TIDMMIRI
RNS Number : 4222N
Mirriad Advertising PLC
09 May 2018
Mirriad Advertising plc
PRELIMINARY RESULTS FOR THE YEARED 31 DECEMBER 2017
9 May 2018
Mirriad Advertising plc
("Mirriad" or the "Group")
Results for the year ended 31 December 2017
Mirriad Advertising plc, a video technology company delivering
in-video advertising globally, announces its audited results for
the year ended 31 December 2017.
Financial overview
-- Revenue increased 23% to GBP874k (2016: GBP711k) as the Group
deployed its services in key advertising markets
-- Net assets increased 129% to GBP27.9m (2016: GBP12.2m)
following the successful IPO in December 2017
-- Operating loss increased 55% to GBP11.3m (2016: GBP7.3m) as
the Group established new offices and hired additional staff and
invested in its technology
Operational highlights
-- The Company was admitted to AIM following its successful IPO
on 19 December, raising GBP23.7m net of associated costs
-- The Group ran its largest single campaign run in China in Q4
generating total impressions for the advertiser in excess of 800m
with strong post campaign research results
-- Contract signed in the US with Univision in October
-- The Group signed an extended term on its existing contract
with Globosat in Brazil in September extending the term by a
further five years from the start of the original contract
-- Contract signed in Europe with RTL Germany in May
-- Granted patents increased to 11 with 7 additional patents
pending as at 31 December 2017. These cover the Company's core
technology and are registered in a variety of territories including
Europe and the US. A Chinese application was confirmed as pending
in August
-- Grant funding secured from European Union's Eureka Eurostars
programme for the "Valence" project, covering location based
contextual advertising in February (total funding of GBP298k over
the period of the grant)
Post period highlights
-- Renewal of the Group's contract with Youku, a subsidiary of
Alibaba, on a non-exclusive basis allowing the Group to work with
other customers in the Chinese market
-- New contract with NBCU in the US market which the Group is now focused on implementing
-- Investment by Jinhua Puhua Tianqin Equity Investment Fund
Partnership ("Puhua"), a Capital fund established in Jinhua in the
People's Republic of China, at 62p per share raising approximately
GBP2m before costs, on 24 April 2018
-- Released research backed by comScore independently verifying
Mirriad's advertising units on 2(nd) May
Mark Popkiewicz, Chief Executive Officer of Mirriad,
commented:
"We are maintaining our focus on the world's largest and fastest
growing advertising markets which are also markets with high video
consumption. In China we successfully delivered the Group's largest
ever in-video advertising campaign at the end of 2017 closely
followed by independent research which has clearly confirmed the
efficacy and effectiveness of Mirriad in-video advertising. As a
result of the funds raised in the successful IPO, we are actively
engaged in rolling out the new in-video ad unit, management
platform and services to key customers. We believe this will lay
the foundations for future revenue growth."
For further information please visit www.mirriad.com or
contact:
Mirriad Advertising plc Tel: +44 (0)207 884 2530
Mark Popkiewicz, Chief
Executive Officer
David Dorans, Chief Financial
Officer
Numis Securities Limited Tel: +44 (0) 207 260 1200
(Nominated Adviser &
Broker)
Nick Westlake (Nomad)
James Black
Michael Wharton
Hudson Sandler LLP Tel: +44 (0) 20 7796 4133
(Financial Public Relations)
Daniel de Belder
Bertie Berger
Notes to Editors
About Mirriad
Mirriad is a video technology company delivering in-video
advertising by naturally blending brand advertising into popular
entertainment content.
Mirriad creates advertising opportunities within existing video
content across multiple shows. Advertisers can reach target
audiences in a contextually relevant way without interrupting the
viewing experience. The new ad format can be used alone or combined
with other media, and is aligned with existing media trading.
Mirriad is headquartered in London, with offices in the leading
advertising markets in the world: New York, Mumbai, Shanghai and
São Paulo.
Forward looking statements
Certain information contained in this announcement, including
any information as to the Group's strategy, plans or future
financial or operating performance, constitutes "forward-looking
statements". These forward-looking statements may be identified by
the use of forward-looking terminology, including the terms
"believes", "estimates", "anticipates", "projects", "expects",
"intends", "aims", "plans", "predicts", "may", "will", "seeks"
"could" "targets" "assumes" "positioned" or "should" or, in each
case, their negative or other variations or comparable terminology,
or by discussions of strategy, plans, objectives, goals, future
events or intentions. These forward-looking statements include all
matters that are not historical facts. They appear in a number of
places throughout this announcement and include statements
regarding the intentions, beliefs or current expectations of the
Directors concerning, among other things, the Group's results of
operations, financial condition, prospects, growth, strategies and
the industries in which the Group operates. The directors of the
Company believe that the expectations reflected in these statements
are reasonable, but may be affected by a number of variables which
could cause actual results or trends to differ materially. Each
forward-looking statement speaks only as of the date of the
particular statement.
By their nature, forward-looking statements involve risks and
uncertainties because they relate to events and depend on
circumstances that may or may not occur in the future or are beyond
the Group's control. Forward-looking statements are not guarantees
of future performance. Even if the Group's actual results of
operations, financial condition and the development of the
industries in which the Group operates are consistent with the
forward-looking statements contained in this document, those
results or developments may not be indicative of results or
developments in subsequent periods.
Chairman's statement
I am delighted to present Mirriad's first results following the
Company's successful admission to AIM on 19 December 2017.
As a result of the IPO, the Company raised net proceeds of
GBP23.7m. The fundraise has empowered the Company to expand the
Group's activities in its five target markets, China, India, the
US, Brazil and Germany, the world's largest and fastest growing
advertising markets.
The funds raised in the IPO allow the Group to enter 2018 well
capitalised, with a strong balance sheet enabling the Group to
credibly demonstrate longevity to its customers who are principally
large digital distributors and broadcasters. The Group has made
significant progress over the last few months since the IPO in
rolling out its platform and technology with these customers which
we believe will pave the way for revenue growth later in 2018 and
beyond.
In the last quarter of 2017 the Group delivered its single
biggest campaign. On behalf of Tangeche, a major Chinese based car
leasing firm, Mirriad embedded brand images and messages in over
200 episodes of video content over a five month period. This
campaign both from its size and effectiveness is a clear example of
the efficacy of Mirriad's audience based model.
The momentum has continued into the new year with the signing of
two landmark contracts with Univision and NBCU in the North
American market and renewing an important contract with
Youku/Alibaba in the Chinese market. While the Group's contracts do
not guarantee an immediate flow of revenue they are critical
markers of future success.
Our people
People are our greatest asset and sit at the core of Mirriad.
Our team of experts and specialists have developed all of our
intellectual property, our business processes and know-how that
form the basis for our unique proposition. Our proprietary
technology gives us a competitive advantage in the advertising
industry. As a consequence the majority of the Group's expenditure
is on staff and staff related costs. During the year the average
number of employees increased from 74 to 91 as we continued to
expand the Group's technology group and started to build out our
marketing and product teams. We now have staff in place to serve
our partners in China (Shanghai), Brazil (Sao Paulo), India
(Mumbai), the United States (New York) and Europe (London). To
build efficiency each of these offices is linked to provide support
to each other guided by the centre in London.
I would like to express the gratitude of the Board to all our
staff, both longer serving and more recently joined, who have
contributed to the development of the business. I have been
impressed with their dedication and hard work while we have been
putting in place the conditions for future growth. The demands on
the team are unlikely to lessen as we target growth in our key
markets. Retention and recruitment will be key to the Group's
future success. The Board is confident that the Company will be
able to recruit the staff that will be needed to meet future
challenges.
Focus
The Group is putting the foundations in place now to enable
meaningful revenue growth in the future. This requires relentless
focus and a need to remain on strategy. Developing large enterprise
clients takes time and patience and requires the Group to remain
flexible in how it serves their needs while continuing to assure
the effectiveness of our business model.
The Board is confident that the Group can scale revenues by
ensuring that its key customers are provided with the transactional
tools and training needed to facilitate in-video advertising. This
is why the Group has spent considerable time and resource in
developing a transactional tool which we call Marketplace. With
relatively low levels of capital expenditure, the development of
Marketplace and the potential to demonstrate the impact of in video
advertising to broadcasters and digital distributers, we are
confident in the Group's ability to drive significant growth in the
coming year and beyond.
Roger Conant Faxon
Non-executive Chairman
9 May 2018
Chief Executive's statement
Progress in 2017: focus and maturing technology
Mirriad's strategy has centred on three key areas: development
of core technologies; the development of an organisation capable of
supporting large enterprise class customers; and deployment of the
trading platform and associated in-video ad unit deemed essential
to connect clients advertising budgets to the inventory we create
and allow our business to scale.
We have maintained our tight focus on the world's largest and
fastest growing advertising markets with high levels of video
consumption. On that basis we have re-balanced our customer
portfolio in favour of larger more dominant players in each
respective market including Alibaba/Youku, NBCU, RTL Group,
Globosat and others. We expect this focus to yield results in terms
of revenues from the second half of 2018 and beyond as we deploy
our platform and service model. We anticipate the number of
customers under contract to show a small increase by the end of
2018 as current contractual negotiations complete.
The value chain for in-video advertising involves three parties:
content producers, distributors (digital or broadcast) and
advertisers/media agencies and Mirriad's platform provides a
marketplace for activity.
The Group's business is principally based on contracting with
distributors, the primary sellers of the in-video advertising
inventory, and taking a share of revenue from resulting in-video
advertising transactions.
Mirriad's revenue share generally averages approximately
20%.
Our technologies are designed to make a complex problem simple:
Mirriad receives video content; analyses it for advertising
inventory; makes it available to our customers to sell; and
ultimately fulfils the campaigns they have sold to media agencies
and brands. As our technology has developed we have increasingly
focused resources on the last steps in this process.
2017 was an important year for technology developments as we
solidified our capabilities for creating or predicting advertising
inventory from premium entertainment content and naturally
inserting realistic branded imagery into content at scale.
Development work continued around the Marketplace platform which
will enable key stakeholders such as content owners, distributors
and advertisers to transact. We also laid foundations for the
launch of an industry credible in-video advertising unit capable of
supporting media trading at scale: a third party certified,
verifiable, consistent currency, in the form of an in-video
advertising unit is essential to market liquidity.
The Company has been actively protecting its IP and currently
holds 12 granted patents with more in process over 2017.
Industry trends
There continues to be significant publicity around the
verification and value of advertising media with recent comments
from both Marc Pritchard and Keith Weed, respectively Chief
Marketing Officers of Proctor & Gamble and Unilever, the
world's largest two advertisers by spend.
In 2017 Marc Pritchard said that:
"We bombard consumers with thousands of ads a day, subject them
to endless ad load times, interrupt their screens with popups and
overpopulate their screens and feeds... We're awfully busy, but all
of this activity is not breaking through the clutter. It's just
creating more noise."
While Keith Weed said at the IAB Annual Leadership Meeting in
2018 that:
"[Consumers] don't care about good value for advertisers. But
they do care when they see their brands being placed next to ads
funding terror, or exploiting children."
Mirriad ad units are designed to address these issues and more:
bringing a new ad unit format to market requires a new metric that
is transparent, verifiable and validated by some of the most
respected industry measurement companies.
We have very recently announced the results of work we have been
undertaking for over two years concerning the standardisation of
the Mirriad advertising unit with comScore in the USA and Miaozhen
Systems in China. This work is critical in enabling Mirriad
in-video advertising to become a trading currency alongside other
advertising products. The work in these two pivotal markets should
drive more transactional liquidity between media owners and
advertisers.
In 2017 Mirriad solved the challenge of consistent delivery of
the ad units by finalising the development of an automated
measurement and gating technology called the Visual Impact Score
(VIS), now integrated into the Marketplace platform. VIS solves a
formidable problem by ensuring each instance of ad exposure meets
thresholds known to drive effectiveness such as exposure size and
proportion, clarity, proximity to action and prominence.
Early in 2018 Mirriad commissioned independent research from
global measurement company comScore, which analysed a large,
statistically valid random sample of the new Mirriad ad units. The
audit verified Mirriad's VIS score, with 98.5% of the tested ad
units passing the independent audit. Full study results are
available in a whitepaper on the Mirriad website
(www.mirriad.com).
So advertisers can now have independently verifiable certainty
around the quality of each billable ad - essential in today's
highly scrutinized world of value for money and data transparency
especially in the two largest advertising markets in the world.
This will help us in our sales and marketing efforts to new and
existing clients. Mirriad will continue working with multiple
independent vendors of advertising measurement in securing further
validation of the in-video advertising unit construct and its
effectiveness.
Marketing effectiveness
We ran the Group's largest campaign at the end of 2017 and into
the beginning of 2018. Mirriad partnered with Youku/Alibaba to
create an in-video ad campaign for a leading Chinese car leasing
company, Tangeche. The campaign embedded Tangeche's brand messages
as ad units across more than 20 different shows over five months.
This large-scale campaign successfully reached the target audience,
and hit Tangeche's awareness and consideration goals.
We are delighted that the campaign results, independently
researched by Miaozhen Systems, exceeded even our high
expectations.
The campaign delivered nearly 800 million impressions. At the
end of the campaign almost 71% of the audience had seen the ads,
72% of viewers thought that the inclusion of the brand in the shows
made the scenes look more realistic and 94% of the target audience
said they would take follow up action with their intention to use
the brand three times higher than before the campaign.
We believe that the Tangeche campaign is an excellent example
demonstrating the marketing power of in-video advertising when
delivered at scale.
The future
The path to success for Mirriad requires the Group to complete a
number of steps.
In 2017 and into the first half of 2018 we have concentrated on
the first of those steps: deploying our Marketplace platform and
services as well as establishing the in-video advertising unit
through independent 3(rd) party verification. This requires the
organisation to on-board customer sales organisations at some of
the world's largest media companies and takes considerable time and
effort. It also requires integration with third party systems
either at the customer, for core services, or externally, for 3(rd)
party verification and tracking of ad unit delivery. Both
integration and on-boarding are complex and time consuming but
worthwhile initiatives each requiring agreement with and
co-ordinated roll out with our customer organisations, their
clients and other third parties.
Once the supply-side of the model is operational our next step
is to leverage demand for in-video advertising by driving
demand-side awareness of the product and its benefits to
advertisers and clients. We do this through delivery of advertising
effectiveness research, executed locally and culminating in case
studies on behalf of different brand categories. When demand is
generated Mirriad has the technology and processes in place to
fulfil transactions using Marketplace.
The final step is to achieve scale in our target markets.
Ultimately, we believe we can drive scale in the business by
establishing Mirriad in-video advertising as a media buying plan
line item. It is also worth emphasising that Mirriad has planned
capabilities to support programmatic buying and can provide
personalisation depending on our distribution partners'
infrastructure.
Outlook
In 2017 and the first part of 2018 Mirriad has been laying the
foundations for future revenue growth by maintaining focus on its
core markets and focus on its Marketplace technology. I believe the
Group has made good progress on this front over the last few
months. Mirriad has also secured contracts with key customers in
our target markets, entered negotiations with a small number of
potential new customers in these markets and has started the
operational roll out of its systems with the customers currently
under contract. Our proprietary technology will allow the Group to
scale revenue over time and we expect to see the first fruits of
that strategy in the second half of 2018.
Mark Sabin Tadeusz Popkiewicz
Chief Executive Officer
9 May 2018
Finance review
Introduction
2017 was an important year for the Company with the admission of
Mirriad to AIM which raised a net GBP23.7m to fund future
expansion. In 2017 the Group focused on securing contracts with key
customers in its target markets and continued the development of
its core technology and transactional platform. The Group has
focused its resources on fewer larger customers. The Group now has
a base of customers which provides a platform for future growth
though the Directors caution that sales cycles are long and
signature of customer contracts, while an important KPI, does not
immediately lead to future revenue.
Current year results
Revenue for the year increased to GBP874k (2016: GBP711k) as the
Group commercialised its offering in its target markets with a
focus on its Asian business. Revenue has grown consistently between
2015 and 2017. Gross margin increased to GBP694k (2016: GBP559k).
The Group's principal cost is staff and its Administrative expenses
increased
to GBP12,067k (2016: GBP7,995k) as the Group continued to expand
staff in its local offices and invest in its technology team. The
loss for the year before tax increased to GBP11,271k (2016:
GBP7,294k) as a result of this expansion in headcount.
Tax
The Group has not recognised any tax assets in respect of
trading losses arising in the current financial year or accumulated
losses in previous financial years. The tax credit recognised in
the current and previous financial years arises from the receipt of
R&D tax credits.
Earnings per share
Earnings per share were a loss of 19 pence per share (2016: loss
of 18 pence per share) as a result of increased staff costs over
the period. This is based on the weighted average number of shares
in issue during the financial year.
Dividend
No dividend has been proposed for the year ended 31 December
2017 (2016: GBPnil).
Cash flow
Net cash used in operations was GBP7,524k (2016: GBP6,304k) as
headcount increased over the year. During the year GBP842k (2016:
GBP521k) of development costs were capitalised as required
following the Group's adoption of International Financial Reporting
Standards ("IFRS"). The Group also incurred GBP467k (2016: GBP41k)
of capital expenditure on tangible assets the majority of which,
GBP346k, related to the move to a permanent head office site in
London. Net proceeds from the issue of shares in July and December
2017 totalled GBP25m (2016 net proceeds: GBP11.4m). Cash consumed
by the business has increased every year since 2015 as the Group
has increased headcount and opened subsidiaries in its target
markets.
Balance sheet
As a result of the IPO Net Assets increased to GBP27.9m (2016:
GBP12.2m). Cash and cash equivalents at 31 December 2017 was
GBP26.4m (2016: GBP10.3m). Some of the proceeds from the issue of
shares has been placed on deposit for time periods ranging between
instant access and up to one year in maturity.
Accounting policies
The Group's consolidated financial information has been prepared
in accordance with IFRS as adopted in the EU.
The overall impact of the conversion to reporting under IFRS was
to decrease the loss for the year ended 31 December 2016 by
GBP318.6k and by GBP112.5k for the period ended 31 December 2015.
The main driver of this movement was the capitalisation of
development costs.
David Dorans
Chief Financial Officer
9 May 2018
Consolidated statement of profit or loss for the year ended 31
December 2017
Year ended Year ended
31 December 31 December
2017 2016
Notes GBP GBP
------------- -------------
Revenue 3 874,191 710,866
Cost of Sales (180,587) (151,586)
------------------------- ------ ------------- -------------
Gross Profit 693,604 559,280
------------------------- ------ ------------- -------------
Administrative expenses (12,067,393) (7,994,910)
Other operating
Income 101,715 141,225
------------------------- ------ ------------- -------------
Operating Loss (11,272,074) (7,294,405)
------------------------- ------ ------------- -------------
Finance Income 776 301
Loss before income
tax (11,271,298) (7,294,104)
Income tax credit 4 208,849 142,887
------------------------- ------ ------------- -------------
Loss for the period
/ year (11,062,449) (7,151,217)
------------------------- ------ ------------- -------------
Loss per ordinary share
- basic 5 (19p) (18p)
--------------------------------- ------------- -------------
All activities are classified as continuing.
Consolidated statement of comprehensive income for the year
ended 31 December 2017
Year ended Year ended
31 December 31 December
2017 2016
GBP GBP
------------- -------------
Loss for the financial period
/ year (11,062,449) (7,151,217)
---------------------------------- ------------- -------------
Other comprehensive expense:
Items that may be reclassified
to profit or loss:
Currency translation differences (14,088) (133,270)
Total comprehensive expense
for the period / year (11,076,537) (7,284,487)
---------------------------------- ------------- -------------
Items in the statement above are disclosed net of tax.
Consolidated balance sheet at 31 December 2017
As at 31 As at 31 As at 31
December December December
2017 2016 2015
GBP GBP GBP
------------------------ ----------- ------------- ------------
Assets
Non-current assets:
Property, plant
and equipment 425,874 49,017 140,744
Intangible assets 1,640,690 1,621,500 1,736,403
Investments - - -
Trade and other
receivables 212,960 28,634 -
2,279,524 1,699,151 1,877,147
Current assets
Trade and other
receivables 1,074,274 716,734 592,953
Tax receivable 208,840 184,241 41,354
Cash and cash
equivalents 26,383,690 10,347,394 5,824,952
------------------------ ----------- ------------- ------------
27,666,804 11,248,369 6,459,259
------------------------ ----------- ------------- ------------
Total assets 29,946,328 12,947,520 8,336,406
------------------------ ----------- ------------- ------------
Current liabilities
Trade and other
payables 2,054,603 775,744 572,043
------------------------ ----------- ------------- ------------
Total liabilities 2,054,603 775,744 572,043
------------------------ ----------- ------------- ------------
Net Assets 27,891,725 12,171,776 7,764,363
------------------------ ----------- ------------- ------------
Equity and Liabilities
Equity attributable
to owners of
the parent
Share capital 50,917 556 363
Share premium 23,717,390 22,401,586 10,901,926
Share based payment
reserve 1,964,835 289,564 97,517
Retranslation
reserve (190,485) (176,397) (43,127)
Retained earnings
/ (accumulated
losses) 2,349,068 (10,343,533) (3,192,316)
------------------------ ----------- ------------- ------------
Total equity 27,891,725 12,171,776 7,764,363
------------------------ ----------- ------------- ------------
Consolidated statement of changes in equity
For the year ended 31 December 2016
Share
based
Share Share payment Retranslation Accumulated Total
Capital Premium reserve reserve losses Equity
GBP GBP GBP GBP GBP GBP
--------------------- --------- ----------- --------- -------------- ------------- --------------
Balance as
at 1 January
2016 363 10,901,926 97,517 (43,127) (3,192,316) 7,764,363
--------------------- --------- ----------- --------- -------------- ------------- --------------
Loss for
the financial
year - - - - (7,151,217) (7,151,217)
Other comprehensive
loss for
the year - - - (133,270) - (133,270)
--------------------- --------- ----------- --------- -------------- ------------- --------------
Total comprehensive
loss for
the year - - - (133,270) (7,151,217) (7,284,487)
--------------------- --------- ----------- --------- -------------- ------------- --------------
Shares issued
in lieu of
consideration 2 111,735 - - - 111,737
Proceeds
from shares
issued 191 11,387,925 - - - 11,388,116
Share based
payments
recognised
as expense - - 192,047 - - 192,047
--------------------- --------- ----------- --------- -------------- ------------- --------------
Total transactions
with shareholders
recognised
directly
in equity 193 11,499,660 192,047 - - 11,691,900
--------------------- --------- ----------- --------- -------------- ------------- ------------
Balance as
at 31 December
2016 556 22,401,586 289,564 (176,397) (10,343,533) 12,171,776
--------------------- --------- ----------- --------- -------------- ------------- ------------
For the year ended 31 December 2017
Share
based (Accumulated
Share Share payment Retranslation Losses)/Retained Total
Capital Premium reserve reserve earnings Equity
GBP GBP GBP GBP GBP GBP
----------------------- --------- ------------- ---------- -------------- ------------------ ---------------
Balance as
at 1 January
2017 556 22,401,586 289,564 (176,397) (10,343,533) 12,171,776
----------------------- --------- ------------- ---------- -------------- ------------------ ---------------
Loss for
the financial
year - - - - (11,062,449) (11,062,449)
Other comprehensive
loss for
the year - - - (14,088) - (14,088)
----------------------- --------- ------------- ---------- -------------- ------------------ ---------------
Total comprehensive
loss for
the year - - - (14,088) (11,062,449) (11,076,537)
----------------------- --------- ------------- ---------- -------------- ------------------ ---------------
Shares issued
in lieu of
consideration 1 52,543 - - - 52,544
Proceeds
from shares
issued 462 27,541,844 - - - 27,542,306
Share issue
costs - (2,473,635) - - - (2,473,635)
Issue of
deferred
shares 49,898 (49,898) - - - -
Capital restructuring - (23,755,050) - - 23,755,050 -
Share based
payments
recognised
as expense - - 1,675,271 - - 1,675,271
----------------------- --------- ------------- ---------- -------------- ------------------ ---------------
Total transactions
with shareholders
recognised
directly
in equity 50,361 1,315,804 1,675,271 - 23,755,050 26,796,486
----------------------- --------- ------------- ---------- -------------- ------------------ -------------
Balance as
at 31 December
2017 50,917 23,717,390 1,964,835 (190,485) 2,349,068 27,891,725
----------------------- --------- ------------- ---------- -------------- ------------------ -------------
Consolidated statement of cash flows for the year ended 31
December 2017
2017 2016
GBP GBP
---------------------------- ------------ ------------
Net cash from operating
activities (7,709,471) (6,304,283)
Tax credit received 184,250 -
Interest received 776 301
Net cash used in operating
activities (7,524,445) (6,303,982)
---------------------------- ------------ ------------
Cash flow from investing
activities
Investment in subsidiaries (201,953) -
Capitalisation of
development costs (842,010) (520,607)
Purchase of tangible
assets (466,627) (41,312)
Proceeds from disposal
of tangible assets 2,660 227
---------------------------- ------------ ------------
Net cash used in investing
activities (1,507,930) (561,692)
---------------------------- ------------ ------------
Cash flow from financing
activities
Proceeds from issue
of ordinary share
capital (net of costs
of issue) 25,068,671 11,388,116
---------------------------- ------------ ------------
Net cash generated
from financing activities 25,068,671 11,388,116
---------------------------- ------------ ------------
Net increase in cash
and cash equivalents 16,036,296 4,522,442
Cash and cash equivalents
at the beginning of
the year 10,347,394 5,824,952
Cash and cash equivalents
at the end of the
year 26,383,690 10,347,394
---------------------------- ------------ ------------
Notes to the consolidated financial statements
1. Corporate information
Mirriad Advertising plc is a public limited company incorporated
and domiciled in the UK and registered in England with company
registration number 09550311. The Company's registered office is
6th Floor, One London Wall, London, EC2Y 5EB.
The Company is listed on AIM.
2. Basis of preparation
The financial information set out above does not constitute the
Group's statutory accounts for the years ended 31 December 2017 or
2016 but is derived from those accounts. Statutory accounts for
2016 have been delivered to the registrar of companies, and those
for 2017 will be delivered in due course. The auditor has reported
on those accounts; their reports were (i) unqualified, (ii) did not
include a reference to any matters to which the auditor drew
attention by way of emphasis without qualifying their report and
(iii) did not contain a statement under section 498 (2) or (3) of
the Companies Act 2006.
The consolidated financial information has been prepared in
accordance with International Financial Reporting Standards (IFRS)
as adopted by the European Union, IFRIC interpretations and the
Companies Act 2006. The financial information contained in these
financial statements have been prepared under the historical cost
convention, and on a going concern basis.
These financial statements, for the year ended 31 December 2017,
are the first the Group has prepared in accordance with IFRS.
The main changes under IFRS are noted below:
IAS 20 Accounting for grants has been applied to government
grant income received in 2016 and 2015. Previously grant income was
recognised when quarterly grant claims were actually submitted and
the claim amount known, but this has been amended to recognise the
grant income on an accruals basis over the period the grant costs
were incurred.
IAS 38 - Intangible Assets has been implemented which has led to
capitlisation of staff costs related to development of computer
software used by the business. Previously all such costs had been
expensed through the income statement.
New standards, amendments and interpretations not yet
adopted
A number of new standards and amendments to standards and
interpretations are effective for annual periods beginning after 1
January 2017, and have not been applied in preparing this
historical financial information. None of these is expected to have
a significant effect on the financial statements of the Group as
set out below:
-- IFRS 15, "Revenue from contracts with customers" deals with revenue recognition
-- IFRS 16, "Leases" addresses the definition of a lease, recognition and measurement of leases
-- IFRS 9, "Financial instruments" addresses the classification,
measurement and recognition of financial assets and financial
liabilities.
3. Segment information
Management primarily considers the business from a geographic
perspective since the same services are effectively being sold in
every Group entity. Therefore regions considered for segmental
reporting are where the Company and subsidiaries are based, namely
the United Kingdom, USA, India, Brazil, China & Singapore. The
revenue is classified by where the sales were booked not by the
geographic location of the customer. For this reporting purpose the
Singapore and China entities are considered together.
The amount of revenue from external customers by location of the
Group billing entity is shown in the tables below.
Revenue
2017 2016
GBP GBP
----------------------- -------- --------
Turnover by geography
China & Singapore 450,864 64,909
India 248,356 74,727
United Kingdom 101,494 520,655
USA 43,733 50,575
Brazil 29,744 -
----------------------- -------- --------
Total 874,191 710,866
----------------------- -------- --------
Revenue from external customers by country is split out below
based on the destination of the customer:
2017 2016
GBP GBP
----------- -------- --------
China 455,962 357,496
India 251,023 74,727
USA 57,831 58,101
Brazil 29,744 -
Italy 33,036 33,312
Germany 23,444 33,670
Other 23,151 33,262
Australia - 64,622
Korea - 55,676
Total 874,191 710,866
----------- -------- --------
4. Operating loss
The Group operating loss is stated after charging/(crediting):
2017 2016
GBP GBP
Employee benefits 6,905,025 4,117,661
Depreciation of property, plant and equipment 89,770 133,039
Amortisation of intangible assets 822,820 596,626
Foreign exchange movements 166,523 (139,278)
Other general and administrative costs 4,263,842 3,438,448
Other operating income (101,715) (141,225)
Total cost of sales, administrative expenses and other operating income 12,146,265 8,005,271
Other operating income includes income received from government
grants. The Group has complied with all the conditions attached to
these grant awards.
Included within Employee benefit cost are share based payments
for the year ended 31 December 2017 of GBP1.7m (2016: GBP0.2m).
5. Income tax credit
Tax credit included in profit
and loss
2017 2016
GBP GBP
------------------------------- ---------- ----------
Current tax
Research and development
tax credit for the period
/ year (208,849) (142,887)
Total current tax (208,849) (142,887)
------------------------------- ---------- ----------
Deferred tax
Origination and reversal - -
of timing differences
------------------------------- ---------- ----------
Total deferred tax - -
------------------------------- ---------- ----------
Tax on loss (208,849) (142,887)
------------------------------- ---------- ----------
UK corporation tax credit relates to R&D tax credits
received by the Group.
Reconciliation of tax charge:
The tax assessed for the period is based on the standard rate of
corporation tax in the UK 19.25%. The differences are outlined
below:
2017 2016
GBP GBP
--------------------------------- -------------------------- ----------------------
Loss before tax (11,271,298) (7,294,104)
--------------------------------- -------------------------- ----------------------
Loss on ordinary activities
multiplied by the standard
rate of corporation tax in
the UK 19.25% (2016: 20%) (2,169,725) (1,458,821)
Effects of:
Expenses not deductible for
tax purposes 1,002,999 708,968
Enhanced R&D deduction (156,715) (111,396)
R&D tax credit receivable (208,849) (142,887)
Surrender of losses for R&D
tax credit 277,265 197,086
Deferred tax not recognised
on unutilised losses 1,046,176 664,163
--------------------------------- -------------------------- ----------------------
Total tax credit for the period
/ year (208,849) (142,887)
--------------------------------- -------------------------- ----------------------
The tax (charge) / credit relating to components of other
comprehensive income is as follows:
2017
---------------------------- -----------------------------------
Before Tax (charge) After
tax / credit tax
---------------------------- --------- ------------- ---------
Fair value losses:
Currency translation
differences (14,088) - (14,088)
---------------------------- --------- ------------- ---------
Other comprehensive income (14,088) - (14,088)
---------------------------- --------- ------------- ---------
2016
---------------------------- -------------------------------------
Before Tax (charge) After
tax / credit tax
---------------------------- ---------- ------------- ----------
Fair value losses:
Currency translation
differences (133,270) - (133,270)
---------------------------- ---------- ------------- ----------
Other comprehensive income (133,270) - (133,270)
---------------------------- ---------- ------------- ----------
6. Earnings per share
(a) Basic
Basic earnings per share calculated by dividing the loss for the
period / year by the weighted average number of ordinary shares in
issue during the year. Potential ordinary shares are not treated as
dilutive as the Group is loss making and such shares would be
anti-dilutive.
Group 2017 2016
------------------------------------- ------------- ------------
Loss attributable to owners
of the parent GBP (11,062,449) (7,151,217)
------------------------------------- ------------- ------------
Weighted average number of ordinary
shares in issue Number 58,030,338 40,466,430
------------------------------------- ------------- ------------
The loss per share for the year was 19p (2016: 18p).
No dividends were paid during the year (2016: GBPnil).
(b) Diluted
Potential ordinary shares are not treated as dilutive as the
Group is loss making and such shares would be anti-dilutive.
7. Related party transactions
The Group is owned by a number of investors the largest being
IP2IPO Portfolio (GP) Limited (as general partner for IP2IPO
Portfolio L.P) who owns approximately 27% of the share capital of
the Company. Accordingly there is no ultimate controlling
party.
During the year the company had the following significant
related party transactions which were carried out at arm's length.
No guarantees were given or received for any of these
transactions:
IP2IPO Services Limited
IP2IPO Portfolio (GP) Limited - A company with the same parent
company as IP2IPO Services Limited, one of the company directors
during the period had the following transactions: (1) Purchase of
6,010,323 ordinary shares in the IPO in December 2017 at GBP0.62
per share; (2) Charged Mirriad Advertising Plc GBP52,543.76 for
services as a corporate finance advisor. This fee was satisfied by
the issue and allotment of 84,748 preference shares in July
2017.
IP2IPO Limited - A company with the same parent company as
IP2IPO Services Limited, one of the company directors during the
period had the following transactions: (1) Purchase of 10,000
ordinary shares in the IPO in December 2017 at GBP0.62 per share;
(2). Charged Mirriad Advertising Plc GBP10,000 in November 2017 for
placement of a Non-Executive Director, and GBP267.05 for event hire
and refreshments in December 2017. The invoice for the event hire
charges was not received by the Company until January 2018 so was
unpaid as at 31 December 2017. This invoice was subsequently
settled on 30 January 2018.
Top Technology Ventures Limited - A company with the same parent
company as IP2IPO Services Limited, one of the company directors
during the period charged Mirriad Advertising Plc GBP3,500 in
August 2017 for data room charges related to fundraising
activity.
Parkwalk Advisors Limited
The non-executive director of the company during the period
purchased 4,032,258 ordinary shares in the IPO in December 2017 at
GBP0.62 per share.
All the related party transactions disclosed above were settled
by 31 December 2017 except where stated.
The Directors have authority and responsibility for planning,
directing and controlling the activities of the Group and they
therefore comprise key management personnel as defined by IAS 24,
("Related Party Disclosures"). Remuneration of Directors and senior
management is disclosed in the Remuneration report.
8. Post balance sheet events
On 24 April 2018 the Company announced the completion of an
investment by Puhua Tianqin Equity Investment Fund Partnership
("Puhua"), a Capital fund established in Jinhua in the People's
Republic of China.
Puhua has subscribed for 3,225,806 new ordinary shares at a
price of 62 pence per share, the same price funds were raised at in
Mirriad's IPO on 19(th) December 2017. The investment raised gross
proceeds of approximately GBP2 million for the Company.
The financial information set out in this document does not
constitute the Group or Company's statutory accounts.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR FKFDNABKDFPK
(END) Dow Jones Newswires
May 09, 2018 02:01 ET (06:01 GMT)
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