TIDMBBSN
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 GBP2.7m"
Financial Highlights: Strong financial performance
FY21 FY20A Change
--------------------------------- --------- ---------- --------
Revenue GBP21.7m GBP14.5m +50%
Gross Profit GBP7.8m GBP4.0m +96%
Adj. EBITDA (1) GBP1.8m GBP0.1m +1,225%
--------------------------------- --------- ---------- --------
Adj. Operating Profit (2) GBP1.4m (GBP1.5m) -
--------------------------------- --------- ---------- --------
Adj. Operating Profit Per Share 0.18p (0.25)p -
Profit Before Tax GBP0.5m (GBP2.3m) -
Cash GBP5.9m GBP2.8m +114%
Net Cash GBP4.7m GBP2.7m +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 GBP21.7m, and underlying organic revenue growth of 10%
-- Adjusted Operating Profit of GBP1.4m (FY20: loss of GBP1.5m)
and Adjusted EBITDA of GBP1.8m (FY20: GBP0.1m), 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 GBP5.9m, reflecting strong cash generation
of GBP3.2m during the year (FY20: loss of GBP1.5m). Net cash of
GBP4.7m 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 GBP2.7m, 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 GBP7.3m 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
GBP0.5m and cash increase by GBP0.8m 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 GBP6.2m 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 GBP21.7m and gross
profit up almost 100% at GBP7.8m we are pleased to see our business
expand in the UK as well as overseas. Adjusted EBITDA was up 1,225%
at GBP1.8m and we were delighted to report Brave Bison's first ever
statutory profit before tax of GBP0.5m. Our balance sheet remains
strong with GBP5.9m of gross cash at year end, an increase of
GBP3.2m 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 GBP21.7 million (2020: GBP14.5
million).
Organic growth made up GBP1.4 million of this growth. The
majority of this came from our advertising revenue which grew by
9.4% to GBP14.3 million (2020: GBP13.1 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 GBP0.1
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 GBP5.8 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% (GBP3.8 million) to GBP7.8
million (2020: GBP3.9 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
GBP0.2 million (2020: GBP0.7 million), predominantly as a result of
changes in executive staffing. Administration costs increased to
GBP7.1 million from GBP5.2 million, which was driven by the
acquisition which brought in GBP3.3 million of additional
administration costs, which was offset by GBP1.4 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
GBP0.5 million (2020: loss of GBP2.3 million), despite acquisition
costs of GBP0.7 million (2020: GBPnil). The Group's adjusted
operating profit for the year was GBP1.4 million (2020: loss of
GBP1.5 million).
2021 2020
GBP000's GBP000'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 GBP5.9 million in cash and cash
equivalents (2020: GBP2.8 million). The Group had cash inflow of
GBP3.2 million in 2021 (2020: GBP1.5 million outflow), and expects
to maintain positive cash inflow throughout 2022. The Group had net
cash of GBP4.7 million at the end of the year after deducting
government backed bank loans and deferred consideration.
The Group is carrying intangible assets of GBP6.3 million (2020:
GBP0.1 million). Based on an interim fair value exercise the Group
capitalised goodwill of GBP6.2 million (2020: GBP0.2 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
December December
Note 2021 2020
GBP000's GBP000'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
GBP000's GBP000'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
Capital
redemption Merger Merger Translation
Reserve Reserve relief Reserve Retained Total
Share Capital Share premium Reserve deficit Equity
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's GBP000'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
1 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.
2 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 GBP5.9 million (2020: GBP2.8 million). The Group made a profit
before tax of GBP0.5 million for the year ended 31 December 2021
(2020: loss of GBP2.3 million), and generated an increase in cash
and cash equivalents in 2021 of GBP3.2 million (2020: decrease of
GBP1.5 million). The Group has net assets of GBP7.5 million (2020:
GBP0.8 million). During the year the Group raised GBP6.2 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 GBP2.9
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.
3 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.
4 Summary of accounting policies
The Group's presentation and functional currency is GBP
(Sterling). The financial statements are presented in thousands of
pounds (GBP000'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.
4.15. Equity, reserves and dividend payments
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.
5 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.
5.1. Critical accounting judgements
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 GBP0.7 million (2020:
GBP0.7 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
GBP0.8 million (2020: GBP0.8 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 GBP1.0 million (2020: GBP1.3m).
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.
6 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 GBP000's GBP000'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
GBP000's GBP000's
Advertising 14,329 13,092
Fee based services 7,331 1,394
Total revenue 21,660 14,486
======== ========
Gross profit 2021 2020
GBP000's GBP000'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
GBP000's GBP000'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
========= ========
7 Operating Profit and Profit/(loss) before taxation
The operating profit and the profit/(loss) before taxation are
stated after:
2021 2020
GBP000's GBP000'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
8 Restructuring costs
2021 2020
GBP000's GBP000'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.
9 Finance income and costs
2021 2020
GBP000's GBP000's
-------- ---------
Bank interest received - 4
-------- ---------
2021 2020
GBP000's GBP000'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
GBP000's GBP000'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)
---------- ----------
Deferred Tax:
Originations and reversal of temporary differences
(Note 16) -(142)
Effect of tax rate change on opening balances - -
-----
Tax charge/(credit) on profit/loss on ordinary
activities -(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
GBP000's GBP000's
Profit/(loss) on ordinary activities before
tax 458 (2,258)
---------- ----------
Income tax using the Company's domestic tax
rate 19.00% (2020: 19.00%) 87 (429)
Effect of:
Expenses not deductible for tax purposes 175 302
Fixed asset depreciation allowed under SP3/91 (28) (145)
Capital allowances (11) (11)
Share scheme deduction under Part 12 CTA
2009 (55) (2)
Research & development tax credits (17) (90)
Deferred tax movement - (142)
Unutilised tax losses carried forward (151) 290
Total tax credit for period - (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
GBP000's GBP000'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
GBP000's GBP000'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
GBP000's GBP000'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 GBP0.2
million (2020: GBP0.3 million). The amount of share based payments
credit (see Note 24) which relates to the Directors was GBP0.1
million. (2020: GBP0.1 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
GBP000's GBP000's
Salaries including bonuses 273 649
Social security costs 38 85
-------- --------
Total Emoluments 311 734
======== ========
13 Intangible assets
Online Channel Customer
Goodwill Content Technology Brands Relation-ships Total
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000'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 GBP6.2
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 GBP0.6m 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 GBP0.2 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 GBPnil million (2020:
GBPnil).
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 Leasehold Fixtures &
asset Improvements Computer Equipment Fittings Total
GBP000's GBP000's GBP000's GBP000's GBP000'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
GBP000's GBP000's
Property, plant and equipment - 248
Total impairment charge - 248
======== ========
16 Deferred taxation assets and liabilities
Deferred tax recognised:
2021 2020
GBP000's GBP000'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 GBP52.4
million (2020: GBP52.6 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
GBP000'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
GBP000's GBP000'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 GBP4.3 million
(2020: GBP0.9 million). Their carrying value is assessed to be
GBP3.7 million (2020: GBP0.9 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
GBP000's GBP000'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
GBP000's GBP000'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 GBP0.7m 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
GBP000's GBP000'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 GBP1,277,000 is expected to be utilised in the next
reporting periods upon satisfaction of the associated performance
obligation. The 2020 contract liability of GBP144,000 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
GBP000's GBP000'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 Range of remaining Average remaining No. of leases No. of leases
assets leased term lease term with extension with termination
options 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 One to two Total
year years
GBP000's GBP000's GBP000'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
GBP000's GBP000's
Short-term leases - 28
-------- --------
- 28
======== ========
The Group received a COVID-19 related rent concession during the
period of GBP84,000 (2020: GBP140,400). 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
GBP000's GBP000'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 GBP500,000 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
GBP000's GBP000's
Dilapidations provision 118 -
-------- --------
118 -
======== ========
Dilapidation
provision
GBP000'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 GBP000's Number GBP000's
Ordinary shares of
GBP0.001 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 GBP000's Number GBP000's
GBP0.0000001 GBP0.0000001
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 GBP0.1 million
(2020: GBP0.0 million credit).
Details of the options issued under Weighted average
the approved scheme are as follows: Number 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 Country of Proportion
held incorporation 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 As at 31
December December
2021 2020
GBP000's GBP000'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 Euro Other Total
Dollar
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000'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%
Increase Decrease Increase Decrease Increase Decrease
US Dollars US Dollars Singapore Singapore Euro Euro
Impact on loss and equity Dollars Dollars
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000'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.
Less than 1-3 3-5
Total 1 Year Years Years
GBP000's GBP000's GBP000's GBP000'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
GBP000's GBP000'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
GBP000's GBP000'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 At 31
December December
2021 2020
GBP000's GBP000'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
Bank loans Bank loans
Lease Liabilities > 1 year < 1 year Total
GBP000's GBP000's GBP000's GBP000'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:
Fair value
Book value adjustments Fair value
GBP000's GBP000's GBP000'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:
GBP000'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 GBP6.5
million. The payment of the deferred consideration was made in
February 2022.
The consolidated Statement of Comprehensive Income includes
GBP0.5 million of acquisition costs.
The fair value of the financial assets includes trade and other
receivables with a fair value of GBP3.6 million and a gross
contractual value of GBP4.0 million. The best estimate at
acquisition date of the contractual cash flows not to be collected
is GBP0.4 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 GBP0.1
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 GBP4.5 million revenue
and GBP0.1 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:
Fair value
Book value adjustments Fair value
GBP000's GBP000's GBP000'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:
GBP000'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 GBP2.0
million. The payment of the deferred consideration was made in
February 2022.
The consolidated Statement of Comprehensive Income includes
GBP0.2 million of acquisition costs.
The fair value of the financial assets includes trade and other
receivables with a fair value of GBP1.3 million and a gross
contractual value of GBP1.3 million. The best estimate at
acquisition date of the contractual cash flows not to be collected
is GBP0.0 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 GBP0.0
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 GBP1.3 million revenue
and GBP0.2 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 GBP31.8
million and Group profit would have been GBP0.8 million.
Deferred consideration disclosed in the Consolidated Statement
of Financial Position consists of the following:
2021 2020
GBP000's GBP000'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 GBP1 ordinary share into
1,000 GBP0.001 ordinary shares, and issued a further 4,667 GBP0.001
ordinary shares to Brave Bison Group plc, giving it a total of
5,667 ordinary shares. Brave Bison 2021 Limited also issued 500
GBP0.001 B shares to Oliver Green and 500 GBP0.001 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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END
FR BKOBBKBKBOQB
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April 28, 2022 02:01 ET (06:01 GMT)
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