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Brave Bison Grp PLC (BBSN)

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Thursday 28 April, 2022

Brave Bison Grp PLC

Final Results

RNS Number : 6146J
Brave Bison Group PLC
28 April 2022
 

28 April 2022

 

Brave Bison Group plc

("Brave Bison" or the "Company")

 

Final Results

 

Transformational Year and Maiden Statutory Profit

 

Brave Bison, the social and digital media company, is pleased to announce the Company's financial results for the year ending 31 December 2021. These results represent the Company's first-ever statutory profit before tax.

 

Oliver Green, Executive Chairman, commented:

 

"2021 was an important and transformational year for Brave Bison. The business has proven its ability to grow revenues and generate cash by competing in the new age of digital advertising and has delivered maiden statutory profits. We are excited to launch the new, integrated Brave Bison trade brand in the second half of 2022, which will incorporate Greenlight, in addition to Best Response Media, the acquisition of which was announced by the Company this morning.

 

"We have made a strong start to 2022, with a number of new customer wins and a healthy performance across our digital media network. With the team and platform now in place, coupled with the potential for further tactical bolt-on acquisitions, we are on track to meet current market expectations for FY22 Adjusted EBITDA of £2.7m"

 

Financial Highlights: Strong financial performance

 

 

FY21

FY20A

Change

Revenue

£21.7m

£14.5m

+50%

Gross Profit

£7.8m

£4.0m

+96%

Adj. EBITDA (1)

£1.8m

£0.1m

+1,225%

Adj. Operating Profit (2)

£1.4m

(£1.5m)

-

Adj. Operating Profit Per Share

0.18p

(0.25)p

-

Profit Before Tax

£0.5m

(£2.3m)

-

Cash

£5.9m

£2.8m

+114%

Net Cash

£4.7m

£2.7m

+75%

 

(1) Adj. EBITDA is defined as earnings before interest, taxation, depreciation and amortisation, and after adding back acquisition costs, restructuring costs and share-based payments. Under IFRS16 most of the costs associated with the Company's property leases are classified as depreciation and interest, therefore Adj. EBITDA is stated before deducting these costs.

(2) Adj. Operating Profit is stated after adding back acquisition costs, restructuring costs and share-based payments, and is after the deduction of costs associated with property leases.

 

· Revenue growth of 50% to £21.7m, and underlying organic revenue growth of 10%

 

· Adjusted Operating Profit of £1.4m (FY20: loss of £1.5m) and Adjusted EBITDA of £1.8m (FY20: £0.1m), an increase of 1,225%

 

· Adjusted Operating Profit per share of 0.18p (FY20: loss of 0.25p), demonstrating the accretive nature of acquisitions made to date

 

· Cash resources of £5.9m, reflecting strong cash generation of £3.2m during the year (FY20: loss of £1.5m). Net cash of £4.7m after deducting outstanding COVID loans and deferred consideration

 

Strategic Highlights: Accelerated growth across the business

 

· Transformational acquisition of Greenlight completed in September 2021, increasing the breadth of Brave Bison's digital advertising capabilities

 

· Significant year-on-year growth of Brave Bison's digital media network, including the addition of six new Snap Discover shows. Average monthly views across the network were 1.7bn and total followers & subscribers were 168m

 

· Launched The Wave House Season 2 in partnership with a specialist influencer agency. The Wave House is one of the most popular 'Creator Mansions' in the UK, attracting millions of likes and views across TikTok, YouTube, Instagram and Snapchat

 

· Total headcount for the Company grew from 40 at the end of 2020 to 146 at the end of 2021

 

· New customer wins and renewals during the period include Asus, Vodafone, Ryder Cup, a FTSE250 retailer and a FTSE100 consumer products group

 

Current Trading & Outlook

 

· Strong start to the new year with a number of new customer wins, three new Snap Discover shows and record-breaking performance on YouTube for Australian Open, a Brave Bison channel partner

 

· Integration of Greenlight into the Brave Bison operating platform is ahead of schedule and substantially complete, with the launch of the combined brand planned before the end of June 2022

 

· Acquisition of Best Response Media, announced separately this morning, is an earnings accretive bolt-on acquisition that enhances Brave Bison's ecommerce capabilities to include all leading ecommerce technology platforms.

 

· Brave Bison is on track to meet current market expectations for FY22 Adjusted EBITDA(1) of £2.7m, before the impact of the Best Response Media acquisition

 

 

For further information please contact:

 

Brave Bison Group plc

Oliver Green, Executive Chairman   via Cenkos

Theo Green, Chief Growth Officer

Philippa Norridge, Chief Financial Officer

 

Cenkos Securities plc   Tel: +44 (0)20 7397 8900

Nominated Adviser & Broker

Nicholas Wells

Ben Jeynes

 

 

 

 

 

Chairman's Report

 

2021 was a transformational year for Brave Bison. During the period we almost doubled gross profit, made a highly accretive and strategic acquisition, delivered a maiden statutory profit and generated a significant amount of cash. We moved into new London headquarters in King's Cross and bolstered our management team with a number of key senior hires across our media network and digital advertising agency.

 

Brave Bison now has four business pillars:

· Brave Bison Performance:  performance media and search engine optimisation (SEO)

· Brave Bison Social & Influencer:  social advertising

· Brave Bison Commerce: transactional websites and platforms

· Brave Bison Media Network:  portfolio of owned and operated social channels.

 

Through these four pillars, Brave Bison is both a digital media owner and a digital advertising agency. We act as a broadcaster for the digital age: publishing content on our own channels like The Hook (on Instagram), The Wave House (on TikTok) and Slick (on Snapchat), and on behalf of our channel partners like PGA Tour and US Open (on YouTube). We also buy media across advertising platforms like Google, Facebook, as well as directly from creators, and manage transactional platforms for our customers. Current partners include global enterprises such as Reckitt Benckiser, Panasonic, Vodafone and New Balance.

 

Year in Review

Brave Bison saw considerable growth in the first half of the year with revenues of £7.3m in H1, up 32% over the prior period earlier despite what was still a challenging global environment with lockdowns in place in the UK and Singapore. Careful management of operating expenses and cashflow saw an Adjusted EBITDA of £0.5m and cash increase by £0.8m during the half-year period.

 

At an operating level, the processes we put in place during 2020 meant that, despite the restrictions, our teams were still able to work productively. Rather than only hire talent in London and Singapore we began to recruit both nationally and internationally which allowed us to hire from a much broader, and more diverse pool of talent. As the world emerges from the pandemic, we are keen to maintain flexible and hybrid working for our teams as we believe it will remain an attractive feature in the continued retention and attraction of high quality talent and will also enable us to reduce property costs in the medium term.

 

In April 2021, we launched The Wave House Season 2: a first of its kind production that saw us rent a mansion in the English countryside in which six social media stars were tasked with the aim of making original content for the likes of TikTok, Snapchat, Facebook and YouTube. After garnering over 100m views on social platforms and coverage in the likes of the Daily Mail, Vice and BBC we negotiated sponsorship from one of the world's largest music companies and agreed an exclusive edit for Snapchat.

 

Our YouTube network continues to go from strength to strength. In 2021 our channels generated  average monthly views of 566m and we signed contract renewals with some of our largest partners including the PGA Tour, United States Tennis Association (USTA) and Newsflare. Our proposition around channel management for third parties is focused on helping our partners grow views, engagement, subscribers and ultimately revenue across the platform. Existing partners include a roster of sports federations, media and music companies and creators.  During the period we signed agreements with a number of new partners including Ryder Cup, CPLT20, Scandinavian talk show Skavlan and creators such as Adolofo Loro, DJ Scuff and El Open Mic.  Since the year end we were delighted to confirm continued momentum in the winning of new clients with the addition of Le Mans Endurance Management as a client of the Group.

 

On Snapchat we launched a slate of new programming across content verticals such as fitness, food and entertainment. One of our new shows, The Sip, is centred around pop culture and celebrity news with a millennial and gen z focus. We launched a number of new shows on Snapchat under The Hook brand which we acquired mid-2020, including collaborations with well-known comedy influencers Josh & Archie and JOLLY.

 

Our Social & Influencer business has continued to thrive. Engagements with the likes of Vodafone and Panasonic were renewed and we signed new agreements with BBC, Suntory and a global real estate company. We were especially pleased to be ranked 2nd in The Drum's Elite Agency Census cementing our position as one of the most respected social advertising outfits in the UK.

 

In September, we completed the acquisition of Greenlight Digital and Greenlight Commerce (together 'Greenlight'), a London-based digital advertising and technology business. After an oversubscribed fundraising of £6.2m pursuant to which we welcomed a number of new institutional investors to our shareholder register, we added Performance and Commerce to our existing Social & Influencer and Media Network business units. Greenlight works with a roster of global clients including New Balance, ASUS and Reckitt Benckiser and in Q4 2021 we set about integrating the operations of both businesses.

 

By the end of the year, we had moved all of the Brave Bison team into Greenlight's offices in King's Cross and had implemented new processes to integrate the group and ensure that we run the business as one company. Streamlined operations now include a single P&L, one leadership team, a company-wide monthly townhall, weekly updates and shared functions across IT, HR, Finance and Marketing. The final part of the integration will happen towards the end of H1 2022 when we launch a revised brand for Brave Bison including a new service offering that combines Brave Bison's existing expertise in social advertising and our media network with our newly acquired performance media and commerce capabilities.

 

With revenue for the full year up 50% at £21.7m and gross profit up almost 100% at £7.8m we are pleased to see our business expand in the UK as well as overseas. Adjusted EBITDA was up 1,225% at £1.8m and we were delighted to report Brave Bison's first ever statutory profit before tax of £0.5m. Our balance sheet remains strong with £5.9m of gross cash at year end, an increase of £3.2m in 2021 despite the proceeds of the share placing being fully utilised in connection with the acquisition of Greenlight. We remain on the lookout for further transformational acquisitions that will continue to drive scale and reach on a global level but we remain well positioned to make smaller, bolt-on acquisitions from existing resources.

 

Brave Bison is an exciting company in an exciting space. We are unique in that we blend an owned and operated digital media network with a suite of digital-only advertising services. Our platform is profitable, cash generative and growing organically. We have an ambitious management team with a clear plan to scale our existing business, develop new revenue streams and make tactical and accretive acquisitions. We look forward to updating shareholders with progress over the remainder of the coming year and beyond.

 

 

Oliver Green

Executive Chairman, Brave Bison Group plc

27 April 2022

CFO's Report

 

Brave Bison's primary activity is that of digital media and advertising services.  Within this we recognise two main revenue streams.  Firstly, there is advertising revenue generated from our digital media network, across platforms including YouTube, Facebook and Snapchat.  Secondly, there is fee-based revenue from providing advertising and technology services.  Following the acquisition of Greenlight during the year, the fee based revenue stream can be split between our social advertising agency, our performance agency, and our commerce agency.

 

2021 has been an exciting year for Brave Bison.  We were able to build on the work done to restructure the business in 2020 to deliver organic growth, and profitability in the existing business, while also completing a transformational acquisition.  Overall our revenue increased by 50% to £21.7 million (2020:  £14.5 million). 

 

Organic growth made up £1.4 million of this growth.  The majority of this came from our advertising revenue which grew by 9.4% to £14.3 million (2020:  £13.1 million) during 2021.  This was a result of both adding new channels and shows to our media network across multiple platforms, and also growing the existing channels within our network.  We were able to deepen our relationships with some key clients, by offering new services such as enhanced in-tournament support for sporting clients, which in turn drove increased revenue and views for both us and them. 

 

Our social and influencer fee based revenue grew by £0.1 million during the year.  APAC continued to be impacted by restrictions as a result of the pandemic, which had a particular impact on a number of our clients in the travel industry.  We did see traction in the UK with our social media consultancy and influencer offering, and we have invested in talent in this area to drive growth in 2022.

 

The remaining £5.8 million growth in revenue came from the acquisition of Greenlight from September.  Greenlight has both in-demand and high growth capabilities such as performance marketing and commerce.  It brings in new clients, talent, services and opportunities to the group, and gives the combined group a unique offering across the digital and social media space.  There have also been some cost synergies as a result of the acquisition - most notably in the area of property costs.  All of the UK operations were moved into the Greenlight offices in King's Cross from the end of September when the lease in Borough concluded.

 

Gross profit has increased by 96% (£3.8 million) to £7.8 million (2020: £3.9 million).  The gross profit margin has increased, primarily because a higher proportion of the revenue is fee based, which has higher gross profit margins than the advertising revenue from platforms.

 

The Group has incurred restructuring costs during the year of £0.2 million (2020: £0.7 million), predominantly as a result of changes in executive staffing.  Administration costs increased to £7.1 million from £5.2 million, which was driven by the acquisition which brought in £3.3 million of additional administration costs, which was offset by £1.4 million of cost savings and synergies.

 

As a result of these improvements in revenue and cost savings the Group is pleased to report a profit before tax for the year of £0.5 million (2020:  loss of £2.3 million), despite acquisition costs of £0.7 million (2020: £nil). The Group's adjusted operating profit for the year was £1.4 million (2020:  loss of £1.5 million).

 

 

 

2021

2020

 

 

 

 

£000's

£000's

 

 

 

Adjusted EBITDA

1,762

133

Finance costs

(67)

(61)

Finance income

-

4

Impairment charge

-

(248)

Depreciation

(279)

(527)

Amortisation

(34)

(848)

Adjusted Operating Profit / (loss)

1,382

(1,547)

Restructuring costs

(176)

(718)

Acquisition costs

(686)

-

Equity settled share based payments

(62)

7

Profit / (loss) before tax

458

(2,258)

 

Adjusted EBITDA is a non-IFRS measure that the Group uses to measure its performance and is defined as earnings before interest, taxation, depreciation and amortisation and after add back of costs related to restructuring, acquisitions and share based payments.  It should be noted that a portion of the property costs in both 2021 and 2020 fall into the finance costs and depreciation lines as a result of the introduction of IFRS 16 'Leases'.  As a result, the Group has also started to use Adjusted Operating Profit as a measure of performance, which is stated after add back of costs related to restructuring, acquisitions, share based payments and impairments, but which is after the deduction of costs associated with property leases.

Statement of Financial Position

 

The Group ended the year with £5.9 million in cash and cash equivalents (2020: £2.8 million).  The Group had cash inflow of £3.2 million in 2021 (2020: £1.5 million outflow), and expects to maintain positive cash inflow throughout 2022.  The Group had net cash of £4.7 million at the end of the year after deducting government backed bank loans and deferred consideration. 

 

The Group is carrying intangible assets of £6.3 million (2020: £0.1 million). Based on an interim fair value exercise the Group capitalised goodwill of £6.2 million (2020: £0.2 million) on the purchase of Greenlight.

 

 

Philippa Norridge

Chief Financial Officer, Brave Bison Group plc

27 April 2022

 

 

 

 

CONSOLIDATED INCOME STATEMENT AND CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 

For the year ended 31 December 2021

 

 

 

31

31

 

Note

December

 2021

December

 2020

 

 

 

 

 

 

£000's

£000's

 

 

 

 

Revenue

6

21,660

14,486

Cost of sales

 

(13,854)

(10,510)

Gross profit

 

7,806

3,976

 

 

 

 

Administration expenses

 

(7,105)

(5,211)

Restructuring costs

8

(176)

(718)

Impairment charge

15

-

(248)

Operating profit/(loss)

7

525

(2,201)

 

 

 

 

Finance income

9

-

4

Finance costs

9

(67)

(61)

Profit/(loss) before tax

7

458

(2,258)

 

 

 

 

Analysed as

 

 

 

Adjusted EBITDA

 

1,762

133

Finance costs

9

(67)

(61)

Finance income

9

-

4

Impairment charge

15

-

(248)

Depreciation

14

(279)

(527)

Amortisation

13

(34)

(848)

Adjusted Operating Profit/(loss)

 

1,382

(1,547)

Restructuring costs

8

(176)

(718)

Acquisition costs

29

(686)

-

Equity settled share based payments

24

(62)

7

Profit/(loss) before tax

 

458

(2,258)


Income tax credit

10

-

227

 

 

 

 

Profit/(loss) attributable to equity holders of the parent

 

458

(2,031)

 

 

 

 

Statement of Comprehensive Income

 

 

 

Profit/(loss) for the year

 

458

(2,031)

Items that may be reclassified subsequently to profit or loss

 

 

 

Exchange (loss)/gain on translation of foreign subsidiaries

 

(7)

2

Total comprehensive profit/(loss) for the year attributable to owners of the parent

 

451

(2,029)


Profit/(loss) per share (basic and diluted)

 

 

 

Basic and diluted profit/(loss) per ordinary share (pence)

11

0.06p

(0.33p)

 

All transactions arise from continuing operations.

 

 

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION


As at 31 December 2021

 

 

 

At 31

At 31

 

 

December

December

 

Note

2021

2020

 

 

 

 

Non-current assets

 

 

 

Intangible assets

13

6,265

144

Property, plant and equipment

14

672

151

 

 

6,937

295

 

 

 

 

Current assets

 

 

 

Trade and other receivables

17

6,636

3,036

Deferred tax asset

16

135

-

Cash and cash equivalents

 

5,906

2,754

 

 

12,677

5,790

 

 

 

 

Current liabilities

 

 

 

Trade and other payables

18

(10,528)

(4,859)

Bank Loans <1 year

20

(108)

-

Lease Liabilities

19

(629)

(416)

 

 

(11,265)

(5,275)

 

 

 

 

Non-current liabilities

 

 

 

Lease Liabilities

19

(393)

-

Bank loans >1 year

20

(308)

(50)

Provisions for liabilities

21

(118)

-

 

 

(819)

(50)

 

 

 

 

Net Assets

 

7,530

760

 

 

 

 

Equity

 

 

 

Share capital

22

1,081

613

Share premium

 

84,551

78,762

Capital redemption reserve

 

6,660

6,660

Merger reserve

 

(24,060)

(24,060)

Merger relief reserve

 

62,624

62,624

Retained deficit

 

(123,468)

(123,988)

Translation reserve

 

142

149

Total equity

 

7,530

760

 

 

 

 

 

 

 

 

 

 

 

 

 

The financial statements were authorised for issue by the Board of Directors on 27 April 2022 and were signed on its behalf by

   

Philippa Norridge

Chief Financial Officer

 

 

 

 

CONSOLIDATED STATEMENT OF CASH FLOWS

 

For the year ended 31 December 2021

 

 

 

2021

2020

 

 

£000's

£000's

 

 

 

 

Operating activities

 

 

 

Profit/(loss) before tax

 

458

(2,258)

Adjustments:

 

 

 

Depreciation, amortisation and impairment

 

57

1,623

Finance income

 

-

(4)

Finance costs

 

67

61

Share based payment charges

 

62

(7)

Decrease / (increase) in trade and other receivables

 

1,314

(425)

Increase in trade and other payables

 

2,033

101

Tax received

 

-

85

Cash inflow / (outflow) from operating activities

 

3,991

(824)

 

 

 

 

Investing activities

 

 

 

Acquisition of subsidiaries

 

(7,735)

-

Net cash acquired on acquisition

 

1,451

-

Purchase of property plant and equipment

 

(34)

-

Purchase of intangible assets

 

-

(166)

Interest received

 

-

4

Interest paid

 

(5)

-

Cash outflow from investing activities

 

(6,323)

(162)

 

 

 

 

Cash flows from financing activities

 

 

 

Issue of share capital

 

6,257

1

Proceeds from borrowings

 

-

50

Repayment of borrowings

 

(36)

-

Repayment of lease liability

 

(730)

(562)

Cash inflow / (outflow) from financing activities

 

5,491

(511)

 

 

 

 

Net increase/(decrease) in cash and cash equivalents

 

3,159

(1,497)

 

 

 

 

Movement in net cash

 

 

 

Cash and cash equivalents, beginning of year

 

2,754

4,249

Increase/(decrease) in cash and cash equivalents

 

3,159

(1,497)

Movement in foreign exchange

 

(7)

2

Cash and cash equivalents, end of year

 

5,906

2,754

 

 

 

 

 

 

 

 

 

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2021

 

Share Capital

Share premium

 

Capital redemption Reserve

 

 

Merger Reserve

 

 

Merger relief Reserve

 

 

Translation

Reserve

Retained

deficit

Total

Equity

 

£000's

£000's

£000's

£000's

£000's

£000's

£000's

£000's

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At 1 January 2020

612

78,762

6,660

(24,060)

62,624

147

(121,950)

2,795

 

 

 

 

 

 

 

 

 

Shares issued during the year 

1

-

-

-

-

-

-

1

Equity settled share based payments

-

-

-

-

-

-

(7)

(7)

 

 

 

 

 

 

 

 

 

Transactions with owners

1

-

-

-

-

-

(7)

(6)

 

 

 

 

 

 

 

 

 

Other comprehensive income

 

 

 

 

 

 

 

 

Loss and total comprehensive income for the year

-

-

-

-

-

2

(2,031)

(2,029)

 

 

 

 

 

 

 

 

 

At 31 December 2020

613

78,762

6,660

(24,060)

62,624

149

(123,988)

760

 

 

 

 

 

 

 

 

 

Shares issued during the year

468

5,789

-

-

-

-

-

6,257

Equity settled share based payments

-

-

-

-

-

-

62

62

 

 

 

 

 

 

 

 

 

Transactions with owners

468

5,789

-

-

-

-

62

6,319

 

 

 

 

 

 

 

 

 

Other Comprehensive income

 

 

 

 

 

 

 

 

Profit and total comprehensive income for the year   

-

-

-

-

-

(7)

458

451

 

 

 

 

 

 

 

 

 

At 31 December 2021

1,081

84,551

6,660

(24,060)

62,624

142

(123,468)

7,530

 

 

NOTES TO THE FINANCIAL STATEMENTS

 

For the year ended 31 December 2021

Brave Bison

 

Brave Bison Group plc ("the Company") (formerly Rightster Group plc) was incorporated in England and Wales on 30 October 2013 under the Companies Act 2006 (registration number 08754680) and its registered address is The Varnish Works, 3 Bravingtons Walk, London, N1 9AJ.  On 12 November 2013 the Company entered into share exchange agreements to acquire 100% of the issued share capital of Brave Bison Limited, a company incorporated in England and Wales on 16 May 2011 and registered at the same address. On 12 November 2013 the Company was admitted to the Alternative Investment Market (AIM) where its ordinary shares are traded.

 

The consolidated financial statements of the Group for the year ended 31 December 2021 comprise the Company and its subsidiaries (together referred to as the "Group").  The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the CFO's Report, and Risks and Uncertainties on.  In addition, Note 26 to the financial statements includes the Group's objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments and its exposure to credit risk and liquidity risk.

 

Basis of preparation

 

2.1.  Going Concern

 

The consolidated financial statements have been prepared on a going concern basis, which assumes that the Group will be able to meet its liabilities as they fall due for the foreseeable future, and at least for 12 months from the date of approval of the consolidated financial statements. The Group is dependent for its working capital requirements on cash generated from operations, and cash holdings. The cash holdings of the Group at 31 December 2021 were £5.9 million (2020: £2.8 million). The Group made a profit before tax of £0.5 million for the year ended 31 December 2021 (2020: loss of £2.3 million), and generated an increase in cash and cash equivalents in 2021 of £3.2 million (2020: decrease of £1.5 million).  The Group has net assets of £7.5 million (2020: £0.8 million).  During the year the Group raised £6.2 million of cash from an equity raise, which was used for the acquisition of Greenlight.

 

The Directors have prepared detailed cash flow projections for the period to 31 December 2022 and for the following 6 month period to 30 June 2023 which are based on their current expectations of trading prospects. The Group achieved positive cashflow of £2.9 million in H2 2021, and the Board forecasts that the Group will continue to achieve positive cash inflows in 2022 due to both the cost savings that have already been made, and the expected revenue growth. 

 

The Directors are confident that the Group's cash flow projections are achievable, and are committed to taking any actions available to them to ensure that any shortfall in forecast revenues receipts is mitigated by cost savings.

 

The Directors also continue to monitor the impact of the ongoing COVID-19 pandemic, and maintain rolling forecasts which are regularly updated. 

 

The Directors remain confident that the Group has sufficient cash resources for a period of at least twelve months from the date of approval of these consolidated financial statements despite the impact of the pandemic and accordingly, the Directors have concluded that it is appropriate to continue to adopt the going concern basis in preparing these consolidated financial statements. 

 

 

Basis of consolidation

 

The consolidated financial statements consolidate the financial statements of Brave Bison Group plc and all its subsidiary undertakings up to 31 December 2021, with comparative information presented for the year ended 31 December 2020. No profit and loss account is presented for Brave Bison Group plc as permitted by section 408 of the Companies Act 2006.

 

Subsidiaries are all entities over which the Group has the power to control the financial and operating policies and is exposed to or has rights over variable returns from its involvements with the investee and has the power to affect returns.  Brave Bison Group plc obtains and exercises control through more than half of the voting rights for all its subsidiaries. All subsidiaries have a reporting date of 31 December and are consolidated from the acquisition date, which is the date from which control passes to Brave Bison Group plc.

 

Entities other than subsidiaries or joint ventures, in which the Group has a participating interest and over whose operating and financial policies the Group exercises significant influence, are treated as associates. The results of associate undertakings are consolidated under the equity method of accounting. The Group applies uniform accounting policies and all intra-group transactions, balances, income and expenses are eliminated on consolidation.

 

Unrealised gains and losses on transactions between Group companies are eliminated. Where recognised losses on intra-group asset sales are reversed on consolidation, the underlying asset is also tested for impairment from a Group perspective.

 

Business combinations are accounted for using the acquisition method. The acquisition method involves the recognition at fair value of all identifiable assets and liabilities, including contingent liabilities of the subsidiary, at the acquisition date, regardless of whether or not they were recorded in the financial statements of the subsidiary prior to acquisition. On initial recognition, the assets and liabilities of the subsidiary are included in the consolidated statement of financial position at their fair values, which are also used as the basis for subsequent measurement in accordance with the Group accounting policies. Goodwill is stated after separating out identifiable intangible assets. Goodwill represents the excess of acquisition cost over the fair value of the Group's share of the identifiable net assets of the acquired subsidiary at the date of acquisition.

 

Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year are recognised from the effective date of acquisition, or up to the effective date of disposal, as applicable.

 

2.2.  Adoption of new and revised standards

 

The Group has chosen to adopt the amendment to IFRS 16 "Leases" early, and has applied this during the year:

 

Update to IFRS 16 "Leases" 

 

The changes in COVID-19-Related Rent Concessions (Amendment to IFRS 16) amend IFRS 16 to:-

 

· provide lessees with an exemption from assessing whether a COVID-19-related rent concession is a lease modification; 

· require lessees that apply the exemption to account for COVID-19-related rent concessions as if they were not lease modifications; 

· require lessees that apply the exemption to disclose that fact; and 

· require lessees to apply the exemption retrospectively in accordance with IAS 8, but not require them to restate prior period figures.

 

Other Standards and amendments that are not yet effective and have not been adopted early by the Company include:

· Amendments to IAS 1 - Classification of Liabilities as Current or Non-current;

· Amendments to IAS8 - Accounting Policies, Changes in Accounting Estimates and Errors;

· Amendments to IAS 16 - Property, Plant and Equipment: Proceeds before intended use;

· Amendments to IFRS 3 - Reference to the Conceptual Framework;

· Amendments to IAS 37 - Onerous Contracts - Cost of Fulfilling a Contract;

· Annual Improvements to IFRS Standards 2018-2020;

· Amendments to IFRS 10 and IAS 28 - Sale or contribution of assets between an investor and its associate or joint venture; and

· Amendments to IFRS 4, IFRS 7, IFRS 9, IFRS 16 & IAS 39 - Interest Rate Benchmark Reform - Phase 2.

 

Statement of compliance

 

The financial statements have been prepared in accordance with the accounting policies and presentation required by UK adopted International Financial Reporting Standards (IFRS), and International Financial Reporting Interpretations Committee ("IFRIC") Interpretations as endorsed for use in the UK. They are presented in pounds sterling. The financial statements have also been prepared in accordance with those parts of the Companies Act 2006 that are relevant to companies that prepare financial statements in accordance with UK adopted IFRS.

 

Summary of accounting policies

 

The Group's presentation and functional currency is £ (Sterling). The financial statements are presented in thousands of pounds (£000's) unless otherwise stated.

 

4.1.  Revenue

 

Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for services provided in the normal course of business, net of discounts and sales related taxes.

 

Revenue is recognised when the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity, the costs incurred or to be incurred can be measured reliably, and when the criteria for each of the Group's different activities has been met.

The determination of whether the Group is acting as a principal or an agent in a transaction involves judgment and is based on an assessment of who controls a specified good or service before it is transferred to a customer.  Significant contracts are reviewed for the indicators of control.  The Group is deemed to be acting as a principal in all significant contracts.

 

Where the Group's contractual performance obligations have been satisfied in advance of invoicing the client then unbilled income is recognised on the balance sheet.  Where the Group's contractual performance obligations have been satisfied less than amounts invoiced then a contract liability is recognised.

 

The accounting policies specific to the Group's key operating revenue categories are outlined below:

 

Advertising revenue:

 

· Ad-funded YouTube channel management of third party content owners' videos.  Revenue is recognised at the point in time when the performance obligation of delivering monetised views occurs; and

· Monetisation of the Group's owned and operated brands and videos via platforms such as Facebook and Snapchat.  Revenue is recognised at the point in time when the performance obligation of delivering monetised views occurs.

 

 

Fee Based Service revenue:

 

· Branded Content. Managing the creation of commissioned content and being responsible for procuring the talent and the associated production costs. The Group recognises revenue in line with the contractual obligation to deliver a completed episode.  Revenue is recognised at the point in time when each completed episode is delivered.  Production costs are deferred on the balance sheet as contract assets until each completed episode is delivered;

· Managing customer content on platforms such as Facebook and YouTube including rights management and audience development. Revenue from providing these services is recognised over the time that the performance obligation to provide services are satisfied;

· License fee revenues for the Group's own content and third parties' content are recognised at the point in time when the performance obligation of delivering the content is satisfied;

· Performance marketing services. Revenue from providing these services is recognised over the time that the performance obligation to provide services are satisfied; and

· E-commerce web build. Revenue from providing these services is recognised over the time that the performance obligation to provide services are satisfied.

 

4.2.  Interest and dividend income

 

Interest income and expenses are reported on an accrual basis using the effective interest method. Dividend income, other than from investments in associates, is recognised at the time the right to receive payment is established.

 

4.3.  Government grants

 

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

 

A grant that specifies performance conditions is recognised in income when the performance conditions are met.  Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability. Government grants are presented as a deduction from the related expense.

 

4.4.  Foreign currency translation

 

Transactions in foreign currencies are translated at the exchange rate ruling at the date of the transaction. Monetary assets and liabilities in foreign currencies are translated at the rates of exchange ruling at the balance sheet date. Non-monetary items that are measured at historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

Any exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were initially recorded are recognised in the profit or loss in the period in which they arise.

 

The assets and liabilities in the financial statements of foreign subsidiaries and related goodwill are translated at the rate of exchange ruling at the balance sheet date. Income and expenses are translated at the actual rate on the date of transaction. The exchange differences arising from the retranslation of the opening net investment in subsidiaries and on income and expenses during the year are recognised in other comprehensive income and taken to the "translation reserve" in equity. On disposal of a foreign operation the cumulative translation differences (including, if applicable, gains and losses on related hedges) are transferred to the income statement as part of the gain or loss on disposal.

 

4.5.  Segment reporting

 

IFRS 8 Operating Segments requires operating segments to be identified on the same basis as is used internally for the review of performance and allocation of resources by the Group Chief Executive (chief operating decision maker - CODM).

 

The Board has reviewed the Group and all revenues are functional activities of a digital media and marketing group, and these activities take place on an integrated basis.  The senior executive team review the financial information on an integrated basis for the Group as a whole, with respective heads of business who are geographically located and in accordance with IFRS 8 Operating Segments, the Group will be providing a geographical split. The Group will also be providing a split between the Advertising and Fee based services. Segmental information is presented in accordance with IFRS 8 for all periods presented within Note 6.

 

4.6.  Leasing

 

For any new contracts entered into on or after 1 January 2019, the Group considers whether a contract is, or contains a lease. A lease is defined as 'a contract, or part of a contract, that conveys the right to use an assed (the underlying asset) for a period of time in exchange for consideration'. To apply this definition the Group assesses whether the contract meets three key evaluations which are whether:

 

· The contract contains an identified asset, which is either explicitly identified in the contract or implicitly specified by being identified at the time the asset is made available to the Group;

· The Group has the right to obtain substantially all of the economic benefits from use of the identified asset throughout the period of use, considering its rights within the defined scope of the contract; and

· The Group has the right to direct the use of the identified asset throughout the period of use. The Group assess whether it has the right to direct 'how and for what purpose' the asset is used throughout the period of use.

 

At lease commencement date, the Group recognises a right-of-use asset and a lease liability on the balance sheet. The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred by the Group, an estimate of any costs to dismantle and remove the asset at the end of the lease, and any lease payments made in advance of the lease commencement date (net of any incentives received).

 

The Group depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The Group also assesses the right-of-use asset for impairment when such indicators exist.

 

At the commencement date, the Group measures the lease liability at the present value of the lease payments unpaid at that date, discounted using the interest rate implicit in the lease if that rate is readily available or the Group's incremental borrowing rate.

 

Lease payments included in the measurement of the lease liability are made up of fixed payments (including in substance fixed), variable payments based on an index or rate, amounts expected to be payable under a residual value guarantee and payments arising from options reasonably certain to be exercised.

 

Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is remeasured to reflect any reassessment or modification, or if there are changes in in-substance fixed payments.

 

When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset, or profit and loss if the right-of-use is already reduced to zero.

 

The Group has elected to account for short-term leases and leases of low-value assets using the practical expedients. Instead of recognising a right-of-use asset and lease liability, the payments in relation to these are recognised as an expense in the profit or loss on a straight-line basis over the lease term.

 

On the statement of financial position, right-of-use assets have been included in property, plant and equipment and lease liabilities have been included in trade and other payables.

 

4.7.  Property, plant and equipment

 

Property, plant and equipment are stated at historical cost less accumulated depreciation and impairment.  Depreciation is calculated to write down the cost less estimated residual value of all property, plant and equipment by equal annual instalments over their expected useful lives less estimated residual values, using the straight line method.  The rates generally applicable are:

 

· Fixtures & Fittings - 3 years or over remaining lease term

· Computer Equipment - 3 years

 

The gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.

 

The assets' residual value and useful lives are reviewed, and adjusted if required, at each balance sheet date.  The carrying amount of an asset is written down immediately to its recoverable amount if the carrying amount is greater than its estimated recoverable amount.

 

The Group depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The Group also assesses the right-of-use asset for impairment when such indicators exist.

 

4.8.  Impairment of property, plant and equipment

At each balance sheet date, the Group reviews the carrying amounts of its property, plant and equipment to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.

 

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.
 

4.9.  Intangible assets

 

An intangible asset, which is an identifiable non-monetary asset without physical substance, is recognised to the extent that it is probable that the expected future economic benefits attributable to the asset will flow to the Group and that its cost can be measured reliably. The asset is deemed to be identifiable when it is separable or when it arises from contractual or other legal rights.

 

Intangible assets acquired as part of a business combination, are shown at fair value at the date of the acquisition less accumulated amortisation.  Amortisation is charged on a straight line basis to profit or loss.  The rates applicable, which represent the Directors' best estimate of the useful economic life, are:

 

· Customer relationships - 5 years

· Online channel content - 3 to 5 years

· Brands - 3 years

· Technology - 1 to 5 years

 

For customer relationships the estimate of useful economic life was revised from 10 years to 5 years during the prior year as the Directors felt this was a more accurate reflection of the average length of a customer relationship in our industry.

 

4.10.  Impairment of intangible assets

 

At each balance sheet date, the Group reviews the carrying amounts of its intangible assets and goodwill to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

 

Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

 

If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss. 

 

 

4.11.  Development costs

Expenditure on the research phase of an internal project is recognised as an expense in the period in which it is incurred.  Development costs incurred on specific projects are capitalised when all the following conditions are satisfied:

 

· Completion of the asset is technically feasible so that it will be available for use or sale;

· The Group intends to complete the asset and use or sell it;

· The Group has the ability to use or sell the asset and the asset will generate probable future economic benefits (over and above cost);

· There are adequate technical, financial and other resources to complete the development and to use or sell the asset; and

· The expenditure attributable to the asset during its development can be measured reliably.
 

Development costs not meeting the criteria for capitalisation are expensed as incurred.  The cost of an internally generated asset comprises all directly attributable costs necessary to create, produce and prepare the asset to be capable of operating in the manner intended by management.  Directly attributable costs include employee (other than Director) costs incurred along with third party costs.

 

Judgement by the Directors is applied when deciding whether the recognition requirements for development costs have been met.  Judgements are based on the information available at the time when costs are incurred.  In addition, all internal activities related to the research and development of new projects is continuously monitored by the Directors.

 

4.12.  Investments in associates and joint ventures

Investments in associates and joint ventures are accounted for using the equity method. The carrying amount of the investment in associates and joint ventures is increased or decreased to recognise the Group's share of the profit or loss and other comprehensive income of the associate or joint venture, adjusted where necessary to ensure consistency with the accounting policies of the Group.

 

4.13.  Taxation

 

Tax expenses recognised in profit or loss comprise the sum of the tax currently payable and deferred tax not recognised in other comprehensive income or directly in equity.

 

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the statement of comprehensive income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

 

Deferred tax

Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and are accounted for using the liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences, and deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be recognised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to recognise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

 

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset recognised based on tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.  Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

 

 

4.14.  Financial Instruments

 

Recognition and derecognition

Financial assets and financial liabilities are recognised with the Group becomes a party to the contractual provisions of the financial instrument. Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and substantially all the risks and rewards are transferred. A financial liability is derecognised when it is extinguished, discharged, cancelled or expires.

 

Loan and other receivables

The Group accounts for loan and other receivables by recording the loss allowance as lifetime expected credit losses. These are shortfalls in contractual cash flows, considering the potential for default at any point during the life of the financial instrument. The Group uses its historical experience, external indicators and forward-looking information to calculate expected credit losses.

 

Trade and other payables

Trade and other payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest method.

 

Contract assets and liabilities

The Group does not adjust the promised amount of consideration for the effects of a significant financing component if the entity expects, at contract inception, that the period between when the entity transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less.

 

 

Share capital

Share capital represents the nominal value of shares that have been issued.

 

Share premium

Share premium includes any premiums received on issue of share capital. Any transaction costs associated with the issuing of shares are deducted from share premium arising on those shares, net of any related income tax benefits.

 

Retained deficits

Retained deficits include all current and prior period retained profits or losses. It also includes credits arising from share based payment charges.

 

Translation reserve

Translation reserve represents the differences arising from translation of investments in overseas subsidiaries.

 

Merger reserve

The merger reserve is created when group reconstruction accounting is applied. The difference between the cost of investment and the nominal value of the share capital acquired is recognised in a merger reserve.

 

Merger relief reserve

Where the following conditions are met, any excess consideration received over the nominal value of the shares issued is recognised in the merger relief reserve:

 

· the consideration for shares in another company includes issued shares; and

· on completion of the transaction, the company issuing the shares will have secured at least a 90% equity holding in the other company.

Capital redemption reserve

Where the Company purchases its own equity share capital, on cancellation, the nominal value of the shares cancelled is deducted from share capital and the amount is transferred to the capital redemption reserve.

 

Dividend distributions payable to equity shareholders are included in 'other liabilities' when the dividends have been approved in a general meeting prior to the reporting date.

 

4.16.  Cash and cash equivalents

 

Cash and cash equivalents include cash in hand, deposits held at call with banks, together with other short-term highly liquid investments that are readily convertible into known amounts of cash having maturities of 3 months or less from inception and which are subject to an insignificant risk of change in value, and bank overdrafts.

 

4.17.  Employee benefits

 

The Group operates two schemes on behalf of its employees, private healthcare and a defined contribution pension plan and amounts due are expensed as they fall due.

 

4.18.  Share based payments

 

Employees (including Directors) of the Group received remuneration in the form of share-based payment transactions, whereby employees render services in exchange for rights over shares ('equity-settled transactions').  The Group has applied the requirements of IFRS 2 Share-based payments to all grants of equity instruments. The transactions have been treated as equity settled.

 

The cost of equity settled transactions with employees is measured by reference to the fair value at the grant date of the equity instrument granted. The fair value is determined by using the Black-Scholes method. The cost of equity-settled transactions is recognised, together with a corresponding charge to equity, over the period between the date of grant and the end of a vesting period, where relevant employees become fully entitled to the award. The total value of the options has been pro-rated and allocated on a weighted average basis.

 

4.19.  Restructuring Costs

 

Restructuring costs relate to corporate re-organisation activities previously undertaken or announced, as detailed in note 8.

 

4.20.  Provisions

 

The Group has recognised a provision for the costs to restore leased property to its original condition, as required by the terms and conditions of the lease.  This is recognised when the obligation is incurred, either at the commencement date or as a consequence of having used the underlying asset during a particular period of the lease, at the directors' best estimate of the expenditure that would be required to restore the assets. Estimates are regularly reviewed and adjusted as appropriate for new circumstances.

 

Critical accounting judgements and key sources of estimation uncertainty

The preparation of financial statements under UK adopted IFRS requires the Group to make estimates and assumptions that affect the application of policies and reported amounts. Estimates and judgements are continually evaluated and are based on historical experience and other factors including expectations of future events that are believed to be reasonable under the circumstances. Actual results may differ from these estimates. The estimates and assumptions which have a risk of causing a material adjustment to the carrying amount of assets and liabilities are discussed below.

 

 

Intangible assets and impairment

The Group recognises the intangible assets acquired as part of business combinations at fair value at the date of acquisition. The determination of these fair values is determined by experts engaged by management and based upon management's and the Directors' judgement and includes assumptions on the timing and amount of future incremental cash flows generated by the assets and selection of an appropriate discount rate. Furthermore management must estimate the expected useful lives of intangible assets and charge amortisation on these assets accordingly.

 

Included within intangible assets are capitalised customer relationships. These were acquired as part of the acquisitions of Viral Management Limited and Base79 Limited. These assets were fully amortised during the prior period, as detailed in note 13. During 2020 the Group capitalised the costs associated with the acquisition of certain assets of The Hook, which it has estimated have a useful economic life of 5 years.

 

Trade debtors' recovery

Within trade debtors there is a balance of £0.7 million (2020: £0.7 million) which is over one year in age which the Group has judged it not necessary to provide for.  This is because it believes it is recoverable, since there is a trade creditor balance of £0.8 million (2020: £0.8 million) with the same company, and the Group is anticipating reaching agreement that these balances may be set off against each other.

 

Treatment of revenue as agent or principal

The determination of whether the Group is acting as a principal or an agent in a transaction involves judgment and is based on an assessment of who controls a specified good or service before it is transferred to a customer.  Significant contracts are reviewed for the indicators of control. These include if the Group is primarily responsible for fulfilling the promise to provide the good or service, if the Group has inventory risk before the good or services has been transferred to the customer and if the Group has discretion in establishing the price for the good or service.  Revenue relating to Snapchat was assessed in the prior year and it was determined that the Group was acting as a principal, therefore the revenue was recognised on a gross basis.  This increased the revenue by £1.0 million (2020: £1.3m). 

 

Deferred taxation

Deferred tax assets are recognised in respect of tax loss carry forwards only to the extent that the realisation of the related tax benefit through future taxable profits is probable.

 

Greenlight acquisition and purchase price allocation

The purchase price allocation of the Greenlight acquisition was provisionally assessed, and the Group judged that at the interim valuation stage it was not able to reliably estimate the fair value of acquired intangibles and therefore the excess of consideration over fair value of other assets and liabilities has been allocated to goodwill. Whilst the Greenlight brand is not intended to be used following the planned re-brand in 2022, and the key customer relationships sat with the founders who did not remain with the business post-acquisition, a full valuation exercise will be completed within the one year IFRS3 measurement period from the date of acquisition which may recognise additional intangible assets separately from goodwill.

 

5.2.  Estimates

 

Share based payment charges

The Group is required to measure the fair value of its share based payments. The fair value is determined using the Black-Scholes method which requires assumptions regarding exchange rate volatility, the risk free rate, share price volatility and the expected life of the share based payment. Exchange rate volatility is calculated using historic data over the past three years.  The volatility of the Group's share price has been calculated as the average of similar listed companies over the preceding periods. The risk-free rate range used is between 0% and 2.74% and management, including the Directors, have estimated the expected life of most share based payments to be 4 years.

 

Bad debt provision

Recoverability of some receivables may be doubtful although not definitely irrecoverable. Where management feel recoverability is in doubt an appropriate provision is made for the possibility that the amounts may not be recovered in full.  Provisions are made using past experience however subjectivity is involved when assessing the level of provision required.

 

Segment Reporting

 

Geographic reporting

The Group has identified three geographic areas (United Kingdom & Europe, Asia Pacific and Rest of the world) and the information is presented based on the customers' location.

 

 

 

 

 

 

 

  2021

2020

Revenue

 

£000's

£000's

United Kingdom & Europe

 

17,548

10,022

Asia Pacific

 

894

881

Rest of the world

 

3,218

3,583

Total revenue

 

21,660

14,486

 

 

 

 

 

The Group identifies two revenue streams, advertising and fee based services. The analysis of revenue by each stream is detailed below, a detailed overview can be found in the Strategic Report.

 

 

 

 

 

 

 

 

 

Revenue

 

 2021

 2020

 

 

£000's

£000's

Advertising

 

14,329

13,092

Fee based services

 

7,331

1,394

Total revenue

 

21,660

14,486

 

 

 

 

 

Gross profit

 

 2021

 2020

 

 

£000's

£000's

Advertising

 

3,044

2,962

Fee based services

 

4,762

1,014

Total gross profit

 

7,806

3,976

 

 

 

 

 

 

 

 

Timing of revenue recognition

 

 

 

 

 

 

 

The following table includes revenue from contracts disaggregated by the timing of recognition.

 

 

 

2021

2020

 

 

£000's

£000's

Products and services transferred at a point in time

 

14,432

13,437

Products and services transferred over time

 

7,228

1,049

Total revenue

 

21,660

14,486

 

 

Operating Profit and Profit/(loss) before taxation

 

The operating profit and the profit/(loss) before taxation are stated after:

 

2021

2020

 

 

 

 

£000's

£000's

Auditor's remuneration:

 

 

Audit services

80

69

Audit related services

5

5

Tax compliance

8

6

Operating lease rentals - land and buildings on short term leases

56

(97)

Depreciation: property, plant and equipment

279

527

Impairment of right-of-use asset

-

248

Amortisation

34

848

Foreign exchange loss

28

54

 

Restructuring costs

 

  2021

2020

 

£000's

 000's

Restructuring costs

176

718

 

Restructuring costs in 2021 relate to corporate reorganisation activities as a result of the acquisition of Greenlight. Restructuring costs in 2020 relate to redundancy payments and associated costs in relation to the Board refresh and corporate re-organisation activities undertaken as a result.

 

Finance income and costs

 

 

2021

2020

 

£000's

£000's

Bank interest received

-

4

 

 

 

 

 2021

2020

 

£000's

 000's

Interest expense for leasing arrangements

62

61

Interest on bank loans

5

-

 

67

61

 

10  Income tax credit

 

Major components of tax credit:

 

 

 

2021

2020

 

£000's

£000's

Current tax:

 

 

UK corporation tax at 19.00% (2020: 19.00%)

-

-

Research and development tax credits

-

(90)

Overseas tax

-

5

 

 

 

Total current tax

-

(85)

 

 

-

(142)

-

-

-

(227)

 

UK corporation tax is calculated at 19.00% (2020: 19.00%) of the estimated assessable loss for the year. Taxation for other jurisdictions is calculated at the rates prevailing in those jurisdictions.

 

The credit for the year can be reconciled to the loss per the income statement as follows:

 

Reconciliation of effective tax rate:

 

 

2021

2020

 

 

 

£000's

£000's

458

(2,258)

 

 

 

 

87

(429)

 

 

175

302

(28)

(145)

(11)

(11)

(55)

(2)

(17)

(90)

-

(142)

(151)

290

-

(227)

 

11  Profit /(loss) per share

 

Both the basic and diluted profit / (loss) per share have been calculated using the profit / (loss) after tax attributable to shareholders of Brave Bison Group plc as the numerator, i.e. no adjustments to profits / (losses) were necessary in 2020 or 2021. The calculation of the basic profit / (loss) per share is based on the profit / (loss) attributable to ordinary shareholders divided by the weighted average number of shares in issue during the year.  Share options were anti-dilutive in 2020 but dilutive in 2021.

 

 

 

2021

2020

 

 

 

Weighted average number of ordinary shares

768,367,147

612,667,036

Dilution due to share options

57,637,981

41,367,914

Total weighted average number of ordinary shares

826,005,128

654,034,950

 

 

 

Basic profit/(loss) per ordinary share (pence)

0.06p

(0.33p)

Diluted profit/(loss) per ordinary share (pence)

0.06p

(0.33p)

Adjusted basic operating profit/(loss) per ordinary share (pence)

0.18p

(0.25p)

Adjusted diluted operating profit/(loss) per ordinary share (pence)

0.17p

(0.25p)

 

 

 

 

 

2021

 2020

 

 

 

 

£000's

£000's

Profit/(loss) for the year attributable to ordinary shareholders

458

(2,031)

 

 

 

Equity settled share based payments

62

(7)

Restructuring costs

176

718

Acquisition costs

686

-

Tax credit

-

(227)

 

 

 

Adjusted operating profit / (loss) for the period attributable to the equity shareholders

1,382

(1,547)

 

12  Directors and employees

 

The average number of persons (including Director's) employed by the Group during the year was:

 

 

 

 

 2021

2020

 

Number

Number

Sales, production and operations

60

47

Support services and senior executives

15

11

 

75

58

The aggregate cost of these employees was:

 

 

 

 

2021

2020

 

£000's

£000's

 

 

 

Wages and salaries

3,558

2,276

Payroll taxes

341

185

Pension contributions

183

172

 

4,082

2,633

 

Director's emoluments paid during the period and included in the above figures were:

 

 

 

 

2021

2020

 

£000's

£000's

Emoluments (including compensation for loss of office)

304

262

Compensation for loss of office

-

387

 

304

649

 

The highest paid Director received emoluments totalling £0.2 million (2020: £0.3 million).  The amount of share based payments credit (see Note 24) which relates to the Directors was £0.1 million. (2020: £0.1 million charge). The key management of the Group are the executive members of Brave Bison Group plc's Board of Directors. Key management personnel remuneration includes the following expenses:

 

 

 2021

 2020

 

£000's

£000's

Salaries including bonuses

273

649

Social security costs

38

85

Total Emoluments

311

734

 

 

 

13  Intangible assets

 

 

Goodwill

Online Channel Content

Technology

 

 

Brands

Customer Relation-ships

Total

 

£000's

£000's

£000's

£000's

£000's

£000's

Cost

 

 

 

 

 

 

At 31 December 2019

35,075

1,868

5,213

273

19,332

61,761

Additions

-

166

-

-

-

166

At 31 December 2020

35,075

2,034

5,213

273

19,332

61,927

 

 

 

 

 

 

 

Additions

6,155

-

-

-

-

6,155

At 31 December 2021

41,230

2,034

5,213

273

19,332

68,082

 

 

 

 

 

 

 

Amortisation and impairment

 

 

 

 

 

At 31 December 2019

35,075

1,868

5,213

273

18,506

60,935

Charge for the year

-

22

-

-

826

848

At 31 December 2020

35,075

1,890

5,213

273

19,332

61,783

 

 

 

 

 

 

 

Charge for the year

-

34

-

-

-

34

At 31 December 2021

35,075

1,924

5,213

273

19,332

61,817

 

 

 

 

 

 

 

Net Book Value

 

 

 

 

 

 

 

 

 

 

 

 

 

At 31 December 2019

-

-

-

-

826

826

 

 

 

 

 

 

 

At 31 December 2020

-

144

-

-

-

144

 

 

 

 

 

 

 

At 31 December 2021

6,155

110

-

-

-

6,265

 

 

 

 

 

 

 

          

 

During the year, the Group acquired Greenlight Digital Limited and Greenlight Commerce Limited and capitalised goodwill of £6.2 million.

 

Goodwill is not amortised, but tested annually for impairment with the recoverable amount being determined from value in use calculations.

 

During 2020 the Group accelerated amortisation relating to customer relationships by £0.6m as the estimate of the useful economic life of these assets was reduced to 5 years rather than 10 years as the Directors felt this was a more accurate reflection of the average length of client relationship in our industry.

 

During 2020 the Group acquired certain assets from The Hook and capitalised costs of £0.2 million. This is included above in Online Channel Content and is being amortised over five years with represents the Directors best estimate of the useful economic life.

 

The recoverable amount of the intangible assets has been determined based on value in use. Value in use has been determined based on future cash flows after considering current economic conditions and trends, estimated future operating results, growth rates and anticipated future economic conditions.

As at 31 December 2021, the intangible assets were assessed for impairment. The impairment charge was £nil million (2020: £nil). 

 

The estimated cash flows for a period of 5 years were developed using internal forecasts, and a pre-tax discount rate of 10%. The cash flows beyond 5 years have been extrapolated assuming nil growth rates. The key assumptions are based on growth of existing and new customers and forecasts, which are determined through a combination of management's views, market estimates and forecasts and other sector information.

 

14.Property, plant and equipment

 

 

Right of Use asset

Leasehold Improvements

Computer Equipment

Fixtures &

 Fittings

Total

 

 

 

 

 

 

 

£000's

£000's

£000's

£000's

£000's

Cost

 

 

 

 

 

At 31 December 2019

1,018

-

902

220

2,140

Additions

17

-

-

-

17

At 31 December 2020

1,035

-

902

220

2,157

 

 

 

 

 

 

Additions

-

-

34

-

34

Acquisition of subsidiary

719

11

36

-

766

At 31 December 2021

1,754

11

972

220

2,957

 

 

 

 

 

 

Depreciation and impairment

 

 

 

 

 

At 31 December 2019

127

-

896

208

1,231

Charge for the year

514

-

3

10

527

Impairment charge

248

-

-

-

248

At 31 December 2020

889

-

899

218

2,006

 

 

 

 

 

 

Charge for the year

256

2

19

2

279

At 31 December 2021

1,145

2

918

220

2,285

 

 

 

 

 

 

Net Book Value

 

 

 

 

 

At 31 December 2019

891

-

6

12

909

 

 

 

 

 

 

At 31 December 2020

146

-

3

2

151

 

 

 

 

 

 

At 31 December 2021

609

9

54

-

672

 

 

15  Impairment charge

 

 

2021

2020

 

£000's

£000's

 

 

 

Property, plant and equipment

-

248

Total impairment charge

-

248

 

 

16  Deferred taxation assets and liabilities

 

Deferred tax recognised:

 

2021

2020

 

£000's

£000's

Deferred tax asset

 

 

Deferred tax

135

-

 

135

-

 

Unutilised tax losses carried forward which have not been recognised as a deferred tax asset at 31 December 2021 were £52.4 million (2020: £52.6 million).  These have not been recognised due to uncertainty about future consistent taxable profits.

 

Reconciliation of movement in deferred tax

 

 

 

Deferred tax on intangible assets

 

 

£000's

 

 

 

As at December 2019

 

(142)

 

 

 

Recognised in the income statement

 

142

As at 31 December 2020

 

-

 

 

 

Addition due to acquisition of Greenlight

 

(135)

Recognised in the income statement

 

-

As at 31 December 2021

 

(135)

 

 

This deferred tax asset relates to short term timing differences and has therefore been recognised.

 

 

 

 

17  Trade and other receivables

 

 

2021

2020

 

£000's

£000's

Trade receivables

4,258

914

Less allowance for credit losses

(559)

(40)

Net trade receivables

3,699

874

Unbilled income

1,964

1,716

Other receivables

973

446

 

6,636

3,036

 

The contractual value of trade receivables is £4.3 million (2020: £0.9 million). Their carrying value is assessed to be £3.7 million (2020: £0.9 million) after assessing recoverability. The contractual value and the carrying value of other receivables are considered to be the same. The Group's management considers that all financial assets that are not impaired or past due are of good credit quality.

 

The ageing analysis of these trade receivables showing fully performing and past due but not impaired is as follows:

 

 

2021

2020

 

£000's

£000's

Not overdue

1,814

156

Not more than three months

786

3

More than three months but not more than six months

53

2

More than six months but not more than one year

-

2

More than one year

1,046

711

 

3,699

874

 

The movement in provision for impairment of trade receivables can be reconciled as follows:

 

 

2021

2020

 

£000's

£000's

Opening provision

(40)

(59)

Provisions from acquisition of Greenlight

(500)

-

Receivables provided for during period

(40)

(40)

Reversal of previous provisions

21

59

 

(559)

(40)

 

Provisions are created and released on a specific customer level on a monthly basis when management assesses for possible impairment. At each half year and year end, management will assess for further impairment based upon expected credit loss over and above the specific impairments noted throughout the year. Within trade debtors there is a balance of £0.7m which is over one year in age which the Group has judged it not necessary to provide for.  This is because it believes it is recoverable, since there is a similar trade creditor balance with the same company, and the Group is anticipating reaching agreement that these balances may be set off against each other.


The other classes within trade and other receivables do not contain impaired assets.

 

 

 

 

18  Trade and other payables

 

 

2021

2020

 

£000's

£000's

 

 

 

Trade payables

2,030

926

Other payables

-

68

Other taxation and social security

1,161

60

Contract liabilities

1,277

144

Deferred consideration

750

-

Accruals and deferred income

5,310

3,661

 

10,528

4,859

 

All amounts are short term and the Directors consider that the carrying value of trade and other payables are considered to be a reasonable approximation of fair value.

 

The average credit period taken for trade purchases was 53 days (2020: 32 days).

 

Contract liabilities are utilised upon satisfaction of the associated contract performance obligations. The 2021 contract liability of £1,277,000 is expected to be utilised in the next reporting periods upon satisfaction of the associated performance obligation. The 2020 contract liability of £144,000 was recognised within revenue during 2021 upon satisfaction of the associated performance obligation.

 

19  Lease Liabilities

 

Lease liabilities are presented in the statement of financial position as follows:

 

2021

2020

 

£000's

£000's

 

 

 

Current

629

416

Non-current

393

-

 

1,022

416

 

The Group acquired two office leases with the acquisition of Greenlight which expire in November 2023. With the exception of short-term leases and leases of low-value underlying assets, each lease is reflected on the balance sheet as a right-of-use asset and a corresponding lease liability.

 

The table below describes the nature of the Group's leasing activities by type of right-of-use asset recognised in the statement of financial position:

 

 

No. of right-of-use assets leased

Range of remaining term

Average remaining lease term

No. of leases with extension options

No. of leases with termination options

Office building

2

2 years

2 years

-

-

 

The lease liabilities are secured by the related underlying assets. Future minimum lease payments at 31 December 2021 were as follows:

 

 

 

Within one year

One to two years

Total

 

 

£000's

£000's

£000's

Lease payments

 

700

408

1,108

Finance charges

 

(71)

(15)

(86)

Net present values

 

629

393

1,022

 

The Group has elected not to recognise a lease liability for short terms leases (leases with an expected term of 12 months or less). Payments made under such leases are expensed on a straight-line basis.

 

The expense relating to payments not included in the measurement of the lease liability is as follows:

 

 

2021

2020

 

£000's

£000's

 

 

 

Short-term leases

-

28

 

-

28

 

The Group received a COVID-19 related rent concession during the period of £84,000 (2020: £140,400).  It has applied the exemption granted by the COVID-19 Related Rent Concessions (Amendment to IFRS 16) and has therefore not assessed this as a lease modification but has included it within administration expenses.

 

At 31 December 2021 the Group had not committed to any leases which had not yet commenced excluding those recognised as a lease liability.

 

20  Bank loans

 

2021

2020

 

£000's

£000's

 

 

 

Loan <1 year

108

-

Loan >1 year

308

50

 

416

50

 

The Group has a Bounce Back Loan Agreement which is due to be fully repaid in 2026. The repayment amount and timing of each instalment is based on a fixed interest rate of 2.5% payable on the outstanding principal amount of the loan and applicable until the final repayment date.  This loan is unsecured.  The Group also has a Coronavirus Business Interruption Loan ("CBIL") which was acquired as part of the Greenlight acquisition which is due to be fully repaid in 2026.  The repayment amount and timing of each instalment is based on a fixed interest rate of 4.35% per annum payable on the outstanding principal amount of the loan and applicable until the final repayment date.  The CBIL and an unused bank overdraft facility of £500,000 available to the Company's subsidiary Greenlight Digital Limited are secured by a fixed and floating charge over its assets together with a cross guarantee with Brave Bison Group Plc, Brave Bison Limited and Greenlight Commerce Limited in favour of Barclays Bank, dated 1 September 2021. 

 

21  Provisions for liabilities

 

2021

2020

 

£000's

£000's

 

 

 

Dilapidations provision

118

-

 

118

-

 

 

 

Dilapidation provision

 

 

£000's

As at 31 December 2020

 

-

On acquisition of subsidiary

 

113

Additional provision in the year

 

5

As at 31 December 2021

 

118

 

The dilapidations provision represents management's best estimate of the Group's liability relating to the restoration of the leased property to its original condition at the end of the lease.

22  Share capital

 

 

Ordinary share capital

At 31 December 2021

At 31 December 2020

 

 

Number

£000's

Number

£000's

Ordinary shares of £0.001

1,080,816,000

1,081

612,821,228

613

 

 

 

 

 

 

 

Total ordinary share capital of the Company

1,081

 

613

          

 

Rights attributable to ordinary shares

The holders of ordinary shares are entitled to receive notice of and attend and vote at any general meeting of the Company.

 

A reconciliation of the movement in share capital during the year is detailed in Note 23.

 

23  Reconciliation of share capital

 

 

2021

2020

 

Ordinary

Ordinary Share

Ordinary

Ordinary Share

 

Shares

Capital

Shares

Capital

 

Number

£000's

Number

£000's

 

£0.0000001

 

£0.0000001

 

 

 

 

 

 

Opening balance

612,821,228

613

612,342,970

612

Issue of ordinary shares

467,994,772

468

478,258

1

Closing balance

1,080,816,000

1,081

612,821,228

613

 

24  Share options

 

During 2021 Brave Bison Limited granted 26,500,000 RSUs, which vest annually over a 3 year period to senior employees in the business at an exercise price of 1.35 pence.

 

The options were valued using the Black-Scholes valuation model, using the following assumptions.

 

 

 

2021

2020

Expected option life

4 years

4 years

Expected volatility

50%

50%

Weighted average volatility

50%

50%

Risk-free interest rate

0.75%

0% - 2.74%

Expected dividend yield

0%

0%

 

 

 

 

Within the assumptions above, a 50% share price volatility has been used, the assumption is based on the average volatility of similar listed companies over the preceding periods and reviewed against the actual volatility of the Group during the year.

 

The charge/credit included within the financial statements for share options for the year to 31 December 2021 is a £0.1 million (2020: £0.0 million credit). 

 

Details of the options issued under the approved scheme are as follows:

Number

Weighted average exercise price

Outstanding at the beginning of the year

42,560,773

0.7p

Granted during the year

26,500,000

1.4p

Exercised during the year

(5,838,212)

(0.3)p

Cancelled during the year

(4,391,721)

(0.8)p

Outstanding at the end of the year

58,830,840

0.8p

Exercisable at the end of the year

6,671,999

1.2p


The weighted average share price on the date options were exercised was 1.48p.

 

Share options expire after 10 years, the options above expiring between August 2024 and December 2029.

 

 

25  Undertakings included in the financial statements

 

The consolidated financial statements include:

 

 

Class of

 share held

Country of

incorporation

Proportion

 held

Nature of business

Direct subsidiary

 

 

 

 

Brave Bison 2021 Limited

Ordinary

UK

100%

Non-trading

Greenlight Digital Limited

Ordinary

UK

100%

Performance marketing

Greenlight Commerce Limited

Ordinary

UK

100%

Commerce agency

Brave Bison Limited

Ordinary

UK

100%

Online video distribution

 

 

 

 

 

Indirect subsidiaries

 

 

 

 

Rightster India LLP

Ordinary

India

100%

Non-trading

Viral Management Limited

Ordinary

UK

100%

Non-trading

Base 79 Limited

Ordinary

UK

100%

Non-trading

Base 79 Iberia SL

Ordinary

Spain

100%

Non-trading

Brave Bison Asia Pacific Pte

Ordinary

Singapore

100%

Online video distribution

 

 

 

 

 

 

Associates

 

 

 

 

Rebel FC Limited

Ordinary

UK

30%

Liquidated in 2020

 

 

 

 

 

Rebel FC Limited was dissolved on the 17 November 2020.

 

All subsidiaries are exempt from an audit with the exception of Brave Bison Limited, Brave Bison Asia Pacific Pte and Greenlight Digital Limited.  Greenlight Commerce Limited is taking the s479A exemption from audit.

 

26  Financial Instruments

 

Categories of financial instruments

 As at 31

December

 2021

 As at 31

December

 2020

 

£000's

£000's

Financial assets

 

 

Trade and other receivables

6,285

2,872

Cash and bank balances

5,906

2,754

 

12,191

5,626

 

 

 

Financial liabilities at amortised cost

 

 

Trade and other payables

9,811

(4,715)

Lease liabilities

1,022

(416)

 

10,833

(5,131)

 

Financial risk management

The Group's financial instruments comprise cash and liquid resources and various items, such as trade receivables and trade payables that arise directly from its operations. The main purpose of these financial instruments is to raise finance for the Group's operations. The principal financial risks faced by the Group are liquidity, foreign currency and credit risks.  The policies and strategies for managing these risks are summarised as follows:

Foreign currency risk

Transactional foreign currency exposures arise from both the export of services from the UK to overseas clients, and from the import of services directly sourced from overseas suppliers. The Group is primarily exposed to foreign exchange in relation to movements in sterling against the US Dollar, the Euro and the Singapore Dollar.

The Group does not use derivatives to hedge translation exposures.  All gains and losses are recognised in profit or loss on translation at the reporting date.  The Group's current exposures in respect of currency risk are as follows:

 

 

 

 

 

 

 

 

 

 

Sterling

US Dollar

Singapore Dollar

Euro

Other

Total

 

 

£000's

£000's

£000's

£000's

£000's

£000's

 

 

 

 

 

 

 

 

Financial assets

 

4,452

1,091

21

62

-

5,626

Financial liabilities

 

(2,419)

(2,552)

(50)

(39)

(71)

(5,131)

Total exposure at

31 December 2020

 

2,033

(1,461)

(29)

23

(71)

495

 

 

 

 

 

 

 

 

Financial assets

 

9,297

2,606

22

266

-

12,191

Financial liabilities

 

(8,095)

(2,347)

(178)

(141)

(72)

(10,833)

Total exposure at

31 December 2021

 

1,202

259

(156)

125

(72)

1,358

 

 

 

 

 

 

 

 

 

Sensitivity analysis

The table below illustrates the estimated impact on profit or loss as a result of market movements in the US Dollar, Singapore Dollar, Euro and Sterling exchange rate.

 

 

10%

10%

10%

10%

10%

10%

Impact on loss and equity

Increase US Dollars

Decrease US Dollars

Increase Singapore Dollars

Decrease Singapore Dollars

Increase Euro

Decrease Euro

 

£000's

£000's

£000's

£000's

£000's

£000's

 

 

 

 

 

 

 

For the year to 31 December 2020

(146)

146

(3)

3

2

(2)

 

 

 

 

 

 

 

For the year to 31 December 2021

(26)

26

(16)

16

13

(13)

 

Credit risk

The Group's principal financial assets are cash and cash equivalents and trade and other receivables.  The Group has no significant concentration of credit risk.  The maximum exposure to credit risk is that shown within the balance sheet.  All amounts are short term and management consider the amounts to be of good credit quality.

 

Liquidity/funding risk

The Group's funding strategy is to ensure a mix of funding sources offering flexibility and cost effectiveness to match the requirements of the Group.

 

Contractual maturities

The Group manages liquidity risk by maintaining adequate reserves.

 

Interest rate risk

The Group holds the majority of its cash and cash equivalents in corporate current accounts. These accounts offer a competitive interest rate with the advantage of quick access to the funds.

 

Capital policy

The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain a capital structure that optimises the cost of capital.

 

The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance. The capital structure of the Group consists of cash and cash equivalents as disclosed in the statement of financial position and equity attributable to equity holders of the parent, comprising issued capital, reserves and retained earnings as disclosed in the consolidated statement of changes in equity.

 

Debt is defined as long and short-term borrowings (excluding derivatives). Equity includes all capital and reserves of the Group that are managed as capital.

 

Financial instruments measured at fair value

Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into three levels of fair value hierarchy. This grouping is determined based on the lowest level of significant inputs used in fair value measurement, as follows:

 

· level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities;

· level 2 - inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

· level 3 - inputs for the asset or liability that are not based on observable market data (unobservable inputs).

 

The Group categorises all financial assets and liabilities as level 1.

 

Maturity analysis

Set out below is a maturity analysis for non-derivative financial liabilities. The amounts disclosed are based on contractual undiscounted cash flows. The table includes both interest and principal cash flows. The Group had no derivative financial liabilities at either reporting date.

 

 

 Total

Less than

1 Year

1-3

Years

3-5

Years

 

£000's

£000's

£000's

£000's

 

 

 

 

 

As at 31 December 2020

 

 

 

 

Trade and other payables

4,715

4,715

-

-

Leases liabilities

416

416

-

-

 

 

 

 

 

As at 31 December 2021

 

 

 

 

Trade and other payables

9,811

9,811

-

-

Lease liabilities

1,022

629

393

-

 

 

 

 

 

 

 

 

27  Transactions with Directors and other related parties

 

Transactions with associates and related parties during the year were:

 

 

2021

2020

 

£000's

£000's

Recharges to Tangent Marketing Services Limited

 

 

Recharge for HR related salary

24

9

Recharge for property related costs

32

-

Recharge for production related salary

6

-

 

62

9

 

 

 

 

2021

2020

 

£000's

£000's

Recharges from Tangent Marketing Services Limited

 

 

Recharge of Philippa Norridge's salary during the period 5 February 2020 to 30 April 2020 while acting as interim CFO

-

34

Recharge for IT related salary

13

3

Recharge for marketing related services

27

-

Recharge for production related salary

4

-

 

44

37

 

 

 

At 31

December

At 31

December

 

2021

2020

 

£000's

£000's

Amounts owed to Tangent Marketing Services Limited

5

3

Amounts owed by Tangent Marketing Services Limited

4

5

 

Tangent Marketing Services Limited is a related party by virtue of its shareholding in Brave Bison Group Plc. All of the above transactions were conducted at arms length.

 

There are no related party transactions with any family members of the Directors.

 

 

 

 

28  Reconciliation of liabilities arising from financing activities

 

 

Lease Liabilities

Bank loans > 1 year

Bank loans < 1 year

Total

 

 

 

 

 

 

£000's

£000's

£000's

£000's

 

 

 

 

 

At 31 December 2020

416

50

-

466

Cashflows

(730)

-

(36)

(766)

Acquisition of subsidiary

1,336

258

144

1,738

At 31 December 2021

1,022

308

108

1,438

 

 

 

 

 

 

29  Acquisitions

 

On 1 September 2021, the Company acquired the entire issued share capital of Greenlight Digital Limited and Greenlight Commerce Limited. The consideration was financed by a share placing and existing cash balances.

Greenlight Digital is a specialist performance marketing agency providing SEO, paid media, paid social, digital public relations and other digital marketing services.

 

The provisional fair value of the assets acquired and liabilities assumed were as follows:

 

 

Book value

Fair value adjustments

Fair value

 

 

 

 

 

 

 

 

 

£000's

£000's

£000's

Goodwill

5,686

-

5,686

Tangible Assets

755

-

755

Trade and other receivables

3,576

-

3,576

Cash and cash equivalents

785

-

785

Current Liabilities

(3,679)

-

(3,679)

Non-current liabilities

(722)

-

(722)

Deferred tax

133

-

133

 

6,534

-

6,534

 

The consideration for the acquisition is as follows:

 

 

£000's

 

 

Initial cash consideration - paid

5,887

Initial equity consideration - paid

69

Deferred cash consideration - paid in February 2022

578

 

6,534

 

The company acquired the entire issued share capital of Greenlight Digital Limited for a total consideration of £6.5 million. The payment of the deferred consideration was made in February 2022. 

 

The consolidated Statement of Comprehensive Income includes £0.5 million of acquisition costs.

 

The fair value of the financial assets includes trade and other receivables with a fair value of £3.6 million and a gross contractual value of £4.0 million. The best estimate at acquisition date of the contractual cash flows not to be collected is £0.4 million.  The goodwill represents the acquired accumulated workforce and the synergies expected from integrating Greenlight Digital into the Group's existing business.  The Group has carried out an interim fair value adjustment exercise and will be completing a full exercise within the one year measurement period from the date of the acquisition in accordance with IFRS3, and alongside the completion of the integration and the launch of the revised brand.  At the interim valuation stage the Group has not been able to reliably estimate the fair value of acquired intangibles and therefore the excess of consideration over fair value of other identifiable assets and liabilities has been allocated to goodwill.  Once the full valuation exercise has been completed additional intangible assets may be recognised separately from goodwill.

 

The fair value of the 5,082,770 ordinary shares issued as part of the consideration paid for Greenlight Digital Limited £0.1 million was based on the share price at the date at which the acquisition became unconditional, which was determined to be the placing price the funds were raised at for the purpose of the acquisition.

 

Greenlight Digital Limited contributed £4.5 million revenue and £0.1 million to the Group's profit for the period between the date of acquisition and the reporting date.

 

Greenlight Commerce Limited specialises in working with blue-chip brands and omni-channel retailers on eCommerce technology systems.

 

The provisional fair value of the assets acquired and liabilities assumed were as follows:

 

 

Book value

Fair value adjustments

Fair value

 

 

 

 

 

 

 

 

 

£000's

£000's

£000's

Goodwill

469

-

469

Tangible Assets

-

-

-

Trade and other receivables

1,338

-

1,338

Cash and cash equivalents

666

-

666

Current Liabilities

(524)

-

(524)

Non-current liabilities

-

-

-

Deferred tax

2

-

2

 

1,951

-

1,951

 

The consideration for the acquisition is as follows:

 

 

£000's

 

 

Initial cash consideration - paid

1,759

Initial equity consideration - paid

20

Deferred cash consideration - paid in February 2022

172

 

1,951

 

 

The company acquired the entire issued share capital of Greenlight Commerce Limited for a total consideration of £2.0 million. The payment of the deferred consideration was made in February 2022.

 

The consolidated Statement of Comprehensive Income includes £0.2 million of acquisition costs.

 

The fair value of the financial assets includes trade and other receivables with a fair value of £1.3 million and a gross contractual value of £1.3 million. The best estimate at acquisition date of the contractual cash flows not to be collected is £0.0 million.  The goodwill represents the acquired accumulated workforce and the synergies expected from integrating Greenlight Commerce into the Group's existing business.  The Group has carried out an interim fair value adjustment exercise and will be completing a full exercise within the one year measurement period from the date of the acquisition in accordance with IFRS3, and alongside the completion of the integration and the launch of the revised brand.  At the interim valuation stage the Group has not been able to reliably estimate the fair value of acquired intangibles and therefore the excess of consideration over fair value of other identifiable assets and liabilities has been allocated to goodwill.  Once the full valuation exercise has been completed additional intangible assets may be recognised separately from goodwill.

 

The fair value of the 1,518,230 ordinary shares issued as part of the consideration paid for Greenlight Commerce Limited £0.0 million was based on the share price at the date at which the acquisition became unconditional, which was determined to be the placing price the funds were raised at for the purpose of the acquisition.

 

Greenlight Commerce Limited contributed £1.3 million revenue and £0.2 million to the Group's profit for the period between the date of acquisition and the reporting date.

 

If the acquisition of Greenlight Digital Limited and Greenlight Commerce Limited had been completed on the first day of the financial year, Group revenues for the year would have been £31.8 million and Group profit would have been £0.8 million.

 

Deferred consideration disclosed in the Consolidated Statement of Financial Position consists of the following:

 

 

2021

2020

 

£000's

£000's

On acquisition of Greenlight Digital Limited

578

-

On acquisition of Greenlight Commerce Limited

172

-

 

750

-

 

 

 

 

 

30  Post balance sheet events

 

After the year end 100% of the issued share capital in Greenlight Digital Limited, Greenlight Commerce Limited and Brave Bison Limited was transferred to Brave Bison 2021 Limited.  Brave Bison 2021 Limited converted its existing £1 ordinary share into 1,000 £0.001 ordinary shares, and issued a further 4,667 £0.001 ordinary shares to Brave Bison Group plc, giving it a total of 5,667 ordinary shares.  Brave Bison 2021 Limited also issued 500 £0.001 B shares to Oliver Green and 500 £0.001 B shares to Theodore Green.  This was for the purpose of setting up the LTIP which is detailed in the Directors Remuneration Report.

 

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