TIDMMIRI
RNS Number : 8637B
Mirriad Advertising PLC
07 June 2023
7 June 2023
Mirriad Advertising plc
(" Mirriad " or the " Company ")
Final Audited Results for the year ended 31 December 2022
Mirriad, the leading in-content advertising company, announces
its final audited results for the year ended 31 December 2022
("2022").
Financial highlights
-- Completion of placing raising GBP5.75m (gross of expenses)
together with open offer raising GBP0.55m in June 2023
-- Revenue of GBP1.5m (2021: GBP2.0m) a reduction from 2021 as
the Company exits its Chinese business and focuses on growth in the
US market
-- EBITDA loss widened to GBP15.2m (2021 GBP11.6m) and cash
consumption increased to GBP12.9m (2021: GBP10.4m) as the Company
continued to invest in its US and technology teams
-- Further restructuring of business announced with significant
reduction in administrative costs anticipated from H2 2023
onwards
-- Net cash at 31 December 2022 of GBP11.3m (2021: GBP 24.5m )
-- Net assets at 31 December 2022 of GBP11.1m (2021: GBP24.9m) tracking cash holding
KPIs
As in prior periods, the Company is reporting operational key
performance indicators ("KPIs"). The three "supply side" KPIs track
the wider market adoption of the Mirriad platform and the three
"demand side" KPIs track the development of the commercial
relationships with agencies, advertisers and partnerships. Overall,
the Company uses these KPIs to anticipate future revenue
generation.
KPI 2022 2021 % Change
Supply side:
1. Active supply partnerships* #37 #25 +48%
2. Supply partners represented #61 #46 +33%
3. Seconds of content available** 651,990 secs. 472,754 secs. +38%
---------------- ---------------- ------------
Demand side:
1. Active agency relationships #19 #19 No change
2. Number of advertisers who have #59 #45 +31%
run campaigns
3. Strategic and commercials partnership #3 #3
agreements with advertisers and agencies No change
---------------- ---------------- ------------
* Defined as the number of supply partners who ran a campaign
during the period
** Defined as the total number of seconds of advertising
inventory available for sale during the period
Operational highlights
-- Increase in overall supply partners. Mirriad now has access
to content from 61 content partners globally (2021: 46)
-- Number of advertisers placing campaigns increased to 59 during the year (2021: 45)
Post period highlights
-- Completion of a strategic review of the Company's business announced on 20 January 2023
-- Microsoft collaboration announced on 3 May 2023
-- Successful placing and open offer raising GBP6.3m (gross of
expenses) to provide funding for the Company to end June 2024
-- Restructuring underway to reduce Company's cash burn from an
average of GBP1.1 million per month in the year to 31 December 2022
to an anticipated average of GBP680,000 per month in the 12-month
period from July 2023 to June 2024
Current trading and outlook
-- Trading in the current year is lower than originally
anticipated in the US. The US market showed a stronger than
expected slowdown during the final quarter of 2022 and first
quarter of 2023. As a result of this slowdown campaigns are taking
longer to book, are being booked closer to air date and advertisers
are operating in a more conservative manner
-- EMEA Q1 2023 revenues are ahead of the Company's plan and
show an increase of 240 per cent. to GBP83k (2021: GBP24k) compared
to Q1 2022
-- The Company believes the overall market will improve
considerably in the second half of 2023 and that the volume of
trade will improve substantially once the Company rolls out a
programmatic sales solution which it expects to do by the end of
2023
-- Cash holding GBP7.52m at the end of Q1 2023
Stephan Beringer, CEO of Mirriad, said: "The past 12 months have
tested the Company's resilience and the strategic review was
enacted to tackle head-on the Directors' belief that the Company
was significantly undervalued.
"Successfully launching a supply and demand side marketplace for
a new technology, from the ground up, within an established
industry, was never an insignificant task. Mirriad's pathway to
scaled adoption, while reliant on the quality of product, platform
and delivery, also depends on the market's readiness for in-content
as a potentially vital differentiator in a heavily saturated arena.
I firmly believe that this awareness reached a tipping point in
2022.
" Now, after some tough decisions on our cost base and a
successful fundraise, Mirriad is well-positioned to drive
shareholder value into H2 2023 and beyond by developing the
Company's programmatic advertising business."
S
For further information please visit www.mirriad.com or
contact:
Mirriad Advertising plc Tel: +44 (0)207 884 2530
Stephan Beringer, Chief Executive Officer
David Dorans, Chief Financial Officer
Financial Adviser, Nominated Adviser & Joint Tel: +44 (0)20 7886 2500
Broker:
Panmure Gordon
James Sinclair-Ford / Daphne Zhang (Corporate
Advisory)
Rupert Dearden (Corporate Broking)
Financial Communications:
Charlotte Street Partners
Tom Gillingham Tel: +44 (0) 7741 659021
Fergus McGowan Tel: +44 (0) 7590 049023
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014 as it forms part of UK
domestic law by virtue of the European Union (Withdrawal) Act 2018
("MAR"). Upon the publication of this announcement, this inside
information is now considered to be in the public domain.
Notes to Editors
About Mirriad
Mirriad's award-winning solution unleashes new revenue for
content producers and distributors by creating new advertising
inventory in content. Our patented, AI and computer vision
technology dynamically inserts products and innovative signage
formats after content is produced. Mirriad's market-first solution
seamlessly integrates with existing subscription and advertising
models, and dramatically improves the viewer experience by limiting
commercial interruptions.
Mirriad currently operates in the US, Europe and the Middle
East.
Forward looking statements
Certain information contained in this announcement, including
any information as to the Group's strategy, plans or future
financial or operating performance, constitutes "forward-looking
statements". These forward-looking statements may be identified by
the use of forward-looking terminology, including the terms
"believes", "estimates", "anticipates", "projects", "expects",
"intends", "aims", "plans", "predicts", "may", "will", "seeks"
"could" "targets" "assumes" "positioned" or "should" or, in each
case, their negative or other variations or comparable terminology,
or by discussions of strategy, plans, objectives, goals, future
events or intentions. These forward-looking statements include all
matters that are not historical facts. They appear in a number of
places throughout this announcement and include statements
regarding the intentions, beliefs or current expectations of the
Directors concerning, among other things, the Group's results of
operations, financial condition, prospects, growth, strategies and
the industries in which the Group operates. The directors of the
Company believe that the expectations reflected in these statements
are reasonable, but may be affected by a number of variables which
could cause actual results or trends to differ materially. Each
forward-looking statement speaks only as of the date of the
particular statement.
By their nature, forward-looking statements involve risks and
uncertainties because they relate to events and depend on
circumstances that may or may not occur in the future or are beyond
the Group's control. Forward-looking statements are not guarantees
of future performance. Even if the Group's actual results of
operations, financial condition and the development of the
industries in which the Group operates are consistent with the
forward-looking statements contained in this document, those
results or developments may not be indicative of results or
developments in subsequent periods.
Chairman's statement
2022 was another year of rebalancing in international
advertising markets as consumers around the world adjusted to
record inflationary pressures and the effectiveness of some
traditional advertising formats continued to face challenges on
multiple fronts. So far in 2023 we have also seen a
stronger-than-expected slowdown across the board, during which
campaigns are taking longer to book, are being booked closer to air
date and advertisers are operating in a more conservative
manner.
In Company terms too, there is no doubt the past year has been
challenging, but the proactive decision to conduct a formal review
of the various strategic options available in Q1 2023 was pivotal
in closing a successful fundraise.
Now, the management team is working at pace to refocus the
business around the core opportunities that await, following a
prolonged period of uncertainty. As the global advertising industry
grapples with ad-skipping, dwindling viewer attention and the
oversaturation of existing advertising breaks, it is clear that
Mirriad's approach provides an essential solution. The wider
appreciation of the role in-content advertising can play in
overcoming these hurdles is reflected in the likes of Amazon
entering the market.
We welcome these developments as a vindication of in-content's
potential as a format, but also
remain confident in Mirriad's position as the sector leader,
with strong patent protection and years of technological progress
already achieved.
Despite these fundamentals, the Company's global operating
picture was complicated by differing post-pandemic trajectories in
the territories we operate in. While Covid recovery and opening up
continued in most countries, China lagged behind in terms of
lifting restrictions, with knock-on impacts on new content
production and consumer spending.
Against this backdrop, management made the decision to close its
Chinese operations. This has helped to reduce costs and aligns with
the continuing pivot towards the US as the market with the most
upside potential. The US is the world's largest advertising market
with an estimated total addressable market of $106 billion and the
home of globally leading entertainment companies and advertising
technology (or adtech) platforms.
To further add to our US-specific senior expertise, we were
delighted to add JoAnna Foyle and Nicole McCormack to the Company's
Board as non-executive directors. They both bring beneficial supply
and demand side sector and geographic experience to the table, and
they were joined by Lois Day, who was also appointed to the Board
as well as the Audit and Remuneration committees. I would
additionally like to reiterate my thanks to Kelsey Lynn Skinner for
her positive work as a non-executive director before stepping down
for maternity reasons in the summer of last year.
Alongside this strengthening of the Board, the Company has
reported against the agreed KPIs set out in 2021, with reporting
continuing at regular intervals as previously outlined.
Mirriad is also committed to a clear and considered approach to
Environmental, Social and Governance (ESG) matters, always ensuring
a balance between our corporate and ESG strategies. The Company
continues to develop its policies in this area, and since last year
its estimated carbon emissions, including travel, have been offset
by purchasing carbon credits.
Combined with this, the Company has retained a high employee
satisfaction score of 89% for 2022 even as there was an increase in
survey participation to 87%. This was an increase of 8% on 2021.
Mirriad continues to support a Company-wide volunteering policy to
help staff give back to the communities we operate in around the
globe. We have advanced our diversity and inclusion activities
further with a three part dignity at work course undertaken by a
range of managers which included a behavioural profiling
element.
Looking to the year ahead, it would be remiss to underplay the
headwinds that continue to buffet the global advertising market,
however, the breadth of the in-content opportunity is now being
more clearly understood by key players within the advertising and
content industries. Mirriad's approach solves some of the major
challenges faced by advertisers in a time of market pressures, is
developed to a point far beyond competitor capabilities due to the
number of campaigns already run, and the Company is entering a new
chapter as a true innovator in a segment that is finally starting
to get the attention it deserves.
John Pearson
6 June 2023
Chief Executive Officer's Statement
The past 12 months have tested the resilience of the Company,
our approach and the wider leadership team, but we are now in a
stronger position to address the opportunities ahead.
Successfully establishing a supply and demand side marketplace
for a new technology, from the ground up, within an established
industry, was never an insignificant aim. Mirriad's pathway to
scaled adoption, while reliant on the quality of product, platform
and delivery, also depends on the market's readiness for in-content
as a potentially vital differentiator in a heavily saturated
arena.
I firmly believe that this awareness reached a tipping point in
2022 after two years of pandemic that kept the priorities of
potential partners and buyers in a constant flux. This improved
awareness can be seen clearly in the fact that Mirriad worked with
50% of the top ten global advertisers by spend during 2022, while
streaming platforms have opened themselves to advertising and
several established parties, including Amazon and NBCU have now
entered or announced plans to enter the in- content space.
We see these new entrants as a vindication of our long-standing
confidence in the potential of the format and we have taken
decisive steps to ensure the Company can capitalise on this . We
know that Mirriad provides the best-in-class experience for content
owners, distributors and audiences via our patent-protected and
rapidly evolving platform, all of which draws on unmatched
experience of numerous successfully delivered campaigns.
This journey towards increased awareness of the in-content
format - made more complex by a combination of industry and macro
factors - has unquestionably taken longer than predicted at the
outset of our strategic plan.
As well as exploring the best options for securing the Company's
future via a comprehensive Strategic Review at the start of 2023
and the subsequent equity raise, we have used this extended
timeframe to put in place essential building blocks - from
programmatic integration through to robust supply and demand side
pipelines - to ensure Mirriad can fully capitalise on the scale we
believe this advertising segment can achieve as the market opens up
to the new format.
Throughout these processes, we have not been alone in having to
react to advertising market turbulence, but our strength lies in
the ability to address the three strategic truths that still apply
to every content owner, distributor, and advertiser:
1. consumers are shifting to more ad- free or ad-light video environments;
2. ad clutter and over-exposure are driving ad-fatigue or avoidance; and
3. the industry needs more quality inventory to engage with audiences.
Independent research has consistently highlighted that Mirriad
is delivering a transformative solution that addresses all three of
these challenges, and the fact that they have not been addressed by
conventional approaches in the past year underlines the fundamental
strength of our position as the in-content market-leader.
Strategic approach
With revenue falling short of expectations, the Strategic Review
process and subsequent equity raise provided the framework for
restructuring that will drive further efficiencies across the
Company. However, these actions are only one part of a longer-term
cost control drive and, at the same time, we are focused on the
twin pillars of integrating with the ecosystem and driving
adoption, with automation being vital to achieving the second point
- in 2022 we made decisive changes to the marketplaces we
serve.
The decision to exit China was driven by the ongoing challenges
relating to Covid-19 restrictions, and their knock- on effect on
consumer confidence and consumption, content production and
advertisers' advertising spend. The Company's leadership team
explored all options available before coming
to the decision and we are confident the decision was the right
one, both in terms of reducing costs and allowing even stronger
focus on the important US market.
In 2022, US revenues grew by 34% to GBP1.2m, accounting for 78%
of total revenue, despite a soft fourth quarter due to
macroeconomic uncertainties and unfavourable media investment
patterns in many industries. Within this we delivered innovative
campaigns and announced new partnerships that unlock even more
content, and bring access to ever more diverse audiences in this
key market.
This underlines the importance of persisting with the strategic
pivot towards the world's largest advertising market and the
potential rewards that could await with the scale we are pursuing.
To improve annual recurring revenue and increase average campaign
sizes, the Company is focusing on a key account strategy for
advertisers and has built a strong position in the US. It currently
has active engagements with nine of the top 20 US advertisers by
spend, and six more in its sales pipeline.
We continue to tightly control costs wherever possible and an
already implemented cost control programme, of which the wind-down
of our Chinese operation is part is expected to deliver GBP2.5m of
total annualised savings, with the vast majority to be achieved in
2023. This will be supplemented by the additional cost saving and
restructuring drive that is being implemented post fundraise.
Business focus, technological progress and performance
Overall Company revenue in 2022 fell just short of our targets,
albeit we ended the year in a better cash position than forecast.
Taking firm steps to restructure the company underlines our
commitment to growing revenue as part of the first adoption phase,
and, by extension, improving shareholder value. The positive moves
across the KPIs set out by the Board underline the progress being
made despite ongoing market headwinds.
The Company's pipeline is strong and the whole team is focused
on converting the significant opportunities that lie ahead.
The net proceeds of the completed fundraising will be used to
further develop the Company's technology to allow for the
introduction of programmatic sales and to continue broader
commercial development. Specifically, it will allow the Group to
develop its business by continuing to invest in its technology and
product development strategy, transitioning from a manual
advertising placement model purchased on an ad hoc basis, to
programmatic buying of in-content advertising at scale.
Leveraging programmatic sales pipelines will be enabled by
migrating the Company's platform to an open architecture, which
integrates with partner platforms, meaning partners can white label
the Company's technology and components.
Technical progress continues at pace, and specifically the
Company is now geared for the acceleration of business through its
programmatic capabilities. On the back of the ad server and supply
side platform partnerships and integrations announced earlier in
2022, the Company has now delivered in-
content advertisements via an end-to-end programmatic
transaction and is further expanding integrations, its media tech
capabilities, and its cloud partnerships. The Company also enhanced
its quality assurance and testing capability by building a number
of new test environments and introducing automated testing. We also
introduced technology to automate the delivery of mass volume
campaigns, a building block for programmatic and the delivery of
multi-advertiser and multi-version monetisation of in-content
inventory.
Across our key markets, Mirriad is regarded as a leader in the
in-content advertising space, which was underlined by the Company
winning the 2022 AdExchanger Award for most innovative TV
advertising technology.
Outlook
Our decision to raise new finance and restructure the business
gives us scope to ensure progress is quickly made in the key areas
that will drive growth, like programmatic delivery. We will
continue to control costs, while leveraging the high-quality
partners we have secured to run more campaigns in 2023. This will
be the message communicated across the Mirriad team as we drive
changes across the business.
The ongoing challenges facing the advertising market are clear,
and we are confident in Mirriad's unique ability to address these
and deliver an experience that benefits brands, content owners and
audiences alike.
I would like to thank the investors who continue to support us
on this not always linear journey, and for their frank,
constructive and insightful engagement. The team at Mirriad is
focused on converting our exciting pipeline to drive the Company
forward in 2023 to generate long-term shareholder value.
Last year I said we are leading what has the potential to be a
transformative new advertising segment. We now have conclusive
proof that significant other players are starting to appreciate its
vast potential, and thanks to some tough decisions, we are
positioned to reap the rewards of our longstanding commitment to,
and leadership of, the in-content approach.
Stephan Beringer
Chief Executive Officer
6 June 2023
Financial review
2022 saw a significant change in our revenue base as we
continued to develop our US business and reported a meaningful
increase in campaign activity in that market. Overall Company
revenues declined year on year as Covid-19 restrictions in China
led to an sudden and unexpected contraction in revenues in that
market. This had not been anticipated at the end of 2021 when we
developed our 2022 plans. Our planning assumption had been that
China would open up in line with our other markets and that we
would see a similar revenue performance as in 2021. As it became
clear that this was not going to be the case we reviewed our
business in China. We came to the conclusion that the business was
not sustainable and that the best course of action was a managed
withdrawal from the market with a complete closure at the end of
March 2023 at the end of the Tencent Video contract. We reduced our
headcount in China by half during September 2022 and have completed
the closure of the office at the end of Q1 2023.
As it was clear that overall revenue would not grow in the way
that we had expected we also took steps to review other areas of
our cost base which resulted in some changes in our technology team
in September 2022 and a restructuring of our European commercial
team in December 2022.
During the year we continued to focus investment in our US
operations as the market with the highest opportunity. We also
continued to invest in our technology team reorientating spend in
line with our objectives of driving integration and automation.
2022 results
Revenue for the year was lower than the prior year at GBP1.5
million (2021: GBP2.0 million) reflecting, particularly, the impact
of Covid-19 on our Chinese business and a significant year on year
reduction in revenues as a result of the sustained lockdowns in
place in China.
During the year revenues from the US expanded and now represent
78% of revenues up from 44% in 2021. We continued to broaden the
range of supply partners during the year.
European revenues increased during the year with work for Aldi
on RTL in Germany and a second campaign on Channel 4 for Pinterest
in the UK. Overall European revenues increased by 24% to
GBP178k (2021: GBP144k).
We announced our first test campaigns in Japan for Fuji TV and
Gaie and are continuing to work on plans to develop this market
with local partners.
The Company remains focused on expanding its business in the US
and EMEA in order to grow revenue and move the business to a more
sustainable footing.
There was a small reduction in our cost of sales. A number of
long tenured staff in our Indian operation resigned and as a result
we decided to introduce a new staffing strategy bringing in a
number of trainee staff on one-year fixed term contracts with a
view to training them to use Mirriad technology and workflow. As a
result headcount increased but overall staff cost declined to
GBP286k (2021: GBP294k). The combination of reduced revenue and
slightly reduced staff cost led to a reduction in gross profit to
GBP1.2m (2021: GBP1.7m). As noted in previous years the vast
majority of our cost of sales relates to our staff based in Mumbai.
The staff element of this work is largely fixed at current volumes
which means that margin is impacted by the throughput of work and
has the potential to improve significantly as these volumes
increase.
The Group's principal operating cost remains staff with the
majority of cost focused on our technology and US teams. Underlying
headcount decreased year on year as we scaled back in China and
made some changes in our European commercial team. Year-end
headcount was 115 compared to 130 at the end of 2021. The 2022
closing figure comprises 105 employees and 10 long term contractors
engaged by the UK business and mainly based off shore.
Over the course of 2022, administrative expenses increased to
GBP16.9 million (2021: GBP13.9 million). The team in the US
increased from 12 to 15 staff. Overall our technology team ended
the year with a similar headcount to the previous year, 46 (2021:
47) albeit that the average number employed and the cost of staff
increased year on year as we refocused the team to align with
strategic priorities.
During the year the Company incurred restructuring costs as we
partially closed the operations in China, with a full withdrawal at
the end of Q1 2023, reoriented our technology team in
line with development priorities and restructured our EMEA
commercial and operational teams. As a result the profit and loss
account includes a charge of GBP550k relating to the closure and
restructuring costs. Of these GBP352k were included in the cashflow
for 2022 and the remaining GBP198k will impact cashflow during
2023.
Mirriad has continued to review and monitor the application of
IAS 38 with respect to the capitalisation of development cost. We
continue to take the view that due to the uncertainty of future
revenue generation we will not capitalise any development cost in
2022 even though technology remains key to the Company's business
and internally generated software and IP remain a key focus for
future development of the business. Accordingly, the income
statement includes GBP4.0 million (2021: GBP3.4 million) of staff
costs related to research and development ("R&D") activity, an
increase of 17% year on year.
The increase in operating costs and reduction in gross margin
fed through to EBITDA with the EBITDA loss increasing to GBP15.2
million (2021: GBP11.6 million). Likewise, the loss before tax
increased to
GBP15.6 million (2021: GBP12.0 million).
Tax
The Group has not recognised any tax assets in respect of
trading losses arising in the current financial year or accumulated
losses in previous financial years. The tax credit recognised in
the current and previous financial years arises from the receipt of
R&D tax credits.
Earnings per share
Loss per share increased as a result of the increased loss for
the period on an unchanged share capital. The loss per share for
2022 was 5p per share (2021: loss of 4p per share).
Dividend
No dividend has been proposed for the year ended 31 December
2022 (2021: GBPnil).
Cashflow
Net cash used in operating activities was GBP12.9 million (2021:
GBP10.4 million) as the increase in operating costs flowed through
to cash. The Group incurred GBP76k (2021: GBP159k) of capital
expenditure on tangible assets in the year. No shares were issued
during the year so there were no net proceeds from the issue of
shares (2021: GBP44k).
Balance Sheet
Net assets decreased to GBP11.1million (2021: GBP24.9 million)
as a result of the losses for the year. Cash and cash equivalents
at 31 December 2022 were GBP11.3 million (2021: GBP24.5
million).
Accounting policies
The Group's consolidated financial information has been prepared
in accordance with UK-adopted international accounting standards
and with the requirements of the Companies Act 2006 as applicable
to companies reporting under those standards. The Group's
significant accounting policies have been applied consistently
throughout the year.
Going concern
The financial statements have been prepared on a going concern
basis notwithstanding the Group having made a loss for the year of
GBP15.27 million (2021: GBP10.97 million). The going concern basis
assumes that the Group and Company will have sufficient funds
available to continue to trade for the foreseeable future and not
less than 12 months from the date of signing these financial
statements.
The Group's cash balance was GBP11.3 million at the year end and
the Group remains debt free with no external borrowing. The Group
further announced that its cash balance was GBP7.52million as at 31
March 2023.
The Company announced a successful placing that raised
GBP5.75million before fees, GBP5.2million after fees on 16 May
2023. The Company said at that time that it anticipated that this
funding would provide sufficient working capital for the Company to
continue to trade until the end of June 2024 based on base case
forecasts which assume both revenue growth and cost savings being
achieving within that period. After making enquiries and producing
cash flow forecasts for the period up to 31 December 2025, the
Directors have reasonable expectations, as at the date of approving
the financial statements, that the Company and the Group will have
adequate resources to fund the activities of the Company and the
Group for the next 12 months from the date of signing these
financial statements. The Group and Company's base case forecast
suggest that the Group will require additional external funding in
July 2024 to be able to continue as a going concern. However, in a
severe but plausible downside scenario, if either the revenue
growth forecasts or cost saving initiatives fall below expectation,
additional funding may be required with 12 months of signing these
financial statements which is not currently committed. While the
financial statements are prepared on a going concern basis, under a
sever but plausible downside scenario, the future of the Group and
Company is dependent on raising additional external funds from new
equity, debt or customer contracts within 12 months from the date
of signing these financial statements. These conditions indicate
the existence of a material uncertainty that may cast significant
doubt over the company's ability to continue as a going concern.
The financial statements do not include the adjustments that would
result if the Group and the Company were unable to continue as a
going concern.
Events after the reporting period
On 16 May 2023 the Company announced a successful placing that
raised GBP5.75million before fees and expenses, GBP5.2million after
fees and expenses. These funds were received prior to the approval
of these financial statements.
David Dorans
6 June 2023
Consolidated statement of profit or loss
For the year ended 31 December 2022
Year ended Year ended
31 December 31 December
2022 2021
Note GBP GBP
-------------------------------- ---- ------------ ------------
Revenue 3 1,507,257 2,009,721
Cost of sales (286,316) (293,627)
-------------------------------- ---- ------------ ------------
Gross profit 1,220,941 1,716,094
Administrative expenses (16,863,015) (13,936,458)
Other operating income - 200,982
-------------------------------- ---- ------------ ------------
Operating loss 4 (15,642,074) (12,019,382)
-------------------------------- ---- ------------ ------------
Finance income 71,875 9,907
Finance costs (22,512) (10,768)
-------------------------------- ---- ------------ ------------
Finance income - net 49,363 (861)
-------------------------------- ---- ------------ ------------
Loss before income tax (15,592,711) (12,020,243)
Income tax credit 491,888 1,047,771
-------------------------------- ---- ------------ ------------
Loss for the year (15,100,823) (10,972,472)
-------------------------------- ---- ------------ ------------
Loss per Ordinary Share - basic 5 (5p) (4p)
-------------------------------- ---- ------------ ------------
All activities are classified as continuing.
Consolidated statement of comprehensive income
For the year ended 31 December 2022
Year ended Year ended
31 December 31 December
2022 2021
GBP GBP
---------------------------------------------------------- ------------ ------------
Loss for the financial year (15,100,823) (10,972,472)
---------------------------------------------------------- ------------ ------------
Other comprehensive loss
Items that may be reclassified to profit or loss:
Exchange differences on translation of foreign operations 43,782 (216,756)
---------------------------------------------------------- ------------ ------------
Total comprehensive loss for the year (15,057,041) (11,189,228)
---------------------------------------------------------- ------------ ------------
Items in the statement above are disclosed net of tax.
Consolidated balance sheet
At 31 December 2022
Group
--------------------------
As at As at
31 December 31 December
2022 2021
GBP GBP
--------------------------------- ------------ ------------
Assets
Non-current assets
Property, plant and equipment 544,242 767,396
Trade and other receivables 187,657 162,962
--------------------------------- ------------ ------------
731,899 930,358
--------------------------------- ------------ ------------
Current assets
Trade and other receivables 2,221,091 1,892,152
Other current assets 529,377 1,116,320
Cash and cash equivalents 11,289,123 24,501,214
--------------------------------- ------------ ------------
14,039,591 27,509,686
--------------------------------- ------------ ------------
Total assets 14,771,490 28,440,044
--------------------------------- ------------ ------------
Liabilities
Non-current liabilities
Lease liabilities 206,988 411,993
--------------------------------- ------------ ------------
206,988 411,993
--------------------------------- ------------ ------------
Current liabilities
Trade and other payables 2,904,311 2,866,773
Provisions 198,199 -
Current tax liabilities 14,330 2,481
Lease liabilities 322,401 217,825
--------------------------------- ------------ ------------
3,439,241 3,087,079
--------------------------------- ------------ ------------
Total liabilities 3,646,229 3,499,072
--------------------------------- ------------ ------------
Net assets 11,125,261 24,940,972
--------------------------------- ------------ ------------
Equity and liabilities
Equity attributable to owners of
the parent
Share capital 52,690 52,690
Share premium 65,754,666 65,754,666
Share-based payment reserve 4,906,855 3,665,525
Retranslation reserve (316,272) (360,054)
Accumulated losses (59,272,678) (44,171,855)
--------------------------------- ------------ ------------
Total equity 11,125,261 24,940,972
--------------------------------- ------------ ------------
Consolidated statement of changes in equity
For the year ended 31 December 2022
Year ended 31 December 2021
------------------------------------------------------------------------------------
Share-based Retranslation Accumulated
payment
Share capital Share premium reserve reserve losses Total equity
GBP GBP GBP GBP GBP GBP
----------------------- ------------- ------------- ----------- ------------- ------------ ------------
Balance at 1 January
2021 52,688 65,710,297 2,850,571 (143,298) (33,199,383) 35,270,875
----------------------- ------------- ------------- ----------- ------------- ------------ ------------
Loss for the financial
year - - - - (10,972,472) (10,972,472)
Other comprehensive
loss for the year - - - (216,756) - (216,756)
----------------------- ------------- ------------- ----------- ------------- ------------ ------------
Total comprehensive
loss for the year - - - (216,756) (10,972,472) (11,189,228)
----------------------- ------------- ------------- ----------- ------------- ------------ ------------
Proceeds from shares
issued 2 44,369 - - - 44,371
Share-based payments
recognised as expense - - 814,954 - - 814,954
----------------------- ------------- ------------- ----------- ------------- ------------ ------------
Total transactions
with shareholders
recognised directly
in equity 2 44,369 814,954 - - 859,325
----------------------- ------------- ------------- ----------- ------------- ------------ ------------
Balance at 31 December
2021 52,690 65,754,666 3,665,525 (360,054) (44,171,855) 24,940,972
----------------------- ------------- ------------- ----------- ------------- ------------ ------------
Year ended 31 December 2022
------------------------------------------------------------------------------------
Share-based Retranslation Accumulated
payment
Share capital Share premium reserve reserve losses Total equity
GBP GBP GBP GBP GBP GBP
----------------------- ------------- ------------- ----------- ------------- ------------ ------------
Balance at 1 January
2022 52,690 65,754,666 3,665,525 (360,054) (44,171,855) 24,940,972
----------------------- ------------- ------------- ----------- ------------- ------------ ------------
Loss for the financial
year - - - - (15,100,823) (15,100,823)
Other comprehensive
income for the year - - - 43,782 - 43,782
----------------------- ------------- ------------- ----------- ------------- ------------ ------------
Total comprehensive
loss for the year - - - 43,782 (15,100,823) (15,057,041)
----------------------- ------------- ------------- ----------- ------------- ------------ ------------
Share-based payments
recognised as expense - - 1,241,330 - - 1,241,330
----------------------- ------------- ------------- ----------- ------------- ------------ ------------
Total transactions
with shareholders
recognised directly
in equity - - 1,241,330 - - 1,241,330
----------------------- ------------- ------------- ----------- ------------- ------------ ------------
Balance at 31 December
2022 52,690 65,754,666 4,906,855 (316,272) (59,272,678) 11,125,261
----------------------- ------------- ------------- ----------- ------------- ------------ ------------
Consolidated statement of cash flows
For the year ended 31 December 2022
Group
--------------------------
2022 2021
GBP GBP
------------------------------------------ ------------ ------------
Cash flow used in operating activities (14,017,146) (10,450,796)
Tax credit received 1,116,320 72,993
Taxation paid (39,829) (46,928)
Interest received 71,875 9,907
Lease interest paid (22,512) (10,768)
------------------------------------------ ------------ ------------
Net cash used in operating activities (12,891,292) (10,425,592)
------------------------------------------ ------------ ------------
Cash flow from investing activities
Investment in subsidiaries - -
Purchase of tangible assets (75,647) (159,250)
Proceeds from disposal of tangible
assets - -
------------------------------------------ ------------ ------------
Net cash used in investing activities (75,647) (159,250)
------------------------------------------ ------------ ------------
Cash flow from financing activities
Proceeds from issue of Ordinary
Share capital
(net of costs of issue) - 44,371
Payment of lease liabilities (245,152) (379,711)
------------------------------------------ ------------ ------------
Net cash used in financing activities (245,152) (335,340)
------------------------------------------ ------------ ------------
Net decrease in cash and cash equivalents (13,212,091) (10,920,182)
Cash and cash equivalents at the
beginning of the year 24,501,214 35,421,396
------------------------------------------ ------------ ------------
Cash and cash equivalents at the
end of the year 11,289,123 24,501,214
------------------------------------------ ------------ ------------
Cash and cash equivalents consists
of:
Cash at bank and in hand 11,289,123 24,501,214
------------------------------------------ ------------ ------------
Cash and cash equivalents 11,289,123 24,501,214
------------------------------------------ ------------ ------------
Notes to the consolidated financial statements
For the year ended 31 December 2022
1. Corporate Information
Mirriad Advertising plc is a public limited company incorporated
and domiciled in the UK and registered in England with company
registration number 09550311. The Company's registered office is
6th Floor, One London Wall, London, EC2Y 5EB.
2. Basis of preparation
The financial information set out above does not constitute the
Group's statutory accounts for the years ended 31 December 2022 or
2021 but is derived from those accounts. Statutory accounts for
2021 have been delivered to the registrar of companies, and those
for 2022 will be delivered in due course. The auditor has reported
on those accounts; their reports were (i) unqualified, (ii)
included a reference to material uncertainty related to going
concern which the auditor drew attention by way of emphasis without
qualifying their report and (iii) did not contain a statement under
section 498 (2) or (3) of the Companies Act 2006.
The financial statements of Mirriad Advertising plc have been
prepared in accordance with UK-adopted international accounting
standards and with the requirements of the Companies Act 2006 as
applicable to companies reporting under those standards. The
financial statements have been prepared under the historical cost
convention.
The accounting policies applied are consistent with those of the
annual report and accounts for the year ended 31 December
2021.
(a) New standards, amendments and interpretations
The Group has applied the following standards and amendments for
the first time for the annual reporting period commencing 1 January
2022:
-- Proceed before intended use - Amendments to IAS 16;
-- Onerous contracts - Costs of fulfilling a contract - Amendments to IAS 37;
-- Reference to conceptual framework - Amendments to IFRS 3;
-- Annual Improvements 2018-2020 Cycle - Amendments to IFRS 1, IFRS 9, and IAS 41.
The amendments listed above did not have any impact on the
amounts recognised in prior periods and are not expected to
significantly affect the current or future periods.
(b) New standards, amendments and interpretations not yet
adopted
A number of new standards and amendments to standards and
interpretations are effective for annual periods beginning after 1
January 2023, and have not been applied in preparing these
financial statements. These standards are not expected to have a
material impact on the entity in the current or future reporting
periods or on foreseeable future transactions.
3. Segment information
Management mainly considers the business from a geographic
perspective since the same services are effectively being sold in
every Group entity. Therefore regions considered for segmental
reporting are where the Company and subsidiaries are based, namely
the UK, the USA, India and China. The revenue is classified by
where the sales were booked not by the geographic location of the
customer.
The only income outside of the primary business activity relates
to income received from grants which is recognised in other
operating income.
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision maker.
The chief operating decision maker, which is responsible for
allocating resources and assessing performance of the operating
segments, has been identified as the steering committee that makes
strategic decisions. The steering committee is made up of the Board
of Directors. There are no sales between segments. The revenue from
external parties reported to the strategic steering committee is
measured in a manner consistent with that in the income
statement.
The parent company is domiciled in the United Kingdom. The
amount of revenue from external customers by location of the Group
billing entity is shown in the tables below.
2022 2021
Revenue GBP GBP
---------------------- --------- ---------
Turnover by geography
USA 1,180,798 884,248
UK 178,476 144,309
China 147,983 981,164
---------------------- --------- ---------
Total 1,507,257 2,009,721
---------------------- --------- ---------
2022 2021
GBP GBP
---------------------- --------- ---------
Turnover by category
Rendering of services 1,507,257 2,009,721
---------------------- --------- ---------
Total 1,507,257 2,009,721
---------------------- --------- ---------
2022 2021
Revenues from external customers by country, based
on the destination of the customer GBP GBP
--------------------------------------------------- --------- ---------
USA 1,100,680 863,960
China 147,983 981,164
Canada 80,118 20,288
Germany 67,711 12,800
Turkey 33,601 26,194
UK 27,833 41,475
United Arab Emirates 16,896 -
France 12,605 35,399
Japan 12,381 -
Belgium 7,449 7,993
Other - 20,448
--------------------------------------------------- --------- ---------
Total 1,507,257 2,009,721
--------------------------------------------------- --------- ---------
4. Operating loss
The Group operating loss is stated after
charging/(crediting):
2022 2021
GBP GBP
---------------------------------------------- ---------- ----------
Employee benefits 11,200,918 9,398,756
Depreciation of property, plant and equipment 439,727 440,390
Foreign exchange movements 6,734 (247,956)
Other general and administrative costs 5,177,356 4,638,895
Office closure costs 324,596 -
Other operating income - (200,982)
----------------------------------------------- ---------- ----------
Total cost of sales, administrative expenses
and other operating income 17,149,331 14,029,103
----------------------------------------------- ---------- ----------
Other general and administrative costs includes legal and
professional fees, IT infrastructure & software related costs,
property costs, marketing and research costs.
Office closure costs includes employee redundancy and other
expenses related to the closure of the China office. of this total
GBP126,397 was incurred in the year and GBP198,199 was provided for
at the year end.
Other operating income includes income received from government
grants and research and development expenditure credits. The Group
has complied with all the conditions attached to these grant
awards.
Included within Employee benefits costs are share based payments
for the year ended 31 December 2022 of GBP1.2m (2021: GBP0.8m).
5. Loss per share
Basic loss per share is calculated by dividing the loss for the
year by the weighted average number of Ordinary Shares in issue
during the year. Potential Ordinary Shares are not treated as
dilutive as the Group is loss making and such shares would be
anti-dilutive.
Group 2022 2021
---------------------------------------------------- ------------ ------------
Loss attributable to owners of the parent (GBP) (15,100,823) (10,972,472)
Weighted average number of Ordinary Shares in issue
(number) 279,180,808 279,091,959
---------------------------------------------------- ------------ ------------
The loss per share for the year was 5p (2021: 4p).
No dividends were paid during the year (2021: GBPnil).
(b) Diluted
Potential Ordinary Shares are not treated as dilutive as the
Group is loss making and such shares would be anti-dilutive.
6. Related party transactions
The Group is owned by a number of investors, the largest being
M&G Investment Management, which owns approximately 13% of the
share capital of the Company (2021: 13%). Accordingly there is no
ultimate controlling party.
During the year the Company had the following significant
related party transactions. No guarantees were given or received
for any of these transactions:
Transactions with Directors
There were no transactions with Directors during the year (2021:
none).
Transactions with other related parties
IP2IPO Limited - a company which shares a parent company with
IP2IPO Portfolio (GP) Limited, a major shareholder in the Group,
and which also appoints a Director of the Group charged Mirriad
Advertising plc for the following transactions during the year: (1)
GBP9,556 for the services of Kelsey Lynn Skinner as a Director
during the year for the period from 1 January 2022 until 23 June
2021 (2021: GBP16,667). All of this amount was invoiced and paid as
at 31 December 2022; (2) GBP10,444 for the services of Lois Day as
a Director during the year for the period from 23 June 2022 to 31
December 2022 (2021: GBPnil). GBP1,667 of this amount is accrued
and unpaid as at 31 December 2022. GBP1,667 of this amount was
invoiced and unpaid as at 31 December 2022, and subsequently paid
on 26 January 2023; and (3) GBP3,000 for the services of the
Company Secretary for the period from 1 January 2022 to 31 March
2022. (2021: GBP12,000). All of this amount was invoiced and paid
as at 31 December 2022
Parkwalk Advisors Limited - a company which shares a parent
company with IP2IPO Portfolio (GP) Limited, a major shareholder in
the Group, charged Mirriad Advertising plc for the following
transactions during the year: (1) GBP20,000 for the services of
Alastair Kilgour as a Director during the year (2021: GBP20,000).
GBP1,667 of this amount is accrued and unpaid as at 31 December
2022. GBP1,667 of this amount was invoiced and unpaid as at 31
December 2022, and subsequently paid on 26 January 2023
All the related party transactions disclosed above were settled
by 31 December 2022 except where stated.
During the year ended 31 December 2022, the Company entered into
transactions with its subsidiary companies for working capital
purposes, which net off on consolidation - these have not been
shown above.
The Directors have authority and responsibility for planning,
directing and controlling the activities of the Group and they
therefore comprise key management personnel as defined by IAS 24
"Related party disclosures". Remuneration of Directors and senior
management is disclosed in the Remuneration Report.
7. Events after the reporting period
On 16 May 2023 the Company announced a successful placing that
raised GBP5.75 million, before fees, GBP5.2 million after fees,
together with an Open Offer which may bring in additional
funds.
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END
FR EAKKKELNDEFA
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June 07, 2023 02:00 ET (06:00 GMT)
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