TIDMBOOM
RNS Number : 1305J
Audioboom Group PLC
25 April 2022
This announcement contains inside information as stipulated
under the UK Market Abuse Regulations ("MAR").
25 April 2022
Audioboom Group plc
("Audioboom", the "Company" or the "Group")
Final audited results for the year ended 31 December 2021
Audioboom (AIM: BOOM), the leading global podcast company, is
pleased to announce its final audited results for the year ended 31
December 2021.
Financial and operating highlights
-- 2021 revenue of US$60.3 million, up 125% on 2020 (US$26.8
million). Year-on-year growth outpaced the predicted wider industry
average growth by 108% ((1)
-- Maiden adjusted EBITDA( (2) profit of US$3.1 million (US$1.8
million loss), with the Company recording positive adjusted EBITDA
( (2) in every month of 2021
-- Maiden annual net profit before tax of US$1.7 million (2020: US$3.3 million loss)
-- Maiden total profit of US$7.0 million (2020: US$3.2 million
loss), enhanced by recognition of deferred tax asset
-- Average global monthly downloads for Q4 increased to 113
million, up 39% on Q4 2020 (81.7 million). Global downloads in
October 2021 reached a record 115.7 million
-- Average brand advertiser count for Q4 of 396, up 32% on Q4 2020 (301)
-- Average global revenue per 1,000 downloads (eCPM) for Q4
increased to US$55.85, up 49% (Q4 2020: US$37.55)
-- Group cash of US$3.0 million (31 December 2020: US$3.3 million)
Key commercial developments
-- Continued development of our production arm, Audioboom
Studios, with the commercial success of Dark Air with Terry
Carnation, as well as the extension of our production partnership
with Formula 1
-- Enhanced our creator network through new commercial
partnerships with leading podcasts, including Redhanded, The Way I
Heard It with Mike Rowe, Zane & Heath Unfiltered, Dark History,
Hacks on Tap, and Spitballers
-- Launch of key advertising technology, including inventory
creation tool, AdRip, and our global automated advertising
marketplace, Showcase
Post year end highlights
-- Record Q1 revenue of US$19.7 million, up 107% on Q1 2021 (US$9.5 million)
-- Record Q1 adjusted EBITDA(2) profit of approximately US$0.9
million (Q1 2021: US$0.03 million)
-- Average global monthly downloads increased for the ninth
successive quarter to 126.2 million, up 45% on Q1 2021 (87.1
million). Global downloads in March 2022 reached a record 131.0
million
-- Continued growth of Showcase, our global advertising
marketplace. Revenue from advertising technology in Q1 2022 more
than 151% greater than in Q1 2021, and now contributing more than
11% to Group revenue
-- Strong pricing due to robust advertising demand, with an
Average Unit Rate (AUR) during the quarter for our top 25 podcasts
at US$14,295 vs Q1 2021's AUR of US$6,455
-- Further expansion of Audioboom Studios with new title
launches including National Park After Dark, Can I Get In Your
Pantry?? and Devils in the Dark, which reached number 1 on the UK
True Crime podcast chart and the Top 15 of Apple's overall podcast
chart
-- Long-term renewal of key content partnerships in our Premium
Network, including Casefile True Crime, Mile Higher, Strange &
Unexplained, Lights Out and The Sesh
-- Launch of a new strategic partnership with leading radio and
media company, NZME, to monetise Audioboom's advertising inventory
in New Zealand
-- To supplement available cash reserves, a GBP1.5 million
overdraft with HSBC was implemented on 14 April 2022
-- As of its trading update provided on 11 April 2022, the
Company had contracted revenue in excess of US$60.5 million for
2022 through advance advertising bookings, underpinning
expectations for the current financial year and higher than total
revenue in 2021
1) Interactive Advertising Bureau's May 2021 Podcast Advertising
Revenue Study stated that US podcast advertising revenue was
expected to grow by 60% in 2021 relative to 2020
2) Earnings before interest, tax, depreciation, amortisation,
share based payments, non-cash foreign exchange movements and
material one-off items
Stuart Last, CEO of Audioboom, commented: "I am delighted to
report on a defining year for the business which saw top-line
growth of 125%, our maiden EBITDA and net profit, and the
transformation of shareholder value. Our phenomenal performance has
positioned us as the world's leading pure-play podcast business and
increased our market-share significantly. Our innovation led to the
launch of new best-in-class advertising technology tools, the
scaling of our platform and new levels of success for our creator
partners and advertisers.
Our ambition is to build the world's leading podcasting
business, and I am delighted with the start we have made in 2022
and look forward to the future with confidence. I would like to
thank our creators, clients, customers and partners, as well as our
incredibly talented Audioboom team and our supportive shareholders
as we look forward to another exciting and successful year."
Enquiries
Audioboom Group plc
Stuart Last, Chief Executive Officer Tel: +44(0)20 3714
Brad Clarke, Chief Financial Officer 4285
finnCap Ltd (Nominated Adviser and Broker)
Jonny Franklin-Adams/Abigail Kelly/Milesh Hindocha Tel: +44(0)20 7220
(Corporate Finance) 0500
Richard Chambers/Harriet Ward (ECM)
About Audioboom
Audioboom Group plc ("Audioboom") is a global leader in
podcasting - our shows are downloaded more than 126 million times
each month by 34 million unique listeners around the world.
Audioboom is ranked as the fourth largest podcast publisher in the
US by Triton Digital.
Audioboom's ad-tech and monetisation platform underpins a
scalable content business that provides commercial services for a
premium network of 250 top tier podcasts, with key partners
including 'Casefile True Crime' (US), 'Morbid' (US), 'True Crime
Obsessed' (US), 'The Morning Toast' (US), 'No Such Thing As A Fish'
(UK), and 'The Cycling Podcast' (UK).
Audioboom Studios is home to a slate of content developed and
produced by Audioboom, including 'Dark Air with Terry Carnation',
'F1: Beyond The Grid', 'RELAX!', 'Covert', 'It's Happening with
Snooki & Joey', 'Mafia', 'Huddled Masses' and 'What Makes A
Killer'.
Audioboom operates internationally, with operations and global
partnerships across North America, Europe, Asia and Australasia.
The platform allows content to be distributed via Apple Podcasts,
Spotify, Pandora, Amazon Music, Deezer, Google Podcasts,
iHeartRadio, RadioPublic, Saavn, Stitcher, Facebook and Twitter as
well as a partner's own websites and mobile apps.
For more information, visit audioboom.com.
CHAIRMAN'S STATEMENT
I am delighted to introduce these annual results which reflect
upon the fantastic performance of 2021 and a very strong start to
2022.
As the Company bounced back from a somewhat Covid-constrained
2020, the strength of its business model was illustrated by 125%
top-line growth (more than doubling the projected growth of the
wider industry), a maiden annual profit and impressive growth
across all of its KPIs and operational areas. Market expectations
were regularly exceeded throughout the year.
It remains testament to the efforts of the management team and
all staff that the Company's growth once again led to increased
market share and further cemented its position as one of the
world's largest independent podcast companies in an industry that
continues its rapid maturity into mainstream media.
In his CEO Review, Stuart Last provides further detail around
the Company's strategy and focus, component parts of the business,
operational and financial performance, the strong start to 2022 and
the outlook for the future.
I would like to take this opportunity to thank the entire
Audioboom team for their continuing professionalism and commitment,
and also to thank our shareholders and partners for their loyalty
and vision in supporting Audioboom as it continues to grow. The
Board and I look forward to the future with considerable optimism
and excitement.
Michael Tobin OBE
Chairman
22 April 2022
CHIEF EXECUTIVE OFFICER'S REVIEW
Introduction
I am pleased to report on a defining year for the business which
saw top-line growth of 125%, our maiden EBITDA and net profit, and
the transformation of shareholder value. Our phenomenal performance
has positioned us as the world's leading pure-play podcast business
and increased our market-share significantly. Our innovation led to
the launch of new best-in-class advertising technology tools, the
scaling of our platform and new levels of success for our creator
partners and advertisers.
In the first quarter of 2021 we felt the final effects of the
Covid-19 pandemic, but advertisers returned to the medium quickly,
driving strong demand and high pricing for our key content. At the
same time we expanded our creator network significantly, with
increased consumption of our shows driving us to 4(th) position on
the Triton Digital podcast publisher ranker in the US.
During the second quarter we debuted Dark Air with Terry
Carnation - our most successful original production to date - and
we brought new top tier shows to the network, including Dark
History, RedHanded and Zane & Heath Unfiltered.
The launch of our proprietary inventory creation tool, AdRip, in
Q3 2021 had an immediate positive impact on the business. AdRip
enables back catalogue content to be monetised efficiently by
automating the removal of embedded premium advertising once an
episode is 90 days old, and replacing it with fresh ads each time
it is listened to in the future.
In the final quarter of 2021 we launched Showcase, our second
advertising product, that enables brands to connect with audiences
at scale using automated ad-tech to target advertising campaigns to
listeners based on demographics, location, content types and
keywords.
Momentum has continued into 2022, with our recent trading update
highlighting strong revenue and EBITDA performance during Q1. I am
pleased to provide a further update on the current year later in
this report.
Strategy
Audioboom powers podcasting. Our platform connects the world's
best podcast content with advertisers, and then distributes it to
audiences globally. We are an indispensable component in
podcasting's 3-sided marketplace of audience, advertiser and
creator. Each is important to the successful growth of the medium
individually - but they require Audioboom at the centre to connect
them all, to ensure they operate effectively and to extract maximum
value for all.
The Audioboom platform is fully scalable. Today it handles more
than 8,000 content channels, 3,000+ advertisers, and receives more
than 126 million episode downloads monthly by a unique audience of
more than 34 million. With minimal additional investment, the
platform could handle exponentially more podcast channels,
advertising campaigns and listeners.
Audioboom's growth strategy continues to focus on the expansion
of content within the platform, which happens in three ways:
1. content acquisition - securing exclusive commercial rights to
monetise and distribute podcasts from leading creators;
2. content creation - developing and/or producing content
through our Audioboom Studios production arm;
3. content access - utilising our Sonic Influencer Marketing
unit to access advertising inventory outside of Audioboom's own
network.
Commencing in 2017 Audioboom monetised this content through the
development of a Premium advertising offering in which leading
podcast hosts endorse products and brands to their engaged audience
natively within their shows. These ads drive actions (in the form
of attributable product sales) or awareness. This advertising
product is highly effective - the combination of trusted
influencers, engaged audiences, Audioboom's best-practice coaching
for ad execution, and third-party attribution data - and enables
campaigns to be sold at a premium price point.
In 2021 Audioboom added a secondary advertising offering through
Showcase, an automated tech-driven marketplace. Showcase, which
launched formally in November 2021 but was operational across the
year, is focused on optimising revenue by monetising back catalogue
content as well as the long-tail of smaller podcasts on the
platform via Dynamic Ad Insertion (DAI). Our ad tech consolidates
this large volume of advertising inventory and exposes it to a
portfolio of demand channels which include international
monetisation partners, a new self-serve campaign booking platform,
and a programmatic ecosystem of more than 25 established demand
side platforms (DSPs) used by the biggest advertising buyers in the
world. Showcase offers advertisers the ability to target
advertising to audience location, content genres, audience
demographics or keywords.
To support the launch of Showcase, we developed a proprietary
inventory creation tool called AdRip. This tool automates the
removal of native Premium ad units once an episode is 90 days old,
and replaces them with markers that enable Showcase to dynamically
insert new, fresh advertising into the episode every time it is
listened to in the future. Back catalogue content (episodes that
are more than 90 days old) makes up around 50% of our consumption -
approximately 58 million downloads per month. This vast catalogue
will continue to grow, and can now be re-monetised efficiently.
In December 2021, Showcase achieved a key milestone,
contributing revenue of more than US$1 million on a monthly basis
to the business for the first time. We will continue to expand
Showcase during 2022 by adding more demand channels to increase
monetisation performance, including - as recently announced - a
strategic partnership with leading radio and digital media company,
NZME, who will monetise Audioboom's advertising inventory in New
Zealand via our Showcase platform. On the supply side, we expect to
expose more than 4 billion available impressions to advertisers in
Showcase during 2022.
The result of this development work is two clear products for
advertisers: a Premium offering, focused on the strongest
performing 250 shows in our network which enables brands to utilise
the powerful influence of the show's host to maximise impact of the
advertising; and an efficient automated offering that offers
advertisers scale and customisable audience targeting options.
Another area of focus in the latter part of 2021 was the
expansion of our production business. In October we consolidated
all of our creative and production services under the Audioboom
Studios brand. This includes: our owned and operated original
concepts, in which we fully develop and produce new shows with full
intellectual property (IP) control; our co-productions, such as our
work with Formula 1 on the official F1 podcast slate; production
services including recording, engineering and post-production; and
branded content, with shows and feature material being developed in
partnership with our brand advertisers.
Audioboom Studios is strategically valuable to the business,
delivering IP ownership and the strongest gross margin of any of
our advertising-based revenue lines. Audioboom Studios content is
our most premium product - its eCPM (revenue per 1000 downloads) is
significantly higher than our creator network. An additional
benefit is the direct audience connection that builds Audioboom as
a creative production brand.
The expansion of Audioboom Studios is a key area of investment
for us. In Q4 2021 we began building a production team in the UK,
with the first UK-focused podcast launched in February this year.
Devils in the Dark was an immediate hit, reaching number 1 on the
UK's True Crime chart and the top 15 of Apple's overall podcast
chart.
Overview of the Market
Audioboom's position as the world's leading pure-play podcast
publisher is highlighted by three trusted measurement services -
Triton Digital's Podcast Reports, Podtrac's Podcast Ranker, and
Edison's Top Podcast Networks chart:
-- In Triton Digital's US ranker Audioboom is the 4(th) largest
publisher in terms of unique audience reach, and the 5(th) largest
in terms of consumption (downloads);
-- Audioboom also ranks as the 3(rd) largest publisher in both
Triton's New Zealand and Australian reports;
-- Audioboom would rank as the 3rd largest podcast publisher if
the Company took part in Podtrac's industry ranker, on both metrics
- US unique audience and global monthly downloads;
-- In Edison Research's list of top podcast networks, Audioboom
ranks as 6(th) for 2021 based on interviews with weekly podcast
listeners.
On each measurement service Audioboom ranks as the highest
independent podcast publisher, as well as the highest ranking
pure-play podcast publisher.
The market continued to grow strongly in 2021. The Interactive
Advertising Bureau's most recent revenue study, compiled by PwC,
projects the US market to have reached $1.3 billion in 2021 -
annual growth of 60%. Audioboom outperformed this growth
significantly with our 125% revenue growth in 2021, outpacing the
wider industry projections by 108%.
Audioboom has outperformed the industry's growth in each of the
past four years - our average annual outperformance of the industry
is 70%.
The clearest and most significant result of this performance is
the growth of our market share over this four-year period. In 2017
our market share was 1.9%, growing to 4.5% in 2021.
The podcast market is expected to continue its expansion, with
projected total growth of 62% over the next two years - Audioboom
is well positioned to take maximum advantage of these industry
tailwinds, and we expect to continue to grow at a faster rate than
the wider market, further increasing our market share.
2021 saw more consolidation across the industry, although
transactions in the past year were at lower price points than
previous years and more focused on technology and data rather than
content. Notable corporate activity in 2021 and Q1 2022
includes:
-- Spotify's acquisition of audio tech platform Whooska, and
data providers Chartable and Podsights;
-- Amazon's acquisition of hosting platform Art19 and the
finalisation of their acquisition of production house Wondery;
-- iHeartMedia's acquisitions of ad tech and data business Triton Digital;
-- Global Media's acquisition of podcast hosting platform Captivate; and
-- Acast's IPO on Nasdaq North.
Audioboom's business model, structure and financial performance
provides strong optionality on our future path. Our global scale
and ownership of technology and content production will make us an
attractive proposition for major media or technology businesses
looking to fast-track a leadership position in podcasting.
Alternatively, our profitable business model sees us funded for
continued growth and a strong future as the leading independent
player in the space.
Operational Review
I am pleased to report a strong year of operational progress
across all areas of the business.
KPIs
1. Brand advertiser count of 396 in Q4 2021, up 32% on Q4 2020
(301)
Brand advertiser count measures Audioboom's active customers for
our Premium advertising product. Key drivers of this KPI growth
include: addition of new content genres to widen brand appeal;
overall market growth and expansion of brands advertising in
podcasts; optimal campaign performance with agency campaigns
resulting in new agency clients being added.
2. Revenue per 1,000 downloads (eCPM) for Q4 2021 increased 49%
to US$55.85 (Q4 2020: US$37.55)
e-CPM is a measure of the value we extract from every 1,000
downloads on the platform, and how we optimise the supply of
available advertising inventory. Growth drivers for this KPI
include: increasing fill rates; increasing pricing; expansion of
Showcase to monetise back-catalogue content.
3. Global Monthly Downloads for Q4 2021 up 39% to 113 million
(81.7 million in Q4 2020)
Global Monthly Downloads is an industry standard metric. It is a
measure for the scale of our platform, and enables accurate
comparisons to be drawn with our competitors. This data point is
measured using the Interactive Advertising Bureau's most recent
Podcast Measurement Standard, and is verified by Triton Digital - a
leader in audio measurement.
Content Acquisition
Audioboom's creator network saw strong growth in 2021 as our
dual advertising model delivered significant value to our content
partners. Opportunities to develop new partnerships with top tier
podcast creators gathered pace, driven by our strong relationships
with Hollywood talent agencies and management companies.
Key new partnerships formed in 2021 included The Fantasy
Footballers, The Way I Heard with Mike Rowe, RedHanded, Dark
History, and Unfiltered with Zane & Heath. We also renewed
major creator partnerships in 2021 and post period with True Crime
Obsessed, Obsessed with Disappeared, Casefile, Mile Higher, The
Sesh and Lights Out.
Content Creation
In 2021 we launched our biggest commercial hit to date from our
original content and production arm - Dark Air with Terry
Carnation, a show written and starring Rainn Wilson (from the US
version of "The Office").
Earlier in the year we also announced the deepening of our
production partnership with Formula 1, extending our role as their
official podcast partner through to 2023. As well as producing
their flagship show F1: Beyond The Grid, Audioboom now produces a
second podcast for Formula 1, F1 Nation.
In the first half of 2021 investment into content creation was
limited as we focused on ensuring the business reached its maiden
profitability goal. As we moved into the second half of the year,
with full confidence of achieving that goal, we began to invest
into our production arm, relaunching the unit as Audioboom Studios,
and expanding our development team with a particular focus on the
UK market. This investment in H2 2021 has led to the successful
launch of three new projects from Audioboom Studios in the first
quarter of 2022 - National Park After Dark, Can I Get in Your
Pantry?, and Devils in the Dark.
Audioboom Studios' revenue in 2021 was US$2.4 million (growth of
118% over 2020's US$1.1 million), with a gross margin of 40%.
Content Access
Sonic Influencer Marketing, our platform that enables brands to
purchase advertising inventory across the entire podcast landscape,
made significant progress in 2021, delivering revenue to the Group
of US$11 million (116% growth over 2020's US$5.1 million).
In early 2021 we launched a new Salesforce-based inventory
management platform and a Tableau-based data platform for Sonic.
These platforms power new levels of intelligence around audiences,
pricing and campaign performance, enabling Sonic to scale
efficiently.
One key metric for Sonic is monthly revenue per client, which
highlights both the commercial growth of the unit, and also its
ability to scale effectively. In Q4 2021 this figure reached
$63,184 vs $30,224 in the same period in 2020.
Sonic has experienced a strong start to 2022, having booked more
advertising revenue for the year by the end of Q1, than they
achieved in the entirety 2021.
Financial Review
In 2021, the Company recorded revenue growth that more than
doubled the expected wider podcast industry growth. In tandem with
this, we had to guide the market to increase their expectations of
our performance over the year on seven occasions. We continued to
take market share versus our competitors and the Company was
profitable in every month of 2021. We continued to build on our
strong operation and financial foundations and did so with an
average headcount of 37 staff, the same as in the prior year,
continuing to be an extremely efficient and focused
organisation.
Revenue increased by 125% to US$60.3 million for 2021 from
US$26.8 million in 2020. In 2021, 96% of Group revenue was
generated in the United States - which is the largest and most
developed market for podcasting, up from 94% in 2020 due to the
continued growth in that territory - including the exceptional
growth of Marketplace revenue in 2021, as well as the third full
year of trading at Sonic Influencer Marketing.
Group gross margin decreased slightly to 22% in 2021 (2021: 23%)
and Audioboom continues to have a mix of revenue streams,
contributing different gross margins. Direct revenue, where
advertising is placed on third party podcasts via the Audioboom
sales teams, yielded a 22% gross margin in 2021. Marketplace
contributed a 26% gross margin in 2021. Audioboom Studios
contributed a 36% gross margin in 2021 and, due to the higher
associated gross margin, is a key area of focus going forward for
the Company. Sonic Influencer Marketing contributes a gross margin
of 12% and therefore, despite the continued growth of this
business, it does impact the overall Group gross margin.
The Company continued to control overheads and we have aligned
staff globally to ensure that every employee contributes to the
growth of the business. We continue to monitor the cost base
closely and align it to the Company's operational demands and this
will continue into 2022 as we increase focus on areas that we
believe can drive further revenue growth, in Audioboom Studios, and
further increased Marketplace monetisation.
The Company's overall trading for the period, as measured by
adjusted EBITDA (earnings before interest, tax, depreciation,
amortisation, share based payments, non-cash foreign exchange
movements and before exceptional items) recorded a maiden profit of
US$3.1 million, significantly improved from the US$1.7 million loss
in 2020.
The total profit before tax for the year demonstrated a maiden
profit of US$1.7 million, again significantly improved from the
US$3.3 million loss in 2020. The total maiden net profit of US$7.0
million (2020: US$3.2 million loss) was due to the recognition of a
US$5.3 million (2020: US$nil) deferred tax asset in relation to
unutilised tax losses of US$22.5 million (2020: US$nil) which can
be utilised to offset tax arising on future taxable profits. The
cash outflow from operating activities fell to US$0.8 million from
US$3.3 million in 2020, a 76% reduction.
The working capital cycle of the Company is now established in
terms of processes built and refined over the last four years.
Debtor collections continue to be good while we also continue to
reduce average payable days. The implementation of the bespoke
podcast advertising booking system in 2018, continued improved cash
collection and sustained revenue growth has led to 2021 debtor days
of 94 being comparable to the 87 reported in 2020. It should be
noted that a record revenue quarter in Q4 of US$20.7 million
contributed to the year-end debtor day total being above the 2020
total and the Company continues to incur very minimal bad debt
write offs. Average payable days reduced from 65 days in 2020 to 55
days in 2021.
Post period end, the US$4 million loan facility with SPV
Investments Limited ended in February 2022, and the Company has
secured a GBP1.5 million overdraft with HSBC which will help
towards any working capital requirements. The US$4 million content
funding facility from SPV Investments Limited is due to expire in
June 2022.
The financial results shown above illustrate that the drive to
increase revenues whilst maintaining strong cost management is
working and should deliver significant shareholder value as the
Company continues to take market share in the growing podcast
industry.
Trading Update and Outlook
2022 is set to be another successful year for Audioboom with
continued revenue expansion and growth in profitability. Progress
in the first quarter was strong - as recently announced, we
achieved Q1 revenue of US$19.7 million, year-on-year revenue growth
of 107% and adjusted EBITDA profit of US$0.9 million. Demand for
our advertising inventory is high, with more than US$60.5 million
of advertising bookings already contracted for 2022 - more than our
total revenue for 2021. 2022 has started well in relation to
renewing key content partnerships in our Premium Network, including
new deals with Casefile True Crime, Mile Higher, Strange &
Unexplained, Lights Out and The Sesh. We are working to renew
further key content partnerships in the coming months, maintaining
the financial discipline that is embedded in the contract renewal
process. Should these renewals be successful, we will update the
market expectations for 2022 at the appropriate time.
Showcase, our tech-based advertising product, is continuing to
expand faster than other areas of the business with Q1 revenue 150%
greater than the same period in 2021. During the first quarter
Showcase contributed more than 11% of the Group's revenue. We also
added NZME - a leading radio and media company in New Zealand - as
a new monetisation partner for Showcase. NZME will deliver revenue
against Audioboom's consumption in New Zealand. During Q1 2022, we
made more than 1 billion impressions available to buyers within
Showcase, delivering true global scale.
Our ambition is to build the world's leading podcasting
business, and I am delighted with the start we have made in 2022,
and look forward to the future with confidence. I would like to
thank our creators, clients, customers and partners, as well as our
incredibly talented Audioboom team and our supportive shareholders
as we look forward to another exciting and successful year.
Stuart Last
Chief Executive Officer
22 April 2022
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 31 DECEMBER 2021
2021 2020
Notes US$'000 US$'000
Continuing operations
Revenue 2 60,317 26,782
Cost of sales (47,066) (20,581)
----------------- -----------------
Gross profit 13,251 6,201
Administrative expenses (11,452) (9,288)
----------------- -----------------
------------------------------------------ ------ ------------------ ------------------
Adjusted operating profit / (loss) 3,133 (1,720)
- Share based payments 17 (1,174) (715)
- Depreciation (55) (60)
- Corporate transaction costs - (167)
- Depreciation - leases 14 (252) (319)
- Operating foreign exchange gain /
(loss) 163 (106)
- Restructuring costs (16) -
---------------- ----------------
------------------------------------------ ------ ------------------ ------------------
Operating profit / (loss) 3 1,799 (3,087)
Finance costs 6 (87) (210)
---------------- ----------------
Profit / (loss) before tax 1,712 (3,297)
Taxation on continuing operations 7 5,275 -
---------------- ----------------
Profit / (loss) for the financial period
attributable to equity holders of the
parent 6,987 (3,297)
---------------- ----------------
Other comprehensive profit / (loss)
Foreign currency translation difference 6 61
---------------- ----------------
Total comprehensive profit / (loss)
for the period 6,993 (3,236)
======== ========
Profit / (loss) per share
from continuing operations
Diluted EPS 8 40 cents (23) cents
Basic EPS 8 45 cents (23) cents
============ ============
All results for both periods are derived from continuing
operations.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2021
As at 31 December As at 31 December
2021 2020
Notes US$'000 US$'000
ASSETS
Non-current assets
Property, plant and equipment 9 77 90
Right of use asset 14 576 822
Deferred tax asset 7 4,650 -
--------------- ---------------
5,303 912
Current assets
Trade and other receivables 11 18,147 8,028
Cash and cash equivalents 2,969 3,257
Deferred tax asset 7 625 -
--------------- ---------------
21,741 11,285
------------------- -------------------
TOTAL ASSETS 27,044 12,197
------------------- -------------------
Current liabilities
Trade and other payables 12 (12,167) (5,415)
Lease liability 14 (269) (252)
------------------- -------------------
NET CURRENT ASSETS 9,305 5,618
------------------- -------------------
Non-current liabilities
Lease liability 14 (358) (636)
------------------- -------------------
NET ASSETS 14,250 5,894
========= =========
EQUITY
Share capital 13 - -
Share premium 13 61,011 60,822
Issue cost reserve (2,048) (2,048)
Foreign exchange translation
reserve (377) (276)
Reverse acquisition reserve (3,380) (3,380)
Retained earnings (40,956) (49,224)
---------------- ----------------
TOTAL EQUITY 14,250 5,894
======== ========
The accompanying accounting policies and notes form an integral
part of these financial statements.
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEARED 31 DECEMBER 2021
2021 2020
US$'000 US$'000
Profit / (loss) from continuing operations 6,987 (3,297)
---------------- ----------------
Profit / (loss) for the period 6,987 (3,297)
Adjustments for:
Deferred tax credit (5,275) -
Interest payable 87 210
Depreciation of fixed assets 55 60
Share based payments 1,174 715
Increase in trade and other receivables (10,120) (906)
Increase in trade and other payables 6,712 301
Decrease in lease liability (348) (411)
Foreign exchange (loss) / gain (80) 76
---------------- ----------------
Cash flows from operating activities (808) (3,252)
Taxation received - 28
---------------- ----------------
Net cash used in operating activities (808) (3,224)
---------------- ----------------
Investing activities
Purchase of property, plant and equipment (43) (10)
---------------- ----------------
Net cash used in investing activities (43) (10)
---------------- ----------------
Financing activities
SPV loan interest and fees 6 - (113)
Proceeds from SPV loan 6 - 700
Repayment of SPV loan 6 - (700)
Proceeds from HSBC loan 12 374 -
Proceeds from issue of ordinary share
capital (net of issue costs) 189 4,612
---------------- ----------------
Net cash generated from financing activities 563 4,499
======== ========
Net (decrease) / increase in cash and
cash equivalents (288) 1,265
---------------- ----------------
Cash and cash equivalents at beginning
of period 3,257 1,992
---------------- ----------------
Cash and cash equivalents at end of
period 2,969 3,257
======== ========
The Group had no borrowings at the end of either financial
period and therefore no reconciliation of net debt has been
provided.
AUDIOBOOM GROUP PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2021
Share Share Issue Reverse Foreign Retained Total
capital premium cost acquisition exchange earnings equity
reserve reserve translation
reserve
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
------------------- ------------------- ------------------- ------------------- ------------------- ------------------- -------------------
At 31 December
2019 - 56,210 (2,048) (3,380) (337) (46,783) 3,662
------------------- ------------------- ------------------- ------------------- ------------------- ------------------- -------------------
Loss for the
period - - - - - (3,297) (3,297)
Issue of shares - 4,612 - - - - 4,612
Equity-settled
share-based
payments - - - - - 856 856
Foreign exchange
gain on
translation
of overseas
subsidiaries - - - - 61 - 61
------------------- ------------------- ------------------- ------------------- ------------------- ------------------- -------------------
At 31 December
2020 - 60,822 (2,048) (3,380) (276) (49,224) 5,894
------------------- ------------------- ------------------- ------------------- ------------------- ------------------- -------------------
Profit for
the period - - - - - 6,987 6,987
Issue of shares - 189 - - - - 189
Equity-settled
share-based
payments - - - - - 1,174 1,174
Foreign exchange
gain on
translation
of overseas
subsidiaries - - - - 6 - 6
------------------- ------------------- ------------------- ------------------- ------------------- ------------------- -------------------
At 31 December
2021 - 61,011 (2,048) (3,380) (270) (41,063) 14,250
------------------- ------------------- ------------------- ------------------- ------------------- ------------------- -------------------
Share premium
Share premium represents the consideration paid for shares in
excess of par value (nil), less directly attributable costs.
Issue cost reserve
The issue cost reserve arose from expenses incurred on share
issues.
Reverse acquisition reserve
The reverse acquisition reserve relates to the reverse
acquisition of Audioboom Limited by Audioboom Group plc on 20 May
2014.
Foreign exchange translation reserve
The foreign exchange translation reserve is used to record
exchange differences arising from the translation of the financial
statements of foreign operations.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2021
1. ACCOUNTING POLICIES
General information and basis of preparation
Audioboom Group plc is incorporated in Jersey under the
Companies (Jersey) Law 1991. The Company's shares are traded on
AIM, the market of that name, operated by the London Stock
ExchangeThe Company is required under rule 19 of the AIM Rules for
Companies to provide shareholders with audited consolidated
financial statements.
The Group prepares its consolidated financial statements in
accordance with International Accounting Standards ('IAS') and
International Financial Reporting Standards ('IFRS') as adopted by
the EU. The financial statements have been prepared on the
historical cost basis. The consolidated financial statements have
been prepared in accordance with and in compliance with the
Companies (Jersey) Law 1991, and were approved by the Board on 22
April 2022
These results are audited, however the financial information set
out in this announcement does not constitute the Group's statutory
accounts for the period ended 31 December 2020, but is derived from
the 2020 Annual Report & Accounts. The auditors have reported
on those accounts; their report was unqualified.
The preparation of financial statements in accordance with IFRS
requires the use of estimates and assumptions that affect the
reported amounts of assets and liabilities, and disclosure of
contingent assets and liabilities, at the date of the financial
statements and the reported amounts of revenue and expenses during
the reporting period. Although these estimates are based on
management's best knowledge of current events and actions, actual
results may ultimately differ from those estimates.
The accounting policies used in completing this financial
information have been consistently applied in all periods
shown.
New standards adopted by the Group
The Group has not adopted any new standards for the period
commencing 1 January 2021.
Standards, amendments and interpretations of published standards
not yet effective
Certain standards, amendments to, and interpretations of,
published standards have been published that are mandatory for the
Group's accounting years beginning on or after 1 January 2022 or
later years and which the Group has decided not to adopt early:
-- Onerous Contracts - Cost of Fulfilling a Contract (Amendments
to IAS 37) (effective for periods commencing on or after 1 January
2022);
-- IFRS 17: Insurance Contracts (effective for periods commencing on or after 1 January 2023);
-- Property, Plant and Equipment: Proceeds before Intended Use
(Amendments to IAS 16) (effective for periods commencing on or
after 1 January 2022);
-- Annual Improvements to IFRS Standards 2018-2020 (Amendments
to IFRS 1, IFRS 9, IFRS 16 and IAS 41) (effective for periods
commencing on or after 1 January 2022); and
-- References to Conceptual Framework (Amendments to IFRS 3)
(effective for periods commencing on or after 1 January 2022).
None of the above listed changes are anticipated to have a
material impact on the Group's financial statements.
ACCOUNTING POLICIES (continued)
Key accounting policies
Going concern
The financial statements have been prepared on the going concern
basis, which assumes that the Group will have sufficient funds to
continue in operational existence for at least twelve months from
the date of approval of the financial statements . The Group ended
the year with access to US$6.3 million of capital, being US$3.0
million of cash and US$3.3 million remaining available to draw down
under the loan facility arrangement with SPV Investments Limited
announced in February 2020 subsequently ended in February 2022, and
in its place the Company secured a GBP1.5 million overdraft
facility with HSBC on 14 April 2022. The Board's forecasts for the
Group, including due consideration of the business forecasting
continuing positive EBITDA in 2022, projected increase in revenues
and decreasing cash-burn of the Group and taking account of
reasonable possible adverse changes in trading performance
including changes outside of expected trading performance, indicate
that the Group will have sufficient cash available to continue in
operational existence for the next 12 months from the date of
approval of the financial statements and beyond. Based on the
Board's forecasts, the Group considers that it will not require
additional funding for the foreseeable future for the purposes of
meeting its liabilities as and when they fall due. The Board
believes that the Group is well placed to manage its business
risks, and longer-term strategic objectives, successfully.
Management has carried out sensitivity analyses of the Group's
cash flow models to assess the impact of a range of possible
outcomes, including lower than anticipated revenues, and the
mitigations that the Group has available to it, including a
reduction in overhead costs, active working capital management and
the availability of finance from HSBC. Accordingly, the Directors
are satisfied that the Group will continue to be able to meet its
ongoing liabilities as and when they fall due in reasonably
foreseeable circumstances.
Therefore, the Directors consider the going concern basis of
preparation of these financial statements appropriate.
Revenue
Revenue represents amounts receivable for services provided in
the normal course of business, and excludes intra-group sales,
Value Added Tax and trade discounts.
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. Revenue
comprises:
l Sale of advertising: the value of goods and services is
recognised on broadcast of the podcast
l Sponsorship income: the value of goods and services is
recognised over the time to which it relates
l Sale of subscriptions: the value of goods and services is
recognised across the period of subscription
The Directors have considered the requirements of IFRS 15 in
respect of multiple performance obligations within one contract and
have not identified any such instances. There are no contracts
which incorporate variable or contingent consideration.
The Group entities, Audioboom Limited and Sonic Influencer
Marketing, are both considered to be the principal entity in terms
of revenue recognition. The entities set or communicate the
advertising pricing that is required to advertise on represented
podcast content, contracts directly with the brand or agency to
secure the advertising and confirms the date at which that
advertising will be allocated. The entities are also responsible
for invoicing and collecting payment from customers who have booked
advertising slots and furthermore bear inventory risk associated
with advertising slots acquired but not sold.
Content partner minimum revenue guarantees
In order to attract and retain leading podcast partners, the
Group offers certain partners minimum revenue guarantees ("MG")
over the life of the agreement between the parties. The MG offers
guaranteed revenue over the life of the agreement in the form of
monthly payments and/or an upfront advance payment, which is then
recouped over the life of the agreement, thus reducing future
expected payments proportionally. The MG's provided secure the
right of access to future content and therefore the expenditure in
relation to these guarantees is recognised over the term of the
contract, as this is the period over which the content providers'
obligations are discharged to the Group and accordingly the
basis
ACCOUNTING POLICIES (continued)
on which the Group consumes the benefit of these obligations. In
accordance with IFRS 9, no liability is recognised at the date of
the contract as the MG relates to future performance obligations of
the content provider.
Foreign currency
For the purpose of the consolidated financial statements, the
results and financial position of each Group company are expressed
in US Dollars, which is the presentational currency of the
consolidated financial statements. The majority of trade in the
Company is in the USA and therefore the Company's functional
currency is US Dollars.
In preparing the financial statements of the individual
companies, transactions in currencies other than the entity's
functional currency (foreign currencies) are recorded at the rates
of exchange prevailing on the dates of the transactions. At each
balance sheet date, monetary assets and liabilities that are
denominated in foreign currencies are retranslated at the rates
prevailing on the balance sheet date. Non-monetary items that are
measured in terms of historical cost in a foreign currency are not
retranslated.
Exchange differences arising on the settlement of monetary
items, and on the retranslation of monetary items, are included in
profit or loss for the period.
For the purpose of presenting consolidated financial statements,
the assets and liabilities of the Group's foreign operations are
translated at exchange rates prevailing on the balance sheet date.
Income and expense items are translated at the average monthly rate
of exchange ruling at the date of the transaction, unless exchange
rates fluctuate significantly during that month, in which case the
exchange rates at the date of the transactions are used.
Property, plant and equipment
Property, plant and equipment are stated at cost less
accumulated depreciation and impairment losses, if any.
Depreciation is calculated under the straight-line method to
write off the depreciable amount of the assets over their estimated
useful lives. Depreciation of an asset does not cease when the
asset becomes idle or is retired from active use unless the asset
is fully depreciated. The principal annual rates used for this
purpose are between three and five years.
The depreciation method, useful lives and residual values are
reviewed, and adjusted if appropriate, at the end of each reporting
period to ensure that the amounts, method and years of depreciation
are consistent with previous estimates and the expected pattern of
consumption of the future economic benefits embodied in the items
of the property, plant and equipment.
Subsequent costs are included in the asset's carrying amount or
recognised as a separate asset, as appropriate, only when the cost
is incurred, and it is probable that the future economic benefits
associated with the asset will flow to the Group and the cost of
the asset can be measured reliably. The carrying amount of parts
that are replaced is derecognised. The costs of the day-to-day
servicing of property, plant and equipment are recognised in profit
or loss as incurred. Costs also comprise the initial estimate of
dismantling and removing the asset and restoring the site on which
it is located for which the Group are obligated to incur when the
asset is acquired, if applicable.
Leases
Leases of property for periods longer than one year are
capitalised at the fair value of the leased property (disclosed as
a right of use asset on the face of the statement of financial
position) with the corresponding rental obligations, net of finance
charges, included in current and non-current liabilities. The fair
value of the lease asset and corresponding liability is calculated
as the present value of the minimum value of lease payments for
which the Group will become liable, discounted at a rate considered
appropriate.
Lease rental payments are split between a reduction in the lease
liability and finance cost, with depreciation charges of the right
of use asset over its useful economic life recognised as an expense
in the Group's income statement.
Payments made under operating leases, where the risks and
rewards are not transferred to the Group, are recognised as an
expense in the income statement.
ACCOUNTING POLICIES (continued)
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand
deposits and other short-term, highly liquid investments that are
readily convertible to a known amount of cash and are subject to an
insignificant risk of changes in value.
Basis of consolidation
The consolidated financial statements consolidate the financial
statements of Audioboom 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 Audioboom 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. Audioboom 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 Audioboom Group
plc.
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
Share based payments
Where share options are awarded to employees, the fair value of
the options at the date of grant is charged to the statement of
comprehensive income on a straight-line basis over the vesting
period. Non-market vesting conditions are taken into account by
adjusting the number of options expected to vest at each statement
of financial position date so that, ultimately, the cumulative
amount recognised over the vesting period is based on the number of
options that eventually vest. Market vesting conditions are
factored into the fair value of the options granted. The cumulative
expense is not adjusted for failure to achieve a market vesting
condition.
Warrants
Warrants issued to Directors, employees and third-party
suppliers are measured at the fair value of the service provided
with reference to comparable cash settled transactions or, where
the value of the services provided is uncertain, with reference to
an appropriate valuation methodology. Warrants are ascribed a value
at the date of grant, with this value recognised as an expense in
the statement of comprehensive income over the relevant vesting
period.
Current and deferred taxation
Current tax is the expected tax payable on taxable income for
the period, using tax rates enacted or substantively enacted at the
balance sheet date, and any adjustments to tax payable in respect
of previous periods.
Deferred tax is the tax expected to be payable or recoverable 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 profits ('temporary differences') and is
accounted for using the balance sheet liability method.
Deferred tax liabilities are generally recognised for all
taxable temporary differences.
Deferred tax assets are generally recognised to the extent that
it is probable that taxable profits will be available against which
deductible temporary differences can be utilised. Where there are
deductible temporary differences arising in subsidiaries, deferred
tax assets are recognised only where it is probable that they will
reverse in the foreseeable future and taxable profits will be
available against which the temporary differences can be
utilised.
The carrying amount of deferred tax assets is reviewed at each
balance sheet date and reduced to the extent that it is no longer
probable that sufficient tax profits will be available to allow all
or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled or the asset is
realised. Deferred tax is charged or credited to the statement of
income.
ACCOUNTING POLICIES (continued)
Financial Instruments
Financial assets
Trade receivables and other receivables that have fixed or
determinable payments that are not quoted in an active market are
classified as loans and receivable financial assets, using the
effective interest method less impairment. Interest is recognised
by applying the effective interest method, except for short-term
receivables when the recognition of interest would be
immaterial.
Financial liabilities
All financial liabilities are initially measured at fair value
plus directly attributable transaction costs and subsequently
measured at amortised cost using the effective interest method,
other than those categorised as fair value through profit or loss.
Financial liabilities are classified as current liabilities unless
the Group has an unconditional right to defer settlement of the
liability for at least 12 months after the reporting date.
Equity instruments
Instruments classified as equity are measured at cost and are
not remeasured subsequently.
Critical accounting judgements and key areas of estimation
uncertainty
Share based compensation
The Group issues equity settled share based payments to certain
Directors and employees, which have included grants of options in
the current period. Equity settled share based payments are
measured at fair value at the date of grant, with the charge being
recognised within the statement of comprehensive income over the
period of service to which the grant relates.
The fair value of share options is measured using a
Black-Scholes framework. The Directors have used judgement in the
calculation of the fair values of the share based compensation
which has been granted during the period, and different assumptions
in the model would change the financial result of the business.
Warrants
The Group issues warrants to certain Directors and third
parties. Warrants are measured at the fair value of the service
provided with reference to comparable cash settled transactions or
appropriate valuation methodologies at the date of grant, with the
charge being recognised within the statement of comprehensive
income over the period of service to which the grant relates.
IFRS 16: Leases
The Group recognises lease liabilities at the present value of
future cash flows. The determination of present value involves
judgements and estimates, in particular in relation to the discount
factor to be applied to those cash flows. In determining an
appropriate discount factor the Directors considered a range of
factors including the Group's cost of capital together with the
interest rate charged on the Group's external debt facilities.
Having considered these factors the Directors have assessed that 8%
is an appropriate discount factor to determine the value of the
Group's lease liabilities.
Recognition and measurement of deferred tax assets
The Group recognises deferred tax assets in relation to
unutilised tax losses which can be utilised to offset tax arising
on future taxable profits. Utilisation of these tax losses is
dependent on the timing and extent of future taxable profits of the
Group. Therefore the recognition and measurement of deferred tax
assets is based on the judgement of the Directors as to this
profitability and represents an area of material estimation
uncertainty.
2. REVENUE 2021 2020
US$'000 US$'000
Subscription 504 463
Advertising 59,813 26,319
-------------- --------------
60,317 26,782
======= =======
The Directors consider the Group to operate within one operating
segment, content related revenue, and consequently expenditure and
balance sheet analysis is not presented between subscription and
advertising services.
Geographical information
The Group's operations are principally located in the UK and the
USA. The main assets of the Group, cash and cash equivalents, are
held in the UK.
The Group's revenue from external customers by geographical
location is detailed below:
2021 2020
US$'000 US$'000
United Kingdom 2,536 1,638
Rest of the World - 36
USA 57,781 25,108
-------------- --------------
60,317 26,782
======= =======
The Group invoiced 35% of its income to three customers who
represented more than 10% of the reported revenues.
The Group currently has two material geographic revenue regions,
however, as the Group's controlling operations are primarily based
in the UK, there is no separation of income, expenditure and
sections of the balance sheet for the purposes of segmental
reporting.
3. OPERATING PROFIT / (LOSS) 2021 2020
US$'000 US$'000
Operating profit / (loss) for the period
has been arrived at after charging the following:
Depreciation of property, plant
& equipment 55 60
Operating foreign exchange gain
/ (loss) 163 (106)
Staff costs (refer to note 5 for
detail) 7,599 5,781
======= =======
4. AUDITOR'S REMUNERATION 2021 2020
US$'000 US$'000
Audit services
Fees for the audit of the consolidated annual
financial statements and the audit of the
Company's subsidiaries pursuant to legislation 89 74
-------------- --------------
89 74
======= =======
5. STAFF COSTS 2021 2020
Number Number
Average number of production, editorial
and sales staff 29 31
Average number of management and administrative
staff 8 6
-------------- ---------------
37 37
======= =======
US$'000 US$'000
Wages and salaries 5,900 4,613
Social security costs 419 362
Pension costs (defined contribution scheme) 290 206
Share based payments 990 600
-------------- ---------------
7,599 5,781
======= =======
6. FINANCE COSTS 2021 2020
US$'000 US$'000
Depreciation - lease interest (see note 14) 87 97
SPV loan interest and arrangement fee - 113
------------ -------------
87 210
======= =======
On 7 February 2020, the Company announced that it had entered
into a two-year US$4 million secured loan facility arrangement (the
"Facility") with SPV Investments Limited. USS$0.7 million of the
Facility was drawn down, and subsequently repaid in November 2020.
As at 31 December 2021, US$3.3 million of the non-revolving loan
facility remained undrawn and the Facility ended post period end.
In the prior year, the Facility attracted an arrangement fee of
US$80,000 and the Company incurred 8% interest annualised on
amounts drawn (US$33,000). The Company has a GBP1.5 million
overdraft facility with HSBC and this was not utilised as at the
date of this report (see note 20).
7. TAXATION
Tax reconciliation
The taxation credit on the loss for the period differs from the
amount computed by applying the corporation tax rate to the loss
before tax for the following reasons:
2021 2020
US$'000 US$'000
Profit / (loss) on ordinary activities
before tax 1,712 (3,297)
---------------- ----------------
Tax at UK corporation tax rate of 19.00%
(2020: 19.00%) 325 (626)
Expenses not deductible for tax purposes 8 35
Utilisation of unrecognised tax losses 4,785 -
brought forward
Deferred tax not recognised - 453
Effect of share based payments 157 138
---------------- ----------------
Tax credit and effective tax rate for 5,275 -
the period
========= =========
2021 2020
US$'000 US$'000
Current tax
UK corporation tax on profit / losses in the - -
current year
Deferred tax credit 5,275 -
---------------- ----------------
Tax credit recognised in the consolidated 5,275 -
statement of income
========= =========
The Group has carried forward UK losses amounting to US$31.9
million as of 31 December 2021 (2020: US$35.6 million). The gross
amount of losses upon which the deferred tax asset has been
recognised amounts to US$22.5 million (2020: US$nil). This is based
on expected utilisation of future taxable profits as estimated by
the Directors. The deferred tax asset is expected to be utilised
within five years. Refer to the recognition and measurement of
deferred tax assets accounting judgement detail in the accounting
policies section for further disclosure.
There was a deferred tax liability of US$nil (2020: US$nil).
2021 2020
US$'000 US$'000
Deferred tax current asset (unutilised tax 625 -
losses)
Deferred tax non-current asset (unutilised 4,650 -
tax losses)
----------------- -----------------
Total deferred tax asset 5,275 -
======== ========
8. PROFIT PER SHARE
Basic earnings per share is calculated by dividing the profit
attributable to shareholders by the weighted average number of
ordinary shares in issue during the period.
IAS 33 requires presentation of diluted EPS when a company could
be called upon to issue shares that would decrease earnings per
share, or increase the loss per share. For a loss-making company
with outstanding share options, the net loss per share would be
decreased by the exercise of options. Therefore for the year ended
31 December 2020, as per IAS33:36, the anti-dilutive potential
ordinary shares are disregarded in the calculation of diluted
EPS.
Reconciliation of the profit and weighted average number of
shares used in the calculation are set out below:
Profit Weighted average Earnings
per
/ (Loss) number of share
shares
2021
US$'000 Thousand Cents
Basic EPS
Profit attributable to equity
holders 6,987 15,695 45
Diluted EPS
Profit attributable to equity
holders 6,987 17,353 40
========= ========= =========
2020
US$'000 Thousand Cents
Basic EPS
Loss attributable to shareholders:
- Continuing and discontinued
operations (3,297) 14,276 (23)
========= ========= =========
9. PROPERTY, PLANT AND EQUIPMENT
Furniture
&
equipment Computers Technical Studio Total
US$'000 US$'000 US$'000 US$'000 US$'000
Cost
At 31 December
2019 53 224 3 124 404
Additions 2 4 - - 6
Disposals (29) - - - (29)
Foreign exchange
effect - (5) - - (5)
-------------- --------------- --------------- --------------- ----------------
At 31 December
2020 26 223 3 124 376
-------------- --------------- --------------- --------------- ----------------
Additions - 43 - - 43
-------------- --------------- --------------- --------------- ----------------
At 31 December
2021 26 266 3 124 419
-------------- --------------- --------------- --------------- ----------------
Depreciation
At 31 December
2019 42 128 3 91 264
Charge for the
period 5 37 - 18 60
Disposals (29) - - - (29)
Foreign exchange
effect (4) (5) - - (9)
---------------- --------------- --------------- --------------- ----------------
At 31 December
2020 14 160 3 109 286
----------------- --------------- --------------- --------------- ----------------
Charge for the
period 4 34 - 17 55
Foreign exchange
effect 1 2 - (2) 1
---------------- --------------- --------------- --------------- ----------------
At 31 December
2021 19 196 3 124 342
----------------- --------------- --------------- --------------- ----------------
Net book value
At 31 December
2019 11 96 - 33 140
========= ========= ========= ========= =========
At 31 December
2020 12 63 - 15 90
========= ========= ========= ========= =========
At 31 December
2021 7 70 - - 77
========= ========= ========= ========= =========
10. SUBSIDIARIES
As at 31 December 2021, Audioboom Group plc held more than 20%
of the share capital of the following companies:
Registered office Class of shares % held by parent
57 Southwark Street,
City Bridge House,
Audioboom Limited Southwark, SE1 1RU Ordinary 100%
251 Little Falls Drive,
Wilmington, Delaware
Audioboom Inc. 1980, USA Ordinary 100%
1013 Centre Road,
Austin Advertising Suite 403S, Wilmington,
Inc. Delaware 19805, USA Ordinary 100%
Audioboom Inc is held through Audioboom Limited. Austin
Advertising Inc is held through Audioboom Inc.
11. TRADE AND OTHER RECEIVABLES 2021 2020
US$'000 US$'000
Amounts receivable for the sale of goods
and services 15,483 6,358
Allowance for doubtful debts (131) -
---------------- ----------------
Net receivables 15,352 6,358
Other receivables 254 240
Prepayments and accrued income 2,456 1,383
Taxes recoverable 85 47
---------------- ----------------
18,147 8,028
========= =========
The average credit period taken on sales of goods and services
is 94 days (2020: 87 days). No interest is charged on receivables.
Trade receivables are provided for based on estimated irrecoverable
amounts from the sale of goods and services, determined by
reference to past default experience and likelihood of recovery as
assessed by the Directors.
Included in the Group's trade receivable balance are debtors
with a carrying amount of US$2.5 million (2020: US$0.3 million)
which are past due at the reporting date.
Having considered the Group's exposure to bad debts and the
probability of default by customers, no expected credit losses have
been recognised in accordance with IFRS 9 (2020: US$nil).
Accrued income carried forward into 2022, that will reverse
fully in 2022, is US$2.0 million (2020: US$0.5 million).
12. TRADE AND OTHER PAYABLES 2021 2020
US$'000 US$'000
Current liabilities
Trade payables 7,653 4,158
Other taxes and social security 77 30
Accruals 3,880 1,216
Other payables 183 11
Loan liability 374 -
---------------- ----------------
Trade and other payables due within less
than one year 12,167 5,415
========= =========
Trade payables and accruals principally comprise amounts
outstanding for trade purchases and ongoing costs. The average
credit period taken for trade purchases is 55 days (2020: 65 days).
The Group has financial risk management policies in place to ensure
that all payables are paid within the credit time frame.
The Group records negligible deferred income and therefore no
analysis of contract liabilities has been provided.
On 17 February 2021, Audioboom Inc received a US$374,000
Paycheck Protection Program loan from HSBC Bank USA operating under
the US Small Business Administration where financial support is
given to US domiciled companies during the Covid-19 pandemic. The
loan will be forgiven should Audioboom Inc not reduce headcount
during the loan period.
13. STATED CAPITAL ACCOUNT
No. of Share Share
shares capital premium
US$'000 US$'000
At 31 December 2019 14,006,757 - 56,210
Shares issued in the period
Share options exercised 267,737 - 539
Shares issued at 225p each 1,400,000 - 4,073
---------------------- ------------------- ---------------------
At 31 December 2020 15,674,494 - 60,822
---------------------- ------------------- ---------------------
Shares issued in the period
Share options exercised 93,523 - 189
-------------------- --------------------- -----------------------
At 31 December 2021 15,768,017 - 61,011
=========== =========== ===========
There is no authorised share capital and all shares rank pari
passu. All issued share capital is fully paid up. All ordinary
shares have no par value.
14. RIGHT OF USE ASSET LEASES
Set out below are the carrying amounts of right-of-use assets
recognised and the movements during the period:
Office
Lease Total
US$'000
At 31 December
2019 1,300
Disposals (150)
Depreciation
expense (319)
Foreign exchange (9)
----------------
At 31 December
2020 822
----------------
Depreciation
expense (252)
Foreign exchange 6
----------------
At 31 December
2021 576
=========
Set out below are the carrying amounts of lease liabilities and
the movements during the period:
2021 2020
US$'000 US$'000
Balance at 1 January 888 1,369
Payment of lease liabilities (348) (411)
Imputed lease interest costs 87 86
Disposals - (150)
Foreign exchange - (6)
------------- -------------
Balance at 31 December 627 888
======== ========
Current 269 252
Non-current 358 636
The following are the amounts recognised in the consolidated
income statement:
2021 2020
US$'000 US$'000
Depreciation expense of right of use assets 252 319
Interest expense on lease liabilities 87 86
------------- -------------
Total amount recognised 339 405
======== ========
The Company had total cash outflows for leases of US$435,000 in
2021 (2020: $497,000).
The following are the total value of the commitments on an
undiscounted basis:
2021 2020
US$'000 US$'000
Under one year 356 347
One to five years 474 829
------------- -------------
Total value of commitments 830 1,176
======== ========
15. OPERATING LEASE ARRANGEMENTS 2021 2020
$'000 $'000
The Group as lessee
Lease payments under operating leases recognised
as an expense
in the year 78 70
------------- -------------
At the balance sheet date, the Group had outstanding commitments
for future minimum lease payments under non-cancellable operating
leases, which fall due as follows:
Under one year 73 49
------------- -------------
73 49
======== ========
The operating lease is not recognised as an asset or liability
in the Statement of Financial Position under IFRS 16 due to its
total length being less than one year.
16. RELATED PARTY TRANSACTIONS
Key management personnel remuneration
See the Remuneration Committee Report for details relating to
key management personnel remuneration during the year. Key
management during the year being Stuart Last, CEO and Brad Clarke,
CFO.
Content funding facility
On 17 June 2019, the Company agreed a content funding facility
with SPV Investments Ltd ('SPV), a special purpose vehicle. SPV was
established and is owned equally by Michael Tobin, the Company's
Chairman, and Candy Ventures sarl, the Company's largest
shareholder. The SPV was established to provide minimum revenue
guarantees of up to US$4 million to certain leading new and
existing content partners of the Company. Audioboom pays the SPV 8%
of the net advertising revenue (after paying the content partner
its share) received by Audioboom, in relation to those podcasts.
The underlying providers of the guarantees were to be granted
25,000 warrants to subscribe for ordinary shares in the Company for
every US$1 million of guarantee provided, subject to a maximum of
100,000 warrants. The exercise price of all warrants associated
with the SPV content funding facility is GBP3.30 per ordinary share
each, with such warrants being exercisable for five years from
grant. A total of 100,000 warrants have now been issued pursuant to
the facility, which is the maximum number of warrants being capable
of issue in this regard. As at 31 December 2021 the amount
remaining available under the facility was approximately US$3.9
million.
US$4 million loan facility
In February 2020, the Company announced a US$4 million secured
loan facility arrangement (the "Facility") with SPV. The Facility
attracted interest at a rate of 8 per cent. per annum on drawn down
funds, together with a US$80,000 arrangement fee payable on the
first draw down, equivalent to 2 per cent. of the full US$4 million
available under the Facility. The Facility was secured against the
assets of Audioboom Limited. US$0.7 million was drawn down under
the Facility and this was repaid in full in November 2020
(including interest and loan arrangement fees amounting to
US$113,000). As at 31 December 2021 and 31 December 2020, US$3.3
million of the non-revolving Facility remained undrawn and the
Facility subsequently expired in February 2022.
17. SHARE-BASED PAYMENTS
The Company has share option schemes for employees of the Group.
Options are exercisable at the price agreed at the time of the
issue of the share option. The vesting period and/or any
performance conditions vary between employees. If the options
remain unexercised after a period of 10 years from date of grant
the options expire. Options are typically forfeited if the employee
leaves the Group before the options vest. Details of the share
options granted during the period are as follows:
2021 2020
Weighted Weighted
Average Average
Number of Exercise Number of Exercise
Share options Price (GBP) Share options Price (GBP)
Outstanding at beginning
of period 1,038,737 1.822 1,212,643 1.759
Granted during the period 202,000 6.379 271,500 1.840
Forfeited/lapsed during
the period - - (177,669) 1.533
Exercised during the period (93,524) 1.504 (267,737) 1.464
-------------------- ---------------------
Outstanding at end of
period 1,147,213 2.650 1,038,737 1.822
============= =============
Exercisable at end of
period 840,213 2.118 547,379 1.845
============= =============
The options outstanding at 31 December 2021 had a weighted
average exercise price of GBP2.65, and an average remaining
contractual life of 8 years. The inputs into the Black-Scholes
model are as follows:
2021 2020
Weighted average share
price 7.867 1.863
Weighted average exercise
price 7.867 1.863
Expected volatility 85% 85%
Expected life 10 years 10 years
Risk-free rate 0.5% 0.5%
Expected dividend yield 0% 0%
============= =============
Expected volatility was determined by assessing the share price
volatility from the prior year. The Group recognised total expenses
of US$1,174,000 related to equity-settled share-based payment
transactions for the year ended 31 December 2021 (31 December 2020:
US$600,000).
2021 2020
US$'000 US$'000
Share option charge 990 600
Warrant charge 184 115
-------------- --------------
1,174 715
======== ========
At the period end, the Company had in issue outstanding share
warrants for a total of 520,000 shares (2020: 520,000 shares) with
a weighted average exercise price of GBP3.12 (2020: GBP3.12). All
520,000 (2020: 320,000) of the warrants were exercisable at the
period end.
18. CONTENT PARTNER MINIMUM GUARANTEES
In order to attract and retain leading podcast partners, the
Group offers certain partners minimum revenue guarantees ("MG")
over the life of the agreement between the parties. The MG offers
guaranteed revenue over the life of the agreement in the form of
monthly payments and/or an upfront advance payment, which is then
recouped over the life of the agreement, thus reducing future
expected payments proportionally. The MGs provided secure the right
of access to future content and therefore the expenditure in
relation to these guarantees is recognised over the term of the
contract. The content providers' obligations are discharged to the
Group over the term of the contract in line with when the Group
consumes the benefit of these obligations. In accordance with IFRS
9, no liability is recognised at the date of the contract as the MG
relates to future performance obligations of the content
provider.
2021 2020
US$'000 US$'000
MG expenditure committed in 12 months or
less 8,279 6,585
MG expenditure committed in more than 12
months 3,454 1,226
----------------- -----------------
Total MG amount committed to expenditure 11,733 7,811
======== ========
Included within the above minimum guarantees are:
2021 2020
US$'000 US$'000
MG amount that is backed by the SPV content
funding facility 73 2,881
MG amount available in SPV content funding
facility 3,927 1,119
----------------- -----------------
Total SPV content funding facility (see note
16) 4,000 4,000
======== ========
19. FINANCIAL INSTRUMENTS
Capital risk management
The Group manages its capital to ensure that entities in the
Group will be able to meet their financial obligations as they
arise while maximising the return to stakeholders. The capital
structure of the Group consists of cash and cash equivalents 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. As at the period end,
the Group did not have any external borrowings and was not subject
to externally imposed capital requirements. In February 2020, the
Company secured a US$4 million debt facility with two related
parties (see note 16) which has since expired. Post period end on
14 April 2022 the Company secured a GBP1.5 million overdraft with
HSBC.
Categories of financial instruments
2021 2020
US$'000 US$'000
Loans & receivables
Trade and other receivables 15,605 6,599
Cash and cash equivalents 2,969 3,257
Financial liabilities at amortised cost
Trade and other payables 7,837 4,168
======== ========
The carrying amounts of financial assets and financial
liabilities recorded at amortised cost approximates to their fair
values.
Financial and market risk management objectives
It is, and has been throughout the period under review, the
Group's policy not to use or trade in derivative financial
instruments. The Group's financial instruments comprise its cash
and cash equivalents and various items such as trade debtors and
trade creditors that arise directly from its operations. The main
purpose of the financial assets and liabilities is to provide
finance for the Group's operations in the period.
Currency risk management
The Group has limited exposure to foreign currency risk as a
result of matching local currency costs to local currency receipts;
thus the main risks arising from the Group's financial instruments
are interest rate risk and liquidity risk. The Board reviews and
agrees policies for managing these risks and they are summarised
below. These policies have remained unchanged throughout the period
under review.
Interest rate risk management
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.
Credit risk management
Credit risk refers to the risk that a counterparty will default
on its contractual obligations resulting in financial loss to the
Group. The Group has adopted a policy of only dealing with
creditworthy counterparties, as a means of mitigating the risk of
financial loss from defaults. The Group only transacts with
entities after assessing credit quality using independent rating
agencies and, if not available, the Group uses other publicly
available financial information and its own trading records to rate
its major customers. The Group's exposure is continuously monitored
and the aggregate value of transactions concluded is spread amongst
approved counterparties. Credit exposure is controlled by
counterparty limits.
19. FINANCIAL INSTRUMENTS (continued)
Ongoing credit evaluation is performed on the financial
condition of accounts receivable. The credit risk on liquid funds
is limited because the counterparties are banks with high
credit-ratings assigned by international credit-rating agencies.
The carrying amount of financial assets recorded in the financial
statements, which is net of impairment losses, represents the
Group's maximum exposure to credit risk. Please refer to note 11
for more detail on the trade receivables collection period.
The ageing of trade receivables (US$'000s) as at 31 December
2021 was:
Current Over 30 days Over 60 days 90 days + Total
US$5,265 US$4,349 US$3,397 US$2,472 US$15,483
34% 28% 22% 16%
Liquidity risk management
The Group's policy throughout the period has been to ensure
continuity of funds. The Group manages liquidity risk by
maintaining adequate reserves and banking facilities by
continuously monitoring forecast and actual cash flows and matching
the maturity profiles of financial assets and liabilities. Please
refer to note 12 for more detail on the trade payables payment
period.
Fair value of financial instruments
The fair value of other non-derivative financial assets and
financial liabilities are determined in accordance with generally
accepted pricing models based on discounted cash flow analysis
using prices from observable current market transactions.
20. POST BALANCE SHEET EVENTS
To the date of this repoert, 101,686 new Ordinary Shares were
issued to satisfy the exercise of existing share options under the
Company's Share Option Scheme 2014 by an employee. In addition,
between 2 and 4 March 2022, Michael Tobin exercised warrants over
350,000 ordinary shares of no par value in the Company. Therefore,
the total number of Ordinary Shares and voting rights in the
Company is 16,219,703 at the date of this report.
Post period end on 14 April 2022 the Company secured a GBP1.5
million overdraft with HSBC and HSBC have a fixed and floating
charge in place in relation to this overdraft.
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