Half Yearly Report
Crossrider plc
("Crossrider," the "Company" or the "Group")
Unaudited interim results for the six months ended 30 June 2015
Related Party Transaction
Crossrider (AIM:CROS) the creator of digital advertising platforms specialising in monetising web and mobile media through the use of big data, today announces its unaudited half year results for the six months ended 30 June 2015.
Financial highlights
§ Revenue increased 53 per cent, up $14.2 million to $40.8 million (H1/14: $26.6 million)
§ Organic revenue growth of $11.4 million
§ Adjusted EBITDA(1) in line with expectations at $5.5 million (H1/14: $7.6 million) following continuing investment in operations
§ Adjusted cash flow from operations(1) $5.0 million (H1/14: $7.0 million)
§ Adjusted basic EPS(3) 2.6 $ cents per share, (H1/14: 7.4 $ cents per share)
§ Nil debt on balance sheet with $78.3 million of cash balances at the period end to execute acquisition strategy
(1) EBITDA, Adjusted EBITDA and Adjusted cash flow from operations are non GAAP measures. Adjusted EBITDA and adjusted cash flow from operations are company specific measures which exclude other operating income and expenses which are considered to be one off and non-recurring in nature. (See reconciliation in the Chief Financial Officer's review below).
(2) Adjusted basic EPS excludes the after tax impact of amortisation of acquired intangibles, and other operating income and expenses which are considered to be one off and non-recurring in nature.
Operational highlights
§ 62 per cent organic revenue growth from Mobile
§ Extended reach:
o Average unique monthly users up 20 million since December 2014 to 220 million
o Average daily available ad spaces up 2.2 billion since December 2014 to 7.5 billion
§ Integration of technology across web and mobile and resulting mobile margin improvement
§ Investment in technology expected to drive margin improvement and therefore increased profitability in H2/15
Post Balance sheet events
§ Investment of $0.9m in programmatic video technology company Clearvelvet
§ Soft launch of new mobile affiliate network enhancing our existing mobile offering
§ Investment in Algorithmic programmatic media buying platform being developed jointly by Crossrider and (related party) Adience SER Ltd
Outlook
Current trading for the post balance sheet period, particularly in August, is strong and given the Group's focus on margin improvement through the use of technology the Directors expect Group EBITDA to exceed current full year forecasts. Reflecting the high margin strategy, correspondingly revenue is expected to be slightly below market expectations. The balance sheet remains strong and the Board is confident in the Group's ability to execute accretive acquisitions.
Commenting on the results, Koby Menachemi, Chief Executive Officer of Crossrider, said:
"Crossrider's vision is to be the de facto global platform for the digital advertising sector. The first six months of the year has seen organic growth across our platforms, particularly in mobile. The key to being at the cutting edge of our rapidly growing market place is our continued investment in technology and we are very excited by the recent investment in programmatic media buying and video technology which create the building blocks for future growth. Additionally, we continue to search for suitable earnings accretive acquisitions and are evaluating a number of meaningful opportunities."
Related Party Transaction
On 7th September 2015 Adience SER Ltd ("Adience") signed a software license agreement with Crossrider to provide Crossrider with a licence to use its algorithm as part of Crossrider's programmatic media buying platform. The licence will be provided for a fee based on a share of the gross profit generated by Crossrider's programmatic media buying platform. The fee will be a 35 per cent. gross profit share up to the first $1 million and 18 per cent. thereafter.
The transaction set out above constitutes a related party transaction pursuant to Rule 13 of the AIM Rules for Companies ("AIM Rules") as Adience is a related party of the Company by virtue of being an "associate" for the purposes of the AIM Rules of Unikmind Holdings Limited, a substantial shareholder (as defined in the AIM Rules) of the Company. The Directors of Crossrider, having consulted with the Company's nominated adviser, Shore Capital & Corporate Limited, consider that the terms of this transaction are fair and reasonable insofar as the Company's shareholders are concerned.
For further information contact:
|
Crossrider plc Koby Menachemi, Chief Executive Officer Mark Carlisle, Chief Financial Officer
|
+44 (0) 20 3772 2496 via Bell Pottinger |
|
Bell Pottinger David Rydell James Newman Sam Cartwright
|
+44 (0) 20 3772 2496 |
|
Shore Capital Bidhi Bhoma Toby Gibbs
|
+44 (0) 20 7408 4090 |
About Crossrider
Crossrider is a creator of digital advertising platforms specialising in monetising web and mobile media through the use of big data. The Company's web and mobile platforms power ad networks, agencies and direct publishers and enable the delivery of relevant digital advertising through the analysis of big data: making online marketing significantly more efficient and cost effective.
The Group operates web and mobile platforms which generate big data, enabling the development of a proprietary ad serving algorithm and engine that can extract value from this data to deliver relevant advertising to targeted users.
Crossrider's vision is to become the de facto standard platform for delivering relevant web and mobile adverts to billions of people, powering the next generation of digital advertising.
Chief Executive Officer's review
Overview
In 2015 Crossrider has continued to demonstrate prudent financial management and operational excellence as it executes on its proven and profitable business model. During the first six months of the year, Crossrider's revenues increased by 53 per cent to $40.8 million. Adjusted EBITDA decreased by 28 per cent to $5.5 million and was in line with management's expectations reflecting the Group's strategy to invest for future growth whilst continuing to generate profits and cash.
The Group has continued to expand its reach and footprint within the digital advertising sector. During June 2015, Crossrider delivered ads to 220 million users which compared to delivering ads to 200 million users in December 2014. The number of daily available ad spaces on Crossrider's platforms also increased to 7.5 billion in June 2015 compared to 5.3 billion in December 2014. The expansion of the Group's reach should enable Crossrider to grow margins and profits by delivering increased margins and ROI to advertisers through the use of technology rather than through low margin revenue growth.
In the second half of 2015, the Group has made further progress in executing its organic and acquisitive growth strategies by investing in programmatic video technology and a new algorithmic programmatic media buying platform focussed on mobile. Central to success in the burgeoning digital advertising sector is continual development and investment in rapidly evolving new formats. Both of these investments are in line with our stated strategy of investing in unique disruptive technologies that can be leveraged via our existing data and platforms.
Strategy
Organic growth strategy
Crossrider continues to execute against its communicated organic growth strategy of expanding the liquidity of data and reach across Web and Mobile platforms. During the first six months of the year the integration of our businesses and technology has progressed as planned and consequently the operational distinction between the Web and desktop and Mobile divisions has started to dissolve as predicted. This has enabled the Group to focus more of its resources on its mobile growth strategy whilst maintaining profits generated by the Web and desktop platforms.
The Group's organic growth strategy continues to focus on mobile. Crossrider's revenue from mobile grew organically by 62 per cent in the first half of the year and now represents 17 per cent of total revenue.
Crossrider's development team has been working hard on innovation and enhancing the effectiveness of our proprietary technology. Crossrider's proprietary technology collects non-personally identifiable ("NPI") data which algorithms use to appropriately target relevant ads to users via the Group's platforms. This increases Return On Investment (ROI) for advertisers and revenue for publishers. Crossrider's Business Intelligence (BI) Dashboard also enables clients to estimate user lifetimes, values and Average Revenue Per Unit; and therefore to predict future campaign success and ROI. The Group's strategy is to focus on delivering better ROI and therefore increased margins.
The Group's new algorithmic programmatic media buying platform is being developed as part of a partnership with Adience, using its machine learning algorithms which will drive ROI from insights gained based on unique patterns identified within big data. Focussed on mobile, this platform will build on the existing capabilities of the Ajillion platform.
In July, Crossrider launched its new mobile affiliate network. This will drive additional data across Crossrider's platforms as well as benefit from significant revenue synergies with our existing mobile Ad Network Definiitmedia.
Acquisition strategy
Crossrider continues to evaluate a number of potential and significant acquisitions that meet our stated acquisition criteria:
§ Relevant and unique or disruptive technologies that can be leveraged via our existing data and platforms;
§ Demonstrable track record of sustainable growth and profitability; and
§ High quality teams.
Whilst initially small, our $0.9m investment on 7 September for 15 per cent. of Clearvelvet Trading Ltd ("Clearvelevet"), a programmatic video company meets our criteria. Video is the fastest growing advertising format for desktop and mobile and Clearvelvet has unique technology which will:
§ Maximise media ROI by using machine learning algorithms on big-data, harvested by its technology, to reach the most relevant inventory for a specific video campaign;
§ Access mobile and web video inventory, otherwise inaccessible, by using real-time bidding technology; and
§ Enhance video yield optimization - thereby reducing eCPM and increasing ROI.
Web and desktop
The Web and Desktop division generated revenues of $34.0 million in H1/15. This represented organic revenue growth of 35 per cent. over revenues of $25.1 million in H1/14.
Crossrider's web and desktop division comprises its Web apps development and Desktop apps distribution platforms. These platforms use Crossrider's data analysis technology and BI dashboards to allow publishers and advertisers to easily view and understand their traffic sources. Data analysis of KPIs, such as installation success rate; number of active users; and type of browser can be used to model potential revenue over a specific campaign period.
In December 2014, 34,000 Web app developers were using Crossrider's proprietary software platform generating 1.6 million daily new installations. This has risen to c.37,000 since December 2014, and in June 2015 generated 1.4 million daily new installations. Web apps built using the Crossrider platform have now been downloaded c. 1.5 billion times.
The Desktop apps distribution platform continued its momentum from its strong performance in 2014 driven by the distribution of the Company's PC repair utility provider, Reimage. Reimage uses a repository of software "spare parts" by replacing faulty files with new versions. In H1/15, Reimage software was installed on over 20 million devices, repairing nearly 700,000 PCs, reflecting the high quality of this product. On average, 70,000 monthly subscriptions were sold in the first half of 2015.
The strategy for the Web and Desktop division is to continue to drive growth in traffic and data on the platform and to increase ROI through the use of better data analysis as well as the addition of innovative and complimentary new products to the Group's web platforms.
Mobile
The mobile division was acquired by the Group in May 2014. It generated revenues of $6.8 million in H1/15, which represents organic growth of 62 per cent. over H1/14. In H1/15 Mobile revenues represented 17 per cent. of total revenues and this is forecast to increase in H2/15.
Crossrider's mobile division operates its own white label Mobile media management platform (Ajillion); and its own Mobile Ad Network (DefinitiMedia).
During the period Crossrider has focussed on expanding the performance and reach of its "built for mobile" Ajillion platform and ad exchange which currently receives over 6 billion ad requests daily, compared with 4 billion at December 2014 and has an average of 25,000 campaigns running at any one time. Our mobile platform capabilities are also being expanded as Crossrider invests in additional programmatic media buying technology.
Crossrider is also driving the efficient scaling of our DefinitiMedia Ad-Network through the integration of our technology across the web and mobile, increasing through automation the number of campaigns that can be run by an individual account manager.
Our new affiliate network launched in July 2015. This will build on our existing mobile offering and expand into new verticals.
Outlook
Current trading for the post balance sheet period, particularly in August, is strong and given the Group's focus on margin improvement through the use of technology the Directors expect Group EBITDA to exceed current full year forecasts. Reflecting the high margin strategy, correspondingly revenue is expected to be slightly below market expectations. The balance sheet remains strong and the Board is confident in the Group's ability to execute accretive acquisitions.
Koby Menachemi
Chief Executive Officer
7 September 2015
Chief Financial Officer's review
The Group has continued its strong organic growth and traded in line with expectations for the six months ended 30 June 2015. Revenue for the period was $40.8 million, (H1/14: $26.6 million). Of the growth in revenue over H1/2014 of $14.2 million, $11.4 million was due to organic growth and $2.8 million due the acquisition of Ajillion and DefinitiMedia in May 2014. Adjusted EBITDA was $5.5 million, (H1/14: $7.6 million). Cash generated from operations for the period was strong at $4.3 million, (H1/14: $4.8 million); after adjusting for one-off and non-recurring items adjusted operating cash flow was $5.0 million, (H1/14: $7.0 million). The Group has a strong balance sheet with cash of $78.3 million at 30 June 2015 (31 December 2014 $76.0 million).
Revenue
|
|
|
|
H1/15 |
|
H1/14 |
|
|
|
|
$'000 |
|
$'000 |
|
|
|
|
|
|
|
|
Web and Desktop |
|
|
33,950 |
|
25,128 |
|
Mobile |
|
|
6,849 |
|
1,458 |
|
Revenue |
|
|
40,799 |
|
26,586 |
Web and desktop revenue grew by $8.8 million (35per cent) to $34.0 million in H1/15 driven entirely by the organic growth of the Web extensions and Desktop app distribution businesses.
Revenue from Mobile activities in H1/15 totalled $6.8 million and was generated by the Ajillion and DefinitiMedia businesses that were acquired in May 2014. Organic revenue growth from Mobile was $2.6 million (62per cent) in H1/15.
Revenue for the full year is expected to be marginally lower than expected on the basis that Crossrider is focussed on the growth of profits by delivering increased margins and ROI to advertisers through the use of technology rather than through low margin revenue growth.
Segment result
The Group operates two reportable segments: Web and Desktop, and Mobile. Division between the two segments is based upon the channel of delivery of product or service. Segment result has been calculated using revenue less costs directly attributable to that segment. Cost of sales comprises commissions paid to publishers and payment processing fees. Direct sales and marketing costs comprise traffic acquisition costs.
As a result in the change in mix of products sold within the Web and desktop segment towards Crossrider's own apps, traffic acquisition costs have increased resulting in a decrease in the Web and desktop segment margin percentage.
|
|
|
|
H1/15 |
|
H1/14 |
|
Web and desktop |
|
|
$'000 |
|
$'000 |
|
|
|
|
|
|
|
|
Revenue |
|
|
33,950 |
|
25,128 |
|
Cost of sales |
|
|
(4,361) |
|
(5,731) |
|
Direct sales and marketing costs |
|
|
(18,124) |
|
(7,777) |
|
Segment result |
|
|
11,465 |
|
11,620 |
|
Segment margin % |
|
|
34% |
|
46% |
Segment result (continued)
|
|
|
|
H1/15 |
|
H1/14 |
|
Mobile |
|
|
$'000 |
|
$'000 |
|
|
|
|
|
|
|
|
Revenue |
|
|
6,849 |
|
1,458 |
|
Direct sales and marketing costs |
|
|
(5,366) |
|
(1,227) |
|
Segment result |
|
|
1,483 |
|
231 |
|
Segment margin % |
|
|
22% |
|
16% |
Adjusted EBITDA
Adjusted EBITDA for the six months to 30 June 2015 was $5.5 million (H1/14: $7.6 million). Adjusted EBITDA is a non-GAAP company specific measure which is considered to be a key performance indicator for the Group's financial performance. It excludes other operating income, share based payment charges and expenses which are considered to be one-off and non-recurring in nature and are excluded from the following analysis:
|
|
|
|
H1/15 |
|
H1/14 |
|
|
|
|
$'000 |
|
$'000 |
|
|
|
|
|
|
|
|
Revenue |
|
|
40,799 |
|
26,586 |
|
Cost of sales |
|
|
(4,361) |
|
(5,731) |
|
Direct sales and marketing costs |
|
|
(23,490) |
|
(9,004) |
|
Segment result |
|
|
12,948 |
|
11,851 |
|
|
|
|
|
|
|
|
Indirect sales and marketing costs |
|
|
(1,720) |
|
(786) |
|
Research and development costs |
|
|
(1,208) |
|
(1,569) |
|
Management, general and administrative cost |
|
|
(4,504) |
|
(1,856) |
|
Adjusted EBITDA |
|
|
5,516 |
|
7,640 |
Operating loss
A reconciliation of Adjusted EBITDA to operating loss is provided as follows:
|
|
|
|
H1/15 |
|
H1/14 |
|
|
|
|
$'000 |
|
$'000 |
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
|
5,516 |
|
7,640 |
|
Other operating income |
|
|
- |
|
178 |
|
Employee share-based payment charge |
|
|
(2,391) |
|
(2,018) |
|
Exceptional and non-recurring costs |
|
|
(690) |
|
(2,355) |
|
Depreciation and amortisation |
|
|
(4,464) |
|
(4,290) |
|
Operating loss |
|
|
(2,029) |
|
(845) |
Other operating income relates to the net income, (gross income recharged less related expenses) earned from services terminated in 2014.
Exceptional and non-recurring costs in H1/15 comprise non-recurring staff costs of $0.1 million, (H1/14 $0.4m) and payments in respect of the Crossrider, Ajillion and DefinitiMedia acquisitions expensed through the income statement of $0.6 million, (H1/14: $2.0 million).
Loss before tax
Loss before tax was $2.2 million (H1/14: $2.5 million).
Loss after tax
Loss after tax was $2.9 million (H1/14: $2.6 million). The tax charge in the period of $0.8 million includes a $1.0 million charge in respect of the finalisation of a withholding tax position in respect of a distribution within the Group from Israel. The Group continues to recognise a deferred tax asset of $0.7m (H1/14: $0.6m) in respect of tax losses accumulated in previous years. The full year tax charge is expected to be in line with management's expectations.
Cash flow
|
|
|
|
H1/15 |
|
H1/14 |
|
|
|
|
$'000 |
|
$'000 |
|
|
|
|
|
|
|
|
Cash flow from operations |
|
|
4,288 |
|
4,798 |
|
Exceptional and non-recurring costs |
|
|
690 |
|
2,355 |
|
Other operating income |
|
|
- |
|
(178) |
|
Adjusted cash flow from operations |
|
|
4,978 |
|
6,975 |
|
% of Adjusted EBITDA |
|
|
90% |
|
91% |
Cash flow from operations was strong at $4.3 million (H1/14 $4.8 million). Adjusted cash flows from operations was $5.0 million and this represented 90 per cent. of adjusted EBITDA.
Tax paid in the period was $0.2 million (H1/14: $0.1 million).
Cash spent in the period on capital expenditure of $1.3 million (H1/14 $0.5 million) includes $1 million of capitalised development costs (H1/14 $0.3 million). Cash payments in respect of previous acquisitions totalled $0.6 million (H1/14 $8.9 million). As a result, net cash outflow from investing and financing activities was $1.8 million (H1/14 $2.8 million outflow).
Financial position
At 30 June 2015 the Group had cash of $78.3 million (31 December 2014: $76.0 million, net assets of $110 million (31 December 2014: $111 million) and is debt free. At 30 June 2015 trade receivables were $8.8 million (31 December 2014: $12.6 million) which represented 41 days outstanding, (31 December 2014: 34 days).
Mark Carlisle
Chief Financial Officer
7 September 2015
Unaudited consolidated statement of comprehensive income
For the six months ended 30 June 2015
|
|
|
Six months ended 30 June 2015 |
|
Six months ended 30 June 2014 |
|
|
Note |
$'000 |
|
$'000 |
|
|
|
|
|
|
|
Revenue |
3 |
40,799 |
|
26,586 |
|
Cost of sales |
|
(4,361) |
|
(5,731) |
|
Gross profit |
|
36,438 |
|
20,855 |
|
|
|
|
|
|
|
Selling and marketing costs |
|
(25,583) |
|
(11,092) |
|
Research and development costs |
|
(1,967) |
|
(2,034) |
|
Management, general and administrative costs |
|
(6,453) |
|
(4,462) |
|
Depreciation and amortisation |
|
(4,464) |
|
(4,290) |
|
Total operating costs |
4 |
(38,467) |
|
(21,878) |
|
|
|
|
|
|
|
Other operating income (*) |
|
- |
|
178 |
|
Operating loss |
4 |
(2,029) |
|
(845) |
|
|
|
|
|
|
|
Adjusted EBITDA (*) |
4 |
5,516 |
|
7,640 |
|
|
|
|
|
|
|
Other operating income |
|
- |
|
178 |
|
Employee share-based payment charge |
|
(2,391) |
|
(2,018) |
|
Exceptional and non-recurring costs |
4 |
(690) |
|
(2,355) |
|
Depreciation and amortisation |
|
(4,464) |
|
(4,290) |
|
Operating loss |
4 |
(2,029) |
|
(845) |
|
|
|
|
|
|
|
Finance income |
|
- |
|
33 |
|
Finance costs |
|
(117) |
|
(1,689) |
|
Loss before taxation |
|
(2,146) |
|
(2,501) |
|
Tax charge |
|
(808) |
|
(144) |
|
Loss for the period |
|
(2,954) |
|
(2,645) |
|
Other comprehensive income: |
|
|
|
|
|
Total comprehensive income for the period - attributable to owners of the parent |
|
(2,954) |
|
(2,645) |
|
|
|
|
|
|
|
Basic and diluted earnings per share (cents) |
6 |
(2.0) |
|
(2.6) |
(*)Other operating income relates to the net income (gross income recharged less related expenses) earned from services terminated in 2014. Adjusted EBITDA is a non GAAP measure. Adjusted EBITDA is a company specific measure which excludes employee share-based payment charges and other operating income and expenses which are considered to be one off and non-recurring in nature.
All results are derived from continuing operations.
Unaudited consolidated statement of financial position
As at 30 June 2015
|
|
|
30 June 2015
(unaudited) |
|
30 June 2014
(unaudited) |
|
31 December 2014 (audited) |
|
|
Note |
$'000 |
|
$'000 |
|
$'000 |
|
|
|
|
|
|
|
|
|
Non-current assets |
|
|
|
|
|
|
|
Intangible assets |
|
32,464 |
|
40,069 |
|
35,767 |
|
Property, plant and equipment |
|
1,184 |
|
607 |
|
1,178 |
|
Non-current loans receivable |
|
- |
|
1,068 |
|
- |
|
Deferred tax asset |
|
699 |
|
412 |
|
567 |
|
|
|
34,347 |
|
42,156 |
|
37,512 |
|
Current assets |
|
|
|
|
|
|
|
Trade and other receivables |
|
12,013 |
|
11,759 |
|
14,100 |
|
Cash and cash equivalents |
|
78,330 |
|
4,123 |
|
76,041 |
|
|
|
90,343 |
|
15,882 |
|
90,141 |
|
Total assets |
|
124,690 |
|
58,038 |
|
127,653 |
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
Share capital |
5 |
15 |
|
10 |
|
15 |
|
Additional paid in capital |
|
136,399 |
|
11,088 |
|
136,399 |
|
Retained earnings |
|
(26,165) |
|
(24,004) |
|
(25,602) |
|
Equity attributable to equity holders of the parent |
|
110,249 |
|
(12,906) |
|
110,812 |
|
|
|
|
|
|
|
|
|
Non-current liabilities |
|
|
|
|
|
|
|
Borrowings from related parties |
|
- |
|
55,548 |
|
- |
|
Deferred tax liabilities |
|
1,135 |
|
1,431 |
|
1,283 |
|
Deferred consideration for the acquisition of subsidiary |
|
1,309 |
|
1,379 |
|
877 |
|
|
|
2,444 |
|
58,358 |
|
2,160 |
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
Borrowings from related parties |
|
- |
|
875 |
|
- |
|
Trade and other payables |
|
11,821 |
|
10,020 |
|
13,538 |
|
Deferred consideration for the acquisition of subsidiary |
|
176 |
|
1,691 |
|
1,143 |
|
|
|
11,997 |
|
12,586 |
|
14,681 |
|
Total equity and liabilities |
|
124,690 |
|
58,038 |
|
127,653 |
Unaudited consolidated statement of cash flows
For the six months ended 30 June 2015
|
|
|
Six months ended 30 June 2015 |
|
Six months ended 30 June 2014 |
|
|
|
$'000 |
|
$'000 |
|
Cash flow from operating activities |
|
|
|
|
|
Loss for the period after taxation |
|
(2,954) |
|
(2,645) |
|
Adjustments for: |
|
|
|
|
|
Amortisation of intangible assets |
|
4,314 |
|
4,230 |
|
Depreciation of property, plant and equipment |
|
150 |
|
60 |
|
Current tax charge |
|
1,085 |
|
161 |
|
Interest income |
|
- |
|
(29) |
|
Interest expenses |
|
59 |
|
1,623 |
|
Share based payment charge |
|
2,391 |
|
2,018 |
|
Deferred tax movement |
|
(277) |
|
(17) |
|
Unrealised foreign exchange differences |
|
58 |
|
34 |
|
Foreign exchange on the translation of non-current assets in foreign currencies |
|
- |
|
- |
|
Operating cash flow before movement in working capital |
|
4,826 |
|
5,435 |
|
Increase in trade and other receivables |
|
2,087 |
|
(5,135) |
|
Increase in trade and other payables |
|
(2,625) |
|
4,498 |
|
Cash flow from operations |
|
4,288 |
|
4,798 |
|
Tax paid net of refunds |
|
(180) |
|
(67) |
|
Cash generated from operations |
|
4,108 |
|
4,731 |
|
|
|
|
|
|
|
Cash flow from investing activities |
|
|
|
|
|
Purchases of property, plant and equipment |
|
(167) |
|
(205) |
|
Purchases of available for sale financial assets |
|
- |
|
16 |
|
Loans granted |
|
- |
|
(183) |
|
Loan repayments received |
|
- |
|
148 |
|
Net cash paid on business combination |
|
(602) |
|
(8,850) |
|
Capitalisation of development costs |
|
(1,001) |
|
(261) |
|
Net cash used in investing activities |
|
(1,770) |
|
(9,335) |
|
|
|
|
|
|
|
Cash flow from financing activities |
|
|
|
|
|
Proceeds from borrowings |
|
- |
|
6,575 |
|
Net cash generated from financing activities |
|
- |
|
6,575 |
|
Net increase in cash and cash equivalents |
|
2,338 |
|
1,971 |
|
|
|
|
|
|
|
Revaluation of cash due to changes in foreign exchange rates |
|
(49) |
|
- |
|
Cash and cash equivalents at beginning of year |
|
76,041 |
|
2,152 |
|
Cash and cash equivalents at end of year |
|
78,330 |
|
4,123 |
Notes to the interim financial statements
1. General information
The financial information set out in this document is for Crossrider plc (the "Company") and its subsidiary undertakings (together the "Group") in respect of the six months ended 30 June 2015.
Crossrider is a creator of digital advertising platforms specialising in monetising web and mobile media through the use of big data. The Company's web and mobile platforms power ad networks, agencies and direct publishers and enable the delivery of relevant digital advertising through the analysis of big data: making online marketing significantly more efficient and cost effective.
2. Basis of preparation
These interim consolidated financial statements have been prepared using accounting policies based on International Financial Reporting Standards (IFRS and IFRIC Interpretations) issued by the International Accounting Standards Board ("IASB") as adopted for use in the EU. They do not include all disclosures that would otherwise be required in a complete set of financial statements and should be read in conjunction with the 31st December 2014 Annual Report. The financial information for the half years ended 30th June 2015 and 30th June 2014 does not constitute statutory accounts within the meaning of Section 434 (3) of the Companies Act 2006 and both periods are unaudited.
The annual financial statements of Crossrider plc are prepared in accordance with IFRS as adopted by the European Union. The comparative financial information for the year ended 31st December 2014 included within this report does not constitute the full statutory Annual Report for that period. The statutory Annual Report and Financial Statements for 2014 have been filed with the Registrar of Companies. The independent Auditors' Report on that Annual Report and Financial Statement for the year ended 31st December 2014 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under section 498(2) or 498(3) of the Companies Act 2006.
After making enquiries, the directors have concluded that the Group has adequate resources to continue operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the half-yearly consolidated unaudited financial statements.
The same accounting policies, presentation and methods of computation are followed in these interim consolidated financial statements as were applied in the Group's 2014 annual audited financial statements. In addition, the IASB have issued a number of IFRS and IFRIC amendments or interpretations since the last Annual Report was published. It is not expected that any of these will have a material impact on the Group. The Board of Directors approved this interim report on 7th September 2015.
3 Segmental information
Segment revenues and results
The Group operates two reportable segments: Web and Desktop, and Mobile. Division between the two segments is based upon the channel of delivery of product or service.
|
Six months ended 30 June 2015 |
|
Web and Desktop |
|
Mobile |
|
Total |
|
|
|
$'000 |
|
$'000 |
|
$'000 |
|
|
|
|
|
|
|
|
|
Revenue |
|
33,950 |
|
6,849 |
|
40,799 |
|
Cost of sales |
|
(4,361) |
|
- |
|
(4,361) |
|
Direct sales and marketing costs |
|
(18,124) |
|
(5,366) |
|
(23,490) |
|
Segment result |
|
11,465 |
|
1,483 |
|
12,948 |
|
Central operating costs |
|
|
|
|
|
(7,432) |
|
Adjusted EBITDA(1) |
|
|
|
|
|
5,516 |
|
Depreciation and amortisation |
|
|
|
|
|
(4,464) |
|
Employee share-based payment charge |
|
|
|
|
|
(2,391) |
|
Exceptional and non-recurring costs |
|
|
|
|
|
(690) |
|
Operating loss |
|
|
|
|
|
(2,029) |
|
Finance costs |
|
|
|
|
|
(117) |
|
Loss before tax |
|
|
|
|
|
(2,146) |
|
Taxation |
|
|
|
|
|
(808) |
|
Loss after taxation |
|
|
|
|
|
(2,954) |
|
Six months ended 30 June 2014 |
|
Web and Desktop |
|
Mobile |
|
Total |
|
|
|
$'000 |
|
$'000 |
|
$'000 |
|
|
|
|
|
|
|
|
|
Revenue |
|
25,128 |
|
1,458 |
|
26,586 |
|
Cost of sales |
|
(5,731) |
|
- |
|
(5,731) |
|
Direct sales and marketing costs |
|
(7,777) |
|
(1,227) |
|
(9,004) |
|
Segment result |
|
11,620 |
|
231 |
|
11,851 |
|
Central operating costs |
|
|
|
|
|
(4,211) |
|
Adjusted EBITDA(1) |
|
|
|
|
|
7,640 |
|
Depreciation and amortisation |
|
|
|
|
|
(4,290) |
|
Other operating income |
|
|
|
|
|
178 |
|
Employee share-based payment charge |
|
|
|
|
|
(2,018) |
|
Exceptional and non-recurring costs |
|
|
|
|
|
(2,355) |
|
Operating loss |
|
|
|
|
|
(845) |
|
Finance income |
|
|
|
|
|
33 |
|
Finance costs |
|
|
|
|
|
(1,689) |
|
Loss before tax |
|
|
|
|
|
(2,501) |
|
Taxation |
|
|
|
|
|
(144) |
|
Loss after taxation |
|
|
|
|
|
(2,645) |
(1) Adjusted EBITDA is calculated as operating loss before depreciation, amortisation, other operating income, exceptional and non-recurring costs and employee share-based payment charges as set out in note 4. The Directors believe that this provides a better understanding of the underlying trading performance of the business.
4 Operating loss
Adjusted EBITDA
Adjusted EBITDA is calculated as follows:
|
|
|
|
Six months ended 30 June 2015 |
|
Six months ended 30 June 2014 |
|
|
|
|
$'000 |
|
$'000 |
|
|
|
|
|
|
|
|
Operating loss |
|
|
(2,029) |
|
(845) |
|
Depreciation and amortisation |
|
|
4,464 |
|
4,290 |
|
Other operating income |
|
|
- |
|
178 |
|
Employee share-based payment charge |
|
|
2,391 |
|
2,018 |
|
Exceptional and non-recurring costs: |
|
|
|
|
|
|
Non-recurring staff and restructuring costs |
|
|
82 |
|
371 |
|
Expensed contingent consideration |
|
|
608 |
|
1,984 |
|
Adjusted EBITDA |
|
|
5,516 |
|
7,640 |
Operating costs
Operating costs are further analysed as follows:
|
|
Six months ended 30 June 2015 Adjusted $'000 |
Six months ended 30 June 2015 Total $'000 |
|
Six months ended 30 June 2014 Adjusted $'000 |
Six months ended 30 June 2014 Total $'000 |
|
|
|
|
|
|
|
|
Direct sales and marketing costs |
23,490 |
23,490 |
|
9,004 |
9,004 |
|
Indirect sales and marketing costs |
1,720 |
2,093 |
|
786 |
2,088 |
|
Selling and marketing costs |
25,210 |
25,583 |
|
9,790 |
11,092 |
|
Research and development costs |
1,208 |
1,967 |
|
1,569 |
2,034 |
|
Management, general and administrative cost |
4,504 |
6,453 |
|
1,856 |
4,462 |
|
Depreciation and amortisation |
303 |
4,464 |
|
103 |
4,290 |
|
Total operating costs |
31,225 |
38,467 |
|
13,318 |
21,878 |
Adjusted operating costs exclude share based payment charges, exceptional and non-recurring costs and amortisation of acquired intangible assets.
5 Shareholder's equity
Ordinary share capital as at 30 June 2015 amounted to $15,000 (30 June 2014: $10,000; 31 December 2014: $15,000).
The number of shares in issue as at 30 June 2015 was 148,463,039 (30 June 2014: 100,000,000; 31 December 2014: 148,463,039).
6 Earnings per share
Basic loss/earnings per share is calculated by dividing the loss /earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.
|
|
|
|
Six months ended 30 June 2015 |
|
Six months ended 30 June 2014 |
|
|
|
|
cents |
|
cents |
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
(2.0) |
|
(2.6) |
|
Adjusted basic |
|
|
2.6 |
|
7.4 |
|
Adjusted diluted |
|
|
2.5 |
|
7.3 |
Adjusted earnings per share is a non-GAAP measure and therefore the approach may differ between companies. Adjusted earnings have been calculated as follows:
|
|
|
|
Six months ended 30 June 2015 |
|
Six months ended 30 June 2014 |
|
|
|
|
$'000 |
|
$'000 |
|
|
|
|
|
|
|
|
Loss for the period |
|
|
(2,954) |
|
(2,645) |
|
|
|
|
|
|
|
|
Post tax adjustments: |
|
|
|
|
|
|
Other operating income |
|
|
- |
|
(134) |
|
Employee share-based payment charge |
|
|
2,327 |
|
2,018 |
|
Exceptional and non-recurring costs |
|
|
675 |
|
2,355 |
|
Amortisation on acquired intangible assets |
|
|
3,794 |
|
4,138 |
|
Related party loan interest expense |
|
|
- |
|
1,623 |
|
Adjusted profit for the year |
|
|
3,842 |
|
7,355 |
|
|
|
|
Number |
|
Number |
|
Denominator - basic: |
|
|
|
|
|
|
Weighted average number of equity shares for the purpose of earnings per share |
|
|
148,463,039 |
|
100,000,000 |
|
|
|
|
|
|
|
|
Denominator - diluted |
|
|
|
|
|
|
Weighted average number of equity shares for the purpose of diluted earnings per share |
|
|
152,780,605 |
|
100,000,000 |
|
|
|
|
|
|
|
The diluted denominator has not been used where this has anti-dilutive effect. Basic and diluted loss per share are therefore the same for reporting purposes.
The difference between weighted average number of Ordinary shares used for basic earnings per share and the diluted earnings per share is 4,317,566 (H1/14 nil) being the effect of all potentially dilutive Ordinary shares derived from the number of share options granted to employees.
7 Related party transactions
The Group is controlled by Unikmind Holdings Limited incorporated in British Virgin Islands, which owns 70 per cent. of the Company's shares. The controlling party is the Solidinsight Trust, established under the laws of the Isle of Man. Mr. Teddy Sagi is the sole ultimate beneficiary of the Solidinsight Trust.
During the period the following transactions were carried out with related parties:
|
|
Six months ended 30 June 2015 |
|
Six months ended 30 June 2014 |
|
|
$'000 |
|
$'000 |
|
|
|
|
|
|
Revenue from common controlled company |
1,946 |
|
1,738 |
|
Other operating income earned on recharged costs |
10 |
|
178 |
|
Technical support services to end customers provided by common controlled company |
(416) |
|
(106) |
|
Payment processing services provided by common controlled company |
(497) |
|
- |
|
|
1,043 |
|
1,810 |
This information is provided by RNS
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