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Mirriad Advertising Plc LSE:MIRI London Ordinary Share GB00BF52QY14 ORD GBP0.00001
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Media 1.1 -12.2 -8.0 - 32

Mirriad Advertising PLC 2019 interim results and report

12/09/2019 7:00am

UK Regulatory (RNS & others)


Mirriad Advertising (LSE:MIRI)
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TIDMMIRI

RNS Number : 0332M

Mirriad Advertising PLC

12 September 2019

UNAUDITED INTERIM RESULTS

12 September 2019

Mirriad Advertising plc

("Mirriad" or the "Group")

Mirriad transformation gathers pace following implementation of new strategy

Mirriad, the computer vision and AI platform company, announces unaudited half-year results for the six months ended 30 June 2019.

Highlights

Strategic Development

   --    The Group announced a substantial change in strategy in March 2019 
   --    Appointment of new CTO, Niteen Prajapati, on 1 April 2019 
   --    Appointment of new commercial leadership in the US in April 2019 

-- Important new two year contract, including guaranteed revenues, signed with Tencent in July 2019 with effective date of 1 April 2019

   --    First campaigns run with TF1 in France 

-- Framework contract signed with France Télévisions shortly after the period end in July 2019

   --    New Chairman and Non-executive Director 

Financial

   --    GBP16.2m (gross proceeds) from new share issue announced on 31 July 2019 

-- Revenue of GBP429k (30 June 2018 GBP120k) as the Group's new go-to-market strategy shows early signs of success

-- Cash and cash equivalents GBP9.2m (30 June 2018 GBP22.1m), prior to the impact of the fundraise which completed post period end. Cash balance at end August 2019 is GBP22.8m.

   --    Cash consumption GBP6.0m (30 June 2018 GBP6.2m) as the Group implemented its new strategy 

-- Operating loss of GBP7.2m (30 June 2018 GBP6.7m) in line with management expectations including restructuring costs of GBP351k

   --    Loss per share 7p (30 June 2018 6p) 

Stephan Beringer, Chief Executive of Mirriad, said:

"The idea behind Mirriad's award-winning technology is future proof, but it required a market strategy to match. Following the announcement of this new market strategy in March, we have already passed several key milestones in the first half of this year, including a significant new fundraise and the signing of an innovative new contract with Tencent. H1 revenues have increased year-on-year, and we now have several new opportunities - including the commercial partnership with France Télévisions - to steadily grow our revenues further.

"We have also added talent, capability and experience especially in our technology team and our team in the US, to help deliver our strategic priorities. The company is on a stronger footing going into the second half of 2019."

For further information please visit www.mirriad.com, or contact:

 
 Mirriad Advertising plc              Tel: +44 (0)207 884 2530 
  Stephan Beringer, Chief Executive 
  Officer 
  David Dorans, Chief Financial 
  Officer 
 Numis Securities Limited             Tel: +44 (0) 207 260 1000 
  (Nominated Adviser & Broker) 
  James Black 
  Hugo Rubinstein 
 Financial Communications: 
  Charlotte Street Partners 
  Andrew Wilson                         Tel: +44 (0) 7810 636995 
  Tom Gillingham                        Tel: +44 (0) 7741 659021 
 

Chairman's Statement

This has been an important period for Mirriad. Following lower-than-expected revenues in 2018 the Board acted decisively in Q4 2018 and brought in a new management team to lead the business. As well as bringing in Stephan Beringer as CEO, Stephan has built an impressive and experienced senior management team.

Under Stephan's leadership, a new strategy was presented to shareholders in March 2019, and we have started to see positive outcomes from this refreshed approach.

We also made significant changes in the composition of the Board. I assumed the role of Chairman on 30 April 2019 and we subsequently strengthened the Board with the addition of Bob Head as Non-executive Director and Chairman of our Remuneration and Audit Committees on 13 June 2019. Bob brings a wealth of experience in financial management and technology to the business.

Much of the work of the Board in the first six months of the year has been focused on ensuring that Mirriad has the resources and financial stability it needs to successfully implement the new go-to-market strategy. I am pleased that our ability to address these strategic imperatives has been enabled by Mirriad's successful fundraise of GBP16.2m through the issue of additional shares. This will provide general working capital and help the company continue the implementation of its new market strategy.

The support from existing and new investors is a vote of confidence in the Company's direction of travel, which is best illustrated by the two year Tencent contract that was announced in June.

This is a significant piece of news for the company, both in terms of the innovative nature of the partnership, and also the immediate boost it will deliver to 2019/20 revenues. China is a key growth area for advertisers and this partnership offers a clear route to this important market.

The international advertising industry faces clear headwinds in the shape of rising ad-blocker use and changing consumer behaviours. Alongside shifting viewer preferences, streaming services are now challenged with raising additional revenue as the number of services proliferate, and users are faced with increased costs to access the content they want to watch.

Against these challenges, it is clear audiences have a high preference for the non-disruptive advertising experience that Mirriad's technology delivers, and this significant market opportunity is something the Company will be looking to capitalise on in the coming months.

John Pearson

Non-executive Chairman

12 September 2019

Chief Executive's Statement

When I joined Mirriad in late 2018, I was convinced of the strong fundamentals of the Company's technology, but I was also aware that a significant strategic reset would be required to deliver the business growth that this potential offered. This is why we announced a new strategy to shareholders in March 2019.

Three key elements are at the heart of our new strategic approach: a renewed focus on the developed advertising markets in the USA, France, Germany, UK and China; a new go-to-market strategy designed to accelerate sales by seeking to build partnerships with agencies and brands as well as broadcasters and digital publishers; and a focus on developing technology that's built for scale. Automation and integration will be key in the scalability of the Mirriad platform, and the company is working towards this with a reshaped team under the leadership of our new CTO, Niteen Prajapati.

It is important that we acknowledge the missteps that led to the requirement for this new strategy. These were primarily a flawed go-to-market strategy, resources spread over too many markets and the fact that service was being emphasised over Mirriad's core technology, meaning the platform was not sufficiently integrated and automated for scale.

As a result of the flawed strategy, 2018 full year revenue disappointed at GBP416k. However, I am pleased to report that our first six months revenue for 2019 at GBP429k (H1 2018 GBP120k) demonstrates the first early signs that we are growing our revenues.

We have been busy in the first half of 2019: as well as preparation for the fundraising which closed at the end of July we took decisive steps to exit Brazil, exit our commercial operation in India and refocus our Chinese presence through the Tencent partnership.

There is clear audience appetite for the Mirriad product, evidenced by extremely positive feedback from audiences in the US, for our work with T-Mobile in Spanish-language TV series La Piloto, and in France, for our work with SEAT. The research conducted after these campaigns demonstrated that Mirriad's advertising drives both significant improvements in brand awareness and substantial uplifts in brand consideration, using a format that viewers feel adds to the authenticity of content. Our new go-to-market strategy will allow us to capitalise on this significant opportunity.

We anticipate that the new two year contract with Tencent announced in July 2019, taken together with other recent activity, will result in 2019 revenue exceeding that recorded in 2017. It will also be substantially greater than revenues in 2018. We are pleased and encouraged by the volume of work we are undertaking for Tencent in China and currently have 4 brands running in Tencent video content and to end July, orders received already represent c30% of the deal's Year One minimum annual commitment. Any orders above this minimum level will be incremental.

Following a successful fundraise, we can also now look forward to putting our transformation strategy into action by further accelerating the development of the technology and platform and by growing engagement with content producers and distributors in our key markets, the USA, France, Germany, UK and China.

Outside of China we have contracts with four supply partners in our core markets and this is further underpinned by a significant push in the UK and the USA, in line with our new strategy, where we are currently negotiating seven new deals.

Stephan Beringer

Chief Executive

12 September 2019

Finance review

The Company announced in its 2018 annual report that it had sufficient cash to fund its activities throughout the current financial year but that it would need to raise additional funds within 12 months of the date of that announcement. As a result the Board authorised the Chairman, CEO and CFO to actively seek additional funds from existing or new investors.

On 5 July 2019 the Company issued a circular to shareholders announcing that it had secured commitments to invest GBP14.2m in new shares of the Company and that it was also inviting existing shareholders to participate in this fundraising via an open offer mechanic which could raise up to an additional GBP3.9m. On 31 July 2019 the Company announced it had successfully raised gross proceeds of GBP16.2m (GBP15.3m net), comprising the GBP14.2m previously announced, GBP1.2m from existing shareholders under the open offer mechanic and an additional GBP800k placed by the Company's brokers. These funds will be used as general working capital to implement the new go-to-market strategy.

Current period results

During the period the Group discontinued activities in Brazil, and discontinued commercial activity in India in line with the new strategy. The Group also restructured its operations in China removing some activities, such as sales and research, which are now being handled directly by Tencent. The Group removed some roles in the London office and made changes in staffing in the USA. All costs related to the restructuring of the business, which amounted to GBP351k have been accounted for in the period.

Revenues increased substantially year on year. Revenue for the period was GBP429k (30 June 2018 GBP120k) an increase of 258% and also an increase over the equivalent period in 2017 (30 June 2017: GBP352k). Much of this increase has been driven by our new 24 month contract with Tencent in China. This innovative new contract includes a minimum guaranteed monthly revenue in return for provision of technology, operational services, exclusivity in the People's Republic of China and a base volume of advertising. Any advertising delivered to Tencent in excess of this base volume will generate additional revenue.

In other markets we have successfully signed new supply partners in Europe (shown under the UK heading in note 4) though revenues continue to be modest and sporadic as the partners test services in those markets. Revenue in the USA remains low. We have recruited a new sales team in the USA and significant senior management time and resource is being spent on cultivating this market using our new go-to-market strategy.

Gross margin for the period was GBP351k (30 June 2018: GBP54k) as the volume of activity increased.

Operating loss increased to GBP7,179k (30 June 2018: GBP6,652k). As previously noted the Group's principal cost is staff and its Administrative expenses increased to GBP7,555k (30 June 2018: GBP6,783k) as the Group restructured operations and re-oriented spend towards its technology team (now the biggest departmental staff budget) and sales efforts. Total costs incurred in the restructuring, which is now complete, were GBP351k.

In the full year accounts for 2018 the Company took an impairment charge against previously capitalised development costs amounting to GBP1.24m. This was partly based on the uncertainty of future revenue generation. Following a review at the half year the Company has assessed its compliance with IAS 38 and is not capitalising any of its development cost in the first six months of the year.

For the period ending June 2019 total expenditure on research and development was GBP1,137k (30 June 2018: GBP1,109k). None of this has been capitalised in the current period, whereas in the period ended 30 June 2018 GBP410k was capitalised.

Stripping out the impact of the restructuring costs and the impact of capitalisation of development cost in 2018 the comparable operating loss figures would be GBP6,828k for the period ended 30 June 2019 versus GBP7,062k in the period ended 30 June 2018, a reduction of GBP234k.

The loss for the period before tax increased to GBP7,181k (30 June 2018: GBP6,644k) in line with the increase in operating loss noted above.

Tax

The Group has not recognised any tax assets in respect of trading losses arising in the current financial period or accumulated losses in previous financial years. The tax credit recognised in the current and previous period arises from the receipt of R&D tax credits. The amount receivable for the period ended 30 June 2019 is GBP40k.

Earnings per share

As a result of the investment notes above, earnings per share were a loss of 7 pence per share (30 June 2018: loss of 6 pence per share). This calculation is based on the weighted average number of shares in issue during the period and takes into account the small increase in operating loss noted above.

Dividend

No dividend has been proposed for the period ended 30 June 2019 (30 June 2018: GBPnil).

Cash flow

Net cash used in operations during the period was GBP5,889k (30 June 2018: GBP5,768k) as the Group completed its restructuring. During the period no development costs were capitalised (30 June 2018: GBP410k). The Group also incurred GBP28k (30 June 2018: GBP44k) of capital expenditure on tangible assets.

No shares were issued in the period (30 June 2018 GBP1.9m) but the Company announced on 31 July that it had successfully raised an additional GBP16.2m (gross) of new capital.

Balance sheet

The Group has a debt-free balance sheet. Net Assets decreased to GBP8.5m (30 June 2018: GBP23.4m) as the Group consumed cash and after taking into account the impairment of intangible assets noted in the 2018 full year accounts. Cash and cash equivalents at 30 June 2019 was GBP9.2m (30 June 2018: GBP22.1m).

Accounting policies

The Group's consolidated financial information has been prepared in accordance with IFRS as adopted in the EU.

David Dorans

Chief Financial Officer

12 September 2019

Our key performance indicators

 
 Revenue (GBP000)      Cash consumption (GBP000)     Customers under contract 
 6 months 
  to June              6 months                      As at 30 
  2019           429    to June 2019       6,038      June 2019            9 
                ----  ------------------  --------  --------------------  ----- 
 6 months 
  to June              6 months                      As at 30 
  2018           120    to June 2018       6,222      June 2018            9 
                ----  ------------------  --------  --------------------  ----- 
 12 months             12 months                     As at Dec 
  to Dec 2018    416    to Dec 2018        13,106     2018                 11 
                ----  ------------------  --------  --------------------  ----- 
 

Company Information

 
 Directors                     Independent Auditors 
  John Pearson                  PricewaterhouseCoopers LLP 
  Chairman                      3 Forbury Place 
  Stephan Beringer              23 Forbury Road 
  Chief Executive Officer       Reading 
  David Dorans                  RG1 3JH 
  Chief Financial Officer 
  Alastair Kilgour              Solicitors 
  Non-Executive Director        Osborne Clarke LLP 
  Dr Mark Reilly                6th Floor 
  Non-Executive Director        One London Wall 
  Bob Head                      London 
  Non-Executive Director        EC2Y 5EB 
 Company registration number   Company Secretary 
  09550311                      Hannah Coote 
                              ----------------------------------- 
 Registered Office             Nominated Advisor & Broker 
  6(th) Floor                   Numis Securities Limited 
  One London Wall               10 Paternoster Square 
  London                        London 
  EC2Y 5EB                      EC4M 7LT 
                              ----------------------------------- 
 Company website               Financial PR 
  www.mirriad.com               Charlotte Street Partners Limited 
                                The Charlotte Building 
                                6 Evelyn Yard 
                                London 
                                W1T 1QL 
                              ----------------------------------- 
                               Registrars 
                                Computershare Investor Services 
                                plc 
                                The Pavilions 
                                Bridgwater Road 
                                Bristol 
                                BS99 6ZZ 
                              ----------------------------------- 
 

Consolidated statement of profit or loss and statement of comprehensive income for the six months ended 30 June 2019

 
 
                                                                         Year ended 
                                                                         31 December 
                                        Six months       Six months         2018 
                                       ended 30 June    ended 30 June 
                                           2019             2018 
                                        (unaudited)      (unaudited)      (audited) 
                               Note         GBP              GBP             GBP 
                                     ---------------  ---------------  ------------- 
 Revenue                        4            429,067          120,191        415,886 
 Cost of Sales                              (77,719)         (65,779)      (143,548) 
----------------------------  -----  ---------------  ---------------  ------------- 
 Gross Profit                                351,348           54,412        272,338 
----------------------------  -----  ---------------  ---------------  ------------- 
 
 Administrative expenses                 (7,554,771)      (6,783,402)   (14,872,725) 
 Other operating Income                       24,421           76,991        171,433 
----------------------------  -----  ---------------  ---------------  ------------- 
 Operating Loss                          (7,179,002)      (6,651,999)   (14,428,954) 
----------------------------  -----  ---------------  ---------------  ------------- 
 
 Finance Income                               14,773            7,557         57,968 
 Finance costs                              (17,264)                -              - 
----------------------------  -----  ---------------  ---------------  ------------- 
 Finance (costs) / income 
  net                                        (2,491)            7,557         57,968 
 
 Loss before income tax                  (7,181,493)      (6,644,442)   (14,370,968) 
 Income tax credit                            40,129           95,237         42,217 
----------------------------  -----  ---------------  ---------------  ------------- 
 Loss for the period / 
  year                                   (7,141,364)      (6,549,205)   (14,328,769) 
----------------------------  -----  ---------------  ---------------  ------------- 
 
 Loss per ordinary share - basic 
  5                                             (7p)             (6p)          (14p) 
-----------------------------------  ---------------  ---------------  ------------- 
 
 

All activities are classified as continuing.

 
                                                                              Year ended 
                                                                              31 December 
                                             Six months       Six months 
                                            ended 30 June    ended 30 June 
                                                2019             2018            2018 
                                             (unaudited)      (unaudited)      (audited) 
                                                 GBP              GBP             GBP 
                                          ---------------  ---------------  ------------- 
 Loss for the financial period 
  / year                                      (7,141,364)      (6,549,205)   (14,328,769) 
----------------------------------------  ---------------  ---------------  ------------- 
 Other comprehensive expense 
  Items that may be reclassified 
  to profit or loss: 
 Currency translation differences                (24,642)         (29,381)       (88,346) 
----------------------------------------  ---------------  ---------------  ------------- 
 Total comprehensive expense 
  for the period / year                       (7,166,006)      (6,578,586)   (14,417,115) 
----------------------------------------  ---------------  ---------------  ------------- 
 
 
 
 

Consolidated balance sheet

At 30 June 2019

 
                                                                       As at 31 
                                                                       December 
                                         As at 30       As at 30 
                                         June 2019      June 2018        2018 
                                        (unaudited)    (unaudited)     (audited) 
                                Note        GBP            GBP            GBP 
-----------------------------  -----  -------------  -------------  ------------- 
 
 Assets 
  Non-current assets: 
 Property, plant and 
  equipment                               1,043,004        402,718        414,062 
 Intangible assets                                -      1,526,509        170,053 
 Trade and other receivables                210,439        212,362        186,321 
                                          1,253,443      2,141,589        770,436 
 Current assets 
 Trade and other receivables                992,481        760,072        973,750 
 Tax receivable                             119,123        304,077        288,009 
 Cash and cash equivalents                9,166,343     22,090,400     15,203,920 
-----------------------------  -----  -------------  -------------  ------------- 
                                         10,277,947     23,154,549     16,465,679 
-----------------------------  -----  -------------  -------------  ------------- 
 Total assets                            11,531,390     25,296,138     17,236,115 
-----------------------------  -----  -------------  -------------  ------------- 
 
 Current liabilities 
 Trade and other payables                 2,083,712      1,907,311      1,622,460 
 Lease liabilities                          324,724              -              - 
 Current tax liabilities                     16,023              -         36,952 
-----------------------------  -----  -------------  -------------  ------------- 
 Total liabilities                        2,424.459      1,907,311      1,659,412 
-----------------------------  -----  -------------  -------------  ------------- 
 
 Non-current liabilities 
 Lease liabilities                          575,756              -              - 
-----------------------------  -----  -------------  -------------  ------------- 
 Total non-current 
  liabilities                               575,756              -              - 
-----------------------------  -----  -------------  -------------  ------------- 
 
 Net Assets                               8,531,175     23,388,827     15,576,703 
-----------------------------  -----  -------------  -------------  ------------- 
 
 Equity and Liabilities 
  Equity attributable 
  to owners of the parent 
 Share capital                   6           50,949         50,949         50,949 
 Share premium                           25,643,192     25,643,192     25,643,192 
 Share based payment 
  reserve                                 2,318,157      2,114,689      2,141,094 
 Retranslation reserve                    (303,473)      (219,866)      (278,831) 
 Retained earnings 
  / (accumulated losses)               (19,177,650)    (4,200,137)   (11,979,701) 
-----------------------------  -----  -------------  -------------  ------------- 
 Total equity                             8,531,175     23,388,827     15,576,703 
-----------------------------  -----  -------------  -------------  ------------- 
 
 
 
 

Consolidated statement of changes in equity

For the six months ended 30 June 2019

 
                                                        Six months ended 30 June 2018 
                       ---------------------------------------------------------------------------------------------- 
                                                                                           Retained 
                                                                                           earnings 
                                                           Share based                         / 
                                 Share                       payment     Retranslation   (Accumulated 
                                 Capital   Share Premium     reserve        reserve         Losses)      Total Equity 
                      Note         GBP          GBP            GBP            GBP             GBP             GBP 
----------------  -----------  ---------  --------------  ------------  --------------  --------------  ------------- 
 Balance as at 
  1 January 2018                  50,917      23,717,390     1,964,835       (190,485)       2,349,068     27,891,725 
----------------  -----------  ---------  --------------  ------------  --------------  --------------  ------------- 
 Loss for the 
  period                               -               -             -               -     (6,549,205)    (6,549,205) 
 Other 
  comprehensive 
  loss for the 
  period                               -               -             -        (29,381)               -       (29,381) 
----------------  -----------  ---------  --------------  ------------  --------------  --------------  ------------- 
 Total 
  comprehensive 
  loss for the 
  period                               -               -             -        (29,381)     (6,549,205)    (6,578,586) 
----------------  -----------  ---------  --------------  ------------  --------------  --------------  ------------- 
 Proceeds from 
  shares issued                       32       1,999,968             -               -               -      2,000,000 
 Share issue 
  costs                                -        (74,166)             -               -               -       (74,166) 
 Share based 
  payments 
  recognised as 
  expense                              -               -       149,854               -               -        149,854 
----------------  -----------  ---------  --------------  ------------  --------------  --------------  ------------- 
 Total transactions 
  with shareholders 
  recognised directly 
  in equity                           32       1,925,802       149,854               -               -      2,075,688 
-----------------------------  ---------  --------------  ------------  --------------  --------------  ------------- 
 Balance as at 
  30 June 2018                    50,949      25,643,192     2,114,689       (219,866)     (4,200,137)     23,388,827 
-----------------------------  ---------  --------------  ------------  --------------  --------------  ------------- 
 
 
 
                                                     Year ended 31 December 2018 (audited) 
                            -------------------------------------------------------------------------------------- 
                                                                                       (Accumulated 
                                                         Share based                      Losses) 
                               Share                       payment     Retranslation    / Retained 
                               Capital   Share Premium     reserve        reserve        earnings     Total Equity 
                                 GBP          GBP            GBP            GBP             GBP            GBP 
---------------------  ----  ---------  --------------  ------------  --------------  -------------  ------------- 
 Balance as at 
  1 January 2018                50,917      23,717,390     1,964,835       (190,485)      2,349,068     27,891,725 
---------------------  ----  ---------  --------------  ------------  --------------  -------------  ------------- 
 Loss for the 
  financial year                     -               -             -               -   (14,328,769)   (14,328,769) 
 Other comprehensive 
  loss for the 
  year                               -               -             -        (88,346)              -       (88,346) 
---------------------  ----  ---------  --------------  ------------  --------------  -------------  ------------- 
 Total comprehensive 
  loss for the 
  year                               -               -             -        (88,346)   (14,328,769)   (14,417,115) 
---------------------  ----  ---------  --------------  ------------  --------------  -------------  ------------- 
 Proceeds from 
  shares issued                     32       1,999,968             -               -              -      2,000,000 
 Share issue costs                   -        (74,166)             -               -              -       (74,166) 
 Share based payments 
  recognised as 
  expense                            -               -       176,259               -              -        176,259 
---------------------  ----  ---------  --------------  ------------  --------------  -------------  ------------- 
 Total transactions 
  with shareholders 
  recognised directly 
  in equity                         32       1,925,802       176,259               -              -      2,102,093 
---------------------------  ---------  --------------  ------------  --------------  -------------  ------------- 
 Balance as at 
  31 December 
  2018                          50,949      25,643,192     2,141,094       (278,831)   (11,979,701)     15,576,703 
---------------------------  ---------  --------------  ------------  --------------  -------------  ------------- 
 
 
 
                                                        Six months ended 30 June 2019 
                       ---------------------------------------------------------------------------------------------- 
                                                                                           Retained 
                                                                                           earnings 
                                                           Share based                         / 
                                 Share                       payment     Retranslation   (Accumulated 
                                 Capital   Share Premium     reserve        reserve         Losses)      Total Equity 
                      Note         GBP          GBP            GBP            GBP             GBP             GBP 
----------------  -----------  ---------  --------------  ------------  --------------  --------------  ------------- 
 Balance as at 
  1 January 2019 
  as previously 
  reported                        50,949      25,643,192     2,141,094       (278,831)    (11,979,701)     15,576,703 
----------------  -----------  ---------  --------------  ------------  --------------  --------------  ------------- 
 Adjustment on 
  adoption of 
  IFRS 
  16 (net of 
  tax)                                 -               -             -               -        (56,585)       (56,585) 
 Adjusted 
  balances 
  at 1 January 
  2019                            50,949      25,643,192     2,141,094       (278,831)    (12,036,286)     15,520,118 
 Loss for the 
  period                               -               -             -               -     (7,141,364)    (7,141,364) 
 Other 
  comprehensive 
  loss for the 
  period                               -               -             -        (24,642)               -       (24,642) 
----------------  -----------  ---------  --------------  ------------  --------------  --------------  ------------- 
 Total 
  comprehensive 
  loss for the 
  period                               -               -             -        (24,642)     (7,141,364)    (7,166,006) 
----------------  -----------  ---------  --------------  ------------  --------------  --------------  ------------- 
 Share based 
  payments 
  recognised as 
  expense                              -               -       177,063               -               -        177,063 
----------------  -----------  ---------  --------------  ------------  --------------  --------------  ------------- 
 Total transactions 
  with shareholders 
  recognised directly 
  in equity                            -               -       177,063               -               -        177,063 
-----------------------------  ---------  --------------  ------------  --------------  --------------  ------------- 
 Balance as at 
  30 June 2019                    50,949      25,643,192     2,318,157       (303,473)    (19,177,650)      8,531,175 
-----------------------------  ---------  --------------  ------------  --------------  --------------  ------------- 
 
 
 
 Consolidated statement of cash flows for the six months ended 30 June 
  2019 
                                    Note                                  Year ended 
                                                                          31 December 
                                            Six months     Six months        2018 
                                             ended 30       ended 30 
                                             June 2019      June 2018 
                                            (unaudited)    (unaudited)     (audited) 
                                                GBP            GBP            GBP 
  -------------------------------  -----  -------------  -------------  ------------- 
   Net cash from operating 
    activities                       7      (6,096,021)    (5,775,722)   (11,972,408) 
   Tax credit received                          209,015              -              - 
   Taxation paid                                      -              -        (6,691) 
   Interest received                             14,773          7,557         57,968 
   Interest paid                               (17,264)              -              - 
  -------------------------------  -----  -------------  -------------  ------------- 
   Net cash used in operating 
    activities                              (5,889,497)    (5,768,165)   (11,921,131) 
  -------------------------------  -----  -------------  -------------  ------------- 
 
   Cash flow from investing 
    activities 
   Investment in subsidiaries                         -              -      (168,587) 
   Capitalisation of development 
    costs                                             -      (409,952)      (878,500) 
   Purchase of tangible assets                 (27,995)       (43,923)      (137,386) 
   Proceeds from disposal                             -              -              - 
    of tangible assets 
  -------------------------------  -----  -------------  -------------  ------------- 
   Net cash used in investing 
    activities                                 (27,995)      (453,875)    (1,184,473) 
  -------------------------------  -----  -------------  -------------  ------------- 
 
   Cash flow from financing 
    activities 
   Payment of lease liabilities               (120,085)              -              - 
   Proceeds from issue of 
    ordinary share capital 
    (net of costs of issue)                           -      1,928,750      1,925,834 
  -------------------------------  -----  -------------  -------------  ------------- 
   Net cash generated from 
    financing activities                      (120,085)      1,928,750      1,925,834 
  -------------------------------  -----  -------------  -------------  ------------- 
 
   Net increase / (decrease) 
    in cash and cash equivalents            (6,037,577)    (4,293,290)   (11,179,770) 
   Cash and cash equivalents 
    at the beginning of the 
    period / year                            15,203,920     26,383,690     26,383,690 
   Cash and cash equivalents 
    at the end of the period 
    / year                                    9,166,343     22,090,400     15,203,920 
  -------------------------------  -----  -------------  -------------  ------------- 
 
 
 Cash and cash equivalents 
  consists of 
 Cash at bank and in hand      9,166,343           22,090,400   15,203,920 
 Cash and cash equivalents     9,166,343           22,090,400   15,203,920 
----------------------------  ----------  -------------------  ----------- 
 
 
   1    Basis of preparation 

The condensed and consolidated interim financial statements of Mirriad Advertising plc for the period ended 30 June 2019 have been prepared in accordance with Accounting Standard IAS 34 Interim Financial Reporting ("IAS 34").

These condensed interim consolidated financial statements for the six months ended 30 June 2019 and for the six months ended 30 June 2018 do not constitute statutory accounts as defined in Section 434 of the Companies Act and are unaudited. The financial information for the six months ended 30 June 2019 presents financial information for the consolidated Group, including the financial results of the Company's wholly owned subsidiaries Mirriad Advertising Private Limited, Mirriad Inc, Mirriad (Singapore) Pte. Ltd, Mirriad Software Science and Technology (Shanghai) Co. Ltd, Mirriad Brasil Tecnologias Para Midia Ltda, and Mirriad Limited (dormant). Comparative figures in the condensed interim financial statements for the year ending 31 December 2018 have been taken from the Group's audited financial statements on which the Group's auditors, Pricewaterhouse Coopers LLP, expressed an unqualified opinion.

The Board approved these interim financial statements on 12 September 2019.

   1.1   Going concern 

These condensed interim financial statements have been prepared on the going concern basis, which assumes that the Group will continue in operational existence for the foreseeable future.

After making appropriate enquiries, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future and for at least one year from the date of approval of these condensed interim financial statements. For these reasons they continue to adopt the going concern basis in preparing the Group's condensed interim financial statements.

The cash flow projections are the sole responsibility of the directors based upon their present plans, expectations and intentions. In this context, the directors have prepared and considered cash flow projections for the Group for a period extending one year from the date of approval of these financial statements. Based on these cash flows the directors are satisfied that the Group are able to meet their liabilities as and when they fall due for the foreseeable future and for a minimum period of twelve months from the date of these condensed interim financial statements.

   2     Accounting Policies 

The accounting policies applied are consistent with those of the annual report and accounts for the year ended 31 December 2018, as described in those financial statements other than standards, amendments and interpretations which became effective after 1 January 2019 and were adopted by the Group. The only new standard which had a material impact on the Group and required a change in accounting policy and a retrospective adjustment is IFRS 16 "Leases". The impact of the new leasing standard and the new accounting policies are disclosed in note 2.1 below.

The Group's activities and results are not exposed to any seasonality.

   2.1   Impact of IFRS 16 adoption 

This note explains the impact of the adoption of IFRS 16 "Leases" on the Group's financial statements and discloses the new accounting policies that have been applied from 1 January 2019 in note 2.1(b) below.

(a) Adjustments recognised on adoption of IFRS 16

The Group has adopted IFRS 16 retrospectively from 1 January 2019, but has not restated comparatives for the 2018 reporting period, as permitted under the specific transitional provisions in the standard. The reclassifications and the adjustments arising from the new leasing rules are therefore recognised in the opening balance sheet on 1 January 2019.

On adoption of IFRS 16, the Group recognised lease liabilities in relation to leases which had previously been classified as 'operating leases' under the principles of IAS 17 Leases. These liabilities were measured at the present value of the remaining lease payments, discounted using the lessee's incremental borrowing rate as of 1 January 2019. The weighted average lessee's incremental borrowing rate applied to the lease liabilities on 1 January 2019 was 4% for a UK property lease and 10% for an Indian property lease. The value of the lease liability recognised as at 1 January 2019 was GBP1,044,601.

The associated right-of-use assets for property leases were measured on a retrospective basis as if the new rules had always been applied. There were no onerous lease contracts that would have required an adjustment to the right-of-use assets at the date of initial application.

All right-of-use assets recognised relate to property leases as follows and have been included within property, plant and equipment on the balance sheet.

 
                              30 June 2019   1 January 2019 
                                   GBP             GBP 
 Properties                        700,528          820,612 
                             -------------  --------------- 
 Total right-of-use assets         700,528          820,612 
                             -------------  --------------- 
 

The change in accounting policy affected the following items in the balance sheet on 1 January 2019:

   --      Property, plant and equipment (right-of-use assets) - increase by GBP820,612 
   --      Lease liabilities - increase by GBP1,044,601 
   --      Trade and other payables (rent-free period accrual) - decrease by GBP167,404 

The net impact on retained earnings on 1 January 2019 was a decrease of GBP56,585.

   (i)   Impact on segment disclosures and earnings per share 

EBITDA, segment assets and segment liabilities for 30 June 2019 all increased as a result of the change in accounting policies. The following segments were affected by the change in policy.

 
          EBITDA   Segment   Segment liabilities 
            GBP     assets           GBP 
                     GBP 
-------  -------  --------  -------------------- 
 UK       11,157   621,160               658,484 
 India     6,228    79,368                98,508 
-------  -------  --------  -------------------- 
 Total    17,385   700,528               756,992 
-------  -------  --------  -------------------- 
 
   (ii)   Practical expedients applied 

In applying IFRS 16 for the first time, the Group has used the following practical expedients permitted by the standard:

-- the accounting for operating leases with a remaining lease term of less than 12 months as at 1 January 2019 as short-term leases

-- the exclusion of initial direct costs for the measurement of the right-of-use asset at the date of initial application, and

-- the use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease.

The Group has also elected not to reassess whether a contract is, or contains a lease at the date of initial application. Instead, for contracts entered into before the transition date the Group relied on its assessment made applying IAS 17 and IFRIC 4 "Determining whether an Arrangement contains a Lease".

(b) The group's leasing activities and how these are accounted for.

 
 The Group leases offices in the countries where it operates, 
  and rental contracts are typically made for fixed periods of 
  1 to 10 years but may be extended in some cases. Lease terms 
  are negotiated on an individual basis and contain a wide range 
  of different terms and conditions. 
 Until the 2018 financial year, leases of property, plant and 
  equipment were classified as either finance or operating leases. 
  Payments made under operating leases (net of any incentives 
  received from the lessor) were charged to profit or loss on 
  a straight-line basis over the period of the lease. 
 

From 1 January 2019, leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the Group. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The right-of-use asset is depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis.

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:

-- fixed payments (including in-substance fixed payments), less any lease incentives receivable

   --      variable lease payment that are based on an index or a rate 
   --      amounts expected to be payable by the lessee under residual value guarantees 

-- the exercise price of a purchase option if the lessee is reasonably certain to exercise that option, and

-- payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.

The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the lessee's incremental borrowing rate is used, being the rate that the lessee would have to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions.

Right-of-use assets are measured at cost comprising the following:

   --      the amount of the initial measurement of lease liability 

-- any lease payments made at or before the commencement date less any lease incentives received

   --      any initial direct costs, and 
   --      restoration costs 

Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets comprise IT-equipment.

   3     Group financial risk factors 

The condensed interim financial statements do not contain all financial risk management information and disclosures required in annual financial statements; the information should be read in conjunction with the financial information, as at 31 December 2018, summarized in the 2018 annual report and accounts. There have been no significant changes in any risk management policies since 31 December 2018.

   4      Segment information 

Management mainly considers the business from a geographic perspective since the same services are effectively being sold in every Group entity. Therefore regions considered for segmental reporting are where the Company and subsidiaries are based, namely the UK, the USA, India, Brazil, China and Singapore. The revenue is classified by where the sales were booked not by the geographic location of the customer. For this reporting purpose the Singapore and China entities are considered together.

The only income outside of the primary business activity relates to income received from grants which is recognised in other operating income.

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the steering committee that makes strategic decisions. The steering committee is made up of the board of directors and the President. There are no sales between segments. The revenue from external parties reported to the strategic steering committee is measured in a manner consistent with that in the income statement.

The Parent company is domiciled in the United Kingdom. The amount of revenue from external customers by location of the Group billing entity is shown in the tables below.

Revenue

 
                                                           Year ended 
                           Six months      Six months      31 December 
                              ended           ended 
                           30 June 2019    30 June 2018       2018 
                           (unaudited)     (unaudited)      (audited) 
                               GBP             GBP             GBP 
-----------------------  --------------  --------------  ------------- 
 Turnover by geography 
 China and Singapore            267,989          66,010        177,395 
 UK                              69,749           7,750         40,062 
 India                           39,200               -         14,806 
 USA                             27,422          13,491        109,541 
 Brazil                          24,707          32,940         74,082 
-----------------------  --------------  --------------  ------------- 
 Total                          429,067         120,191        415,886 
-----------------------  --------------  --------------  ------------- 
 

Loss before tax

The EBITDA is the loss for the year before depreciation, amortisation, interest and tax. The loss before tax is broken down by segment as follows:

 
                                                              Year ended 
                              Six months      Six months      31 December 
                                 ended           ended 
                              30 June 2019    30 June 2018       2018 
                              (unaudited)     (unaudited)      (audited) 
                                  GBP             GBP             GBP 
--------------------------  --------------  --------------  ------------- 
 UK                            (4,672,391)     (3,648,835)    (7,450,953) 
 USA                           (1,307,718)     (1,219,902)    (2,306,067) 
 India                           (313,731)       (349,981)      (716,655) 
 China and Singapore             (273,008)       (564,353)      (940,649) 
 Brazil                          (236,228)       (277,717)      (516,391) 
 Total EBITDA                  (6,803,076)     (6,060,788)   (11,930,715) 
 Depreciation                    (205,873)        (67,079)      (149,102) 
 Amortisation                    (170,053)       (524,132)    (1,118,862) 
 Impairment of intangible 
  assets                                 -               -    (1,230,275) 
 Finance (costs) / income 
  net                              (2,491)           7,557         57,968 
--------------------------  --------------  --------------  ------------- 
 Loss before tax               (7,181,493)     (6,644,442)   (14,370,986) 
--------------------------  --------------  --------------  ------------- 
 
   5       Earnings per share 

(a) Basic

Basic earnings per share is calculated by dividing the loss for the period / year by the weighted average number of ordinary shares in issue during the year. Potential ordinary shares are not treated as dilutive as the Group is loss making and such shares would be anti-dilutive.

 
 Group                               Six months    Six months 
                                        ended         ended       Year ended 
                                       30 June       30 June      31 December 
                                         2019          2018          2018 
----------------------------------  ------------  ------------  ------------- 
 Loss attributable to owners 
  of the parent (GBP)                (7,141,364)   (6,549,205)   (14,328,769) 
----------------------------------  ------------  ------------  ------------- 
 Weighted average number of 
  ordinary shares in issue Number    105,122,717   103,108,816    104,124,043 
----------------------------------  ------------  ------------  ------------- 
 

The loss per share for the period was 7p (six months to 30 June 2018: 6p; year ended 31 December 2018: 14p).

No dividends were paid during the period (six months to 30 June 2018: GBPnil; year ended 31 December 2018: GBPnil).

(b) Diluted

Potential ordinary shares are not treated as dilutive as the Group is loss making and such shares would be anti-dilutive.

   6       Share capital 

Ordinary shares of GBP0.00001 each

 
 
 Allotted and fully paid        Number 
--------------------------   ------------ 
 At 1 January 2019            105,122,717 
 Issued during the period               - 
 At 30 June 2019              105,122,717 
---------------------------  ------------ 
 

No shares were issued during the period.

   7        Net cash flows used in operating activities 
 
                                                                              Year ended 
                                              Six months      Six months 
                                                 ended           ended        31 December 
                                              30 June 2019    30 June 2018       2018 
                                              (unaudited)     (unaudited)      (audited) 
                                                  GBP             GBP             GBP 
------------------------------------  ----  --------------  --------------  ------------- 
 Loss for the financial period 
  / year                                       (7,141,364)     (6,549,205)   (14,328,769) 
 Adjustments for: 
 Tax on loss on ordinary activities               (40,129)        (95,237)       (42,217) 
 Net finance costs / (income)                        2,491         (7,557)       (57,968) 
 Operating loss:                               (7,179,002)     (6,651,999)   (14,428,954) 
 Amortisation and impairment 
  of intangible assets                             170,053         524,132      2,349,137 
 Depreciation of tangible assets                   205,873          67,079        149,102 
 Loss / (profit) on disposal 
  of tangible assets                                15,453               -        (1,754) 
 Bad debts written off                                 625               -         20,423 
 Share based payment charge                        177,063         149,854        176,259 
 Foreign exchange variance                         (4,300)        (29,381)         43,060 
 - (Increase)/ decrease in debtors                 125,412         314,400        106,740 
 - Increase in creditors                           392,802       (149,807)      (386,421) 
------------------------------------------  --------------  --------------  ------------- 
 Cash flow used in operating 
  activities                                   (6,096,021)     (5,775,722)   (11,972,408) 
------------------------------------------  --------------  --------------  ------------- 
 
   8      Related party transactions 

The Group is owned by a number of investors the largest being IP2IPO Portfolio (GP) Limited (as general partner for IP2IPO Portfolio L.P) who owns approximately 26% of the share capital of the Company. Accordingly there is no ultimate controlling party.

During the period the Company had the following related party transactions which were carried out at arm's length. No guarantees were given or received for any of these transactions.

IP2IPO Limited - a company which shares a parent company with IP2IPO Portfolio (GP) Limited, the largest shareholder in the Group, and which also appoints a Director of the Group charged Mirriad Advertising plc for the following transactions during the period: (1) GBP10,000 for the services of Dr. Mark Reilly as a Director during the period. Of this amount, GBP1,667 was invoiced and unpaid at the period end, and was subsequently paid on 11 July 2019. A further GBP1,667 was accrued and unpaid at the period end. This outstanding amount was paid on 26 July 2019; (2) GBP6,000 for the services of the Company Secretary during the period. GBP3,000 of this amount was accrued and unpaid as at 30 June 2019. This outstanding amount was paid on 26 July 2019; and (3) GBP756.89 for event hire and refreshments. GBP82 of this amount was invoiced and unpaid as at 30 June 2019 and was subsequently paid on 11 July 2019.

Parkwalk Advisors Limited - a company which shares a parent company with IP2IPO Portfolio (GP) Limited, the largest shareholder in the Group, and which also appoints a Director of the Group charged Mirriad Advertising plc for the following transactions during the period: (1) GBP10,000 for the services of Alastair Kilgour as a Director during the period. GBP1,667 of this amount was accrued and unpaid as at 30 June 2019 but was subsequently paid on 16 July 2019.

   9        Availability of Interim Report 

Electronic copies of this interim financial report will be available on the Company's website at www.mirriadplc.com/investor-relations.

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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