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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Brave Bison Group Plc | LSE:BBSN | London | Ordinary Share | GB00BF8HJ774 | ORD 0.1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -0.125 | -5.10% | 2.325 | 2.30 | 2.35 | 2.45 | 2.325 | 2.45 | 1,169,249 | 12:53:07 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Communications Equip, Nec | 31.65M | 2.08M | 0.0016 | 14.50 | 31.54M |
From Jul 2019 to Jul 2024
TIDMBBSN
RNS Number : 7814W
Brave Bison Group PLC
28 April 2021
28 April 2021
Brave Bison Group plc
("Brave Bison", the "Company" and together with its subsidiaries the "Group")
Brave Bison Group plc (AIM: BBSN), the social media and marketing group, today announces its audited results for the year ended 31 December 2020.
Financial Highlights
-- 2020 Adjusted EBITDA* profit of GBP0.1 million, compared to GBP0.4 million loss in 2019
-- H2 2020 Adjusted EBITDA* profit of GBP0.5 million, compared to GBP0.7 million loss in H2 2019, the result of a successful restructuring and repositioning
-- 2020 Revenue of GBP14.5 million, compared to GBP16.8 million in 2019 -- 2020 Gross profit of GBP4.0 million, compared to GBP5.2 million in 2019 -- H2 2020 Gross profit of GBP2.1 million, an increase of 19% compared to GBP1.8 million in 2019
-- 2020 Revenue generated from advertising was GBP13.1 million, compared to GBP12.4 million in 2019, an increase of 6% despite COVID-related disruption
-- Net cash balance of GBP2.7 million at 31 December 2020 -- Positive cashflow of GBP0.6 million in H2 2020
Operational Highlights
-- Appointment of new management team and Board during the period following the appointment of Oliver Green as Executive Chairman, Philippa Norridge as Chief Financial Officer, Theo Green as Director of Growth and Matthew Law as Non-Executive Director
-- The Group has been repositioned around 3 core pillars: a social marketing agency, a network of YouTube channels, and a portfolio of social first media brands
-- Rationalisation completed to align with refined Group proposition and reduce cost base, with monthly staff costs (before bonuses and restructuring costs) reduced by 50% from the start of 2020
-- Acquisition and successful integration of certain assets of The Hook Group Limited ("The Hook"), one of the largest youth-focused media groups with over 14 million followers across social media including almost 1 million followers on TikTok
-- New client wins including Panasonic, Vodafone, BBC, Pernod Ricard, IMV Box and World Dodgeball Federation. Multi-year contract extensions with PGA Tour, Link Up TV and Alofoke Radio
-- Successful revenue diversification across social platforms with content now distributed across Snapchat, TikTok, Facebook, Instagram and YouTube
Current Trading and Outlook
The Board is pleased to report that, following the restructuring carried out in 2020, the Group has been profitable on an adjusted EBITDA* basis for the last 7 months. Trading in the first quarter of FY21 has been strong. This is encouraging given that, historically, the first quarter has been the most challenging period in the year due to the reduction in advertising revenues after the busy Christmas period. Looking to the year ahead, the Board is optimistic about the prospects for the Group and is confident in the delivery of performance in line with current market expectations.
Availability of Annual Report
The Company's Annual Report and Accounts for the financial year ended 31 December 2020 will be available shortly from Brave Bison's website at https://bravebison.io/ .
Commenting on the results, Oliver Green, Executive Chairman of Brave Bison Group plc, said:
"Brave Bison ended 2020 in a stronger position than it started. With a refreshed management team, a refined proposition and a streamlined operating model our Group now has a robust platform to build a profitable and scalable business in the social media and marketing space. I am excited at what the future holds and look forward to updating shareholders on progress at our interim period and throughout the rest of the year."
* Adjusted EBITDA is a non-IFRS measure that the Group uses to measure its performance and is defined as earnings before interest, taxation, depreciation and amortisation and after add back of costs related to restructuring, acquisitions and share based payments.
For further information please contact:
Brave Bison Group plc
Oliver Green, Executive Chairman via Cenkos
Cenkos Securities plc Tel: +44 (0)20 7397 8900
Nominated Adviser & Broker
Nicholas Wells
Ben Jeynes
Chairman's Report
2020 was a year of two halves, with the fallout from the pandemic presenting our business with a number of challenges. Marketing and advertising budgets are often one of the first things to be cut in times of economic uncertainty and very quickly we saw the volume and value of programmatic advertising on our media network fall sharply. Similarly, many of our existing clients paused, deferred or cancelled scheduled projects leaving us with a reduced pipeline of work. The first half of the year therefore saw YoY revenues down significantly and an adjusted EBITDA loss of GBP0.4 million (H1 2019 adjusted EBITDA profit of GBP0.2 million).
Despite what was an incredibly tumultuous few months between March and June, our people and business displayed incredible resilience throughout. We acted quickly to meet the requirements of the new normal by reducing headcount and by working closely with suppliers to reduce costs and conserve cash. We implemented new processes and tools that allowed our staff across the UK and Singapore to work from home safely and effectively. At the same time, we refined our Group proposition to focus on three core areas for sustainable growth: our social marketing agency; our network of YouTube channels that we manage on behalf of more than 600 partners and our portfolio of social-first media brands.
Alongside the repositioning and restructuring of the Group, we saw an opportunity to acquire the assets of The Hook, a leading social media and marketing business. Launched in 2014, The Hook has grown rapidly into one of the largest youth-focused media groups in the UK partnering with global brands to create high-quality social content. With over 14 million followers across all of the major social platforms, The Hook's namesake entertainment and comedy channels are renowned for standout original content covering all areas of popular culture. With its highly engaged millennial and Gen Z audiences, The Hook has quickly become one of our flagship media properties and a platform from which to grow our media network and digital content studio.
With a refined proposition and a leaner and more agile operating model we entered the second half of the year in a much stronger position. We quickly found that whilst marketing budgets were some of the first things to be cut by businesses going into lockdown, digital marketing specifically became one of the first things businesses returned to (and even increased) as soon as economies began to stabilise. Whereas traditional marketing campaigns (TV, print, outdoor) take months to plan and execute, digital marketing can be delivered much more rapidly, making it more effective for clients looking to adapt quickly and leverage data to navigate the global context.
Our social marketing agency won and delivered a number of campaigns for new global clients including Panasonic, Vodafone, Pernod Ricard and Lark, part of ByteDance. As well as consulting brands on how to navigate the social landscape and helping to manage media budgets across the various social platforms, we have developed a new and compelling offering centred around influencer marketing. This is a new and growing form of social media marketing that involves endorsements and product placements from 'influencers' or people that have a purported level of knowledge or social influence in their field. Our social marketing agency is now well placed to benefit from clients moving their advertising and marketing budgets away from traditional channels and into digital and social channels, a trend that has been accelerated by COVID-19 and the digitisation of services. By combining social strategy and content production with social media management and performance-lead influencer marketing, we now have the ability to win and deliver large scale projects that have a big impact on the top and bottom line, as well as the opportunity to work with clients on a longer-term basis and build out a base of recurring income.
Across our own media network and portfolio of managed YouTube channels, we launched a slate of new programming, signed new contracts and renewed existing ones. The Hook released a new original content series called 'Sex Drive' featuring well-known Love Island and Netflix stars. The series, an intergenerational comedy that explores modern relationships through a series of Carpool Karaoke-style conversations between millennial celebrities and a family member, grossed millions of views across Facebook and Instagram. On Snapchat, we grew our portfolio of shows, launching the celebrated 'Art Ink' series and increased the number of episodes we release every week for a number of our shows. We renewed contracts with some of our biggest YouTube partners including Link Up TV, PGA Tour and Alofoke Group giving us a base of reoccurring income and a platform from which to grow and develop our YouTube business further.
The results for the second half of the year, including generating positive cashflow of over GBP0.6 million and an adjusted EBITDA of GBP0.5 million, mark encouraging progress for Brave Bison as we build a media and marketing group for the future. The Group is well capitalised, led by an experienced and committed management team, and is positioned well to benefit from the growth in digital advertising and the proliferation of social content over the next decade. As well as growing organically, we are excited at the prospect of expanding our Group via targeted acquisitions that would enhance our digital capabilities for clients and broaden our media network across new audiences and platforms. Brave Bison is an attractive platform for those entrepreneurs and founders looking to scale their companies and it is clear we are open for business. We look forward to making progress in 2021 and beyond.
Oliver Green
Executive Chairman, Brave Bison Group plc
CFO's Report
Trading Results
The Group's primary activity is that of a digital media and marketing group. Within this we recognise two main revenue streams. Firstly, there is advertising revenue on our portfolio of social-first media brands, as well as from third party channels that we manage on YouTube. Secondly, there are fee-based revenue streams from our social marketing agency, consisting of revenue from branded content and influencer campaigns, as well as licensing our existing content.
2020 has been a year of change for Brave Bison, against a challenging backdrop of the global pandemic and corresponding reductions in advertising budgets. The refreshed Board and management team have been able to react quickly to these challenges, restructuring the business in keeping with a renewed operational focus and delivering a leaner and more nimble operation. This has meant we have been able to deliver an adjusted EBITDA profit of GBP0.1 million (2019: GBP0.4 million loss) for the year.
Our revenue decreased by 14% to GBP14.5 million (2019: GBP16.8 million). A significant proportion of the decrease related to a reduction in revenue from Facebook to GBP4.1 million (2019: GBP6.4 million). Revenues from Facebook decreased sharply from April 2019 as a result of a change in Facebook's monetisation policies, so 2020 is the first year that the full impact of that is evident. We have since diversified across an increased number of platforms which will help reduce our exposure to events such as platform policy changes in the future. This diversification is also delivering strong revenue growth on Snapchat, where revenues have increased almost ten-fold to GBP2.7 million (2019: GBP0.3 million). Other platforms such as Tiktok and Instagram are yet to be monetised, but we have significantly grown our presence on these platforms and will be well positioned to grow revenues accordingly once monetisation is rolled out.
Advertising revenue from YouTube channel management services was impacted by the pandemic in April and May of 2020, but we were pleased to have seen a better than expected recovery in the second half of the year. Overall, we saw growth in our YouTube related revenue of 16.9% to GBP6.2 million (2019: GBP5.3 million). This is despite our high number of sports related clients who were unable to run events for large parts of the year, and is a testament to the ability of our team to adapt their channel management strategy to the circumstances.
Our fee-based revenue stream reduced to GBP1.4 million (2019: GBP4.4 million). The majority of these revenues have historically been driven out of our APAC office, and this was impacted heavily from the beginning of the year by the pandemic. We had a number of expected projects that were in the travel and tourism industries, and a number that were tied to the Tokyo Olympics, and as a result we saw a high proportion of our clients postpone or reduce spend. We did however win some exciting clients during the year such as Panasonic and Lark (part of ByteDance), and we expect this region to recover in 2021.
Gross profit has decreased by 23% (GBP1.2 million) to GBP4.0 million (2019: GBP5.2 million) in line with the reduction in overall revenues. The gross profit margin has reduced slightly, primarily because a lower proportion of the revenue is fee based, which has higher gross profit margins than the advertising revenue from platforms.
The Group has incurred restructuring costs during the year of GBP0.7 million (2019: GBP0.6 million), predominantly as a result of changes in executive staffing. Administration costs dropped significantly as a result to GBP5.2 million from GBP6.6 million, meaning that despite the reduction in revenues, the loss before tax reduced to GBP2.3 million (2019: GBP3.5 million loss). This can be analysed as follows:
Hot Features
Premium
2020 2019
as restated
GBP000's GBP000's
Adjusted EBITDA 133 (410)
Restructuring costs (718) (649)
Loss on disposal of foreign subsidiary - (509)
Equity settled share based payments 7 (165)
-------- -----------
EBITDA (578) (1,733)
Finance costs (61) (22)
Finance income 4 85
Impairment charge (248) (757)
Depreciation (527) (178)
Amortisation (848) (649)
-------- -----------
Loss before tax (2,258) (3,254)
Adjusted EBITDA is a non-IFRS measure that the Group uses to measure its performance and is defined as earnings before interest, taxation, depreciation and amortisation and after add back of costs related to restructuring, acquisitions and share based payments. It should be noted that a portion of the property costs in both 2020 and 2019 fall into the finance costs and depreciation lines as a result of the introduction of IFRS 16 'Leases'. If the adjusted EBITDA was amended to factor in these costs then this would show an adjusted EBITDA loss of GBP0.4 million (2019: GBP0.6 million loss).
There has been a prior year adjustment of GBP0.5 million relating to foreign subsidiaries which were liquidated in 2019. This represents a correction of the treatment of the balance in the retranslation reserve of these entities which IAS 21 states needs to be moved to the face of the income statement upon liquidation. There was also an adjustment of GBP0.3 million to opening reserves in 2019 relating to subsidiaries liquidated in 2018.
The impairment charge of GBP0.2 million (2019: GBP0.8 million) relates to the right of use asset, which has reduced in value as a result of the pandemic and resulting lockdown meaning that the office cannot be used. We expect the charges in 2021 for the rest of the lease term (until the end of September 2021) to be commensurate with what we expect from any new lease arrangements after that date.
The amortisation charge includes GBP0.8 million relating to customer relationships where we amended the estimate of the useful economic life of these assets to 5 years rather than 10 years as the Directors felt this was a more accurate reflection of the average length of a customer relationship in our industry.
Statement of Financial Position
The Group ended the year with GBP2.8 million in cash and cash equivalents (2019: GBP4.2 million). The Group had cash outflow of GBP1.5 million in 2020 (2019: GBP1.1 million outflow). The Group was cashflow positive in the second half of 2020 (GBP0.6 million cash inflow), and will be looking to maintain positive cashflow in 2021.
The Group is carrying intangible assets of GBP0.1 million (2019: GBP0.8 million). The Group capitalised spend of GBP0.2 million (2019: GBP0.3 million) on the purchase of the social media assets of The Hook, a youth-focused social media brand, which gives us an enhanced presence on all major social media platforms, with over 14 million followers.
Key performance indicators
2020 2019
GBP000's GBP000's
Revenue 14,486 16,813
Operating loss (2,201) (2,790)
Cash and cash equivalents 2,754 4,249
Adjusted EBITDA 133 (410)
EBITDA (578) (1,733)
Employees
Headcount at year-end including contractors has decreased to 44 (2019: 70) as a result of the restructuring. Of these 24 were male and 20 were female. Of the senior members of management, 4 were male and 3 were female.
Section 172 compliance
Section 172 of the Companies Act 2006 requires the Directors to act in a way that they consider would be most likely to promote the success of the Group for the benefit of its members as a whole, and in doing so have regard to the various stakeholders. Our key stakeholders, and the way in which we engage with them are set out below.
Investors
Details of our approach towards investor relations are set out in the Statement of Corporate Governance. The Board are in regular communication with the major shareholders, and the Company's Annual General Meeting is open to all shareholders.
Employees
We encourage openness and communication throughout the Group, and are committed to being a responsible employer. We hold monthly meetings for all employees where we communicate key events and decisions, and all staff have clear objectives and regular meetings with their line manager.
Platforms
We have a dedicated member of staff to manage our relationships with the various social media platforms that we work with. We have regular meetings with them, and have adapted in response to any shifts in their policies.
Clients
We work closely with all our clients from the brands who commission content, to the owners of the YouTube channels that we manage.
Suppliers
We are committed to treating our suppliers fairly and conducting business in an ethical fashion.
Social and Environment
As far as the directors of the Group are aware, the Group's business does not cause a disproportionately adverse impact on the environment. Further details of our social and environmental initiatives are set out within the Company's Statement of Corporate Governance.
Philippa Norridge
Chief Financial Officer, Brave Bison Group plc
CONSOLIDATED INCOME STATEMENT AND CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2020
31 31
December December
Note 2020 2019
as restated
GBP000's GBP000's
Revenue 4 14,486 16,813
Cost of sales (10,510) (11,632)
-------- -----------
Gross profit 3,976 5,181
Administration expenses (5,211) (6,565)
Restructuring costs 6 (718) (649)
Impairment charge 13 (248) (757)
-------- -----------
Operating loss 5 (2,201) (2,790)
Share of loss from equity accounted investment - (18)
Loss on disposal of foreign subsidiary - (509)
Finance income 7 4 85
Finance costs 7 (61) (22)
-------- -----------
Loss before tax 5 (2,258) (3,254)
Analysed as
Adjusted EBITDA 133 (410)
Restructuring costs 6 (718) (649)
Loss on disposal of foreign subsidiary - (509)
Equity settled share based payments 7 (165)
-------- -----------
EBITDA (578) (1,733)
Finance costs 7 (61) (22)
Finance income 7 4 85
Impairment charge (248) (757)
Depreciation 12 (527) (178)
Amortisation 11 (848) (649)
-------- -----------
Loss before tax (2,258) (3,254)
--------------------------------------------------- ---- -------- -----------
Income tax credit 8 227 35
-------- -----------
Loss attributable to equity holders of
the parent (2,031) (3,219)
======== ===========
Statement of Comprehensive Income
Loss for the year (2,031) (3,219)
Items that may be reclassified subsequently
to profit or loss
Exchange gain /(loss) on translation of
foreign subsidiaries 2 (1)
-------- -----------
Total comprehensive loss for the year attributable
to owners of the parent (2,029) (3,220)
======== ===========
Loss per share (basic and diluted)
Basic and diluted loss per ordinary share
(pence) 9 (0.33p) (0.53p)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2020
At 31 At 31 At 31
December December December
Note 2020 2019 2018
as restated as restated
GBP000's GBP000's GBP000's
Non-current assets
Intangible assets 11 144 826 1,928
Property, plant and equipment 12 151 909 60
Investment in associates - - 56
--------- ----------- -----------
295 1,735 2,044
Current assets
Trade and other receivables 14 3,036 2,611 5,766
Cash and cash equivalents 2,754 4,249 5,362
--------- ----------- -----------
5,790 6,860 11,128
Current liabilities
Trade and other payables 15 (4,859) (4,758) (7,684)
Lease Liabilities 16 (416) (497) -
--------- ----------- -----------
(5,275) (5,255) (7,684)
Non-current Liabilities
Deferred tax - (142) (183)
Lease Liabilities 16 - (403) -
Bank loan 17 (50) - -
--------- ----------- -----------
(50) (545) (183)
Net Assets 760 2,795 5,305
--------- ----------- -----------
Equity
Share capital 613 612 576
Share premium 78,762 78,762 78,762
Capital redemption reserve 6,660 6,660 6,660
Merger reserve (24,060) (24,060) (24,060)
Merger relief reserve 62,624 62,624 62,624
Retained deficit (123,988) (121,950) (118,896)
Translation reserve 149 147 (361)
--------- ----------- -----------
Total equity 760 2,795 5,305
--------- ----------- -----------
The financial statements on pages 41 to 69 were authorised for issue by the Board of Directors on 27 April 2021 and were signed on its behalf by
Philippa Norridge
Director
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2020
2020 2019
as restated
GBP000's GBP000's
Operating activities
Loss before tax (2,258) (3,254)
Adjustments:
Depreciation, amortisation and impairment 1,623 1,505
Finance income (4) (43)
Finance costs 61 22
Share based payment charges (7) 165
Loss on disposal of foreign subsidiaries - 509
(Increase) /decrease in trade and other receivables (425) 3,155
Increase /(decrease) in trade and other payables 101 (2,968)
Tax received /(paid) 85 (7)
-------- -----------
Cash outflow from operating activities (824) (916)
Investing activities
Purchase of property plant and equipment - (9)
Purchase of intangible assets (166) (266)
Interest received 4 43
-------- -----------
Cash outflow from investing activities (162) (232)
Cash flows from financing activities
Issue of share capital 1 36
Bank loan 50 -
Repayment of lease (562)
Cash (outflow) / inflow from financing activities (511) 36
Net decrease in cash and cash equivalents (1,497) (1,112)
======== ===========
Movement in net cash
Cash and cash equivalents, beginning of year 4,249 5,362
Decrease in cash and cash equivalents (1,497) (1,112)
Movement in foreign exchange 2 (1)
Cash and cash equivalents, end of year 2,754 4,249
======== ===========
The increase in the right-of-use asset and corresponding increase in lease liabilities in the prior year are non-cash transactions arising from the adoption of IFRS 16 Leases. The cash flow has been restated to reflect this.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2020
Capital
redemption Merger Merger Translation
Share Share Reserve Reserve relief Reserve Retained Total
Capital premium Reserve deficit Equity
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's
As restated
for the period
ended
31 December
2019 and 31
December
2018
At 1 January
2019 as
previously
stated 576 78,762 6,660 (24,060) 62,624 (750) (118,507) 5,305
FX reserve
movement on
liquidation
of
subsidiaries - - - - - 389 (389) -
At 1 January
2019 as
restated 576 78,762 6,660 (24,060) 62,624 (361) (118,896) 5,305
------------ ------------ ------------ ----------- ------------ ------------ --------- --------
Shares issued
during the
year 36 - - - - - - 36
Equity settled
share based
payments - - - - - - 165 165
Transactions
with owners 36 - - - - - 165 201
------------ ------------ ------------ ----------- ------------ ------------ --------- --------
Other
comprehensive
income
FX reserve
movement on
liquidation
of
subsidiaries - - - - - 509 - 509
Loss and total
comprehensive
income for
the year - - - - - (1) (3,219) (3,220)
At 31 December
2019 as
restated 612 78,762 6,660 (24,060) 62,624 147 (121,950) 2,795
------------ ------------ ------------ ----------- ------------ ------------ --------- --------
Shares issued
during the
year 1 - - - - - - 1
Equity settled
share based
payments - - - - - - (7) (7)
Transactions
with owners 1 - - - - - (7) (6)
------------ ------------ ------------ ----------- ------------ ------------ --------- --------
Other
Comprehensive
income
Loss and total
comprehensive
income for
the year - - - - - 2 (2,031) (2,029)
At 31 December
2020 613 78,762 6,660 (24,060) 62,624 149 (123,988) 760
------------ ------------ ------------ ----------- ------------ ------------ --------- --------
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2020
1 Basis of preparation
The figures for the year ended 31 December 2020 have been extracted from the audited statutory financial statements for the year on which the auditors have issued an unqualified opinion. The financial information attached has been prepared in accordance with the recognition and measurement requirements of international financial reporting standards (IFRS) as adopted by the EU and international financial reporting interpretations committee (IFRIC) interpretations issued and effective at the time of preparing those financial statements.
The financial information for the year ended 31 December 2020 and 31 December 2019 does not constitute statutory financial information as defined in Section 434 of the Companies Act 2006 and does not contain all of the information required to be disclosed in a full set of IFRS financial statements. This announcement was approved by the Board of Directors and authorised for issue on 27 April 2021. The auditor's report on the financial statements for 31 December 2020 was unqualified, and did not include reference to any matters to which the auditors drew attention by way of emphasis without qualifying their reports and did not contain a statement under either Section 498 (2) or 498 (3) of the Companies Act 2006.
1.1. Going Concern
The financial statements have been prepared on a going concern basis, which assumes that the Group will be able to meet its liabilities as they fall due for the foreseeable future, and at least for 12 months from the date of approval of the financial statements. The Group is dependent for its working capital requirements on cash generated from operations, and cash holdings. The cash holdings of the Group at 31 December 2020 were GBP2.8 million (2019: GBP4.2 million). The Group made a loss before tax of GBP2.3 million for the year ended 31 December 2020 (2019: GBP3.3 million), and generated a decrease in cash and cash equivalents in 2020 of GBP1.5 million (2019: GBP1.1 million). The Group has net assets of GBP0.8 million (2019: GBP2.8 million).
The Directors have prepared detailed cash flow projections ("the Projections") for the period to 31 December 2021 and for the following 4 month period to 30 April 2022 which are based on their current expectations of trading prospects. The Group achieved positive cashflow of GBP0.6 million in H2 2020, after restructuring the business, and the Board forecasts that the Group will continue to achieve positive cash inflows in 2021 due to both the cost savings that have already been made, and the expected revenue growth.
The Directors are confident that the Group's cash flow projections are achievable, and are committed to taking any actions available to them to ensure that any shortfall in forecast revenues receipts is mitigated by cost savings.
The Directors also continue to monitor the impact of the COVID-19 pandemic, and maintain rolling forecasts which are regularly updated. While the pandemic did have an impact on revenue in the first half of 2020 as clients cut advertising budgets, advertising revenue recovered faster than anticipated in the second half of the year, and the Directors expect this to continue throughout 2021.
The Directors remain confident that the Group has sufficient cash resources for a period of at least twelve months from the date of approval of these financial statements despite the impact of the pandemic and accordingly, the Directors have concluded that it is appropriate to continue to adopt the going concern basis in preparing these financial statements.
Basis of consolidation
The consolidated financial statements consolidate the financial statements of Brave Bison Group plc and all its subsidiary undertakings up to 31 December 2020, with comparative information presented for the year ended 31 December 2019. No profit and loss account is presented for Brave Bison Group plc as permitted by section 408 of the Companies Act 2006.
Subsidiaries are all entities over which the Group has the power to control the financial and operating policies and is exposed to or has rights over variable returns from its involvements with the investee and has the power to affect returns. Brave Bison Group plc obtains and exercises control through more than half of the voting rights for all its subsidiaries. All subsidiaries have a reporting date of 31 December and are consolidated from the acquisition date, which is the date from which control passes to Brave Bison Group plc.
Entities other than subsidiaries or joint ventures, in which the Group has a participating interest and over whose operating and financial policies the Group exercises significant influence, are treated as associates. The results of associate undertakings are consolidated under the equity method of accounting. The Group applies uniform accounting policies and all intra-group transactions, balances, income and expenses are eliminated on consolidation.
Unrealised gains and losses on transactions between Group companies are eliminated. Where recognised losses on intra-group asset sales are reversed on consolidation, the underlying asset is also tested for impairment from a Group perspective.
Business combinations are dealt with by the acquisition method. The acquisition method involves the recognition at fair value of all identifiable assets and liabilities, including contingent liabilities of the subsidiary, at the acquisition date, regardless of whether or not they were recorded in the financial statements of the subsidiary prior to acquisition. On initial recognition, the assets and liabilities of the subsidiary are included in the consolidated statement of financial position at their fair values, which are also used as the basis for subsequent measurement in accordance with the Group accounting policies. Goodwill is stated after separating out identifiable intangible assets. Goodwill represents the excess of acquisition cost over the fair value of the Group's share of the identifiable net assets of the acquired subsidiary at the date of acquisition.
Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year are recognised from the effective date of acquisition, or up to the effective date of disposal, as applicable.
1.2. Adoption of new and revised standards
The Group has chosen to adopt the amendment to IFRS 16 "Leases" early, and has applied this during the year:
Update to IFRS 16 "Leases"
The changes in COVID-19-Related Rent Concessions (Amendment to IFRS 16) amend IFRS 16 to:-
-- provide lessees with an exemption from assessing whether a COVID-19-related rent concession is a lease modification;
-- require lessees that apply the exemption to account for COVID-19-related rent concessions as if they were not lease modifications;
-- require lessees that apply the exemption to disclose that fact; and
-- require lessees to apply the exemption retrospectively in accordance with IAS 8, but not require them to restate prior period figures.
Other Standards and amendments that are not yet effective and have not been adopted early by the Group include:
-- IFRS 17 Insurance Contracts -- Amendments to IAS 1 - Classification of Liabilities as Current or Non-current; -- Amendments to IAS 16 - Property, Plant and Equipment: Proceeds before intended use; -- Amendments to IFRS 3 - Reference to the Conceptual Framework; -- Amendments to IAS 37 - Onerous Contracts - Cost of Fulfilling a Contract; -- Annual Improvements to IFRS Standards 2018-2020;
-- Amendments to IFRS 10 and IAS 28 - Sale or contribution of assets between an investor and its associate or joint venture; and
-- Amendments to IFRS 4, IFRS 7, IFRS 9, IFRS 16 & IAS 39 - Interest Rate Benchmark Reform - Phase 2.
2 Summary of accounting policies
The Group's presentation and functional currency is GBP (Sterling). The financial statements are presented in thousands of pounds (GBP000's) unless otherwise stated.
2.1. Revenue
Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for services provided in the normal course of business, net of discounts and sales related taxes.
Revenue is recognised when the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity, the costs incurred or to be incurred can be measured reliably, and when the criteria for each of the Group's different activities has been met.
The determination of whether the Group is acting as a principal or an agent in a transaction involves judgment and is based on an assessment of who controls a specified good or service before it is transferred to a customer . Significant contracts are reviewed for the indicators of control. The Group is deemed to be acting as a principal in all significant contracts.
Where the Group's contractual performance obligations have been satisfied in advance of invoicing the client then unbilled income is recognised on the balance sheet. Where the Group's contractual performance obligations have been satisfied less than amounts invoiced then a contract liability is recognised.
The accounting policies specific to the Group's key operating revenue categories are outlined below:
Advertising revenue:
-- Ad-funded YouTube channel management of third party content owners' videos. Revenue is recognised at the point in time when the performance obligation of delivering monetised views occurs; and
-- Monetisation of the Group's owned and operated brands and videos via platforms such as Facebook and Snapchat. Revenue is recognised at the point in time when the performance obligation of delivering monetised views occurs.
Fee Based Service revenue:
-- Branded Content. Managing the creation of commissioned content and being responsible for procuring the talent and the associated production costs. The Group recognises revenue in line with the contractual obligation to deliver a completed episode. Revenue is recognised at the point in time when each completed episode is delivered. Production costs are deferred on the balance sheet as contract assets until each completed episode is delivered;
-- Managing customer content on platforms such as Facebook and YouTube including rights management and audience development. Revenue from providing these services is recognised over the time that the performance obligation to provide services are satisfied; and
-- License fee revenues for the Group's own content and third parties' content are recognised at the point in time when the performance obligation of delivering the content is satisfied.
2.2. Interest and dividend income
Interest income and expenses are reported on an accrual basis using the effective interest method. Dividend income, other than from investments in as sociates, is recognised at the time the right to receive payment is established.
2.3. Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability. Government grants are presented as a deduction from the related expense.
2.4. Foreign currency translation
Transactions in foreign currencies are translated at the exchange rate ruling at the date of the transaction. Monetary assets and liabilities in foreign currencies are translated at the rates of exchange ruling at the balance sheet date. Non-monetary items that are measured at historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.
Any exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were initially recorded are recognised in the profit or loss in the period in which they arise.
The assets and liabilities in the financial statements of foreign subsidiaries and related goodwill are translated at the rate of exchange ruling at the balance sheet date. Income and expenses are translated at the actual rate on the date of transaction. The exchange differences arising from the retranslation of the opening net investment in subsidiaries and on income and expenses during the year are recognised in other comprehensive income and taken to the "translation reserve" in equity. On disposal of a foreign operation the cumulative translation differences (including, if applicable, gains and losses on related hedges) are transferred to the income statement as part of the gain or loss on disposal.
2.5. Segment reporting
IFRS 8 Operating Segments requires operating segments to be identified on the same basis as is used internally for the review of performance and allocation of resources by the Group Chief Executive (chief operating decision maker - CODM).
The Board has reviewed the Group and all revenues are functional activities of a digital media and marketing group, and these activities take place on an integrated basis. The senior executive team review the financial information on an integrated basis for the Group as a whole, with respective heads of business who are geographically located and in accordance with IFRS 8 Operating Segments, the Group will be providing a geographical split. The Group will also be providing a split between the Advertising and Fee based services. Segmental information is presented in accordance with IFRS 8 for all periods presented within Note 4.
2.6. Leasing
For any new contracts entered into on or after 1 January 2019, the Group considers whether a contract is, or contains a lease. A lease is defined as 'a contract, or part of a contract, that conveys the right to use an assed (the underlying asset) for a period of time in exchange for consideration'. To apply this definition the Group assesses whether the contract meets three key evaluations which are whether:
-- The contract contains an identified asset, which is either explicitly identified in the contract or implicitly specified by being identified at the time the asset is made available to the Group;
-- The Group has the right to obtain substantially all of the economic benefits from use of the identified asset throughout the period of use, considering its rights within the defined scope of the contract; and
-- The Group has the right to direct the use of the identified asset throughout the period of use. The Group assess whether it has the right to direct 'how and for what purpose' the asset is used throughout the period of use.
At lease commencement date, the Group recognises a right-of-use asset and a lease liability on the balance sheet. The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred by the Group, an estimate of any costs to dismantle and remove the asset at the end of the lease, and any lease payments made in advance of the lease commencement date (net of any incentives received).
The Group depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The Group also assesses the right-of-use asset for impairment when such indicators exist.
At the commencement date, the Group measures the lease liability at the present value of the lease payments unpaid at that date, discounted using the interest rate implicit in the lease if that rate is readily available or the Group's incremental borrowing rate.
Lease payments included in the measurement of the lease liability are made up of fixed payments (including in substance fixed), variable payments based on an index or rate, amounts expected to be payable under a residual value guarantee and payments arising from options reasonably certain to be exercised.
Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is remeasured to reflect any reassessment or modification, or if there are changes in in-substance fixed payments.
When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset, or profit and loss if the right-of-use is already reduced to zero.
The Group has elected to account for short-term leases and leases of low-value assets using the practical expedients. Instead of recognising a right-of-use asset and lease liability, the payments in relation to these are recognised as an expense in the profit or loss on a straight-line basis over the lease term.
On the statement of financial position, right-of-use assets have been included in property, plant and equipment and lease liabilities have been included in trade and other payables.
2.7. Property, plant and equipment
Property, plant and equipment are stated at historical cost less accumulated depreciation and impairment. Depreciation is calculated to write down the cost less estimated residual value of all property, plant and equipment by equal annual instalments over their expected useful lives less estimated residual values, using the straight line method. The rates generally applicable are:
-- Fixtures & Fittings - 3 years or over remaining lease term -- Computer Equipment - 3 years
The gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.
The assets' residual value and useful lives are reviewed, and adjusted if required, at each balance sheet date. The carrying amount of an asset is written down immediately to its recoverable amount if the carrying amount is greater than its estimated recoverable amount.
The Group depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The Group also assesses the right-of-use asset for impairment when such indicators exist.
2.8. Impairment of property, plant and equipment
At each balance sheet date, the Group reviews the carrying amounts of its property, plant and equipment to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.
2.9. Intangible assets
An intangible asset, which is an identifiable non-monetary asset without physical substance, is recognised to the extent that it is probable that the expected future economic benefits attributable to the asset will flow to the Group and that its cost can be measured reliably. The asset is deemed to be identifiable when it is separable or when it arises from contractual or other legal rights.
Intangible assets acquired as part of a business combination, are shown at fair value at the date of the acquisition less accumulated amortisation. Amortisation is charged on a straight line basis through the profit or loss. The rates applicable, which represent the Directors' best estimate of the useful economic life, are:
-- Customer relationships - 5 years -- Online channel content - 3 to 5 years -- Brands - 3 years -- Technology - 1 to 5 years
For customer relationships the estimate of useful economic life was revised from 10 years to 5 years during the year as the Directors felt this was a more accurate reflection of the average length of a customer relationship in our industry.
2.10. Impairment of intangible assets
At each balance sheet date, the Group reviews the carrying amounts of its intangible assets and goodwill to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.
2.11. Development costs
Expenditure on the research phase of an internal project is recognised as an expense in the period in which it is incurred. Development costs incurred on specific projects are capitalised when all the following conditions are satisfied:
-- Completion of the asset is technically feasible so that it will be available for use or sale;
-- The Group intends to complete the asset and use or sell it;
-- The Group has the ability to use or sell the asset and the asset will generate probable future economic benefits (over and above cost);
-- There are adequate technical, financial and other resources to complete the development and to use or sell the asset; and
-- The expenditure attributable to the asset during its development can be measured reliably.
Development costs not meeting the criteria for capitalisation are expensed as incurred. The cost of an internally generated asset comprises all directly attributable costs necessary to create, produce and prepare the asset to be capable of operating in the manner intended by management. Directly attributable costs include employee (other than Director) costs incurred along with third party costs.
Judgement by the Directors is applied when deciding whether the recognition requirements for development costs have been met. Judgements are based on the information available at the time when costs are incurred. In addition, all internal activities related to the research and development of new projects is continuously monitored by the Directors.
2.12. Investments in associates and joint ventures
Investments in associates and joint ventures are accounted for using the equity method. The carrying amount of the investment in associates and joint ventures is increased or decreased to recognise the Group's share of the profit or loss and other comprehensive income of the associate or joint venture, adjusted where necessary to ensure consistency with the accounting policies of the Group.
2.13. Taxation
Tax expenses recognised in profit or loss comprise the sum of the tax currently payable and deferred tax not recognised in other comprehensive income or directly in equity.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the statement of comprehensive income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.
Deferred tax
Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and are accounted for using the liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences, and deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be recognised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to recognise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset recognised based on tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.
2.14. Financial Instruments
Recognition and derecognition
Financial assets and financial liabilities are recognised with the Group becomes a party to the contractual provisions of the financial instrument. Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and substantially all the risks and rewards are transferred. A financial liability is derecognised when it is extinguished, discharged, cancelled or expires.
Loan and other receivables
The Group accounts for loan and other receivables by recording the loss allowance as lifetime expected credit losses. These are shortfalls in contractual cash flows, considering the potential for default at any point during the life of the financial instrument. The Group uses its historical experience, external indicators and forward-looking information to calculate expected credit losses.
Trade and other payables
Trade and other payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest method.
Contract assets and liabilities
The Group does not adjust the promised amount of consideration for the effects of a significant financing component if the entity expects, at contract inception, that the period between when the entity transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less.
2.15. Equity, reserves and dividend payments
Share capital
Share capital represents the nominal value of shares that have been issued.
Share premium
Share premium includes any premiums received on issue of share capital. Any transaction costs associated with the issuing of shares are deducted from share premium arising on those shares, net of any related income tax benefits.
Retained deficits
Retained deficits include all current and prior period retained profits or losses. It also includes credits arising from share based payment charges.
Translation reserve
Translation reserve represents the differences arising from translation of investments in overseas subsidiaries.
Merger reserve
The merger reserve is utilised when group reconstruction accounting is applied. The difference between the cost of investment and the nominal value of the share capital acquired is recognised in a merger reserve.
Merger relief reserve
Where the following conditions are met, any excess consideration received over the nominal value of the shares issued is recognised in the merger relief reserve:
-- the consideration for shares in another company includes issued shares;
-- on completion of the transaction, the company issuing the shares will have secured at least a 90% equity holding in the other company.
Capital redemption reserve
Where the Company purchases its own equity share capital, on cancellation, the nominal value of the shares cancelled is deducted from share capital and the amount is transferred to the capital redemption reserve.
Dividend distributions payable to equity shareholders are included in 'other liabilities' when the dividends have been approved in a general meeting prior to the reporting date.
2.16. Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks, together with other short-term highly liquid investments that are readily convertible into known amounts of cash having maturities of 3 months or less from inception and which are subject to an insignificant risk of change in value, and bank overdrafts.
2.17. Employee benefits
The Group operates two schemes on behalf of its employees, private healthcare and a defined contribution pension plan and amounts due are expensed as they fall due.
2.18. Share based payments
Employees (including Directors) of the Group received remuneration in the form of share-based payment transactions, whereby employees render services in exchange for rights over shares ('equity-settled transactions'). The Group has applied the requirements of IFRS 2 Share-based payments to all grants of equity instruments. The transactions have been treated as equity settled.
The cost of equity settled transactions with employees is measured by reference to the fair value at the grant date of the equity instrument granted. The fair value is determined by using the Black-Scholes method. The cost of equity-settled transactions are recognised, together with a corresponding charge to equity, over the period between the date of grant and the end of a vesting period, where relevant employees become fully entitled to the award. The total value of the options has been pro-rated and allocated on a weighted average basis.
2.19. Restructuring Costs
Restructuring costs relate to corporate re-organisation activities previously undertaken or announced, as detailed in note 6.
2.20. Prior year adjustment
The prior period financial statements have been restated to correct the loss on disposal of foreign subsidiaries and the translation reserve. Details of the restatement can be found in note 19.
3 Critical accounting judgements and key sources of estimation uncertainty
The preparation of financial statements under IFRS requires the Group to make estimates and assumptions that affect the application of policies and reported amounts. Estimates and judgements are continually evaluated and are based on historical experience and other factors including expectations of future events that are believed to be reasonable under the circumstances. Actual results may differ from these estimates. The estimates and assumptions which have a risk of causing a material adjustment to the carrying amount of assets and liabilities are discussed below.
3.1. Critical accounting judgements
Intangible assets and impairment
The Group recognises the intangible assets acquired as part of business combinations at fair value at the date of acquisition. The determination of these fair values is determined by experts engaged by management and based upon management's and the Directors' judgement and includes assumptions on the timing and amount of future incremental cash flows generated by the assets and selection of an appropriate discount rate. Furthermore management must estimate the expected useful lives of intangible assets and charge amortisation on these assets accordingly.
Included within intangible assets are capitalised customer relationships. These were acquired as part of the acquisitions of Viral Management Limited and Base79 Limited. These assets were fully amortised during the period, as detailed in note 11. During the year the Group capitalised the costs associated with the acquisition of certain assets of The Hook, which it has estimated have a useful economic life of 5 years.
Trade debtors' recovery
Within trade debtors there is a balance of GBP0.7 million (2019: GBP0.7 million) which is over one year in age which the Group has judged it not necessary to provide for. This is because it believes it is recoverable, since there is a trade creditor balance of GBP0.8 million (2019: GBP0.7 million) with the same company, and the Group is anticipating reaching agreement that these balances may be set off against each other.
Treatment of revenue as agent or principal
The determination of whether the Group is acting as a principal or an agent in a transaction involves judgment and is based on an assessment of who controls a specified good or service before it is transferred to a customer . Significant contracts are reviewed for the indicators of control. These include if the Group is primarily responsible for fulfilling the promise to provide the good or service, if the Group has inventory risk before the good or services has been transferred to the customer and if the Group has discretion in establishing the price for the good or service. Revenue relating to Snapchat was assessed and it was determined that the Group was acting as a principal, therefore the revenue was recognised on a gross basis. This increased the revenue by GBP1.3 million. In 2019 Snapchat revenue was recognised on a net basis and if it had been recognised on a gross basis then the revenue would have increased by GBP0.3 million. The directors consider that this 2019 adjustment would not influence the users of the financial statements and on this basis the comparatives were not restated.
Deferred taxation
Deferred tax assets are recognised in respect of tax loss carry forwards only to the extent that the realisation of the related tax benefit through future taxable profits is probable.
3.2. Estimates
Share based payment charges
The Group is required to measure the fair value of its share based payments. The fair value is determined using the Black-Scholes method which requires assumptions regarding exchange rate volatility, the risk free rate, share price volatility and the expected life of the share based payment. Exchange rate volatility is calculated using historic data over the past three years. The volatility of the Group's share price has been calculated as the average of similar listed companies over the preceding periods. The risk-free rate range used is between 0% and 2.74% and management, including the Directors, have estimated the expected life of most share based payments to be 4 years.
Bad debt provision
Recoverability of some receivables may be doubtful although not definitely irrecoverable. Where management feel recoverability is in doubt an appropriate provision is made for the possibility that the amounts may not be recovered in full. Provisions are made using past experience however subjectivity is involved when assessing the level of provision required.
4 Segment Reporting
Geographic reporting
The Group has identified three geographic areas (United Kingdom & Europe, Asia Pacific and Rest of the world) and the information is presented based on the customers' location.
2020 2019
Revenue GBP000's GBP000's
United Kingdom & Europe 10,022 12,135
Asia Pacific 881 3,835
Rest of the world 3,583 843
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Total revenue 14,486 16,813
======== ========
The Group identifies two revenue streams, advertising and fee based services. The analysis of revenue by each stream is detailed below.
Revenue 2020 2019
GBP000's GBP000's
Advertising 13,092 12,396
Fee based services 1,394 4,417
Total revenue 14,486 16,813
======== ========
Gross profit 2020 2019
GBP000's GBP000's
Advertising 2,962 2,831
Fee based services 1,014 2,350
Total gross profit 3,976 5,181
========= ========
Timing of revenue recognition
The following table includes revenue from contracts disaggregated
by the timing of recognition.
2020 2019
GBP000's GBP000's
Products and services transferred at a point
in time 13,437 16,079
Products and services transferred over time 1,049 734
--------- --------
Total revenue 14,486 16,813
========= ========
5 Operating loss and loss before taxation
The operating loss and the loss before taxation are stated after:
2020 2019
as restated
GBP000's GBP000's
Auditor's remuneration:
* Audit services 69 84
* Audit related services 5 10
* Tax advisory - 1
* Tax compliance 6 12
Operating lease rentals - land and buildings
on short term leases (97) 311
Depreciation: property, plant and equipment 527 178
Impairment of intangible assets - 719
Impairment of right-of-use asset 248 -
Impairment of associate - 38
Amortisation 848 649
Foreign exchange loss 54 69
Loss on disposal of foreign subsidiary - 509
6 Restructuring costs
2020 2019
GBP000's GBP000's
Restructuring costs 718 649
======== =========
Restructuring costs in 2020 relate to redundancy payments and associated costs in relation to the Board refresh and corporate re-organisation activities undertaken as a result. Restructuring costs in 2019 related to redundancy payments and associated costs in relation to restructuring as a result of the significant changes required due to the change in the Facebook algorithm and monetisation policy.
7 Finance income and costs
2020 2019
GBP000's GBP000's
-------- ---------
Bank interest received 4 85
-------- ---------
2020 2019
GBP000's GBP000's
Interest expense for leasing arrangements 61 22
======== =========
8 Income tax credit
Major components of tax credit:
2020 2019
GBP000's GBP000's
Current tax:
UK corporation tax at 19.00% (2019: 19.00%) - -
Research and development tax credits (90) -
Overseas tax 5 6
Total current tax (85) 6
---------- -----------
UK corporation tax is calculated at 19.00% (2019: 19.00%) of the estimated assessable loss for the year. Taxation for other jurisdictions is calculated at the rates prevailing in those jurisdictions.
The credit for the year can be reconciled to the loss per the income statement as follows:
Reconciliation of effective tax rate:
2020 2019
as restated
GBP000's GBP000's
Loss on ordinary activities before tax (2,258) (3,254)
---------- -----------
Income tax using the Company's domestic tax
rate 19.00% (2019: 19.00%) (429) (618)
Effect of:
Expenses not deductible for tax purposes 302 314
Fixed asset depreciation allowed under SP3/91 (145) -
Capital allowances (11) -
Share scheme deduction under Part 12 CTA
2009 (2) -
Research & development tax credits (90) -
Deferred tax movement (142) 60
Unutilised tax losses carried forward 290 209
Total tax credit for period (227) (35)
========== ===========
9 Loss per share
Both the basic and diluted loss per share have been calculated using the loss after tax attributable to shareholders of Brave Bison Group plc as the numerator, i.e. no adjustments to losses were necessary in 2019 or 2020. The calculation of the basic loss per share is based on the loss attributable to ordinary shareholders divided by the weighted average number of shares in issue during the year. All share options have been excluded when calculating the basic diluted EPS as they were antidilutive. Share options are currently antidilutive, but are potentially dilutive.
2020 2019
as restated
Weighted average number of ordinary shares 612,667,036 605,510,566
Dilution due to share options 41,367,914 41,488,760
----------- -----------
Total weighted average number of ordinary
shares 654,034,950 646,999,326
=========== ===========
Basic and diluted loss per ordinary share
(pence) (0.33p) (0.53p)
=========== ===========
Adjusted basic loss per ordinary share (pence) (0.07p) (0.24p)
=========== ===========
Adjusted diluted loss per ordinary share
(pence) (0.06p) (0.23p)
=========== ===========
2020 2019
as restated
GBP000's GBP000's
Loss for the year attributable to ordinary
shareholders (2,031) (3,219)
Equity settled share based payments (7) 165
Amortisation, depreciation and impairment 1,623 1,584
Adjusted profit for the period attributable
to the equity shareholders (415) (1,470)
======== ===========
10 Directors and employees
The average number of persons (including Director's) employed by the Group during the year was:
2020 2019
Number Number
Sales, production and operations 47 55
Support services and senior executives 11 15
------ ------
58 70
====== ======
The aggregate cost of these employees was:
2020 2019
GBP000's GBP000's
Wages and salaries 2,276 2,989
Payroll taxes 185 372
Pension contributions 172 208
2,633 3,569
======== ========
11 Intangible assets
Online Channel Customer
Goodwill Content Technology Brands Relation-ships Total
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's
Cost
At 31 December
2018 35,075 1,602 5,213 273 19,332 61,495
Additions - 266 - - - 266
-------- -------------- ---------- -------- --------------- --------
At 31 December
2019 35,075 1,868 5,213 273 19,332 61,761
-------- -------------- ---------- -------- --------------- --------
Additions - 166 - - - 166
-------- -------------- ---------- -------- --------------- --------
At 31 December
2020 35,075 2,034 5,213 273 19,332 61,927
-------- -------------- ---------- -------- --------------- --------
Amortisation and impairment
At 31 December
2018 35,075 718 5,213 273 18,288 59,567
Charge for the
year - 431 - - 218 649
Impairment charge - 719 - - - 719
At 31 December
2019 35,075 1,868 5,213 273 18,506 60,935
-------- -------------- ---------- -------- --------------- --------
Charge for the
year - 22 - - 826 848
-------- -------------- ---------- -------- --------------- --------
At 31 December
2020 35,075 1,890 5,213 273 19,332 61,783
-------- -------------- ---------- -------- --------------- --------
Net Book Value
At 31 December
2018 - 884 - - 1,044 1,928
======== ============== ========== ======== =============== ========
At 31 December
2019 - - - - 826 826
======== ============== ========== ======== =============== ========
At 31 December
2020 - 144 - - - 144
======== ============== ========== ======== =============== ========
During the year the Company acquired certain assets from The Hook and capitalised costs of GBP0.2 million. This is included above in Online Channel Content and is being amortised over five years with represents the Directors best estimate of the useful economic life.
Goodwill is not amortised, but tested annually for impairment with the recoverable amount being determined from value in use calculations.
The Company accelerated amortisation relating to customer relationships by GBP0.6m as the estimate of the useful economic life of these assets was reduced to 5 years rather than 10 years as the Directors felt this was a more accurate reflection of the average length of client relationship in our industry.
The recoverable amount of the intangible assets have been determined based on value in use. Value in use has been determined based on future cash flows after considering current economic conditions and trends, estimated future operating results, growth rates and anticipated future economic conditions.
As at 31 December 2020, the intangible assets were assessed for impairment. The impairment charge was GBP0.0 million (2019: GBP0.7 million).
The estimated cash flows for a period of 5 years were developed using internal forecasts, and a pre-tax discount rate of 10%. The cash flows beyond 5 years have been extrapolated assuming nil growth rates. The key assumptions are based on growth of existing and new customers and forecasts, which are determined through a combination of management's views, market estimates and forecasts and other sector information.
12. Property, plant and equipment
Fixtures
Right of Computer &
Use asset Equipment Fittings Total
GBP000's GBP000's GBP000's GBP000's
Cost
At 31 December 2018 - 902 211 1,113
Additions 1,018 - 9 1,027
At 31 December 2019 1,018 902 220 2,140
Additions 17 - - 17
---------- ---------- --------- --------
At 31 December 2020 1,035 902 220 2,157
---------- ---------- --------- --------
Depreciation and
impairment
At 31 December 2018 - 874 179 1,053
Charge for the year 127 22 29 178
At 31 December 2019 127 896 208 1,231
Charge for the year 514 3 10 527
Impairment charge 248 - - 248
At 31 December 2020 889 899 218 2,006
Net Book Value
At 31 December 2018 - 28 32 60
========== ========== ========= ========
At 31 December 2019 891 6 12 909
========== ========== ========= ========
At 31 December 2020 146 3 2 151
========== ========== ========= ========
During the year the Company impaired the value of the right-of-use asset by GBP0.2 million. The pandemic and national lockdown has meant that the Company has not been able to make full use of the office space.
13. Impairment charge
2020 2019
GBP000's GBP000's
Intangible assets - 719
Property, plant and equipment 248 -
Investment in associates - 38
Total impairment charge 248 757
======== ========
14. Trade and other receivables
2020 2019
GBP000's GBP000's
Trade receivables 914 1,687
Less allowance for credit losses (40) (59)
-------- --------
Net trade receivables 874 1,628
Unbilled income 1,716 545
Contract assets - 16
Other receivables 446 422
3,036 2,611
======== ========
The contractual value of trade receivables is GBP0.9 million (2019: GBP1.7 million). Their carrying value is assessed to be GBP0.9 million (2019: GBP1.6 million) after assessing recoverability. The contractual value and the carrying value of other receivables are considered to be the same. The Group's management considers that all financial assets that are not impaired or past due are of good credit quality.
The ageing analysis of these trade receivables showing fully performing and past due but not impaired is as follows:
2020 2019
GBP000's GBP000's
Not overdue 156 807
Not more than three months 3 10
More than three months but not more than
six months 2 -
More than six months but not more than
one year 2 2
More than one year 711 809
874 1,628
======== ========
The movement in provision for impairment of trade receivables can be reconciled as follows:
2020 2019
GBP000's GBP000's
Opening provision (59) (139)
Receivables provided for during period (40) -
Reversal of previous provisions 59 80
(40) (59)
======== ========
Provisions are created and released on a specific customer level on a monthly basis when management assesses for possible impairment. At each half year and year end, management will assess for further impairment based upon expected credit loss over and above the specific impairments noted throughout the year. Within trade debtors there is a balance which is over one year in age which the Group has judged it not necessary to provide for. This is because it believes it is recoverable, since there is a similar trade creditor balance with the same company, and the Group is anticipating reaching agreement that these balances may be set off against each other.
The other classes within trade and other receivables do not contain impaired assets.
Contract assets are utilised upon satisfaction of the associated contract performance obligations. The 2019 contract asset of GBP16,000 was recognised within cost of sales during 2020 upon satisfaction of the associated performance obligation.
15 Trade and other payables
2020 2019
GBP000's GBP000's
Trade payables 926 1,209
Other payables 68 72
Other taxation and social security 60 20
Contract liabilities 144 88
Accruals and deferred income 3,661 3,369
4,859 4,758
======== ========
All amounts are short term and the Directors consider that the carrying value of trade and other payables are considered to be a reasonable approximation of fair value.
The average credit period taken for trade purchases was 32 days (2019: 39 days).
Contract liabilities are utilised upon satisfaction of the associated contract performance obligations. The 2020 contract liability of GBP144,000 is expected to be utilised in the next reporting periods upon satisfaction of the associated performance obligation. The 2019 contract liability of GBP88,000 was recognised within revenue during 2020 upon satisfaction of the associated performance obligation.
16 Leases
Lease liabilities are presented in the statement of financial position as follows:
2020 2019
GBP000's GBP000's
Current 416 497
Non-current - 403
-------- --------
416 900
======== ========
The Group entered into a two year lease for an office on 1 October 2019. With the exception of short-term leases and leases of low-value underlying assets, each lease is reflected on the balance sheet as a right-of-use asset and a corresponding lease liability.
The table below describes the nature of the Group's leasing activities by type of right-of-use asset recognised in the statement of financial position:
No. of right-of-use Range of remaining Average remaining No. of leases No. of leases
assets leased term lease term with extension with termination
options options
Office building 1 1 year 1 year - -
The lease liabilities are secured by the related underlying assets. Future minimum lease payments at 31 December 2020 were as follows:
Within one One to two Total
year years
GBP000's GBP000's GBP000's
Lease payments 432 - 432
Finance charges (16) - (16)
---------- ---------- --------
Net present values 416 - 416
========== ========== ========
The Group has elected not to recognise a lease liability for short terms leases (leases with an expected term of 12 months or less). Payments made under such leases are expensed on a straight-line basis.
The expense relating to payments not included in the measurement of the lease liability is as follows:
2020 2019
GBP000's GBP000's
Short-term leases 28 55
-------- --------
28 55
======== ========
The Group received a COVID-19 related rent concession during the period of GBP140,400. It has applied the exemption granted by the COVID-19 Related Rent Concessions (Amendment to IFRS 16) and has therefore not assessed this as a lease modification but has included it within administration expenses.
At 31 December 2020 the Group had not committed to any leases which had not yet commenced excluding those recognised as a lease liability.
17 Bank loan
2020 2019
GBP000's GBP000's
Loan 50 -
-------- --------
50 -
======== ========
During the year the Company entered into a Bounce Back Loan Agreement which is due to be fully repaid in 2026. The repayment amount and timing of each instalment is based on a fixed interest rate of 2.5% payable on the outstanding principal amount of the loan and applicable until the final repayment date. The Company has been granted an interest and capital holiday for twelve months from the date of drawdown. The loan is unsecured.
18 Financial Instruments
Categories of financial instruments As at 31 As at 31
December December
2020 2019
GBP000's GBP000's
Financial assets
Loans and other receivables 2,872 2,611
Cash and bank balances 2,754 4,249
---------- ----------
5,626 6,860
Financial liabilities at amortised cost
Trade and other payables (4,715) (4,758)
Lease liabilities (416) (900)
---------- ----------
(5,131) (5,658)
Financial risk management
The Group's financial instruments comprise cash and liquid resources and various items, such as trade receivables and trade payables that arise directly from its operations. The main purpose of these financial instruments is to raise finance for the Group's operations. The principal financial risks faced by the Group are liquidity, foreign currency and credit risks. The policies and strategies for managing these risks are summarised as follows:
Foreign currency risk
Transactional foreign currency exposures arise from both the export of services from the UK to overseas clients, and from the import of services directly sourced from overseas suppliers. The Group is primarily exposed to foreign exchange in relation to movements in sterling against the US Dollar, the Euro and the Singapore Dollar.
The Group does not use derivatives to hedge translation exposures. All gains and losses are recognised in profit or loss on translation at the reporting date. The Group's current exposures in respect of currency risk are as follows:
Sterling US Dollar Singapore Euro Other Total
Dollar
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's
Financial assets 4,556 2,172 45 86 1 6,860
Financial liabilities (2,568) (2,857) (134) (26) (73) (5,658)
Total exposure
at
31 December 2019 1,988 (685) (89) 60 (72) 1,202
======== ========= ========= ======== ======== ========
Financial assets 4,452 1,091 21 62 0 5,626
Financial liabilities (2,419) (2,552) (50) (39) (71) (5,131)
Total exposure
at
31 December 2020 2,033 (1,461) (29) 23 (71) 495
======== ========= ========= ======== ======== ========
Sensitivity analysis
The table below illustrates the estimated impact on profit or loss as a result of market movements in the US Dollar, Singapore Dollar, Euro and Sterling exchange rate.
10% 10% 10% 10% 10% 10%
Increase Decrease Increase Decrease Increase Decrease
US Dollars US Dollars Singapore Singapore Euro Euro
Impact on loss and equity Dollars Dollars
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's
For the year to 31 December
2019 (69) 69 (9) 9 6 (6)
=========== =========== ========== ========== ======== ========
For the year to 31 December
2020 (146) 146 (3) 3 2 (2)
=========== =========== ========== ========== ======== ========
Credit risk
The Group's principal financial assets are cash and cash equivalents and trade and other receivables. The Group has no significant concentration of credit risk. The maximum exposure to credit risk is that shown within the balance sheet. All amounts are short term and management consider the amounts to be of good credit quality.
Liquidity/funding risk
The Group's funding strategy is to ensure a mix of funding sources offering flexibility and cost effectiveness to match the requirements of the Group.
Contractual maturities
The Group manages liquidity risk by maintaining adequate reserves.
Interest rate risk
The Group holds the majority of its cash and cash equivalents in corporate current accounts. These accounts offer a competitive interest rate with the advantage of quick access to the funds.
Capital policy
The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain a capital structure that optimises the cost of capital.
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance. The capital structure of the Group consists of cash and cash equivalents as disclosed in the statement of financial position and equity attributable to equity holders of the parent, comprising issued capital, reserves and retained earnings as disclosed in the consolidated statement of changes in equity.
Debt is defined as long and short-term borrowings (excluding derivatives). Equity includes all capital and reserves of the Group that are managed as capital.
Financial instruments measured at fair value
Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into three levels of fair value hierarchy. This grouping is determined based on the lowest level of significant inputs used in fair value measurement, as follows:
-- level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities;
-- level 2 - inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
-- level 3 - inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The Group categorises all financial assets and liabilities as level 1.
Maturity analysis
Set out below is a maturity analysis for non-derivative financial liabilities. The amounts disclosed are based on contractual undiscounted cash flows. The table includes both interest and principal cash flows. The Group had no derivative financial liabilities at either reporting date.
Less than 1-3 3-5
Total 1 Year Years Years
GBP000's GBP000's GBP000's GBP000's
As at 31 December 2019
Trade and other payables 4,758 4,758 - -
Leases liabilities 900 497 403 -
As at 31 December 2020
Trade and other payables 4,715 4,715 - -
Lease liabilities 416 416 - -
19 Prior year adjustment
During the period the Group made a loss on the disposal of foreign subsidiaries of GBPnil (2019: GBP0.5 million). There has been a prior year adjustment of GBP0.5m relating to foreign subsidiaries which were liquidated in 2019. This represents a correction of the treatment of the balance in the retranslation reserve of these entities which IAS 21 states needs to be moved to the face of the income statement upon liquidation. There was also an adjustment of GBP0.3 million to opening reserves in 2019 relating to subsidiaries liquidated in 2018.
The amendment to the profit and loss account for the year ended 31 December 2019 was as follows:
As previously Adjustment As restated
reported
GBP000's GBP000's GBP000's
Revenue 16,813 - 16,813
Cost of sales (11,632) - (11,632)
------------- ---------- -----------
Gross profit 5,181 - 5,181
Administration expenses (6,565) - (6,565)
Restructuring costs (649) - (649)
Impairment charge (757) - (757)
------------- ---------- -----------
Operating loss (2,790) - (2,790)
Share of loss from equity accounted
investment (18) - (18)
Loss on disposal of foreign subsidiary - (509) (509)
Finance income 85 - 85
Finance costs (22) - (22)
------------- ---------- -----------
Loss before tax (2,745) (509) (3,254)
Income tax credit 35 - 35
------------- ---------- -----------
Loss after tax (2,710) (509) (3,219)
============= ========== ===========
The amendment to the balance sheet as at 31 December 2019 was as follows:
As previously Adjustment As restated
reported
GBP000's GBP000's GBP000's
Non-current assets
Intangible assets 826 - 826
Property, plant and equipment 909 - 909
Investment in associates - - -
------------- ---------- -----------
1,735 - 1,735
Current assets
Trade and other receivables 2,611 - 2,611
Cash and cash equivalents 4,249 - 4,249
------------- ---------- -----------
6,860 - 6,860
Current liabilities
Trade and other payables (4,758) - (4,758)
Lease liabilities (497) - (497)
------------- ---------- -----------
(5,255) - (5,255)
Non-current liabilities
Deferred tax (142) - (142)
Lease liabilities (403) - (403)
Bank loan - - -
------------- ---------- -----------
(545) - (545)
Net Assets 2,795 - 2,795
------------- ---------- -----------
Equity
Share capital 612 - 612
Share premium 78,762 - 78,762
Capital redemption reserve 6,660 - 6,660
Merger reserve (24,060) - (24,060)
Merger relief reserve 62,624 - 62,624
Retained deficit (121,052) (898) (121,950)
Translation reserve (751) 898 147
--------- ----- ---------
Total equity 2,795 - 2,795
--------- ----- ---------
20. Post balance sheet events
There have been no significant post balance sheet events to be disclosed.
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