Final Audited Results for the year end 31 Dec 2022
7 June 2023
Mirriad Advertising plc
("Mirriad" or the "Company")
Final Audited Results for the year ended 31 December 2022
Mirriad, the leading in-content advertising company, announces its final audited results for the year ended 31 December 2022 ("2022").
Financial highlights
· Completion of placing raising £5.75m (gross of expenses) together with open offer raising £0.55m in June 2023
· Revenue of £1.5m (2021: £2.0m) a reduction from 2021 as the Company exits its Chinese business and focuses on growth in the US market
· EBITDA loss widened to £15.2m (2021 £11.6m) and cash consumption increased to £12.9m (2021: £10.4m) as the Company continued to invest in its US and technology teams
· Further restructuring of business announced with significant reduction in administrative costs anticipated from H2 2023 onwards
· Net cash at 31 December 2022 of £11.3m (2021: £24.5m)
· Net assets at 31 December 2022 of £11.1m (2021: £24.9m) tracking cash holding
KPIs
As in prior periods, the Company is reporting operational key performance indicators ("KPIs"). The three "supply side" KPIs track the wider market adoption of the Mirriad platform and the three "demand side" KPIs track the development of the commercial relationships with agencies, advertisers and partnerships. Overall, the Company uses these KPIs to anticipate future revenue generation.
|
KPI |
2022 |
2021 |
% Change |
|
Supply side: 1. Active supply partnerships* 2. Supply partners represented 3. Seconds of content available** |
#37 #61 651,990 secs. |
#25 #46 472,754 secs. |
+48% +33% +38% |
|
Demand side: 1. Active agency relationships 2. Number of advertisers who have run campaigns 3. Strategic and commercials partnership agreements with advertisers and agencies |
#19 #59
|
#19 #45
|
No change +31% No change
|
* Defined as the number of supply partners who ran a campaign during the period
** Defined as the total number of seconds of advertising inventory available for sale during the period
Operational highlights
· Increase in overall supply partners. Mirriad now has access to content from 61 content partners globally (2021: 46)
· Number of advertisers placing campaigns increased to 59 during the year (2021: 45)
Post period highlights
· Completion of a strategic review of the Company's business announced on 20 January 2023
· Microsoft collaboration announced on 3 May 2023
· Successful placing and open offer raising £6.3m (gross of expenses) to provide funding for the Company to end June 2024
· Restructuring underway to reduce Company's cash burn from an average of £1.1 million per month in the year to 31 December 2022 to an anticipated average of £680,000 per month in the 12-month period from July 2023 to June 2024
Current trading and outlook
· Trading in the current year is lower than originally anticipated in the US. The US market showed a stronger than expected slowdown during the final quarter of 2022 and first quarter of 2023. As a result of this slowdown campaigns are taking longer to book, are being booked closer to air date and advertisers are operating in a more conservative manner
· EMEA Q1 2023 revenues are ahead of the Company's plan and show an increase of 240 per cent. to £83k (2021: £24k) compared to Q1 2022
· The Company believes the overall market will improve considerably in the second half of 2023 and that the volume of trade will improve substantially once the Company rolls out a programmatic sales solution which it expects to do by the end of 2023
· Cash holding £7.52m at the end of Q1 2023
Stephan Beringer, CEO of Mirriad, said: "The past 12 months have tested the Company's resilience and the strategic review was enacted to tackle head-on the Directors' belief that the Company was significantly undervalued.
"Successfully launching a supply and demand side marketplace for a new technology, from the ground up, within an established industry, was never an insignificant task. Mirriad's pathway to scaled adoption, while reliant on the quality of product, platform and delivery, also depends on the market's readiness for in-content as a potentially vital differentiator in a heavily saturated arena. I firmly believe that this awareness reached a tipping point in 2022.
"Now, after some tough decisions on our cost base and a successful fundraise, Mirriad is well-positioned to drive shareholder value into H2 2023 and beyond by developing the Company's programmatic advertising business."
ENDS
For further information please visit www.mirriad.com or contact:
|
Mirriad Advertising plc Stephan Beringer, Chief Executive Officer David Dorans, Chief Financial Officer
|
Tel: +44 (0)207 884 2530 |
|
Financial Adviser, Nominated Adviser & Joint Broker: Panmure Gordon James Sinclair-Ford / Daphne Zhang (Corporate Advisory) Rupert Dearden (Corporate Broking)
|
Tel: +44 (0)20 7886 2500
|
|
Financial Communications: Charlotte Street Partners Tom Gillingham Fergus McGowan |
Tel: +44 (0) 7741 659021 Tel: +44 (0) 7590 049023 |
This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"). Upon the publication of this announcement, this inside information is now considered to be in the public domain.
Notes to Editors
About Mirriad
Mirriad's award-winning solution unleashes new revenue for content producers and distributors by creating new advertising inventory in content. Our patented, AI and computer vision technology dynamically inserts products and innovative signage formats after content is produced. Mirriad's market-first solution seamlessly integrates with existing subscription and advertising models, and dramatically improves the viewer experience by limiting commercial interruptions.
Mirriad currently operates in the US, Europe and the Middle East.
Forward looking statements
Certain information contained in this announcement, including any information as to the Group's strategy, plans or future financial or operating performance, constitutes "forward-looking statements". These forward-looking statements may be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "projects", "expects", "intends", "aims", "plans", "predicts", "may", "will", "seeks" "could" "targets" "assumes" "positioned" or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this announcement and include statements regarding the intentions, beliefs or current expectations of the Directors concerning, among other things, the Group's results of operations, financial condition, prospects, growth, strategies and the industries in which the Group operates. The directors of the Company believe that the expectations reflected in these statements are reasonable, but may be affected by a number of variables which could cause actual results or trends to differ materially. Each forward-looking statement speaks only as of the date of the particular statement.
By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future or are beyond the Group's control. Forward-looking statements are not guarantees of future performance. Even if the Group's actual results of operations, financial condition and the development of the industries in which the Group operates are consistent with the forward-looking statements contained in this document, those results or developments may not be indicative of results or developments in subsequent periods.
Chairman's statement
2022 was another year of rebalancing in international advertising markets as consumers around the world adjusted to record inflationary pressures and the effectiveness of some traditional advertising formats continued to face challenges on multiple fronts. So far in 2023 we have also seen a stronger-than-expected slowdown across the board, during which campaigns are taking longer to book, are being booked closer to air date and advertisers are operating in a more conservative manner.
In Company terms too, there is no doubt the past year has been challenging, but the proactive decision to conduct a formal review of the various strategic options available in Q1 2023 was pivotal in closing a successful fundraise.
Now, the management team is working at pace to refocus the business around the core opportunities that await, following a prolonged period of uncertainty. As the global advertising industry grapples with ad-skipping, dwindling viewer attention and the oversaturation of existing advertising breaks, it is clear that Mirriad's approach provides an essential solution. The wider appreciation of the role in-content advertising can play in overcoming these hurdles is reflected in the likes of Amazon entering the market.
We welcome these developments as a vindication of in-content's potential as a format, but also
remain confident in Mirriad's position as the sector leader, with strong patent protection and years of technological progress already achieved.
Despite these fundamentals, the Company's global operating picture was complicated by differing post-pandemic trajectories in the territories we operate in. While Covid recovery and opening up continued in most countries, China lagged behind in terms of lifting restrictions, with knock-on impacts on new content production and consumer spending.
Against this backdrop, management made the decision to close its Chinese operations. This has helped to reduce costs and aligns with the continuing pivot towards the US as the market with the most upside potential. The US is the world's largest advertising market with an estimated total addressable market of $106 billion and the home of globally leading entertainment companies and advertising technology (or adtech) platforms.
To further add to our US-specific senior expertise, we were delighted to add JoAnna Foyle and Nicole McCormack to the Company's Board as non-executive directors. They both bring beneficial supply and demand side sector and geographic experience to the table, and they were joined by Lois Day, who was also appointed to the Board as well as the Audit and Remuneration committees. I would additionally like to reiterate my thanks to Kelsey Lynn Skinner for her positive work as a non-executive director before stepping down for maternity reasons in the summer of last year.
Alongside this strengthening of the Board, the Company has reported against the agreed KPIs set out in 2021, with reporting continuing at regular intervals as previously outlined.
Mirriad is also committed to a clear and considered approach to Environmental, Social and Governance (ESG) matters, always ensuring a balance between our corporate and ESG strategies. The Company continues to develop its policies in this area, and since last year its estimated carbon emissions, including travel, have been offset by purchasing carbon credits.
Combined with this, the Company has retained a high employee satisfaction score of 89% for 2022 even as there was an increase in survey participation to 87%. This was an increase of 8% on 2021. Mirriad continues to support a Company-wide volunteering policy to help staff give back to the communities we operate in around the globe. We have advanced our diversity and inclusion activities further with a three part dignity at work course undertaken by a range of managers which included a behavioural profiling element.
Looking to the year ahead, it would be remiss to underplay the headwinds that continue to buffet the global advertising market, however, the breadth of the in-content opportunity is now being more clearly understood by key players within the advertising and content industries. Mirriad's approach solves some of the major challenges faced by advertisers in a time of market pressures, is developed to a point far beyond competitor capabilities due to the number of campaigns already run, and the Company is entering a new chapter as a true innovator in a segment that is finally starting to get the attention it deserves.
John Pearson
6 June 2023
Chief Executive Officer's Statement
The past 12 months have tested the resilience of the Company, our approach and the wider leadership team, but we are now in a stronger position to address the opportunities ahead.
Successfully establishing a supply and demand side marketplace for a new technology, from the ground up, within an established industry, was never an insignificant aim. Mirriad's pathway to scaled adoption, while reliant on the quality of product, platform and delivery, also depends on the market's readiness for in-content as a potentially vital differentiator in a heavily saturated arena.
I firmly believe that this awareness reached a tipping point in 2022 after two years of pandemic that kept the priorities of potential partners and buyers in a constant flux. This improved awareness can be seen clearly in the fact that Mirriad worked with 50% of the top ten global advertisers by spend during 2022, while streaming platforms have opened themselves to advertising and several established parties, including Amazon and NBCU have now entered or announced plans to enter the in- content space.
We see these new entrants as a vindication of our long-standing confidence in the potential of the format and we have taken decisive steps to ensure the Company can capitalise on this. We know that Mirriad provides the best-in-class experience for content owners, distributors and audiences via our patent-protected and rapidly evolving platform, all of which draws on unmatched experience of numerous successfully delivered campaigns.
This journey towards increased awareness of the in-content format - made more complex by a combination of industry and macro factors - has unquestionably taken longer than predicted at the outset of our strategic plan.
As well as exploring the best options for securing the Company's future via a comprehensive Strategic Review at the start of 2023 and the subsequent equity raise, we have used this extended timeframe to put in place essential building blocks - from programmatic integration through to robust supply and demand side pipelines - to ensure Mirriad can fully capitalise on the scale we believe this advertising segment can achieve as the market opens up to the new format.
Throughout these processes, we have not been alone in having to react to advertising market turbulence, but ourstrength lies in the ability to address the three strategic truths that still apply to every content owner, distributor, and advertiser:
1. consumers are shifting to more ad- free or ad-light video environments;
2. ad clutter and over-exposure are driving ad-fatigue or avoidance; and
3. the industry needs more quality inventory to engage with audiences.
Independent research has consistently highlighted that Mirriad is delivering a transformative solution that addresses all three of these challenges, and the fact that they have not been addressed by conventional approaches in the past year underlines the fundamental strength of our position as the in-content market-leader.
Strategic approach
With revenue falling short of expectations, the Strategic Review process and subsequent equity raise provided the framework for restructuring that will drive further efficiencies across the Company. However, these actions are only one part of a longer-term cost control drive and, at the same time, we are focused on the twin pillars of integrating with the ecosystem and driving adoption, with automation being vital to achieving the second point - in 2022 we made decisive changes to the marketplaces we serve.
The decision to exit China was driven by the ongoing challenges relating to Covid-19 restrictions, and their knock- on effect on consumer confidence and consumption, content production and advertisers' advertising spend. The Company's leadership team explored all options available before coming
to the decision and we are confident the decision was the right one, both in terms of reducing costs and allowing even stronger focus on the important US market.
In 2022, US revenues grew by 34% to £1.2m, accounting for 78% of total revenue, despite a soft fourth quarter due to macroeconomic uncertainties and unfavourable media investment patterns in many industries. Within this we delivered innovative campaigns and announced new partnerships that unlock even more content, and bring access to ever more diverse audiences in this key market.
This underlines the importance of persisting with the strategic pivot towards the world's largest advertising market and the potential rewards that could await with the scale we are pursuing. To improve annual recurring revenue and increase average campaign sizes, the Company is focusing on a key account strategy for advertisers and has built a strong position in the US. It currently has active engagements with nine of the top 20 US advertisers by spend, and six more in its sales pipeline.
We continue to tightly control costs wherever possible and an already implemented cost control programme, of which the wind-down of our Chinese operation is part is expected to deliver £2.5m of total annualised savings, with the vast majority to be achieved in 2023. This will be supplemented by the additional cost saving and restructuring drive that is being implemented post fundraise.
Business focus, technological progress and performance
Overall Company revenue in 2022 fell just short of our targets, albeit we ended the year in a better cash position than forecast. Taking firm steps to restructure the company underlines our commitment to growing revenue as part of the first adoption phase, and, by extension, improving shareholder value. The positive moves across the KPIs set out by the Board underline the progress being made despite ongoing market headwinds.
The Company's pipeline is strong and the whole team is focused on converting the significant opportunities that lie ahead.
The net proceeds of the completed fundraising will be used to further develop the Company's technology to allow for the introduction of programmatic sales and to continue broader commercial development. Specifically, it will allow the Group to develop its business by continuing to invest in its technology and product development strategy, transitioning from a manual advertising placement model purchased on an ad hoc basis, to programmatic buying of in-content advertising at scale.
Leveraging programmatic sales pipelines will be enabled by migrating the Company's platform to an open architecture, which integrates with partner platforms, meaning partners can white label the Company's technology and components.
Technical progress continues at pace, and specifically the Company is now geared for the acceleration of business through its programmatic capabilities. On the back of the ad server and supply side platform partnerships and integrations announced earlier in 2022, the Company has now delivered in-
content advertisements via an end-to-end programmatic transaction and is further expanding integrations, its media tech capabilities, and its cloud partnerships. The Company also enhanced its quality assurance and testing capability by building a number of new test environments and introducing automated testing. We also introduced technology to automate the delivery of mass volume campaigns, a building block for programmatic and the delivery of multi-advertiser and multi-version monetisation of in-content inventory.
Across our key markets, Mirriad is regarded as a leader in the in-content advertising space, which was underlined by the Company winning the 2022 AdExchanger Award for most innovative TV advertising technology.
Outlook
Our decision to raise new finance and restructure the business gives us scope to ensure progress is quickly made in the key areas that will drive growth, like programmatic delivery. We will continue to control costs, while leveraging the high-quality partners we have secured to run more campaigns in 2023. This will be the message communicated across the Mirriad team as we drive changes across the business.
The ongoing challenges facing the advertising market are clear, and we are confident in Mirriad's unique ability to address these and deliver an experience that benefits brands, content owners and audiences alike.
I would like to thank the investors who continue to support us on this not always linear journey, and for their frank, constructive and insightful engagement. The team at Mirriad is focused on converting our exciting pipeline to drive the Company forward in 2023 to generate long-term shareholder value.
Last year I said we are leading what has the potential to be a transformative new advertising segment. We now have conclusive proof that significant other players are starting to appreciate its vast potential, and thanks to some tough decisions, we are positioned to reap the rewards of our longstanding commitment to, and leadership of, the in-content approach.
Stephan Beringer
Chief Executive Officer
6 June 2023
Financial review
2022 saw a significant change in our revenue base as we continued to develop our US business and reported a meaningful increase in campaign activity in that market. Overall Company revenues declined year on year as Covid-19 restrictions in China led to an sudden and unexpected contraction in revenues in that market. This had not been anticipated at the end of 2021 when we developed our 2022 plans. Our planning assumption had been that China would open up in line with our other markets and that we would see a similar revenue performance as in 2021. As it became clear that this was not going to be the case we reviewed our business in China. We came to the conclusion that the business was not sustainable and that the best course of action was a managed withdrawal from the market with a complete closure at the end of March 2023 at the end of the Tencent Video contract. We reduced our headcount in China by half during September 2022 and have completed the closure of the office at the end of Q1 2023.
As it was clear that overall revenue would not grow in the way that we had expected we also took steps to review other areas of our cost base which resulted in some changes in our technology team in September 2022 and a restructuring of our European commercial team in December 2022.
During the year we continued to focus investment in our US operations as the market with the highest opportunity. We also continued to invest in our technology team reorientating spend in line with our objectives of driving integration and automation.
2022 results
Revenue for the year was lower than the prior year at £1.5 million (2021: £2.0 million) reflecting, particularly, the impact of Covid-19 on our Chinese business and a significant year on year reduction in revenues as a result of the sustained lockdowns in place in China.
During the year revenues from the US expanded and now represent 78% of revenues up from 44% in 2021. We continued to broaden the range of supply partners during the year.
European revenues increased during the year with work for Aldi on RTL in Germany and a second campaign on Channel 4 for Pinterest in the UK. Overall European revenues increased by 24% to
£178k (2021: £144k).
We announced our first test campaigns in Japan for Fuji TV and Gaie and are continuing to work on plans to develop this market with local partners.
The Company remains focused on expanding its business in the US and EMEA in order to grow revenue and move the business to a more sustainable footing.
There was a small reduction in our cost of sales. A number of long tenured staff in our Indian operation resigned and as a result we decided to introduce a new staffing strategy bringing in a number of trainee staff on one-year fixed term contracts with a view to training them to use Mirriad technology and workflow. As a result headcount increased but overall staff cost declined to £286k (2021: £294k). The combination of reduced revenue and slightly reduced staff cost led to a reduction in gross profit to £1.2m (2021: £1.7m). As noted in previous years the vast majority of our cost of sales relates to our staff based in Mumbai. The staff element of this work is largely fixed at current volumes which means that margin is impacted by the throughput of work and has the potential to improve significantly as these volumes increase.
The Group's principal operating cost remains staff with the majority of cost focused on our technology and US teams. Underlying headcount decreased year on year as we scaled back in China and made some changes in our European commercial team. Year-end headcount was 115 compared to 130 at the end of 2021. The 2022 closing figure comprises 105 employees and 10 long term contractors engaged by the UK business and mainly based off shore.
Over the course of 2022, administrative expenses increased to £16.9 million (2021: £13.9 million). The team in the US increased from 12 to 15 staff. Overall our technology team ended the year with a similar headcount to the previous year, 46 (2021: 47) albeit that the average number employed and the cost of staff increased year on year as we refocused the team to align with strategic priorities.
During the year the Company incurred restructuring costs as we partially closed the operations in China, with a full withdrawal at the end of Q1 2023, reoriented our technology team in
line with development priorities and restructured our EMEA commercial and operational teams. As a result the profit and loss account includes a charge of £550k relating to the closure and restructuring costs. Of these £352k were included in the cashflow for 2022 and the remaining £198k will impact cashflow during 2023.
Mirriad has continued to review and monitor the application of IAS 38 with respect to the capitalisation of development cost. We continue to take the view that due to the uncertainty of future revenue generation we will not capitalise any development cost in 2022 even though technology remains key to the Company's business and internally generated software and IP remain a key focus for future development of the business. Accordingly, the income statement includes £4.0 million (2021: £3.4 million) of staff costs related to research and development ("R&D") activity, an increase of 17% year on year.
The increase in operating costs and reduction in gross margin fed through to EBITDA with the EBITDA loss increasing to £15.2 million (2021: £11.6 million). Likewise, the loss before tax increased to
£15.6 million (2021: £12.0 million).
Tax
The Group has not recognised any tax assets in respect of trading losses arising in the current financial year or accumulated losses in previous financial years. The tax credit recognised in the current and previous financial years arises from the receipt of R&D tax credits.
Earnings per share
Loss per share increased as a result of the increased loss for the period on an unchanged share capital. The loss per share for 2022 was 5p per share (2021: loss of 4p per share).
Dividend
No dividend has been proposed for the year ended 31 December 2022 (2021: £nil).
Cashflow
Net cash used in operating activities was £12.9 million (2021: £10.4 million) as the increase in operating costs flowed through to cash. The Group incurred £76k (2021: £159k) of capital expenditure on tangible assets in the year. No shares were issued during the year so there were no net proceeds from the issue of shares (2021: £44k).
Balance Sheet
Net assets decreased to £11.1million (2021: £24.9 million) as a result of the losses for the year. Cash and cash equivalents at 31 December 2022 were £11.3 million (2021: £24.5 million).
Accounting policies
The Group's consolidated financial information has been prepared in accordance with UK-adopted international accounting standards and with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards. The Group's significant accounting policies have been applied consistently throughout the year.
Going concern
The financial statements have been prepared on a going concern basis notwithstanding the Group having made a loss for the year of £15.27 million (2021: £10.97 million). The going concern basis assumes that the Group and Company will have sufficient funds available to continue to trade for the foreseeable future and not less than 12 months from the date of signing these financial statements.
The Group's cash balance was £11.3 million at the year end and the Group remains debt free with no external borrowing. The Group further announced that its cash balance was £7.52million as at 31 March 2023.
The Company announced a successful placing that raised £5.75million before fees, £5.2million after fees on 16 May 2023. The Company said at that time that it anticipated that this funding would provide sufficient working capital for the Company to continue to trade until the end of June 2024 based on base case forecasts which assume both revenue growth and cost savings being achieving within that period. After making enquiries and producing cash flow forecasts for the period up to 31 December 2025, the Directors have reasonable expectations, as at the date of approving the financial statements, that the Company and the Group will have adequate resources to fund the activities of the Company and the Group for the next 12 months from the date of signing these financial statements. The Group and Company's base case forecast suggest that the Group will require additional external funding in July 2024 to be able to continue as a going concern. However, in a severe but plausible downside scenario, if either the revenue growth forecasts or cost saving initiatives fall below expectation, additional funding may be required with 12 months of signing these financial statements which is not currently committed. While the financial statements are prepared on a going concern basis, under a sever but plausible downside scenario, the future of the Group and Company is dependent on raising additional external funds from new equity, debt or customer contracts within 12 months from the date of signing these financial statements. These conditions indicate the existence of a material uncertainty that may cast significant doubt over the company's ability to continue as a going concern. The financial statements do not include the adjustments that would result if the Group and the Company were unable to continue as a going concern.
Events after the reporting period
On 16 May 2023 the Company announced a successful placing that raised £5.75million before fees and expenses, £5.2million after fees and expenses. These funds were received prior to the approval of these financial statements.
David Dorans
6 June 2023
Consolidated statement of profit or loss
For the year ended 31 December 2022
|
|
|
Year ended |
Year ended |
|
|
|
31 December |
31 December |
|
|
|
2022 |
2021 |
|
|
Note |
£ |
£ |
|
Revenue |
3 |
1,507,257 |
2,009,721 |
|
Cost of sales |
|
(286,316) |
(293,627) |
|
Gross profit |
|
1,220,941 |
1,716,094 |
|
Administrative expenses |
|
(16,863,015) |
(13,936,458) |
|
Other operating income |
|
- |
200,982 |
|
Operating loss |
4 |
(15,642,074) |
(12,019,382) |
|
Finance income |
|
71,875 |
9,907 |
|
Finance costs |
|
(22,512) |
(10,768) |
|
Finance income - net |
|
49,363 |
(861) |
|
Loss before income tax |
|
(15,592,711) |
(12,020,243) |
|
Income tax credit |
|
491,888 |
1,047,771 |
|
Loss for the year |
|
(15,100,823) |
(10,972,472) |
|
Loss per Ordinary Share - basic |
5 |
(5p) |
(4p) |
All activities are classified as continuing.
Consolidated statement of comprehensive income
For the year ended 31 December 2022
|
|
Year ended |
Year ended |
|
|
31 December |
31 December |
|
|
2022 |
2021 |
|
|
£ |
£ |
|
Loss for the financial year |
(15,100,823) |
(10,972,472) |
|
Other comprehensive loss |
|
|
|
Items that may be reclassified to profit or loss: |
|
|
|
Exchange differences on translation of foreign operations |
43,782 |
(216,756) |
|
Total comprehensive loss for the year |
(15,057,041) |
(11,189,228) |
Items in the statement above are disclosed net of tax.
Consolidated balance sheet
At 31 December 2022
|
|
Group |
|
|
|
|
As at |
As at |
|
|
|
31 December |
31 December |
|
|
|
2022 |
2021 |
|
|
|
£ |
£ |
|
|
Assets |
|
|
|
|
Non-current assets |
|
|
|
|
Property, plant and equipment |
544,242 |
767,396 |
|
|
Trade and other receivables |
187,657 |
162,962 |
|
|
|
731,899 |
930,358 |
|
|
Current assets |
|
|
|
|
Trade and other receivables |
2,221,091 |
1,892,152 |
|
|
Other current assets |
529,377 |
1,116,320 |
|
|
Cash and cash equivalents |
11,289,123 |
24,501,214 |
|
|
|
14,039,591 |
27,509,686 |
|
|
Total assets |
14,771,490 |
28,440,044 |
|
|
Liabilities |
|
|
|
|
Non-current liabilities |
|
|
|
|
Lease liabilities |
206,988 |
411,993 |
|
|
|
206,988 |
411,993 |
|
|
Current liabilities |
|
|
|
|
Trade and other payables |
2,904,311 |
2,866,773 |
|
|
Provisions |
198,199 |
- |
|
|
Current tax liabilities |
14,330 |
2,481 |
|
|
Lease liabilities |
322,401 |
217,825 |
|
|
|
3,439,241 |
3,087,079 |
|
|
Total liabilities |
3,646,229 |
3,499,072 |
|
|
Net assets |
11,125,261 |
24,940,972 |
|
|
Equity and liabilities |
|
|
|
|
Equity attributable to owners of the parent |
|
|
|
|
Share capital |
52,690 |
52,690 |
|
|
Share premium |
65,754,666 |
65,754,666 |
|
|
Share-based payment reserve |
4,906,855 |
3,665,525 |
|
|
Retranslation reserve |
(316,272) |
(360,054) |
|
|
Accumulated losses |
(59,272,678) |
(44,171,855) |
|
|
Total equity |
11,125,261 |
24,940,972 |
|
Consolidated statement of changes in equity
For the year ended 31 December 2022
|
|
Year ended 31 December 2021 |
|||||
|
|
|
|
Share-based |
Retranslation |
Accumulated |
|
|
|
Share capital |
Share premium |
payment reserve |
reserve |
losses |
Total equity |
|
|
£ |
£ |
£ |
£ |
£ |
£ |
|
Balance at 1 January 2021 |
52,688 |
65,710,297 |
2,850,571 |
(143,298) |
(33,199,383) |
35,270,875 |
|
Loss for the financial year |
- |
- |
- |
- |
(10,972,472) |
(10,972,472) |
|
Other comprehensive loss for the year |
- |
- |
- |
(216,756) |
- |
(216,756) |
|
Total comprehensive loss for the year |
- |
- |
- |
(216,756) |
(10,972,472) |
(11,189,228) |
|
Proceeds from shares issued |
2 |
44,369 |
- |
- |
- |
44,371 |
|
Share-based payments recognised as expense |
- |
- |
814,954 |
- |
- |
814,954 |
|
Total transactions with shareholders recognised directly in equity |
2 |
44,369 |
814,954 |
- |
- |
859,325 |
|
Balance at 31 December 2021 |
52,690 |
65,754,666 |
3,665,525 |
(360,054) |
(44,171,855) |
24,940,972 |
|
|
Year ended 31 December 2022 |
|||||
|
|
|
|
Share-based |
Retranslation |
Accumulated |
|
|
|
Share capital |
Share premium |
payment reserve |
reserve |
losses |
Total equity |
|
|
£ |
£ |
£ |
£ |
£ |
£ |
|
Balance at 1 January 2022 |
52,690 |
65,754,666 |
3,665,525 |
(360,054) |
(44,171,855) |
24,940,972 |
|
Loss for the financial year |
- |
- |
- |
- |
(15,100,823) |
(15,100,823) |
|
Other comprehensive income for the year |
- |
- |
- |
43,782 |
- |
43,782 |
|
Total comprehensive loss for the year |
- |
- |
- |
43,782 |
(15,100,823) |
(15,057,041) |
|
Share-based payments recognised as expense |
- |
- |
1,241,330 |
- |
- |
1,241,330 |
|
Total transactions with shareholders recognised directly in equity |
- |
- |
1,241,330 |
- |
- |
1,241,330 |
|
Balance at 31 December 2022 |
52,690 |
65,754,666 |
4,906,855 |
(316,272) |
(59,272,678) |
11,125,261 |
Consolidated statement of cash flows
For the year ended 31 December 2022
|
|
Group |
|
|
|
|
2022 |
2021 |
|
|
|
£ |
£ |
|
|
Cash flow used in operating activities |
(14,017,146) |
(10,450,796) |
|
|
Tax credit received |
1,116,320 |
72,993 |
|
|
Taxation paid |
(39,829) |
(46,928) |
|
|
Interest received |
71,875 |
9,907 |
|
|
Lease interest paid |
(22,512) |
(10,768) |
|
|
Net cash used in operating activities |
(12,891,292) |
(10,425,592) |
|
|
Cash flow from investing activities |
|
|
|
|
Investment in subsidiaries |
- |
- |
|
|
Purchase of tangible assets |
(75,647) |
(159,250) |
|
|
Proceeds from disposal of tangible assets |
- |
- |
|
|
Net cash used in investing activities |
(75,647) |
(159,250) |
|
|
Cash flow from financing activities |
|
|
|
|
Proceeds from issue of Ordinary Share capital |
- |
44,371 |
|
|
Payment of lease liabilities |
(245,152) |
(379,711) |
|
|
Net cash used in financing activities |
(245,152) |
(335,340) |
|
|
Net decrease in cash and cash equivalents |
(13,212,091) |
(10,920,182) |
|
|
Cash and cash equivalents at the beginning of the year |
24,501,214 |
35,421,396 |
|
|
Cash and cash equivalents at the end of the year |
11,289,123 |
24,501,214 |
|
|
Cash and cash equivalents consists of: |
|
|
|
|
Cash at bank and in hand |
11,289,123 |
24,501,214 |
|
|
Cash and cash equivalents |
11,289,123 |
24,501,214 |
|
Notes to the consolidated financial statements
For the year ended 31 December 2022
1. Corporate Information
Mirriad Advertising plc is a public limited company incorporated and domiciled in the UK and registered in England with company registration number 09550311. The Company's registered office is 6th Floor, One London Wall, London, EC2Y 5EB.
2. Basis of preparation
The financial information set out above does not constitute the Group's statutory accounts for the years ended 31 December 2022 or 2021 but is derived from those accounts. Statutory accounts for 2021 have been delivered to the registrar of companies, and those for 2022 will be delivered in due course. The auditor has reported on those accounts; their reports were (i) unqualified, (ii) included a reference to material uncertainty related to going concern which the auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
The financial statements of Mirriad Advertising plc have been prepared in accordance with UK-adopted international accounting standards and with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards. The financial statements have been prepared under the historical cost convention.
The accounting policies applied are consistent with those of the annual report and accounts for the year ended 31 December
2021.
(a) New standards, amendments and interpretations
The Group has applied the following standards and amendments for the first time for the annual reporting period commencing 1 January 2022:
· Proceed before intended use - Amendments to IAS 16;
· Onerous contracts - Costs of fulfilling a contract - Amendments to IAS 37;
· Reference to conceptual framework - Amendments to IFRS 3;
· Annual Improvements 2018-2020 Cycle - Amendments to IFRS 1, IFRS 9, and IAS 41.
The amendments listed above did not have any impact on the amounts recognised in prior periods and are not expected to significantly affect the current or future periods.
(b) New standards, amendments and interpretations not yet adopted
A number of new standards and amendments to standards and interpretations are effective for annual periods beginning after 1 January 2023, and have not been applied in preparing these financial statements. These standards are not expected to have a material impact on the entity in the current or future reporting periods or on foreseeable future transactions.
3. 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 and China. The revenue is classified by where the sales were booked not by the geographic location of the customer.
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, which 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. 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.
|
|
2022 |
2021 |
|
Revenue |
£ |
£ |
|
Turnover by geography |
|
|
|
USA |
1,180,798 |
884,248 |
|
UK |
178,476 |
144,309 |
|
China |
147,983 |
981,164 |
|
Total |
1,507,257 |
2,009,721 |
|
|
2022 |
2021 |
|
|
£ |
£ |
|
Turnover by category |
|
|
|
Rendering of services |
1,507,257 |
2,009,721 |
|
Total |
1,507,257 |
2,009,721 |
|
|
2022 |
2021 |
|
Revenues from external customers by country, based on the destination of the customer |
£ |
£ |
|
USA |
1,100,680 |
863,960 |
|
China |
147,983 |
981,164 |
|
Canada |
80,118 |
20,288 |
|
Germany |
67,711 |
12,800 |
|
Turkey |
33,601 |
26,194 |
|
UK |
27,833 |
41,475 |
|
United Arab Emirates |
16,896 |
- |
|
France |
12,605 |
35,399 |
|
Japan |
12,381 |
- |
|
Belgium |
7,449 |
7,993 |
|
Other |
- |
20,448 |
|
Total |
1,507,257 |
2,009,721 |
4. Operating loss
The Group operating loss is stated after charging/(crediting):
|
|
|
2022 |
2021 |
|
|
|
£ |
£ |
|
Employee benefits |
|
11,200,918 |
9,398,756 |
|
Depreciation of property, plant and equipment |
|
439,727 |
440,390 |
|
Foreign exchange movements |
|
6,734 |
(247,956) |
|
Other general and administrative costs |
|
5,177,356 |
4,638,895 |
|
Office closure costs |
|
324,596 |
- |
|
Other operating income |
|
- |
(200,982) |
|
Total cost of sales, administrative expenses and other operating income |
|
17,149,331 |
14,029,103 |
Other general and administrative costs includes legal and professional fees, IT infrastructure & software related costs, property costs, marketing and research costs.
Office closure costs includes employee redundancy and other expenses related to the closure of the China office. of this total £126,397 was incurred in the year and £198,199 was provided for at the year end.
Other operating income includes income received from government grants and research and development expenditure credits. The Group has complied with all the conditions attached to these grant awards.
Included within Employee benefits costs are share based payments for the year ended 31 December 2022 of £1.2m (2021: £0.8m).
5. Loss per share
Basic loss per share is calculated by dividing the loss for the 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 |
2022 |
2021 |
|
Loss attributable to owners of the parent (£) |
(15,100,823) |
(10,972,472) |
|
Weighted average number of Ordinary Shares in issue (number) |
279,180,808 |
279,091,959 |
The loss per share for the year was 5p (2021: 4p).
No dividends were paid during the year (2021: £nil).
(b) Diluted
Potential Ordinary Shares are not treated as dilutive as the Group is loss making and such shares would be anti-dilutive.
6. Related party transactions
The Group is owned by a number of investors, the largest being M&G Investment Management, which owns approximately 13% of the share capital of the Company (2021: 13%). Accordingly there is no ultimate controlling party.
During the year the Company had the following significant related party transactions. No guarantees were given or received for any of these transactions:
Transactions with Directors
There were no transactions with Directors during the year (2021: none).
Transactions with other related parties
IP2IPO Limited - a company which shares a parent company with IP2IPO Portfolio (GP) Limited, a major shareholder in the Group, and which also appoints a Director of the Group charged Mirriad Advertising plc for the following transactions during the year: (1) £9,556 for the services of Kelsey Lynn Skinner as a Director during the year for the period from 1 January 2022 until 23 June 2021 (2021: £16,667). All of this amount was invoiced and paid as at 31 December 2022; (2) £10,444 for the services of Lois Day as a Director during the year for the period from 23 June 2022 to 31 December 2022 (2021: £nil). £1,667 of this amount is accrued and unpaid as at 31 December 2022. £1,667 of this amount was invoiced and unpaid as at 31 December 2022, and subsequently paid on 26 January 2023; and (3) £3,000 for the services of the Company Secretary for the period from 1 January 2022 to 31 March 2022. (2021: £12,000). All of this amount was invoiced and paid as at 31 December 2022
Parkwalk Advisors Limited - a company which shares a parent company with IP2IPO Portfolio (GP) Limited, a major shareholder in the Group, charged Mirriad Advertising plc for the following transactions during the year: (1) £20,000 for the services of Alastair Kilgour as a Director during the year (2021: £20,000). £1,667 of this amount is accrued and unpaid as at 31 December 2022. £1,667 of this amount was invoiced and unpaid as at 31 December 2022, and subsequently paid on 26 January 2023
All the related party transactions disclosed above were settled by 31 December 2022 except where stated.
During the year ended 31 December 2022, the Company entered into transactions with its subsidiary companies for working capital purposes, which net off on consolidation - these have not been shown above.
The Directors have authority and responsibility for planning, directing and controlling the activities of the Group and they therefore comprise key management personnel as defined by IAS 24 "Related party disclosures". Remuneration of Directors and senior management is disclosed in the Remuneration Report.
7. Events after the reporting period
On 16 May 2023 the Company announced a successful placing that raised £5.75 million, before fees, £5.2 million after fees, together with an Open Offer which may bring in additional funds.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
Latest directors dealings
- 12 hours ago Johnson Matthey
- 13 hours ago Galliford Try
- 13 hours ago Galliford Try
- 13 hours ago Centrica
- 14 hours ago Smith & Nephew