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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Mirriad Advertising Plc | LSE:MIRI | London | Ordinary Share | GB00BF52QY14 | ORD GBP0.00001 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 1.825 | 1.70 | 1.90 | 0.00 | 07:30:48 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Advertising Agencies | 1.51M | -15.1M | -0.0309 | -0.59 | 8.91M |
From Apr 2019 to Apr 2024
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
Hot Features
Premium
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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