same Kantar study also found that a viewer's negative perception of an ad format leads to lower purchase activity. Viewers are so over-saturated by TV and video advertising that, if they do see the ads, they purchase the advertised products and services at a lower rate. Mirriad's virtual in-content format compares very favourably due to its non-intrusive and natural nature. It is liked by viewers and, therefore, the research indicates that it is able to drive 35% more sales.
Pipeline and partners update
Our KPIs show a steep increase in the number of active agency relationships, as well as a rising number of advertisers who have run campaigns. We also saw an increase in repeat customers in H1 with a total of 14 repeat brands advertising in H1 2023 versus 4 in the same period in 2022. While we don't intend to advance the headline number of supply-side partnerships as rapidly going forward, we do expect the depth and breadth of the engagements with top 10 players in the US we're now focusing on, to take our business to its next level thanks to enterprise-level integrations, including the enablement of programmatically transacted inventory. Our expectation is to sign our first programmatic agreement with a major US entertainment content company by the end of this year.
Technology update
To date our revenue profile has been based on a labour-intensive manual sales process, and 2023 is the year we initiate the transition from this first market building and adoption phase to programmatic selling, which is expected to open up increased volumes, far shorter lead times, automated transactions and true scale. We anticipate this form of revenue building in the US market in particular in 2024.
Outlook
Now that we have completed the strategic review and the equity fundraising plan, we have a cash runway to the end of August 2024, which we expect to give us headroom to unlock the significant opportunity that exists with programmatic selling in 2024 in the US in particular.
Our pipeline is strong, with interest from the top players in the industry, thanks to the progress we have made technologically and by proving the unique performance of our solution with some of the biggest networks, advertisers and content owners as a true differentiator in what is a saturated and constrained global ad market.
This approach is our route to scaling the Company in line with its full potential in highly challenged multibillion dollar media and marketing industries, and to creating long-term shareholder value. Everyone at Mirriad is laser-focused on this objective, and I have every confidence in our re-shaped, highly motivated team's ability to deliver.
Stephan Beringer
Chief Executive
22 August 2023
Chief Financial Officer's Statement
Interim results
In H1 2023 revenues were modestly higher than the same period in 2022 even though this was the first year without material revenues from China. Revenues for the Period were £592k (H1 2022: £577k) an increase of 3%. Looking specifically at continuing operations results were more impressive with revenues for the Period increasing by 26% to £576k (H1 2022: £458k). Within this US revenues continued to be impacted by the overall slowdown in the US advertising market, an industry wide phenomenon that started in Q4 2022. This meant that US revenues declined Period on Period to £313k (H1 2022: £418k).
Conversely Europe & the Middle East ("EMEA") saw a significant growth in revenue, albeit from a modest base to £261k (H1 2022: £40k). This was a result of the sale of regular campaigns on both RTL Deutschland and ProSieben in Germany and a new Middle Eastern partner, MBC.
Gross profit for the Period increased modestly to £433k (H1 2022: £430k). The increase in Gross profit was slightly lower than the increase in revenue as a result of inflationary increases in the cost of sales. As previously stated, cost of sales is principally expenditure on staff as the increase was due to salary inflation.
The Group's operating loss decreased by 11% during the Period to £7.5m (H1 2022: £8.5m) because of a reduction in administrative expenses following the exit from our Chinese business and other cost saving measures instigated in H2 2022. The Company had previously flagged that the exit from China would lead to annualised savings of £1m and that other cost savings measures would lead to an incremental reduction in operating expenditure of around £1.5m on an annualised basis with an overall reduction of £2.5m anticipated on an annualised basis. This is before the impact of the restructuring announced in the Period. In total administrative expenses in the Period decreased by 10% to £8.0m (H1 2022: £8.9m). Headcount as at 30 June 2023 was 91 (30 June 2022: 109).
At the half year end, we have again reviewed our compliance with IAS 38 and we continue to believe that the inherent uncertainty of future revenue generation means that it is not appropriate to capitalise any of our development cost in the first six months of the year.
The Group continues to prioritise expenditure on research and development as it builds programmatic capability. Nevertheless, the Company chose to make some tactical reductions in its technology function in line with the wider business restructuring with a view to focusing spend on the transition to programmatic sales. For the period ending June 2023 total expenditure on research and development was broadly flat at £1.9m (H1 2022: £2.0m).
The loss for the period before tax decreased by 12% to £7.5m (H1 2022: £8.4m) in line with the decrease in operating loss noted above.
Tax
The Group has not recognised any tax assets in respect of trading losses arising in the current financial period or accumulated losses in previous financial years. The tax credit recognised in the current and previous period arises from the receipt of R&D tax credits in the UK. The amount receivable for the Period ended 30 June 2023 is £292k (H1 2022: £293k).
Earnings per share
The company recorded a loss of 2 pence per share (H1 2022: loss of 3 pence per share) mainly as a result of the reduced losses. This calculation is based on the weighted average number of shares in issue during the period and so the shares issued following the placing and open offer in June 2023 had a relatively small impact on the calculation.
Dividend
No dividend has been proposed for the Period ended 30 June 2023 (H1 2022: £nil).
Cash flow
Net cash used in operations (defined as the sum of net cash used in operating activities and the net cash used in investing activities) during the Period increased marginally to £7.0m (H1 2022: £6.7m). There are a number of one off items which explain the divergence between operating loss and cashflow: final cash closure costs for our China operations were incurred in the Period whereas the charge was incurred in H2 2022; H1 2022 included a rent free period on the renegotiated London office lease; and H1 2022 included the receipt for the 2019 restated R&D tax credit whereas there was no matching receipt in H1 2023. During the period no development costs were capitalised (H1 2021: £nil). The Group also incurred £8k (H1 2022: £42k) of capital expenditure on tangible assets.
210,128,596 Ordinary Shares were issued in the Period (H1 2022: Nil) as a result of the successful placing and open offer which closed in May 2023.
Balance sheet
The Group has a debt-free balance sheet. Net assets decreased by 43% to £10.3m (30 June 2022: £17.9m) as the Company used cash balances to fund the Group's ongoing operations balanced by the funds raised from the placing and open offer of £5.7m. Cash and cash equivalents at 30 June 2023 were £9.8m (30 June 2022: £17.7m).
Accounting policies
These condensed consolidated interim financial statements for the half-year reporting period ended 30 June 2023 have been prepared in accordance with the UK-adopted International Accounting Standard (IAS) 34, 'Interim Financial Reporting'.
David Dorans
Chief Financial Officer
22 August 2023
Company Information
| Directors John Pearson Chairman Stephan Beringer Chief Executive Officer David Dorans Chief Financial Officer Bob Head Non-Executive Director Nicole McCormack Non-Executive Director JoAnna Foyle Non-Executive Director | Independent Auditors PricewaterhouseCoopers LLP 7 More London Riverside London SE1 2RT
Solicitors Osborne Clarke LLP 6th Floor One London Wall London EC2Y 5EB |
| Company registration number 09550311 | Company Secretary Jamie Allen |
| Registered Office 6th Floor One London Wall London EC2Y 5EB | Nominated Adviser & Broker Panmure Gordon (UK) Limited 40 Gracechurch St London EC3V 0BT |
| Company website www.mirriad.com | Financial PR Charlotte Street Partners Limited Prospect House 5 Thistle Street Edinburgh EH12 1DF |
|
| Registrars Computershare Investor Services plc The Pavilions Bridgwater Road Bristol BS99 6ZZ |
Condensed consolidated statement of profit or loss and condensed statement of comprehensive income for the six months ended 30 June 2023
| |
|
| Six months ended 30 June 2022 (unaudited) £ |
|
| | Note | Six months ended 30 June 2023 (unaudited) £ | Year ended 31 December 2022 (audited) £ | |
| Revenue | 5 | 591,883 | 577,436 | 1,507,257 |
| Cost of Sales | | (158,977) | (147,154) | (286,316) |
| Gross Profit |
| 432,906 | 430,282 | 1,220,941 |
| | | | | |
| Administrative expenses | | (7,960,508) | (8,880,678) | (16,863,015) |
| Other operating Income | | - | - | - |
| Operating Loss |
| (7,527,602) | (8,450,396) | (15,642,074) |
| | | | | |
| Finance Income | | 80,122 | 23,093 | 71,875 |
| Finance costs | | (5,501) | (18,622) | (22,512) |
| Finance income / (costs) net | | 74,621 | 4,471 | 49,363 |
| | | | | |
| Loss before income tax |
| (7,452,981) | (8,445,925) | (15,592,711) |
| Income tax credit | | 291,984 | 293,300 | 491,888 |
| Loss for the period / year |
| (7,160,997) | (8,152,625) | (15,100,823) |
|
|
|
|
|
|
| Loss per ordinary share - basic 6 | (2p) | (3p) | (5p) | |
All activities are classified as continuing.
| | | Six months ended 30 June 2023 (unaudited) £ | Six months ended 30 June 2022 (unaudited) £ | Year ended 31 December 2022 (audited) £ |
| Loss for the financial period / year | | (7,160,997) | (8,152,625) | (15,100,823) |
| Other comprehensive income Items that may be reclassified to profit or loss: | | | | |
| Exchange differences on translation of foreign operations | | 46,903 | 276,856 | 43,782 |
| Total comprehensive loss for the period / year | | (7,114,094) | (7,875,769) | (15,057,041) |
Condensed consolidated balance sheet
At 30 June 2023
| | Note | As at 30 June 2023 (unaudited) £ | As at 30 June 2022 (unaudited) £ | As at 31 December 2022 (audited) £ | ||||
| | |
|
|
| ||||
| Assets Non-current assets: | | | | | ||||
| Property, plant and equipment | | 380,557 | 704,104 | 544,242 | ||||
| Trade and other receivables | | 186,826 | 188,795 | 187,657 | ||||
| | | 567,383 | 892,899 | 731,899 | ||||
| Current assets | | | | | ||||
| Trade and other receivables | | 1,511,862 | 1,307,677 | 2,221,091 | ||||
| Other current assets | | 821,361 | 1,135,286 | 529,377 | ||||
| Cash and cash equivalents | | 9,791,488 | 17,714,189 | 11,289,123 | ||||
| | | 12,124,711 | 20,157,152 | 14,039,591 | ||||
| Total assets |
| 12,692,094 | 21,050,051 | 14,771,490 | ||||
| Liabilities | | | | | ||||
| Non-current liabilities | | | | | ||||
| Lease liabilities | | 110,107 | 357,912 | 206,988 | ||||
|
| | 110,107 | 357,912 | 206,988 | ||||
| Current liabilities | | | | | ||||
| Trade and other payables | | 1,997,476 | 2,419,427 | 2,904,311 | ||||
| Provisions | | 40,743 | - | 198,199 | ||||
| Current tax liabilities | | 14,330 | - | 14,330 | ||||
| Lease liabilities | | 264,109 | 345,196 | 322,401 | ||||
|
|
| 2,316,658 | 2,764,623 | 3,439,241 | ||||
| Total liabilities | | 2,426,765 | 3,122,535 | 3,646,229 | ||||
|
| |
|
|
| ||||
| Net Assets | | 10,265,329 | 17,927,516 | 11,125,261 | ||||
|
| | | | | ||||
| Equity and Liabilities Equity attributable to owners of the parent | | | | | ||||
| Share capital | 7 | 54,791 | 52,690 | 52,690 | ||||
| Share premium | | 71,406,966 | 65,754,666 | 65,754,666 | ||||
| Share based payment reserve | | 5,506,616 | 4,527,838 | 4,906,855 | ||||
| Retranslation reserve | | (269,369) | (83,198) | (316,272) | ||||
| Accumulated losses | | (66,433,675) | (52,324,480) | (59,272,678) | ||||
| Total equity |
| 10,265,329 | 17,927,516 | 11,125,261 | ||||
| | | | |
| ||||
| | | | |
| ||||
Condensed consolidated statement of changes in equity
For the six months ended 30 June 2023
| | | Six months ended 30 June 2022 | ||||||||
| | Note | Share Capital £ | Share Premium £ | Share based payment reserve £ | Retranslation reserve £ | Accumulated Losses £ | Total Equity £ | |||
| Balance as at 1 January 2022 | | 52,690 | 65,754,666 | 3,665,525 | (360,054) | (44,171,855) | 24,940,972 | |||
| Loss for the period | | - | - | - | - | (8,152,625) | (8,152,625) | |||
| Other comprehensive income for the period | | - | - | - | 276,856 | - | 276,856 | |||
| Total comprehensive loss for the period | | - | - | - | 276,856 | (8,152,625) | (7,875,769) | |||
| Share based payments recognised as expense | | - | - | 862,313 | - | - | 862,313 | |||
| Total transactions with shareholders recognised directly in equity | | - | - | 862,313 | - | - | 862,313 | |||
| Balance as at 30 June 2022 |
| 52,690 | 65,754,666 | 4,527,838 | (83,198) | (52,324,480) | 17,927,516 | |||
| | | Year ended 31 December 2022 (audited) | ||||||||
| |
| Share Capital £ | Share Premium £ | Share based payment reserve £ | Retranslation reserve £ | Accumulated Losses £ | Total Equity £ | |||
| Balance at 1 January 2022 | | 52,690 | 65,754,666 | 3,665,525 | (360,054) | (44,171,855) | 24,940,972 | |||
| Loss for the financial year | | - | - | - | - | (15,100,823) | (15,100,823) | |||
| Other comprehensive income for the year | | - | - | - | 43,782 | - | 43,782 | |||
| Total comprehensive loss for the year | | - | - | - | 43,782 | (15,100,823) | (15,057,041) | |||
| Share based payments recognised as expense | | - | - | 1,241,330 | - | - | 1,241,330 | |||
| Total transactions with shareholders recognised directly in equity | | - | - | 1,241,330 | - | - | 1,241,330 | |||
| Balance as at 31 December 2022 |
| 52,690 | 65,754,666 | 4,906,855 | (316,272) | (59,272,678) | 11,125,261 | |||
| | | Six months ended 30 June 2023 | ||||||||
| | Note | Share Capital £ | Share Premium £ | Share based payment reserve £ | Retranslation reserve £ | Accumulated Losses £ | Total Equity £ | |||
| Balance as at 1 January 2023 | | 52,690 | 65,754,666 | 4,906,855 | (316,272) | (59,272,678) | 11,125,261 | |||
| Loss for the period | | - | - | - | - | (7,160,997) | (7,160,997) | |||
| Other comprehensive income for the period | | - | - | - | 46,903 | - | 46,903 | |||
| Total comprehensive loss for the period | | - | - | - | 46,903 | (7,160,997) | (7,114,094) | |||
| Proceeds from shares issued | | 2,101 | 6,301,757 | - | - | - | 6,303,858 | |||
| Share issue costs | | - | (649,457) | - | - | - | (649,457) | |||
| Share based payments recognised as expense | | - | - | 599,761 | - | - | 599,761 | |||
| Total transactions with shareholders recognised directly in equity | | 2,101 | 5,652,300 | 599,761 | - | - | 6,254,162 | |||
| Balance as at 30 June 2023 |
| 54,791 | 71,406,966 | 5,506,616 | (269,369) | (66,433,675) | 10,265,329 | |||
|
Condensed consolidated statement of cash flows for the six months ended 30 June 2023
|
| Cash and cash equivalents consists of |
|
|
| | |
| |||
| Cash at bank and in hand | 9,791,488 | 17,714,189 | | 11,289,123 | |||||
| Cash and cash equivalents | 9,791,488 | 17,714,189 |
| 11,289,123 | |||||
1 Basis of preparation
These condensed consolidated interim financial statements for the half-year reporting period ended 30 June 2023 have been prepared in accordance with the UK-adopted International Accounting Standard (IAS) 34, 'Interim Financial Reporting'.
The interim report does not include all of the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 31 December 2022, which has been prepared in accordance with UK-adopted international accounting Standards and with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards.
These condensed interim consolidated financial statements for the six months ended 30 June 2023 and for the six months ended 30 June 2022 do not constitute statutory accounts as defined in Section 434 of the Companies Act and are unaudited. The financial information for the six months ended 30 June 2023 presents financial information for the consolidated Group, including the financial results of the Company's wholly owned subsidiaries Mirriad Advertising Private Limited, Mirriad Inc, Mirriad Software Science and Technology (Shanghai) Co. Ltd, and Mirriad Limited (dormant). Comparative figures in the condensed interim financial statements for the year ending 31 December 2022 have been taken from the Group's audited financial statements on which the Group's auditors, Pricewaterhouse Coopers LLP, expressed an unqualified opinion.
The Board approved these interim financial statements on 22 August 2023.
1.1 Going concern
These condensed interim financial statements have been prepared on the going concern basis, notwithstanding the Group having made a loss for the period of £7.16 million (June 2022: £8.15 million). The going concern basis assumes that the Group and Company will have sufficient funds available to continue to trade for the foreseeable future and not less than 12 months from the end of the financial period being reported.
The Group's cash balance was £9.8 million at the period end and the Group remains debt free with no external borrowing.
The Company announced a successful placing and open offer that raised a total of £6.3 million, before costs on 2nd June 2023. This amounts to £5.65 million after fees and related costs. After making enquiries and producing cash flow forecasts for the period up to 31 December 2025, the Directors have reasonable expectations, as at the date of approving the financial statements, that the Company and the Group will have adequate resources to fund the activities of the Company and the Group for the next 12 months from the date of the financial period being reported. The Group and Company's base case forecast suggests that the Group will require additional external funding in August 2024 to be able to continue as a going concern. However, in a severe but plausible downside scenario, if either the revenue growth forecasts or cost saving initiatives fall below expectation, additional funding may be required, within 12 months of approving these condensed interim financial statements which is not currently committed.
While these condensed interim financial statements are prepared on a going concern basis, under a severe but plausible downside scenario the future of the Group and Company is dependent on raising additional external funds from new equity, debt or customer contracts within 12 months from the date of signing these financial statements.
As such these conditions indicate the existence of a material uncertainty which may cast significant doubt about the Group's and the Company's ability to continue as a going concern. These condensed interim financial statements do not include the adjustments that would arise if the Group or Company were unable to continue as a going concern.
2 Accounting Policies
The accounting policies applied are consistent with those of the annual report and accounts for the year ended 31 December 2022, as described in those financial statements other than standards, amendments and interpretations which became effective after 1 January 2023 and were adopted by the Group. These have had no significant impact on the Group's loss for the period or equity.
Seasonality of Operations
Due to the seasonal nature of the US and UK advertising markets higher revenues are usually expected in the second half of the year than the first six months. In the financial year ended 31 December 2022, 35% of US revenues accumulated in the first half of the year, with 65% accumulating in the second half. For the UK Company 22% of revenues accumulated in the first half of 2022 and 78% in the second half.
There are no items affecting assets, liabilities, equity, net income or cash flows that are unusual because of their nature, size or incidence which are required to be disclosed under IAS 34 para 16A(c).
There are no events after the interim reporting period which are required to be reported under IAS 34 para 16A(h).
There are no financial instruments being measured at fair value which require disclosure under IAS 34 para 16A(j)
3 Group financial risk factors
The condensed interim financial statements do not contain all financial risk management information and disclosures required in annual financial statements; the information should be read in conjunction with the financial information, as at 31 December 2022, summarized in the 2022 annual report and accounts. There have been no significant changes in any risk management policies since 31 December 2022.
4 Critical accounting estimates and judgements
The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results might differ from these estimates. IAS34(16A)(d) In preparing these condensed interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended 31 December 2022.
There are no changes in estimates of amounts reported in prior financial years.
5 Segment information
Management mainly considers the business from a geographic perspective since the same services are effectively being sold in every Group entity. Therefore, regions considered for segmental reporting are where the Company and subsidiaries are based, namely the UK, the USA, India and China. The revenue is classified by where the sales were booked not by the geographic location of the customer.
In the current and prior reporting period there is no income outside of the primary business activity.
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the steering committee that makes strategic decisions. The steering committee is made up of the Board of Directors. There are no sales between segments. The revenue from external parties reported to the strategic steering committee is measured in a manner consistent with that in the income statement.
The Parent company is domiciled in the United Kingdom. The amount of revenue from external customers by location of the Group billing entity is shown in the tables below.
Revenue
|
| Six months ended 30 June 2023 (unaudited) £ | Six months ended 30 June 2022 (unaudited) £ | Year ended 31 December 2022 (audited) £ |
| Turnover by geography |
|
|
|
| USA | 313,425 | 418,035 | 1,180,798 |
| UK | 261,321 | 39,654 | 178,476 |
| China | 17,137 | 119,747 | 147,983 |
| Total | 591,883 | 577,436 | 1,507,257 |
Loss before tax
The EBITDA is the loss for the year before depreciation, amortisation, interest and tax. The loss before tax is broken down by segment as follows:
| | Six months ended 30 June 2023 (unaudited) £ | Six months ended 30 June 2022 (unaudited) £ | Year ended 31 December 2022 (audited) £ |
| UK | (7,021,637) | (7,436,070) | (13,483,196) |
| USA | 105,213 | (129,500) | (253,219) |
| India | (416,438) | (321,693) | (770,084) |
| China | (30,041) | (312,332) | (695,848) |
| Total EBITDA | (7,362,903) | (8,199,595) | (15,202,347) |
| Depreciation | (164,699) | (250,801) | (439,727) |
| Finance income / (costs) net | 74,621 | 4,471 | 49,363 |
| Loss before tax | (7,452,981) | (8,445,925) | (15,592,711) |
6 Loss per share
(a) Basic
Basic loss per share is calculated by dividing the loss for the period / year by the weighted average number of ordinary shares in issue during the period / year. Potential ordinary shares are not treated as dilutive as the Group is loss making and such shares would be anti-dilutive.
| Group | Six months ended 30 June 2023 | Six months ended 30 June 2022 | Year ended 31 December 2022 |
| Loss attributable to owners of the parent (£) | (7,160,997) | (8,152,625) | (15,100,823) |
| Weighted average number of ordinary shares in issue Number | 309,365,026 | 279,180,808 | 279,180,808 |
The loss per share for the period was 2p (six months to 30 June 2022: 3p; year ended 31 December 2022: 5p).
No dividends were paid during the period (six months to 30 June 2022: £nil; year ended 31 December 2022: £nil).
(b) Diluted
Potential ordinary shares are not treated as dilutive as the Group is loss making and such shares would be anti-dilutive
7 Share capital
Ordinary shares of £0.00001 each
|
|
| |
| Allotted and fully paid |
| Number |
| At 1 January 2023 |
| 279,180,808 |
| Issued during the period |
| 210,128,596 |
| At 30 June 2023 |
| 489,309,404 |
On 5 June 2023 210,128,596 Ordinary Shares were issued for 3p per share as part of a £6.3 million fundraise from new and existing shareholders. This was split as follows:
· 191,666,667 Ordinary Shares issued on 5 June 2023 from the placing exercise;
· 18,461,929 Ordinary Shares issued on 5 June 2023 from an open offer to existing shareholders on the basis of 5 new shares for every 21 existing Ordinary Shares held.
8 Net cash flows used in operating activities
|
|
| Six months ended 30 June 2023 (unaudited) £ | Six months ended 30 June 2022 (unaudited) £ | Year ended 31 December 2022 (audited) £ |
| Loss for the financial period / year |
| (7,160,997) | (8,152,625) | (15,100,823) |
| Adjustments for: |
| | | |
| Tax on loss on ordinary activities | | (291,984) | (293,300) | (491,888) |
| Interest income | | (80,122) | (23,093) | (71,875) |
| Lease interest costs | | 5,501 | 18,622 | 22,512 |
| Operating loss: | | (7,527,602) | (8,450,396) | (15,642,074) |
| Amortisation of right-of-use assets | | 128,446 | 163,550 | 302,804 |
| Depreciation of tangible assets | | 36,253 | 87,251 | 136,923 |
| (Profit) / loss on disposal of disposal of tangible assets | | 3,392 | - | - |
| Bad debts (reversed) / written off |
| (721) | (3,732) | (890) |
| Share based payment charge | | 599,761 | 862,313 | 1,241,330 |
| Adjustment to tax credit in respect of previous periods |
| - | - | 2,041 |
| Foreign exchange variance |
| 46,903 | 276,857 | 43,782 |
| Movement in provisions |
| (157,456) | - | 198,199 |
| - Decrease / (increase) in debtors |
| 710,781 | 562,374 | (336,799) |
| - (Decrease) / increase in creditors |
| (892,168) | (439,659) | 37,538 |
| Cash flow used in operating activities |
| (7,052,411) | (6,941,442) | (14,017,146) |
9 Related party transactions
The Group is owned by a number of investors the largest being M&G Investment Management, which owns approximately 14% of the share capital of the Company. Accordingly there is no ultimate controlling party.
During the period the Company had the following related party transactions. No guarantees were given or received for any of these transactions.
IP2IPO Limited - a company which shares a parent company with IP2IPO Portfolio (GP) Limited, a major shareholder in the Group, and which also appoints a Director of the Group charged Mirriad Advertising plc for the following transactions during the period: (1) £10,000 for the services of Lois Day as a Director from 1 January 2023 until 30 June 2023. Of this amount £1,667 was accrued and unpaid as at 30 June 2023.
Parkwalk Advisors Limited - a company which shares a parent company with IP2IPO Portfolio (GP) Limited, a major shareholder in the Group, and which also appoints a Director of the Group charged Mirriad Advertising plc for the following transactions during the period: (1) £10,000 for the services of Alastair Kilgour as a Director from 1 January 2023 until 30 June 2023. £3,333 of this amount was invoiced and unpaid as at 30 June 2023, and subsequently paid on 12 July 2023. £1,667 of this amount was accrued and unpaid as at 30 June 2023.
All the related party transactions disclosed above were settled by 30 June 2023 except where stated.
10 Availability of Interim Report
Electronic copies of this interim financial report will be available on the Company's website at www.mirriadplc.com/investor-relations.
ENDS
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