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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Blinkx | LSE:BLNX | London | Ordinary Share | GB00B1WBW239 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 20.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From May 2019 to May 2024
TIDMBLNX
RNS Number : 9193F
Blinkx Plc
17 November 2015
BLINKX PLC ANNOUNCES FIRST HALF FINANCIAL YEAR 2016 RESULTS
Integration on Track, Core Products Approach 70% of Revenues - Up 37% Year-on-Year, Unified Programmatic Platform Launched and Ramping Quickly
London, England and San Francisco, CA - 17 November 2015 - blinkx PLC (BLNX.L, "Company" or "Group"), today reports financial year 2016 results for the period covering 1 April 2015 through 30 September 2015 ("H12016" or "the Period"). The Company's H12016 conference call will be webcast live at www.blnx.com on 17 November 2015 at 10:30AM GMT; 5:30AM EST; 2:30AM PST.
Financial Highlights
Hot Features
Premium
Six months Six months
to to
30 September 30 September
2015 2014
(unaudited) (unaudited)
$000 $000
------------- -------------
Revenue 91,388 106,004
% of Core Revenue 69% 43%
% of Non-Core Revenue 31% 57%
Adjusted* EBITDA (6,840) 1,023
Adjusted* Loss for the period attributable
to equity holders of the parent (13,399) (5,589)
Loss for the period attributable to equity
holders of the parent (79,517) (11,866)
Cash & marketable securities 82,341 95,734
Business Highlights
-- "Core" mobile, video and Programmatic revenues grew 37% year-on-year to $62.9 million; -- Redirected resources and investments to Core products, which now represent 69% of revenues;
-- Forged key partnerships with Tier 1 demand partners, including DataXu, MediaMath and The Trade Desk;
-- Expanded advertiser relationships with Kellogg's, Nature Valley, Warner Bros., Google, Nestle, Marriott, Ralph Lauren and Lufthansa;
-- Added major Tier 1 supply partners that include AOL, Nexage and OpenX;
-- Signed 284 direct publisher partners, including Monster, Federated Media, Rodale, Merriam-Webster and Meredith Corporation;
-- Enhanced brand safety and consumer protection through technology integrations with leading traffic quality partners, Integral Ad Science, DoubleVerify and Moat, and ad quality partners, The Media Trust and RiskIQ;
-- Took actions to defocus and exit certain historical, "Non-Core" product lines which, combined with amended forecast to reflect Non-Core performance, resulted in non-cash exceptional charges of approximately $60M;
-- Completed Group-wide restructuring at a cost of $1 million, which is expected to reduce fixed annualized operating expenses by over $15 million on a pro-forma basis, and better align the cost structure with market conditions and shifts in product mix; and
-- Appointed Raj Chellaraj as Chairman of the blinkx Board of Directors.
Commenting on the results, S. Brian Mukherjee, CEO of blinkx, said: "During the Period, the Company continued to pursue its transformation strategy - investing in the Core product areas of mobile, video and Programmatic trading, which continue to demonstrate strong growth within the Sector. This was coupled with an effort to defocus or exit historical product lines that are considered Non-Core to future growth, including certain Desktop products, services and technologies.
Integration - of people, platforms and processes, has been a top priority during the Period and an important driver of operational efficiency and standardization across the Company. The recent acquisitions we completed have effectively aligned with our transformation and growth focus. During the Period, we streamlined operations, shifted investments and resources to drive Core product growth, and aligned our engineering, product, sales and operations teams around the Company's unified RhythmOne ("1R") offering, led by mobile, video and Programmatic capabilities.
The steps we took over the past year, including key acquisitions and investments, have been critical to the Company's transformation. Core product revenues grew by 37% year-on-year - a clear indicator that Company strategy is aligned with market shifts and growth trends. Looking forward, we anticipate Core products to gain further traction, as we focus our efforts to return to profitability."
* Financial Measures and Terms
-- This press release contains references to adjusted EBITDA and Adjusted Loss for the period attributable to equity holders of the parent. These financial measures do not have any standardized meaning prescribed by IFRS and are therefore referred to as non-GAAP measures. The non-GAAP measures used by blinkx may not be comparable to similar measures used by other companies.
-- Adjusted EBITDA is defined as profit attributable to equity holders of the parent before interest, taxes, depreciation and amortisation, share based payment expense, and acquisition and exceptional costs. Management believes that this measure is a useful supplemental metric as it provides an indication of the results generated by the Company's principal business activities prior to consideration of how the results are impacted by non-recurring costs, how the results are taxed in various jurisdictions, or how the results are affected by the accounting standards associated with the Group's share based payment expense.
-- Adjusted Loss for the period attributable to equity holders of the parent before acquisition and exceptional costs, amortization of purchased intangibles and other (expense)/income.
-- "Programmatic" ad buying characteristically refers to the use of software to purchase digital advertising on a data-driven basis, as opposed to the traditional process, e.g. RFPs, human negotiations and manual insertion orders.
For further information please Financial Media Contacts contact: Analyst and Investor Edward Bridges/Charles Palmer Contact FTI Consulting Dan Slivjanovski (UK) 020 3727 1000 blinkx plc (US) 415 655 1450 NOMAD and Joint Broker for blinkx Joint Broker for blinkx plc plc Lorna Tilbian/Mark Lander/Nick Charles Lytle/Christopher Wren Westlake Citigroup Global Markets Limited Numis Securities Limited (UK) 020 7986 9756 (UK) 020 7260 1000
Overview
The past six months have been a period of transformation and investment for blinkx - dynamics that will continue to shape the Company's strategy in the near-term. blinkx accelerated investments in its Core strategic capabilities of mobile, video and Programmatic trading, while reducing and exiting certain historical product lines that are considered Non-Core to future growth. The Company made significant progress toward realigning staff, technology and processes to this goal while adapting to dynamic market conditions.
Performance for H12016 was in line with the Company's October 2015 trading update, led by strong growth in Core revenues. While the Company experienced an overall operating loss in H12016, as a result of the anticipated decline in Non-Core revenues, management took decisive steps to align the Group's cost structure with changing market conditions and profitability profiles of its product mix.
For the first time, 2015 saw Programmatic ad spend surpass traditional digital ad spend to account for 59% of total digital display ad spend - a trend that is expected to continue in the near-term. blinkx invested significantly in its Programmatic offering during the Period and launched its unified Programmatic platform, "RhythmMax" which provides an end-to-end marketplace that contains display, video, rich media and native ad formats across any digitally addressable screen - including mobile, desktop and connected TV.
During the Period, blinkx integrated its platform with industry-leading Programmatic demand partners, Criteo, DataXu, MediaMath, OwnerIQ, Pubmatic, SiteScout, Brightroll, The Trade desk, Bidswitch, Genesis Media, Integrate, Defy Media, SOVRN, CoxDS, Sekindo and OutDigi, and strengthened demand relationships with over 60 new video, mobile and display partners. The Company also bolstered supply side integrations with key partners, including AOL, LiveRail, Nexage, OpenX, Pubmatic, MoPub, PulsePoint and Rubicon, and integrated 284 new publisher partners, including Topix, Monster, Hubbard Broadcasting, Federated Media, Rodale, Merriam-Webster, The Portland Tribune and Meredith Corporation. While many of the above integrations are complete, only a handful are fully operating, with the remainder undergoing configuration tests to bring mobile, video, native and connected TV ad formats online.
RhythmMax allows blinkx to capture a greater share of each advertising dollar spent, and exemplifies the Company's strategy to forward integrate within the value chain, completing the key components of a unified advertising stack - from consumers to advertisers. Importantly, in contrast to competing marketing/advertising platforms, blinkx has taken a decisive stance on the quality of traffic and ads within its marketplace. This has required significant investments in hardware and software, as well as traffic and ad quality detection and monitoring technology, which blinkx believes will be critical for the future of the Company and Industry.
(MORE TO FOLLOW) Dow Jones Newswires
November 17, 2015 02:00 ET (07:00 GMT)
The need for supply accountability is paramount within the ecosystem. It is estimated that advertisers are losing up to $6.3 billion per year in display advertising alone to botnets - the most common type of fraud. As such, one of the Company's areas of investment has been a unique component of RhythmMax branded "RhythmGuard" - a proprietary combination of pre- and post-bid filtering technology that eliminates fraudulent or suspicious traffic before it reaches the marketplace, increasing the efficiency and transparency of advertising campaigns, driving ROI for advertisers, and maximizing yield for publishers. Designed to complement third-party verification tools, RhythmGuard demonstrates the Company's proactive stance toward combating fraud, and aligns RhythmMax with emerging traffic and ad quality standards and requirements.
blinkx also forged several new and expanded relationships with third-party viewability, verification and reporting partners that include Moat, Integral Ad Science, Double Verify, The Media Trust and RiskIQ - all accredited by the Media Rating Council (MRC). The combination of these partnerships and proprietary filtering technology helps blinkx ensure that its audience quality consistently meets advertisers' requirements in this competitive environment. blinkx expects to see a corresponding increase in price and margins over the long term.
blinkx continues to build strength in Core mobile and online video advertising segments, which are expected to grow by 21.2% and 18.5% CAGR respectively over five years, according to eMarketer. The Company considers investment in these areas critical to growth. Video consumption increasingly is occurring through mobile devices, and advertising spend is beginning to shift to mobile away from traditional channels like linear TV. blinkx has a significant supply of highly differentiated in-stream and in-app video inventory that is sought after by advertisers for brand advertising.
On the brand side, blinkx has been able to attract notable new and repeat advertisers, including Kelloggs, Nature Valley, Payless, TIAA CREF, Warner Bros., Google, Synchrony Bank, Nestle, Airheads (PVM), Marriott, Ralph Lauren and Lufthansa.
Market
As expected, online advertising continued to grow in 2015. Today, worldwide digital ad spending accounts for 29.9% of total media ad spending, which itself amounts to approximately $170.2 billion - and is projected to grow at a 13.6% CAGR over five years (2015-2019). By 2019, worldwide digital ad spending is projected to ramp significantly to $283.0 billion, which would equate to nearly two-fifths (39.3%) of total media ad spending.
Programmatic trading - the use of technology to automate the buying, selling or fulfillment of ads - is fast becoming the "new standard" for online advertising, and is even extending to linear TV. In the US, eMarketer estimates that Programmatic display ad spending will reach $15.4 billion in 2015. Of that, mobile Programmatic accounts for three out of five dollars (60.5% or $9.3 billion) spent. Currently, however, a significant majority of mobile advertising bought programmatically is performance-focused (e.g., driving an app install). blinkx believes that immersive, video-led brand advertising will present the larger future mobile opportunity for Advertisers - similar to TV, but more highly personalized.
The ability to identify individuals using first-party data regardless of the device they are using is fast becoming an industry imperative. The potential for true user targeting has driven major deals in the industry. This trend will likely continue, with key partnerships being forged between telecoms and ad tech firms as they combine user data with the ability to deliver, optimize, measure and monetize ad campaigns.
Key sector trends of note include the following:
1. An overwhelming majority of Internet users consume video. In the US, nearly four out of five (78.6%) Internet users are viewers of digital video - 8.4 million more than in 2014. Concurrent with increased consumption, video advertising spending is projected to increase at 18.5% CAGR over the next five years. According to eMarketer, advertisers will spend $7.5 billion on video this year and that figure is projected to nearly double by 2019, reaching an estimated $14.8 billion.
2. Smartphone and tablet use is surging - and advertising dollars are following suit. In 2015, nearly three out of four (73.4%) US Internet users use a smartphone and 61.1% use a tablet. This equates to year-on-year device usage growth rates of 11.4% and 6.7%, respectively. Moreover, at almost three hours per day in 2015, nearly one-quarter (24.2%) of US users' total time spent with media occurs on mobile devices (non-voice) - a figure that exceeds daily desktop/laptop Internet use by 42 minutes. In line with this trend, mobile advertising spending in 2015 is expected to outpace desktop/laptop spending by $2.7 billion. Within mobile, video ad spending is projected to reach nearly $2.8 billion in 2015 (over 9% of total mobile spending).
3. Programmatic buying in 2015 has surpassed direct sales. According to eMarketer, Programmatic will account for 59.0% of total US digital display ad spending in 2015, or $15.4 billion. Programmatic's share of total US digital display ad spending is expected to surge to 72.0% by 2017 ($26.8 billion), fueled by growth of private marketplace and Programmatic direct deals, the rapid rise of Programmatically-driven mobile ad revenues, and the increased availability of more premium inventory via such channels. Mobile Programmatic ad spending will reach $9.3 billion in 2015 and account for 60.5% of total US Programmatic display ad spending.
4. Emerging Consumer Preferences. According to the Q2 2015 GlobalWebIndex survey, 28% of Internet users in North America use Ad Blocking Software. This issue came into relief in September 2015 with the launch of Apple's iOS 9 with ad blocking options built into the operating system. While consumer backlash to the proliferation of online advertising and data collection tools may be understandable, ads remain a necessary option to subsidize access to premium content online. In response to ad blocking, publishers are employing a number of strategies to preserve monetization - serving more "native" ads that are delivered directly from publishers' content management systems and cannot be blocked, installing anti-ad blocking software and enabling pay walls to access content. Currently, the impact of ad blocking on blinkx's business is indeterminate. In essence, ad blocking does highlight a larger trend - the need to develop a sustainable value exchange proposition that is respectful of consumer choice, impactful for the advertiser and sustainable for the content owner.
5. Technology Changes: Technology shifts to enhance consumer experiences online continue to appear. A key development has been the blocking of Flash ads by browsers (used extensively for online video) in favor of the more universal HTML5 standard that runs seamlessly on all mobile and desktop devices. This technology change is driving faster load times for mobile web pages, which are becoming indistinguishable from those of mobile apps and deliver a better consumer experience in the long term.
6. Competitive Landscape: Industry consolidation continues to be an ongoing trend as the ad tech space matures. Advertising platforms have been a particular focus of M&A activity as established supply players forward integrate through the value chain. The recent acquisition of AOL by Verizon, followed by that of Millennial Media by AOL are two striking examples of this trend.
The above trends support and reinforce the Company's recent strategic activities and direction. The sector continues to show strong structural growth and maturation. Advertisers are gravitating toward solutions that centralize media buying and audience targeting across channels, within brand-safe environments. blinkx now has competitive products in many areas with an integrated platform that delivers unique and uniformly qualified inventory, across channels at scale. Industry consolidation also represents a potential path to scale quickly. As parts of the ecosystem combine, there will be opportunity to augment the Company's supply footprint. blinkx will continue to forge new demand partnerships, making its supply available and attractive to a larger pool of ad agencies and demand partners. The ecosystem also is expected to continue to present new challenges like ad blocking and flash blocking. blinkx will continue to monitor such issues, but remains confident that mobile, video and programmatic advertising will grow as key means of enabling access to quality online content.
Technology
During the Period, blinkx invested approximately $16 million in products, platforms, research and development, with a priority focus on cross-screen advertising and Programmatic trading, both key to the company's future growth. blinkx launched the RhythmMax unified Programmatic platform, and has seen exchange volume increase by more than 50% in the last three months, trending to almost 30 billion impressions per day and easily ranking within the top 10 platforms globally by transaction volume. To support this growth, blinkx updated its regional data centers and increased capacity (server and network). The platform is now integrated with over a dozen of the 40 largest Programmatic partners globally, with several others underway and targeted for completion over the next 6 to 12 months. This volume of impressions is currently being monetized at a rate of less than 0.5%, - representing an inherent growth opportunity for the Company, as additional Demand integrations are completed.
(MORE TO FOLLOW) Dow Jones Newswires
November 17, 2015 02:00 ET (07:00 GMT)
To strengthen and accelerate its end-to-end Programmatic technology stack, blinkx forged enhanced relationships with key Demand Side Platforms, including DataXu, MediaMath, Criteo and The Trade Desk. These integrations let agencies and brands access blinkx's inventory on-demand. With Programmatic trading gaining in prominence, blinkx's unified platform allows the Company to represent its inventory through automated trading channels in a manner that maximizes revenue share for the enterprise.
blinkx also made critical enhancements to its RhythmGuard technology, including additional automated protections against malware ads and domain masking by publishers. These added protections help increase transparency around supply quality and brand safety. The result is a highly differentiated marketplace proposition that allows the Company to enrich inventory made available to advertisers through its Programmatic channels, and drive greater demand. Through RhythmMax, the Company can provide one of the cleanest sources of pre-filtered, verified and targetable inventory in the industry, at scale. These capabilities make the platform strategically important to key ecosystem partners, including Mobile and Cable Carriers, Web, Video and App Developers, Content Publishers, Trading Desks, Agencies and Marketers.
On the supply side, blinkx released a comprehensive management platform for publishers through a single, universal "tag," now in beta testing. The universal tag gives publishers control and flexibility to optimize the monetization potential of their sites. This provides greater transparency into ad placements and deepens the Company's relationships with key publisher partners. blinkx is now serving over 1.5 million tags per day.
blinkx also made significant enhancements to its Advanced Creative Platform (ACP), a self-serve utility that lets demand partners dynamically build rich media ads. ACP is expected to drive parallel revenue streams - a modest software-as-a-service (SaaS) revenue from demand partners that access the tool independently for ad production, and greater incremental media fees for advertisers that use the tool as a value-add platform within the blinkx Programmatic marketplace. The Company also designed new creative ad units in support of its mobile video business, and converted all Flash ad units and infrastructure to HTML5, ensuring creative is no longer Flash-dependent as demand partners switch to HTML5.
In addition, blinkx released a new version (6.1) of its Software Development Kit (SDK) for app developers, now in beta testing with several leading app developers. This release included updates to comply with the Apple and Google operating systems, integration with RhythmOne's consolidated ad server and mediation support for third-party AdServers. The SDK supports all standard video and rich media ad units and includes emerging viewability standards for both display and video.
Taken together, these developments represent a significant step forward as the Company coalesces its products and technology to better serve advertisers and publishers in a competitive and challenging marketplace, and continues to invest in capacity to drive future growth.
Integration
Integration efforts during the Period have been focused on eight key areas: Products, Technology, Operations, Marketing, Sales, Finance, Legal and Human Resources. Achievements included consolidation of office locations, strategic staff reductions, and integration of legacy infrastructure and technology to reduce redundancy and streamline operations.
During H1 2016, the Company closed or consolidated office locations in Los Angeles, London, New York and San Francisco. In line with its integration initiatives, the Company made reductions in headcount across sales, advertising operations and publisher operations. By the end of FY 2016, the Company expects to reduce its headcount to approximately 325 from a peak of over 425 Employees and Contractors and consolidate its offices from 21 to 11 globally.
During the Period, key integration milestones included consolidation of reporting, invoice and HR platforms, the streamlining of banking and vendor relationships, and transition to a new human resources management platform. Marketing launched both RhythmOne and RhythmMax brands, built new corporate and trade websites, and significantly ramped content development and lead generation efforts. Sales teams have been fully integrated across regions, and a comprehensive training program was launched to facilitate unified, cross-platform sales that advance the RhythmOne proposition.
blinkx streamlined its product portfolio into four categories to address Publishers, Content Partners, Advertisers and its Platform Infrastructure. The Company focused efforts on launching the RhythmMax platform and consolidating its operations infrastructure from 14 legacy and acquired datacenters into 5 globally distributed datacenters.
The progress of integration has been in line with expectations. Highlights include the aggregation of comprehensive ad inventory and development of private marketplaces within the RhythmMax platform, and testing of owned and controlled properties on the integrated ad server. Upcoming progress milestones include the transition of all ad serving to a single platform, completion of a unified publisher portal and tag management system, and the streamlining of CRM systems to accommodate the new sales structure. These tasks currently are on track for completion in the second half of the financial year.
Leadership
Mr. Raj Chellaraj, the Group's independent Non-executive Director, assumed the role of Chairman of the blinkx Board of Directors. In addition to his role as Chairman of the Board, Mr Chellaraj will serve on the Company's Nomination and Audit Committees. Mr. Chellaraj brings to blinkx over thirty years of finance, strategy and governance expertise in both the private and public sectors. Prior to joining Stanford University as Associate Dean of the Business School, Raj held several senior government positions in the George W. Bush administration. Most recently he was the Assistant Secretary of State for Administration in the United States Department of State, to which he was nominated by President George W. Bush and confirmed unanimously by the United States Senate.
During the Period, Mr Anthony Bettencourt stepped down as Chairman of the blinkx Board of Directors, and will remain on the Board as a Non-executive Director, serving on the Company's Nomination and Remuneration Committees. Mr Bettencourt had been Chairman of the blinkx Board of Directors since 2008.
Financial Highlights
Over 95% of blinkx's revenue is generated from online advertising. Technology and services related to managing digital assets and advertising spend account for the remainder of revenue. In the Period, revenue totaled $91.4 million, compared with $106.0 million in revenue reported for the half year ended September 2014 (H12015). The Company saw strong revenue growth in its Core products including Programmatic, mobile and video ad formats, which accounted for 69% of the overall H12016 revenues versus 43% in H12015. Adjusted EBITDA for H12016 was ($6.8) million compared with adjusted EBITDA of $1.0 million for H12015.
Adjusted loss from operations for H1 2016 was $13.1 million compared with an adjusted loss from operations of $3.5 million for H1 2015. The reduction in profitability was caused by a decline in Non-Core revenues, an increase in the cost of traffic acquisition, primarily due to the shift in the competitive environment and changing product mix.
The total expense base for H1 2016 was $104.5 million compared with $109.5 million for H1 2015. Cost of revenues of $55.3 million increased to 60.5% of revenues compared with 53.5% last year. The increase was driven by a shift in product mix and an increase in premium inventory costs, which is affecting the entire industry. Operating expenses of $49.2 million decreased from $52.8 million year-on-year, driven primarily by cost reduction initiatives and additional operational improvements during the Period, offset by incremental operating costs associated with the acquisitions.
Adjusted net loss for H1 2016 was $13.4 million compared with an adjusted net loss of $5.6 million for H12015.
The Company has taken decisive steps to exit and stop investments in various historical product lines that were considered Non-Core leading to a Net loss for H12016 of $79.5 million compared with a Net loss of $11.9 million for H12015. These steps have simplified operational complexity, addressed certain issues impacting the industry and established the foundation for future growth. Based on these actions and an adjusted forecast due to weaker than expected performance of some products, certain value of Goodwill related to Non-Core legacy assets acquired was considered impaired, as the recoverable amount was less than its carrying value, leading to a non-cash impairment charge of $50.3 million. In addition, the Company accelerated a $9.0 million non-cash write off of certain intangible assets related to legacy platforms and products.
blinkx's cash and marketable securities as at 30 September 2015 totaled $82.3 million, compared with $95.7 million at 31 March 2015. The decrease of $13.4 million during the Period included $6.8 million in Adjusted EBITDA loss, $1.1 million to fund incremental working capital, $3.3 million in development and capital investments, $1.2 million in acquisition related costs and $1.0 million in restructuring charges. The principal risks and uncertainties affecting the Group have not changed since those disclosed in the annual report for the year ended 31 March 2015.
Outlook
(MORE TO FOLLOW) Dow Jones Newswires
November 17, 2015 02:00 ET (07:00 GMT)
The vision for the Company remains to connect consumers with brands through premium content across devices. With the key portfolio components in place, blinkx expects the second half of the financial year to show continued growth of Core mobile, video and Programmatic products, while actively managing down and potentially divesting Non-Core product lines. Integration, continued cost actions, the launch of new products and a return to profitability remain priorities, with key infrastructure milestones scheduled for completion through the first half of calendar 2016 that will simplify execution of multi-channel advertising campaigns for both advertisers and publishers.
The Company's mission is to democratize access to quality digital content in a way that is respectful of consumer choice, impactful for the advertiser and sustainable for the content owner. Solving this fundamental equation is critical in order for the industry to thrive. These basic tenets will guide blinkx's decision-making in the near- and long-term, and represent a path to sustainable growth for both the Company and industry.
BLINKX PLC
CONDENSED CONSOLIDATED INCOME STATEMENT (UNAUDITED)
Results for the six months to 30 September 2015
(in thousands, except per share amounts)
Six months Six months
to to
30 September 30 September
2015 2014
(unaudited) (unaudited)
Note $'000 $'000
----- ------------- -------------
Revenue 91,388 106,004
------------- -------------
Cost of revenue (55,335) (56,719)
Research and development (17,895) (13,964)
Sales and marketing (23,234) (31,664)
Administrative expenses (8,059) (7,150)
Total cost and expenses (104,523) (109,497)
-
Loss from operations before acquisition
and exceptional costs and amortization
of purchased intangibles* (13,135) (3,493)
------------------------------------------------------ ----- ------------- -------------
Amortisation of purchased intangibles
Research and development (1,984) (1,750)
Sales and marketing (2,990) (2,911)
Administrative expenses (125)
(5,099) (4,661)
Acquisition and exceptional costs 8 (60,992) (1,623)
Loss from operations (79,226) (9,777)
Other (expense) / income (27) 7
Investment income 10 67
Finance costs (81) -
Loss before taxation (79,324) (9,703)
Tax 3 (193) (2,163)
Loss for the period attributable to equity
holders of the parent before acquisition
and exceptional costs, amortization of
purchased intangibles and other (expense)/income** (13,399) (5,589)
------------------------------------------------------ ----- ------------- -------------
Loss for the period attributable to equity
holders of the parent (79,517) (11,866)
============= =============
Note Cents Cents
----- ------------- -------------
Earnings per share
Basic 4 (19.75) (2.96)
============= =============
Adjusted basic* 4 (3.33) (1.40)
============= =============
Diluted 4 (19.75) (2.96)
============= =============
Adjusted diluted* 4 (3.33) (1.40)
============= =============
*Adjusted for acquisition and exceptional costs of $61.0m (FY2015:$1.6m) and amortization of purchased intangibles of $5.1m (FY2015: $4.7m).
** Adjusted for acquisition and exceptional costs of $61.0m (FY2015:$1.6m), amortization of purchased intangibles of $5.1m (FY2015: $4.7m), and other loss of $27 thousand (FY2015: other income of $7 thousand).
BLINKX PLC
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(UNAUDITED)
For six months ended 30 September 2015
Six months Six months
to to
30 September 30 September
2015 2014
(unaudited) (unaudited)
$'000 $'000
------------- -------------
Loss for the year (79,517) (11,866)
Exchange difference on translation of
foreign operations (may be reclassified
subsequently to profit or loss) 82 97
Total comprehensive loss for the year,
net of related tax effects (79,435) (11,769)
============= =============
BLINKX PLC
CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
As at 30 September 2015
(in thousands)
As at As at As at
30 September 31 March 30 September
2015 2015 2014
(unaudited) (audited) (unaudited)
Note $'000 $'000 $'000
----- ------------- ---------- -------------
ASSETS
Non-current assets
Goodwill 7 37,129 87,520 75,767
Intangible assets 29,371 43,806 38,574
Property, plant and equipment 2,590 3,340 2,186
Other receivables and restricted
cash 840 1,071 172
Deferred tax asset 18,918 19,128 16,892
Marketable securities 7,490 - -
96,338 154,865 133,591
------------- ---------- -------------
Current assets
Trade receivables 34,195 37,741 37,142
Other receivables 5,408 7,193 5,302
Cash and cash equivalents 22,349 95,734 114,563
Marketable securities 52,502 - -
114,454 140,668 157,007
------------- ---------- -------------
Total assets 210,792 295,533 290,598
------------- ---------- -------------
LIABILITIES
Non-current liabilities
Deferred tax liability (59) (59) (654)
Other payables (632) (1,189) (600)
Provisions for liabilities and
charges - (172) -
Current liabilities
Trade and other payables (42,952) (49,839) (38,198)
Provisions for liabilities and
charges (545) (577) (512)
Total liabilities (44,188) (51,836) (39,964)
Net assets 166,604 243,697 250,634
============= ========== =============
Shareholders' equity
Share capital 5 7,518 7,502 7,469
Share premium account 5 168,024 168,008 167,987
(MORE TO FOLLOW) Dow Jones Newswires
November 17, 2015 02:00 ET (07:00 GMT)
Shares to be issued 6 1,686 1,686 3,579
Share based compensation reserve 24,509 22,175 19,433
Currency translation reserve (8,720) (8,802) (8,372)
Merger reserve 63,554 63,554 61,681
Retained deficit (89,967) (10,426) (1,143)
Total equity 166,604 243,697 250,634
============= ========== =============
BLINKX PLC
CONDENDSED CONSOLIDATED CASH FLOW STATEMENT (UNAUDITED)
For the six months to 30 September 2015
(in thousands)
Six months Six months
to to
30 September 30 September
2015 2014
(unaudited) (unaudited)
Note $'000 $'000
----- ------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES
Loss from operations (79,226) (9,777)
Adjustments for:
Depreciation and amortization 18,051 7,066
Share based payments 2 2,334 2,114
Goodwill impairment 7 50,321 -
Non-cash acquisition and exceptional
cost - (496)
Loss on sales of computer equipment (26) -
Change in provisions (371) -
Foreign exchange gain 75 325
Operating cash flows before movements
in working capital (8,842) (768)
Changes in operating assets and liabilities:
Decrease / (Increase) in trade and other
receivables 6,077 (2,651)
(Decrease) / Increase in trade and other
payables (7,159) (4,042)
Net cash used in operations (9,924) (7,461)
Income taxes (paid) / refund (151) 79
Net cash used in operating activities (10,075) (7,382)
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES
Interest (paid) / received (71) 67
Purchase of property, plant and equipment (382) (298)
Capitalization of internal development
charges (2,414) (1,465)
Acquisitions, net of cash acquired - (3,163)
Purchase of marketable securities (60,000) -
Net cash used in investing activities (62,867) (4,859)
------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net payments on finance lease (489) (14)
Proceeds from issuance of shares 32 47
Net cash (used) / generated in financing
activities (457) 33
------------- -------------
Net decrease in cash and cash equivalents (73,399) (12,208)
Beginning cash and cash equivalents 95,734 126,909
Effect of foreign exchange on cash and
cash equivalents 14 (138)
Cash and cash equivalents at end of period 22,349 114,563
============= =============
BLINKX PLC
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
For the six months to 30 September 2015
(in thousands)
Share
Ordinary Share Shares based Currency Retained
(deficit)
share premium to be payment translation Merger /
capital account issued reserve reserve reserve earnings Total
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
--------- -------- ------- -------- ------------ -------- ---------- ---------
Balance as at 1
April
2014 7,461 167,945 3,579 17,322 (8,469) 61,681 12,372 261,891
Net loss for the
year - - - - - - (11,866) (11,866)
Other
comprehensive
income - - - - 97 - - 97
Total
comprehensive
loss
for the year - - - - 97 - (11,866) (11,769)
Issue of shares,
net of
costs 8 42 - - - - - 50
Credit to equity
for share
based payments - - - 2,111 - - - 2,111
Tax movement on
share
options - - - - - - (1,649) (1,649)
--------- -------- ------- -------- ------------ -------- ---------- ---------
Balance as at 30
September
2014 7,469 167,987 3,579 19,433 (8,372) 61,681 (1,143) 250,634
========= ======== ======= ======== ============ ======== ========== =========
Balance as at 1
April
2015 7,502 168,008 1,686 22,175 (8,802) 63,554 (10,426) 243,697
Net loss for the
year - - - - - - (79,517) (79,517)
Other
comprehensive
income - - - - 82 - - 82
Total
comprehensive
loss
for the year - - - - 82 - (79,517) (79,435)
Issue of shares,
net of
costs 16 16 - - - - - 32
Credit to equity
for share
based payments - - - 2,334 - - - 2,334
Tax movement on
share
options - - - - - - (24) (24)
Balance as at 30
September
2015 7,518 168,024 1,686 24,509 (8,720) 63,554 (89,967) 166,604
========= ======== ======= ======== ============ ======== ========== =========
BLINKX PLC
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
1. General information and basis of preparation
blinkx plc is a Company incorporated in England and Wales under the Companies Act 2006. The address of the registered office is 40 Dukes Place, London, EC3A 7NH, United Kingdom. Over 95% of the Group's revenue is generated from online advertising.
The Company's functional currency is Sterling, being the currency of the primary economic environment in which the Company operates. The presentation currency of the Group is US Dollars as that is the currency of the primary economic environment in which the Group operates.
The condensed interim financial statements have been prepared using accounting policies consistent with those used in the audited statutory financial statements for the year ended 31 March 2014, which were prepared in accordance with International Financial Reporting Standards ("IFRSs") as adopted for use in the European Union. These interim financial statements do not constitute statutory financial statements within the meaning of section 434 of the Companies Act 2006.
Amendments to IFRS's effective from the financial year ending 31 March 2015 are not expected to have a material impact on the Group.
Statutory financial statements for the year ended 31 March 2015 are available on blinkx plc's (the "Group's") website www.blnx.com and have been filed with the Registrar of Companies. The Group's auditor issued a report on those financial statements that was unqualified, did not contain a statement under section 498(2) or section 498(3) of the Companies Act 2006 and did not draw attention to any matters by way of emphasis.
The information for the six month period ended 30 September 2015 is unaudited, but reflects all normal adjustments which are, in the opinion of management, necessary to provide a fair statement of results and the Group's financial position for and as at the period presented. The results of operations for the period ended 30 September 2015 are not necessarily indicative of the operating results for future operating periods.
Marketable securities are accounted for as available for sale financial assets which are carried at fair value with the change in the fair value being recognized in the statement of comprehensive income.
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The directors have considered the financial resources of the Group and the risks associated with doing business in the current economic climate and believe the Group is well placed to manage these risks successfully. The directors have reviewed management's business plan setting out key business assumptions and considered it to be reasonable and are satisfied that the Group has adequate resources to continue in operational existence for the foreseeable future being a period of no less than 12 months from the date of signing of this interim report. Accordingly, they continue to adopt the going concern basis in preparing this interim announcement.
2. Share-based payments
Included within operating expenses are the following amounts in respect of share based payments:
Six months Six months
to to
30 September 30 September
2015 2014
(unaudited) (unaudited)
$'000 $'000
------------- -------------
Sales and marketing 609 746
Research and development 356 296
Administrative expenses 1,369 1,069
2,334 2,111
============= =============
3. Taxation
The tax charge for the six month period ended 30 September 2015 was $0.2 million compared to $2.2 million for the six month period ended 30 September 2014. The tax charge for the Period represents the best estimate of the average annual effective income tax rate expected for the full year plus the effect of discrete items recognized in the period. The Company has not recognized an additional deferred tax asset for the current period losses, which has reduced the effective tax rate, but has retained the previously recognized deferred tax asset based on future forecasts and expected loss utilization.
4. Earnings per share
The calculation of the basic and diluted earnings per share is based on the following information.
Six months Six months
to to
30 September 30 September
2015 2014
(unaudited) (unaudited)
$000 $000
------------- -------------
Earnings
Adjusted* loss (used in calculation of
basic and diluted loss per share) (13,399) (5,589)
============= =============
Loss (used in calculation of basic and
diluted loss per share) (79,517) (11,866)
============= =============
Number Number
Number of shares
Weighted average number of shares for
the basic earnings per share 402,613,239 400,269,402
============= =============
Weighted average number of shares for
the diluted earnings per share 402,613,239 400,269,402
============= =============
* Adjusted for acquisition and exceptional costs of $61.0m (FY2015:$1.6m), amortization of purchased intangibles of $5.1m (FY2015: $4.7m), and other loss of $27 thousand (FY2015: other income of $7 thousand).
5. Share capital
The increase of shares in the period relates to the issuance of 902,648 shares on the exercise of employee share options.
6. Shares to be issued
The shares to be issued reserve relates to shares that are expected to be issued to former Burst shareholders, as part of the consideration, who have not yet submitted the paperwork to effect the exchange of Burst shares for blinkx shares and to Rhythm New Media shareholders as part of consideration.
7. Goodwill impairment
During the period the Company took decisive steps to build out its Core Mobile, Video and Programmatic capabilities and began to exit and limit investments in historical product lines that are considered Non-Core, including certain Desktop products, services and technologies. Based on these actions and an adjusted forecast due to weaker than expected performance of some products, certain value of Goodwill related to Non-Core legacy assets acquired was impaired as the recoverable amount was less than its carrying value, leading to a non-cash impairment charge of $50.3 million.
Goodwill:
As at Reclassifications As at
31 March and acquisition Impairment 30 September
2015 adjustments charge 2015
000's 000's 000's 000's
---------- ------------------ ----------- --------------
Burst 25,000 (25,000) - -
Rhythm NewMedia 24,306 (24,306) - -
LYFE Mobile 2,242 (2,242) - -
All Media Network LLC 1,892 (1,892) - -
RhythmOne - 53,370 (32,363) 21,007
blinkx 2,417 - (2,417) -
PVMG 21,663 - (15,541) 6,122
AdKarma LLC 10,000 - - 10,000
Total 87,520 (70) (50,321) 37,129
========== ================== =========== ==============
During the Period, blinkx launched a major initiative to consolidate certain product, infrastructure, sales and marketing efforts under a single trade name, RhythmOne. Due to these integration steps, the CGUs of Burst, RhythmNewMedia, LYFE Mobile and All Media Network have been combined into the RhythmOne CGU.
8. Acquisition and exceptional costs
In line with the way the Board and chief operating decision maker review the business, large one-off acquisition and exceptional costs and other costs related to acquisitions such as amortization of purchased intangibles, are separately identified and adjusted results are shown. The types of costs included within acquisition costs are those which are directly attributable to an acquisition, such as legal and accounting expenses, integration costs, severance and retention remuneration. The types of cost considered exceptional include restructuring charges, goodwill impairment and change in intangible asset life.
Please note that as part of the integration efforts initiated during the Period, management has assessed the useful lives of certain legacy acquired intangible assets and consequently have recognized an accelerated amortization charge.
Acquisition and exceptional costs:
Six months Six months
to to
30 September 30 September
2015 2014
(unaudited) (unaudited)
$000 $000
------------- -------------
Acquisition costs:
Severance and retention costs 450 823
Professional fees 200 400
Total acquisition costs 650 1,223
Exceptional costs:
Restructuring charges 1,029 400
Change in Intangible asset life 8,991 -
Goodwill impairment (Note 7) 50,322 -
Total exceptional costs 60,342 400
Total acquisition and exceptional costs 60,992 1,623
============= =============
9. Related party transactions
For the purposes of IAS 24 Related Party Disclosures, the directors are considered to be the Group's key management personnel. Their remuneration is disclosed within the Directors' Report as reported in the Statutory financial statements for the year ended 31 March 2015 which does not form part of this report. There were no other related party transactions in either the current year or prior year.
Independent review report to blinkx plc
Report on the Condensed Consolidated Interim Financial Statements
Our conclusion
We have reviewed blinkx plc's Condensed Consolidated Interim Financial Statements (the "interim financial statements") in the First Half Financial Year 2016 Results of blinkx plc for the 6 month period ended 30 September 2015. Based on our review, nothing has come to our attention that causes us to believe that the interim financial statements are not prepared, in all material respects, in accordance with the basis of preparation and accounting policies set out in note 1 General information and basis of preparation to the interim financial statements, and the AIM Rules for Companies.
What we have reviewed
The interim financial statements comprise:
-- the Condensed Consolidated Balance Sheet as at 30 September 2015;
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