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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Big Sofa Technologies Group Plc | LSE:BST | London | Ordinary Share | GB00BZ1B7619 | ORD 3P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 2.55 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMBST
RNS Number : 2439S
Big Sofa Technologies Group PLC
08 March 2019
8 March 2019
This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.
Big Sofa Technologies Group plc
("Big Sofa Technologies" or the "Company")
Final Results for the Year Ended 31 December 2018
Big Sofa Technologies (AIM:BST), an international video analytics provider to the insight and analytics industries, announces results for the twelve months ended 31 December 2018.
2018 Financial Highlights
-- Revenues increased by 29% to GBP1.7 million (2017: GBP1.3 million) -- Gross profit increased by 16% to GBP1.0 million (2017: GBP0.8 million) -- Operating expenses reduced by 5% to GBP4.7 million (2017: GBP4.9 million)
o Programme of annualised cost savings and technology efficiencies initiated during 2018 that are expected to reduce 2019 operating expenses by approximately GBP1.0 million compared to 2018
-- Loss for the year reduced by 13% to GBP3.4 million (2017: GBP3.9 million) -- Investments made into Big Sofa Technologies during the year of GBP4.6 million
o GBP3.4 million from Ipsos, a Big Sofa Technologies customer and one of the world's largest market research organisations
o GBP0.35 million from current/former directors of Big Sofa Technologies
-- Eliminated Company debt through part conversion and repayment of the remaining approximately GBP0.65 million Eridge Capital Limited convertible loan
2018 Operational Highlights
-- Work undertaken for customers including Ipsos, 84.51˚, Target Corporation, Procter & Gamble and a large US-based multinational food and beverage company
-- Growing traction with Ipsos, which accounted for approximately a quarter of revenues
-- Revenues generated from strategic integration of video into large scale surveys were approximately GBP0.35 million
-- Revenues generated from projects to analyse behaviour at scale were approximately GBP0.8 million
-- Revenues from Big Sofa Technologies' analytics platform (renamed Visual Insight System), which enables clients to upload, store and manage video, were approximately GBP0.45 million
-- Significant platform improvements to stability, scalability, ingestion capacity, machine learning capability and user experience
Board Changes
-- Appointed global consumer insight and strategy industry leader, Kirsty Fuller, as Chief Commercial Officer in October 2018 and subsequently as Chief Executive Officer in November 2018 (replacing Simon Lidington who became a non-executive director; Simon will not stand for re-election as a director of the Company at the Annual General Meeting. He will resign with effect from 1 April 2019 but will remain as a consultant)
-- Appointed John Haworth, Chief Financial Officer of Ipsos MORI UK, a UK subsidiary of Ipsos and a 20% shareholder in Big Sofa Technologies, as a non-executive director (replacing Laurence Stoclet as Ipsos' nominated director)
-- Adam Reynolds and Paul Clark stepped down as non-executive directors in June and October 2018 respectively, both in support of efforts to streamline the board while maintaining an appropriate level of governance
Post Year-End Highlights
-- Following completion of platform improvement works and through other technology efficiencies, GBP0.35 million of technology-related annualised cost savings to be achieved in 2019 versus 2018 (part of the GBP1.0 million of annualised cost savings)
-- Successful platform integrations into customer knowledge management systems and complementary technology platforms to facilitate deeper strategic integration at the partner or client level
o First Stop Data Shop - system used by Procter & Gamble
o KnowledgeHound - technology platform for quantitative data and research
o Ipsos - ongoing integrations across key service lines
Kirsty Fuller, Chief Executive Officer of Big Sofa, commented:
"My priority on becoming Chief Executive Officer in November 2018 was to initiate a strategic review and identify areas for cost savings. With a significant R&D programme having completed at year-end, I was able to initiate a programme of material annualised cost savings with a restructuring of the entire team, a refocus on streamlined, efficient processes and a sharpening of the selling proposition. As a result, we began 2019 as a stronger, leaner business.
2019 is an important year for Big Sofa Technologies. It sees the Company step forward confidently with a new vision, a new suite of client offerings, and a more robust and exciting technology capability."
Enquiries:
Big Sofa Technologies Group plc via Vigo Communications Kirsty Fuller, CEO Joe MacCarthy, CFO Arden Partners plc (Nominated Adviser and Joint Broker) +44 (0)20 7614 5900 Paul Shackleton / Ben Cryer Novum Securities (Joint Broker) +44 (0)20 7399 9427 Colin Rowbury Vigo Communications (Financial Public Relations) +44 (0)20 7390 0237 Ben Simons / Jeremy Garcia / Antonia Pollock
About Big Sofa Technologies Group plc
Big Sofa Technologies is an insight-led technology company. The design and development of our technology has been guided by expert understanding of the insight and analytics industries and the needs, pressures and business questions of the clients they serve.
We uncover and analyse new-to-the-industry behavioural data sets in video, enabled by the power of our pioneering data capture and platform technology. We are innovating both in how video-led projects and programmes are designed and in how the data is analysed, showcased, embedded and re-mined.
Our software platform collates, analyses and organises large volumes of raw/unstructured video enabling our clients, which include leading market research and data companies and major household brands, to perform detailed and sophisticated consumer insight analysis and make genuine use of video content.
Big Sofa Technologies' shares are admitted to trading on the London Stock Exchange's AIM market under the ticker BST.L.
To find out more, visit www.bigsofatech.com
Follow us on twitter at @bigsofatech
Chairman's Statement
Big Sofa Technologies continued to build its customer base in 2018. During the year, the Company's clients included Ipsos, 84.51˚, Target Corporation, Procter & Gamble and a large US-based multinational food and beverage company. I draw confidence from the fact that diverse and substantial organisations such as these are engaging with Big Sofa Technologies and our video analytics capabilities.
It is particularly significant that Ipsos, a Big Sofa Technologies customer and one of the world's largest market research organisations, invested an aggregate GBP3.4 million into the Company during 2018, resulting in its ownership of approximately 20 per cent of the business.
The Company's balance sheet benefitted both from investments of an aggregate GBP4.6 million during 2018, including from former and current directors, as well as from the elimination of the Company's debt through the part conversion and repayment of the Eridge Capital convertible loan on 31 May 2018.
Several changes were made to the composition of the board of directors during 2018.
On 26 September 2018, we welcomed John Haworth, Ipsos MORI UK's chief financial officer, as a non-executive director. Our teams are working together to raise awareness and increase adoption of our technology and services throughout Ipsos' global organisation. John, who is London-based, replaced Laurence Stoclet, who is Paris-based, as Ipsos' nominated director on the board of Big Sofa Technologies.
Kirsty Fuller was appointed to the board on 1 October 2018 and took over as Chief Executive Officer the following month. Kirsty is a leader in the global consumer insight and strategy industry and is already having a positive impact both on our strategic development and the management of costs. Kirsty replaced Simon Lidington who, having co-founded the business, moved into a non-executive director role from which the Company continues to benefit from his expertise. Simon will not stand for re-election as a director of the Company at the Annual General Meeting. He will resign with effect from 1 April 2019 but will remain as a consultant.
Adam Reynolds and Paul Clark stepped down as non-executive directors on 4 June 2018 and 10 October 2018 respectively, both in support of efforts to streamline the board of directors while maintaining an appropriate level of governance.
I am encouraged by the progress that Big Sofa Technologies continues to make in cultivating relationships with a growing number of large organisations and our deeper customer strategic integrations. I look forward to this positive momentum being continued.
Nick Mustoe
Non-executive Chairman
7 March 2019
Review of Operations
Strategy
I joined Big Sofa Technologies in October 2018 and took over as Chief Executive Officer the following month. My priority was to initiate a strategic review and identify areas for cost savings. The business had invested significantly in its technology platform architecture in 2018 - a programme which reached completion at the end of the year. With this fundamental R&D programme completed, I was able to initiate a programme of material annualised cost savings with a restructuring of the entire Big Sofa Technologies team, a refocus on streamlined, efficient processes and a sharpening of the selling proposition. This strategic review and implementation resulted in Big Sofa Technologies starting 2019 as a stronger, leaner business.
I see three pillars to our 2019 strategic roadmap:
Strategic integration with key Ipsos service lines
The investment by Ipsos represented a significant milestone in the strategic growth of Big Sofa Technologies. In 2019, there is a commitment to strategic integration programmes with key Ipsos service lines with a focus on the enablement of innovation in research approaches to drive revenue growth. This spans the integration of video and video analytics into survey and community platforms as well as new generation product testing and service evaluation. An invitation to the forthcoming Ipsos Leadership Conference will enable further progression of this agenda.
Visual Insight System
Alongside the Ipsos strategic partnership, the business will be building on its direct-to-client successes, developing a bespoke (and newly named) Visual Insight System (a dynamic, interactive knowledge management system applicable to all sizes of customer) for knowledge sharing, data re-mining and cross-discipline collaboration and connection. In 2018, we completed successful projects for clients including 84.51˚, the consumer insights subsidiary of Kroger, the second largest retailer in the world, Procter & Gamble, and a large US-based multinational food and beverage company. We aim to extend our reach beyond retail and consumer packaged goods into technology and media brands. With improved, interactive functionality being delivered in the first half of 2019, this offering has been renamed Visual Insight System.
Automated data extraction
Large scale data providers are investigating the automated extraction of data from video/film footage at scale. This pushes forward our machine learning roadmap delivered by our R&D function. The applications of this capability span manufacturing processes, healthcare and more. A small pilot was conducted with a potential partner in this space at the end of 2018. This third strategic pillar represents a new revenue stream for 2019 and may take time to build.
Revenues
Ipsos accounted for approximately a quarter of Big Sofa Technologies' revenues in 2018, predominantly derived from projects to strategically integrate video into large scale surveys.
Revenues generated from integration of video into large scale surveys were approximately GBP0.35 million in 2018.
Revenues generated from projects to analyse behaviour at scale were approximately GBP0.8 million in 2018. Using artificial intelligence and human-led tools, we transform unstructured content into meaningful and quantifiable data for clients. We completed successful projects of this nature during the year for 84.51˚, Procter & Gamble and a large US-based multinational food and beverage company.
Big Sofa's analytics platform, which enables clients to upload, store and manage video, generated approximately GBP0.45 million of revenue in 2018.
The balance of revenues in 2018 was derived from the production of videos for the presentation of client data and consulting fees.
Technology Development and Integration
Throughout 2018, Big Sofa Technologies completed a comprehensive architecture rebuild, creating a more scalable video analytics platform. As a result, the platform:
- ingests and stores significantly higher volumes and file sizes - enables clients to collate and curate media more easily as well as monitor compliance - has an improved interface for intuitive navigation and interpretation - has a smart, automated pipeline for rapid processing and quality checks
Cost Savings
A rolling roadmap of technology improvements will be implemented in an agile and timely manner in 2019 thanks to the platform architecture rebuild of 2018. However, with the substantial platform architecture rebuild completed, the Company will be able to realise, when aggregated with other technology efficiencies, approximately GBP0.35 million in technology-related annualised expense savings in 2019 compared to 2018. These savings form part of an overall programme of savings across the business in 2019 of approximately GBP1.0 million compared to 2018. This is the outcome of a thorough strategic review resulting in a streamlining of people and processes.
Outlook
2019 is an important year for Big Sofa Technologies. It sees the Company step forward confidently with a new vision, a new suite of client offerings, and a more robust and exciting technology capability. Our product roadmap combines enhancements to our interface, functionality, machine learning capabilities and overall user experience.
I believe that our three commercial pillars - Ipsos integration, direct-to-client Visual Insight System (from knowledge management to knowledge activation) and automated data extraction (machine learning) - represent a sound strategy for 2019. Combined with a more agile, exciting product roadmap, a fresh visual identity, and a team and office restructuring, we have a strong recipe for success.
Kirsty Fuller
Chief Executive Officer
7 March 2019
Financial Review
Summary Financial Performance
Hot Features
Premium
FY 2018 FY 2017 Change
GBP'000s GBP'000s %
Revenue 1,680 1,301 +29%
Gross Profit 982 845 +16%
Gross Margin 58% 65% -10%
Operating expenses 4,655 4,900 -5%
Loss for the year (3,403) (3,923) -13%
Revenues increased by 29 per cent to GBP1.7 million (2017: GBP1.3 million), the majority of which continued to come from the US.
Gross profit increased by 16 per cent, reflecting higher revenues, although the gross profit margin dropped from 65 to 58 per cent as we incurred higher initial costs for some of the large-scale behavioural analysis projects in the year. Having incurred set-up costs on these early projects, we do not expect to incur them again and therefore expect the margin to increase in the medium to long term.
Operating expenses reduced by 5 per cent to approximately GBP4.65 million, as the benefit of annualised cost savings initiated in the latter part of 2018 began to take effect.
Increased revenues and gross profit, combined with reduced expenses, resulted in the loss for the year reducing by 13 per cent to approximately GBP3.4 million (2017: GBP3.9 million).
Net cash outflow from operating activities was approximately GBP2.8 million (2017: GBP3.0 million). R&D investment (included within 'purchase of intangible assets' in the Consolidated Statement of Cash Flows) was approximately GBP0.7 million (2017: GBP0.6 million). In total, the Company has invested approximately GBP1.7 million between 2016-2018 in R&D. This investment has generated cash tax credits from HMRC of approximately GBP0.1 million in both 2017 and 2018 and GBP0.15 million in 2019 to date, all in respect of development work undertaken in 2016 and 2017. Additional cash tax credits for development work undertaken in 2018 are expected in 2019.
During the year we continued to invest in our technology platform, to develop new commercial relationships and to deepen existing ones. This has been funded, in part, through raising a total of GBP4.7 million of additional equity in 2018. This funding also enabled the Company to redeem the unconverted portion of the Eridge Capital Limited convertible loan (approximately GBP0.65 million). The Company is now debt free.
At the year-end the Company had net assets of approximately GBP2.0 million (2017: GBP0.45 million).
Joe MacCarthy
Chief Financial Officer
7 March 2019
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year ended Year ended
31 December 31 December
2018 2017
GBP'000 GBP'000
---------------------------------------- ------------ ------------
Revenue from contracts with
customers 1,680 1,301
Cost of sales (699) (456)
Gross profit 981 845
Administrative expenses (4,654) (4,900)
----------------------------------------- ------------ ------------
Operating loss (3,673) (4,055)
Finance expenses (28) (71)
Loss before income tax (3,701) (4,126)
Tax credit 298 203
Loss for the year (3,403) (3,923)
----------------------------------------- ------------ ------------
Exchange differences on re-translating
foreign operation (87) 34
Total comprehensive loss (3,490) (3,889)
Attributable to owners of
the parent: (3,490) (3,889)
Loss per ordinary share in
respect of continuing activities
- basic and diluted (pence) (3.75)p (6.62)p
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31 December 31 December
2018 2017
GBP'000 GBP'000
------------------------------- ------------ ------------
Non-current assets
Property, plant and equipment 40 58
Intangible assets 739 545
Total non-current assets 779 603
-------------------------------- ------------ ------------
Current assets
Trade and other receivables 1,069 578
Contract assets 128 277
Cash and cash equivalents 816 376
-------------------------------- ------------ ------------
Total current assets 2,013 1,261
-------------------------------- ------------ ------------
Total assets 2,792 1,864
-------------------------------- ------------ ------------
Current liabilities
Trade and other payables 603 664
Contract liabilities 126 52
Loans and borrowings - 705
Total current liabilities 779 1,421
-------------------------------- ------------ ------------
Total liabilities 779 1,421
-------------------------------- ------------ ------------
Net assets 2,013 443
-------------------------------- ------------ ------------
Share capital 4,163 1,954
Share premium account 9,545 6,969
Reverse acquisition reserve (2,881) (2,881)
Merger relief reserve 2,501 2,501
Other reserves 620 467
Accumulated deficit (11,935) (8,567)
-------------------------------- ------------ ------------
Total equity 2,013 443
-------------------------------- ------------ ------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Reverse Merger
Share Share acquisition relief Other Accumulated
capital Premium reserve reserve reserves deficit Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------- ---------- ---------- ------------- ---------- ---------- ------------ ----------
Equity as
at
1 January
2017 1,703 5,670 (2,881) 2,501 181 (4,644) 2,530
Loss for the
year - - - - - (3,923) (3,923)
Issue of shares 251 1,299 - - - - 1,550
Issue of share
options - - - - 304 - 304
Foreign currency
translation
reserve movement - - - - 34 - 34
Convertible
loan adjustment - - - - (52) - (52)
Equity as
at
31 December
2017 1,954 6,969 (2,881) 2,501 467 (8,567) 443
------------------- ---------- ---------- ------------- ---------- ---------- ------------ ----------
Loss for the
year - - - - - (3,403) (3,403)
Issue of shares 2,209 2,672 - - - - 4,881
Cost of share
issue - (74) - - - - (74)
Issue of share
options - - - - 266 - 266
Issue of warrants (22) - - 22 - -
Foreign currency
translation - - - - (87) - (87)
Convertible
loan redemption - - - - (48) 35 (13)
Equity as
at
31 December
2018 4,163 9,545 (2,881) 2,501 620 (11,935) 2,013
------------------- ---------- ---------- ------------- ---------- ---------- ------------ ----------
Notes to the preliminary financial statements
Basis of preparation
The financial statements have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively IFRSs), as adopted by the European Union ("adopted IFRSs") and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.
The preparation of financial statements in compliance with adopted IFRSs requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies. The areas where significant judgments and estimates have been made in preparing the financial statements and their effect are disclosed below.
Changes in accounting policies and disclosures
The Group has applied any applicable new standards, amendments to standards and interpretations that are mandatory for the financial year beginning on or after 1 January 2018 including IFRS 15 and IFRS 9. However, none of them has a material impact on the Group's consolidated financial statements.
Going concern
The directors have prepared a cash flow forecast covering a period extending beyond 12 months from the date of these financial statements. The forecast contains certain assumptions about the performance of the business including growth in future revenue, the cost model and margins; and importantly the level of cash recovery from trading. The directors are aware of the risks and uncertainties facing the business but the assumptions used are the directors' best estimate of the future development of the business.
The Group forecasts include additional funding requirements upon which the Group is dependent. The directors are satisfied that these funding requirements will be met. Additionally, in the event that the Group fails to meet its revenue predictions, the directors have outlined cost saving measures that will ensure there are enough funds to operate for at least the next twelve months. The directors are satisfied that this can be achieved.
After considering the forecasts and the risks, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For these reasons, they continue to adopt the going concern basis of accounting in preparing the annual financial statements. Nevertheless, the directors acknowledge that there is material uncertainty related to events or conditions that may cast significant doubt on the entity's ability to continue as a going concern and, therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of business.
The financial statements do not include any adjustments that would result if the Group was unable to continue as a going concern.
1. Earnings per share
Year ended Year ended
31 December 2018 31 December 2017
Basic and diluted
Loss for the period and earnings used in basic & diluted EPS (GBP) (3,403,214) (3,923,453)
Weighted average number of shares used in basic and diluted EPS 90,737,694 59,301,048
Loss per share (pence) (3.75) (6.62)
-------------------------------------------------------------------- ------------------ ------------------
Basic earnings per share is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period. The weighted average number of shares for the current and prior years included shares issued by Big Sofa Technologies Group plc.
Due to the loss in the periods the effect of the share options was considered anti-dilutive and hence no diluted loss per share information has been provided.
Annual Report and Accounts
Copies of the Annual Report and Accounts, together with a notice convening an annual general meeting will be available within the Investors section of the Company's website at www.bigsofatech.com later today.
Annual General Meeting
The annual general meeting of the Company will be held at 9.00 a.m. on 1 April 2019 at the offices of Kindred Agency Limited, 4(th) Floor, Dean Bradley House, 52 Horseferry Road, London SW1P 2AF.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
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