TIDMMIRI
RNS Number : 4349Y
Mirriad Advertising PLC
09 May 2019
Mirriad Advertising plc
PRELIMINARY RESULTS FOR THE YEARED 31 DECEMBER 2018
9 MAY 2019
Mirriad Advertising plc
("Mirriad", the "Company" or the "Group")
Results for the year ended 31 December 2018
Mirriad Advertising plc, the established computer vision and AI
platform company, announces its unaudited results for the year
ended 31 December 2018.
Financial overview
-- 2018 revenue of GBP416k (2017 GBP874k) in the context of the
previously flagged challenges with the Group's go-to-market
strategy. Trading improved in H2 with revenue of GBP296k (H1
GBP120k)
-- Net assets reduced 44% to GBP15.6m (2017: GBP27.9m) as a
result of the losses in the period and a decision to take an
impairment charge against internally generated software of
GBP1.2m
-- Operating loss increased 27% to GBP14.4m (2016: GBP11.3m)
including the GBP1.2m impairment noted above
-- Cash and cash equivalents at 31 December 2018 were GBP15.2m
Operational highlights
-- Appointment of new senior management team on 1(st) October
when Stephan Beringer joined as CEO and Jana Eisenstein as
President
-- Signature of initial contract with Tencent in China
-- GBP2m equity investment by Jinhua Puhua Tianqin Equity Investment Fund Partnership ("Puhua")
-- Signature of contract with TF1 in France
-- Awarded the Best Video Marketing and Advertising Platform in
the Digiday Technology Awards in September
Post period highlights
-- New strategy announced by Stephan Beringer in March 2019 to
address the ineffectiveness of the Group's previous go-to-market
strategy
-- Closure of the Group's operations in Brazil and withdrawal
from commercial operations in India which are low per capita
advertising spend markets
-- Appointment of new CTO, Niteen Prajapati, on 1(st) April 2019
-- Roger Faxon stepped down as Chairman on 30(th) April to be replaced by John Pearson
-- Trading in 2019 to date is in line with the Company's budget
and Q1 2019 revenue surpassed H1 2018 revenue
-- The Company has sufficient cash to fund its activities
throughout the current financial year however will need to raise
additional funds in the next 12 months. Cash balances at 31 March
2019 were GBP12.3m
Stephan Beringer, Chief Executive Officer of Mirriad,
commented:
"I was under no illusion about the scale of the task ahead when
I joined Mirriad in 2018, and the challenge is reflected in these
results. We have moved decisively to address the ineffectiveness of
the company's previous strategy and to reset our cost base.
"The business is now getting into a far better position to use
its award-winning technology to tap into the huge market
opportunities we have identified and put the business on a path to
growth, creating value for our investors. I am very encouraged by
the progress to date and have confidence that our new strategy can
and will deliver value for our shareholders."
For further information please visit www.mirriad.com or
contact:
Mirriad Advertising plc Tel: +44 (0)207 884 2530
Stephan Beringer, Chief Executive
Officer
David Dorans, Chief Financial
Officer
Numis Securities Limited Tel: +44 (0) 207 260 1000
(Nominated Adviser & Broker)
Nick Westlake
James Black
Hugo Rubinstein
Financial Communications:
Charlotte Street Partners
Andrew Wilson Tel: +44 (0) 7810 636995
Tom Gillingham Tel: +44 (0) 7741 659021
Notes to Editors
About Mirriad
Mirriad is an established computer vision and AI-powered
platform company, built on Academy-Award winning entertainment
tech, with 29 patents and patents pending. Using sophisticated
technologies, Mirriad connects people with brands, through seamless
ad insertions in popular linear and digital content. Advertisers
can now reach very large target audiences in a contextually
relevant way without interrupting the viewing experience.
Research has consistently shown in-video advertising to be
highly effective for the marketer and preferred by audiences on TV,
online, and mobile.
Mirriad is headquartered in London, with offices in New York,
Paris, Munich, Mumbai, and Shanghai.
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 Annual Report for the year
ended 31(st) December 2018 following my recent appointment to the
role of Chairman.
Looking back
2018 was a year of transition for Mirriad. Although there were
operational and technological achievements to be proud of, the
financial results were not what the Board had expected. Businesses
such as Mirriad that are looking to disrupt established business
models require the ability to pivot their strategies to break
through. The Board deemed this necessary in 2018 both in leadership
and strategy.
Mirriad's DNA is based on Academy Award-winning computer vision
and image mapping technology. The Company has developed and evolved
this technology to become a solution for advertisers by allowing
the insertion of branding, messaging and products at an
unprecedented level of quality and speed. Mirriad is currently the
only solution in the market that can deliver high impact
experiences with 100% realism across linear TV and digital video.
It is a technology that has huge potential as a new solution to
create inventory and add revenue for broadcasters and digital
publishers.
However, the company had consistently been unable to grow
revenues at the pace that reflected its potential. The Board
therefore decided that a new perspective and market experience was
needed to drive the business forward. As a consequence at the
beginning of the fourth quarter we changed senior management
bringing in Stephan Beringer as CEO to review the company, its
technology and its go-to-market strategy.
Stephan quickly and decisively reset the company's Strategy,
repositioned its presence in the market, reviewed its cost base and
refocused its technology road map to better serve its customers.
The Board fully endorses Stephan's new strategy and believes
strongly that while there is much to do, the business is now on the
right track to deliver on its promise. Mirriad has never had
difficulty getting potential customers excited about its
technology. Now we firmly believe we have a team and go-to-market
strategy that will deliver on the financial potential brought by
those customers. We look forward to the impact of the new strategy
on the company's results during 2019.
Corporate governance
Shareholders will be aware that during 2018, companies were
required to formally adopt a corporate governance code. The Board
have chosen to fully adopt the Quoted Companies Alliance Corporate
Governance Code.
Board
In October 2018 we made a significant change in the leadership
of the organisation, appointing Stephan Beringer as Chief Executive
Officer and subsequently appointing Jana Eisenstein as President.
Stephan joined the Board on appointment and Mark Popkiewicz stepped
down. I would like to thank Mark for all his work in the evolution
of the company.
Shortly before the publication of this report in May 2019 we
also announced that Roger Faxon had decided to step down as
Chairman having steered the business through its IPO and subsequent
management changes. The rest of the Board and I are very grateful
for his hard work, passion and dedication in getting Mirriad to its
current stage.
Culture
The new management team, with support from the Board, is
renewing the cultural and skill mix of the organisation. The
organisation is being re-focused, and the markets it operates in
are changing. Mirriad needs to hire the best senior talent, with
the right skills, that it can economically justify. It needs to
fill in advertising industry knowledge skill gaps - which is why we
have brought Stephan and Jana into the organisation. I also want to
see the business develop and retain its top talent in the extremely
competitive markets in which it operates.
Engaging with our stakeholders
The Board and I take our responsibilities to shareholders and
other stakeholders seriously. Each of the Board members brings a
different set of skills to the business, along with a different
network of contacts, and so has something different to offer
stakeholders. Shortly after Stephan's appointment, he met with a
range of major shareholders to understand their perceptions of the
company, their expectations and their concerns. These meetings were
followed up in late March with presentations, including a webinar
open to investors and analysts, setting out the Company's new
strategy and giving an overview of performance since Stephan
joined. The Company intends to engage more frequently with
shareholders now that the management transition is complete. The
Company itself continues to engage actively with its employees via
regular biannual staff surveys and bimonthly Town Hall meetings.
The management team is also well advanced in a programme to meet
with key customers to discuss how the business can better address
their needs.
The year ahead
The Company is changing its market focus as we believe it had
stretched across too many geographies. The emphasis now is on the
US, Germany, France, the UK and China, which the Company considers
to be the highest value media markets. The Company is also changing
its go-to-market strategy to enable it to scale more quickly and
aligning its product with industry nomenclature and metrics. At
heart, Mirriad is a technology company, and it will continue to
invest in automation and further develop its artificial
intelligence capability. I, along with the rest of the Board,
believe that the development of these foundations in 2019 will set
the business up for growth in 2020.
John Pearson
Non-executive chairman
9 May 2019
CEO's statement
Mirriad has many strengths and areas of competitive advantage
and I believe that Mirriad's core proposition is more powerful than
ever. Mirriad is the only cross-platform solution that offers a
true in-video format which looks as real as the content it
integrates with. However, the business had been taken on a path to
market that was not ideal, it stretched across too many
geographies, it had been relying on too few market opportunities,
the strategy was not followed through and foremost the Company was
significantly out of touch with its content and distribution
partners as well as advertisers and their agencies. A reset was
clearly needed.
I came to Mirriad with a plan to assess the business within my
first 100 days. Revenues were significantly below expectations due
to sporadic campaign work. I wanted to assess where the business
had come from and what I saw it needed to be in the future. I also
wanted the entire team to own that plan so that it was not just my
vision of where we need to go but the whole Company's. We have
actively involved all departments in looking at how they work, what
their issues are, how they can better address our customers, what
potentially blocks them from delivering excellence and what ideas
they have to make a leap forward from a technology and solution
standpoint.
At the same time we have been very actively engaged with the
external market and stakeholders. We have talked to many C-level
executives at brands, media agencies and broadcasters/distributors
to get their view on our product, the opportunities it opens and
how we change the way we engage with the market. I have also met
and talked to many of our key shareholders to get their perspective
on the business.
2018 highlights
There have been a number of successes in 2018.
Research studies have proved two things: viewers like the
Mirriad format, they think it makes content richer and better, they
regard it as innovative and prefer it over other forms of
advertising; secondly, presence in content makes brands more
desirable and increases brand consideration. Our product really is
unique in the entertainment space as we are the only company that
we know of that embeds images into any content our partners supply.
This is a key distinction as our advertising looks like it has
always been part of the programme and not overlaid afterwards.
The company has continued to develop its core video technology
such as that for delivering machine learning solutions to compute
proximity and prominence values. The company also continued to
develop the platform we use to manage and automate the different
processes and workflows introducing new automated "Buy Orders" so
that we make the solution work better for all our customers.
We have signed or renewed deals with key distribution partners
such as Tencent, Univision, TF1 and RTL and we have had a range of
new engagements with the demand side of the market, particularly
the media agencies.
Changes in the market
Audiences are shifting and moving across platforms, devices and
applications, and they are increasingly rejecting intrusive
advertising. At the same time, engagement with consumers is being
controlled and dominated more and more by the major platforms and
developments such as GDPR and e-privacy regulations are adding to
advertisers' constraints in terms of differentiation, ownership and
growth. Brands need to be hyper-relevant to everybody, deliver
fully connected experiences, engage at scale and ensure their
messages are high quality and do all of this with maximum
efficiency. I believe that this is where Mirriad can make a
difference and support advertisers, agencies and media partners. We
offer a desirable format which becomes part of the entertainment
content that people are most passionate about. We can leverage this
passion for the benefit of any brand. We can travel with the
content wherever it goes, whether in linear, digital, mobile or on
demand. We are safe in terms of the content we use for the
inventory we create. This means that we can address many of the
challenges that the content industry is facing in terms of the
experience it offers and the way it generates revenue as well as
offering a product which is future proof.
The new strategy
Our new strategy can be summarised in 4 key points:
-- Align with the market, don't re-invent it: We have to become
part of the media buying ecosystem, not expect the ecosystem to
adapt to us. We have to speak the same language, use the same
metrics, integrate with the same systems as the media world in
which we operate in order to achieve scale and give both the demand
and supply side an easy path to the solution's benefits.
-- Build scale: Mirriad is not a niche tool, our technology can
deliver the widest possible reach.
We must continue developing our core computer vision and AI
technology to, ultimately, allow total automation, further build
our content partnerships across platforms, and offer inventory at
scale to the agencies and the advertisers they're in charge of.
-- Focus on core markets: To live up to our ambition and to
deliver growth for all stakeholders, we must allocate resources to
activities and geographies that are most central to our
development.
-- The right kind of revenue: Revenue is a key focus for
Mirriad, but not at the expense of the long-term size and health of
the business. Our leading position in the ecosystem will in part be
determined by the partnerships, deals and integrations we do today,
so all of them must reflect the company we want to be in the
future.
Cultural change
One of my key tasks has been to start a process of cultural
change to foster agility, speed, innovation and the passion to
succeed in all staff. We have a great starting point as we have
many staff who have served the business loyally and diligently over
the last years. We are tapping into that talent pool and making
sure that that pride in the "brilliance" of what we deliver as a
product is fully aligned with our new pace and strategy.
That means open and frank communication across the business so
we can learn from the past while preparing for the future. We want
staff to have the freedom to innovate, get on with what they are
doing without interference, feel free to speak out and who aren't
afraid to fail. This is how we win.
Outlook for 2019
We are accelerating across all areas of activity with a focus on
scale and impact. This means an acceleration in development of our
technology and platform. Also we need to apply ourselves to the
development of our go-to-market strategy and that means adding more
supply partners, delivering research cases that prove superior
results and ultimately building up the business to become a "line
item" in clients' media plans in 2020.
We are ensuring that the organisation has the right skills, in
the right places. We have taken some tough decisions and exited the
market in Brazil and commercially in India which are low per capita
advertising markets so that we can put our efforts into the markets
which have the highest sophistication and investment levels. These
are the USA, Germany, France, the UK and China. We are extremely
ambitious for this business: it has the capability to build on its
artificial intelligence skills to connect brands and people in a
wholly new way.
Stephan Beringer
Chief Executive Officer
9 May 2019
Financial review
Introduction
2018 was a challenging year for the Company as the Board
concluded that the Company's go-to-market strategy was not going to
deliver the revenue growth the Board and shareholders expected. The
Board took the decision to change senior management during the
second half of the year. From October onwards the Group's senior
management team was engaged in a process to review and refresh the
strategy. The new strategy was shared with investors in March 2019.
The second half of 2018 showed an improvement on revenue compared
to the first half of 2018. Of the Company's KPIs, customers under
contract showed an improvement year on year while both revenue and
cash consumption weakened.
FY 2018 Results
Revenue for the year was GBP415,886 (2017: GBP874,191) following
lower than anticipated results in all of the Group's markets as
commercialisation lagged behind what was originally expected.
During the year the Group continued to focus on developing its
operations and delivered its first substantive campaign in the USA
in Q4 for T-Mobile on Univision. The USA was the market which saw
the largest year on year increase in revenues.
While 2018 revenue reduced in most markets there were particular
reductions in India and China.
In India, although the Group renewed its deal with Star, this
renewal did not include a revenue guarantee as in the prior year.
Regrettably, campaigns did not scale as anticipated and post year
end the Group has exited the Indian commercial market as management
elected to focus on markets with higher per capita advertising
spend.
In China the Group announced the signing of a key new deal with
Tencent. We did not expect this to generate meaningful revenue
during 2018 as its implementation is reliant on the development of
a more video specific technology allowing a segmented delivery of
programme elements to Tencent rather than the entire programme as
is done with other clients. At the time of this report that
technology was in final testing. The introduction of this
innovative technology should allow revenues to scale.
As a result of the reduced volume of campaigns gross margin
reduced to GBP272,338 (2017: GBP693,604). A significant part of the
Company's cost of sales relates to staff who, along with the
Company's technology, are responsible for analysing content and
producing the advertising imagery which is ultimately inserted into
that content. The staff element of this work is largely fixed and
since activity did not scale as anticipated margin deteriorated.
Management are confident that the business can handle a
significantly greater volume of campaigns than were actually
delivered during 2018 and that future margins will improve.
The Group's principal cost is staff and its Administrative
expenses increased to GBP14,872,725 (2017: GBP12,067,393) as the
Group's average headcount expanded compared to the prior year. The
income statement includes GBP1,461,112 (2017: GBP1,179,148) related
to research and development (R&D) activity. In total gross
expenditure on the company's technology team (including the
capitalised element, see below) increased by GBP318,454.
Administrative expenses include an impairment charge of
GBP1,230,275 relating to internally generated software that was
previously capitalised in accordance with International Financial
Reporting Standards ("IFRS"). While management believe that this
software remains critical to the future success of the business and
the software continues to be used with the Group's clients, the
slower than anticipated pace of revenue growth means that we
believe it appropriate to take an impairment charge against the
asset. Accordingly we have written the carrying value down to zero.
We will continue to monitor this area of the business and ensure
that we fully comply with the accounting standard in future
periods.
EBITDA loss increased to GBP11,930,715 (2017: GBP10,359,484).
This measure does not include the impairment charge and therefore
we believe gives a truer picture of the Group's current cost
base.
The loss for the year before tax increased to GBP14,370,986
(2017: GBP11,271,298) as a result of this expansion in headcount
and the impairment charge noted above.
Tax
The Group has not recognised any tax assets in respect of
trading losses arising in the current financial year or accumulated
losses in previous financial years. The tax credit recognised in
the current and previous financial years arises from the receipt of
R&D tax credits.
Earnings per share
Loss per share was 14 pence per share (2017: loss of 19 pence
per share) as a result of increased staff costs over the period
balanced by the increase in the Company's issued share capital.
This calculation 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
2018 (2017: GBPnil).
Cash flow
Net cash used in operations was GBP11,921,131 (2017:
GBP7,524,445) as average headcount increased over the year. During
the year GBP878,500 (2017: GBP842,010) of development costs were
capitalised as required under IFRS. As noted above the Group has
taken an impairment against the whole of this capitalised cost due
to the slower pace of revenue growth. The Group also incurred
GBP137,386 (2017: GBP466,627) of capital expenditure on tangible
assets. Net proceeds from the issue of shares in May 2018 totaled
GBP1,925,834 (2017: GBP25,068,671) relating to an investment from
Puhua.
Balance sheet
Net Assets decreased to GBP15.6m (2017: GBP27.9m) as a result of
the losses for the year net of the proceeds from the issue of
shares and after taking into account the impairment of software
assets. Cash and cash equivalents at 31 December 2018 was GBP15.2m
(2017: GBP26.4m).
Accounting policies
The Group's consolidated financial information has been prepared
in accordance with International Financial Reporting Standards as
adopted in the EU.
Going concern
The financial statements have been prepared on a going concern
basis. After making enquiries and producing cash flow forecasts,
the Directors have reasonable expectations, as at the date of
approving the financial statements, that the Company and the Group
will have adequate resources to fund the activities of the Company
and the Group for the next nine months from the date of the
financial statements. Albeit that the financial statements are
prepared on a going concern basis, there is a material uncertainty
in relation to going concern as this is dependent on raising
additional external funds from new or existing shareholders within
12 months of the date of this report.
Events after the balance sheet date
The Company presented its revised strategy to shareholders in
March 2019. The strategy recommended exiting the market in Brazil
and exiting India commercially (the Group's production operation
remains in Mumbai). In anticipation of changes to the operating
model in China the Group also reduced staff in its Shanghai office.
A number of staff were also made redundant from the London office.
The costs for these changes will be taken in 2019 as the decision
to enact changes was made after the year end. The changes resulting
from the strategy review will be neutral to the Company's cost base
in 2019.
The Company has reviewed its cost base following the strategy
reset and believes that this review together with the one-off costs
of change dropping out of the cost base (cGBP0.5m in 2019) will
result in a reduction in administrative expenses in 2020.
David Dorans
Chief Financial Officer
9 May 2019
Consolidated statement of profit or loss
For the year ended 31 December 2018
Year ended Year ended
31 December 31 December
2018 2017
Note GBP GBP
-------------------------------- ---- ------------ ------------
Revenue 3 415,886 874,191
Cost of sales (143,548) (180,587)
-------------------------------- ---- ------------ ------------
Gross profit 272,338 693,604
Administrative expenses (14,872,725) (12,067,393)
Other operating income 171,433 101,715
-------------------------------- ---- ------------ ------------
Operating loss 4 (14,428,954) (11,272,074)
Finance income 57,968 776
-------------------------------- ---- ------------ ------------
Loss before income tax (14,370,986) (11,271,298)
Income tax credit 42,217 208,849
-------------------------------- ---- ------------ ------------
Loss for the year (14,328,769) (11,062,449)
-------------------------------- ---- ------------ ------------
Loss per Ordinary Share - basic 5 (14p) (19p)
-------------------------------- ---- ------------ ------------
All activities are classified as continuing.
Consolidated statement of comprehensive income
For the year ended 31 December 2018
Year ended Year ended
31 December 31 December
2018 2017
GBP GBP
-------------------------------------------------- ------------ ------------
Loss for the financial year (14,328,769) (11,062,449)
-------------------------------------------------- ------------ ------------
Other comprehensive expense
Items that may be reclassified to profit or loss:
Currency translation differences (88,346) (14,088)
-------------------------------------------------- ------------ ------------
Total comprehensive expense for the year (14,417,115) (11,076,537)
-------------------------------------------------- ------------ ------------
Items in the statement above are disclosed net of tax.
Consolidated balance sheet
At 31 December 2018
Group
-------------------------
As at As at
31 December 31 December
2018 2017
GBP GBP
---------------------------- ------------ -----------
Assets
Non-current assets
Property, plant and
equipment 414,062 425,874
Intangible assets 170,053 1,640,690
Investments - -
Trade and other receivables 186,321 212,960
----------------------------- ------------ -----------
770,436 2,279,524
---------------------------- ------------ -----------
Current assets
Trade and other receivables 973,750 1,074,274
Other current assets 288,009 208,840
Cash and cash equivalents 15,203,920 26,383,690
----------------------------- ------------ -----------
14,465,679 27,666,804
---------------------------- ------------ -----------
Total assets 17,236,115 29,946,328
----------------------------- ------------ -----------
Current liabilities
Trade and other payables 1,622,460 2,054,603
Current tax liabilities 36,952
----------------------------- ------------ -----------
Total liabilities 1,659,412 2,054,603
----------------------------- ------------ -----------
Net assets 15,576,703 27,891,725
----------------------------- ------------ -----------
Equity and liabilities
Equity attributable
to owners of the parent
Share capital 50,949 50,917
Share premium 25,643,192 23,717,390
Share-based payment
reserve 2,141,094 1,964,835
Retranslation reserve (278,831) (190,485)
(Accumulated losses)
/ retained earnings (11,979,701) 2,349,068
----------------------------- ------------ -----------
Total equity 15,576,703 27,891,725
----------------------------- ------------ -----------
Consolidated statement of changes in equity
For the year ended 31 December 2018
Year ended 31 December 2017
----------------------------------------------------------------------------------------
(Accumulated
Share-based Retranslation losses)/retained
Share capital Share premium payment reserve earnings Total equity
reserve
GBP GBP GBP GBP GBP GBP
------------------------- ------------- ------------- ----------- ------------- ---------------- ------------
Balance 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 at 31 December
2017 50,917 23,717,390 1,964,835 (190,485) 2,349,068 27,891,725
-------------------------- ------------- ------------- ----------- ------------- ---------------- ------------
Year ended 31 December 2018
----------------------------------------------------------------------------------------
(Accumulated
Share-based Retranslation losses)/retained
Share capital Share premium payment reserve earnings Total equity
reserve
Note GBP GBP GBP GBP GBP GBP
--------------------- ----- ------------- ------------- ----------- ------------- ---------------- ------------
Balance at 1 January 2018 50,917 23,717,390 1,964,835 (190,485) 2,349,068 27,891,725
---------------------------- ------------- ------------- ----------- ------------- ---------------- ------------
Loss for the financial
year - - - - (14,328,769) (14,328,769)
Other comprehensive
loss for the year - - - (88,346) - (88,346)
---------------------------- ------------- ------------- ----------- ------------- ---------------- ------------
Total comprehensive
loss for the year - - - (88,346) (14,328,769) 14,417,115
---------------------------- ------------- ------------- ----------- ------------- ---------------- ------------
Proceeds from
shares issued 32 1,999,968 - - - 2,000,000
Share issue costs - (74,166) - - - (74,166)
Share-based payments
recognised as
expense - - 176,259 - - 176,259
---------------------------- ------------- ------------- ----------- ------------- ---------------- ------------
Total transactions
with shareholders
recognised directly
in equity 32 1,925,802 176,259 - - 2,102,093
---------------------------- ------------- ------------- ----------- ------------- ---------------- ------------
Balance at 31 December
2018 50,949 25,643,192 2,141,094 (278,831) (11,979,701) 15,576,703
---------------------------- ------------- ------------- ----------- ------------- ---------------- ------------
Consolidated statement of cash flows
For the year ended 31 December 2018
Group
-------------------------
2018 2017
GBP GBP
-------------------------------------- ------------ -----------
Net cash used in operating activities (11,972,408) (7,709,471)
Tax credit received - 184,250
Taxation paid (6,691) -
Interest received 57,968 776
--------------------------------------- ------------ -----------
Net cash used in operating activities (11,921,131) (7,524,445)
--------------------------------------- ------------ -----------
Cash flow from investing activities
Investment in subsidiaries (168,587) (201,953)
Capitalisation of development
costs (878,500) (842,010)
Purchase of tangible assets (137,386) (466,627)
Proceeds from disposal of tangible
assets - 2,660
--------------------------------------- ------------ -----------
Net cash used in investing activities (1,184,473) (1,507,930)
--------------------------------------- ------------ -----------
Cash flow from financing activities
Proceeds from issue of Ordinary
Share capital (net of costs
of issue) 1,925,834 25,068,671
--------------------------------------- ------------ -----------
Net cash generated from financing
activities 1,925,834 25,068,671
--------------------------------------- ------------ -----------
Net (decrease) / increase in
cash and cash equivalents (11,179,770) 16,036,296
Cash and cash equivalents at
the beginning of the year 26,383,690 10,347,394
--------------------------------------- ------------ -----------
Cash and cash equivalents at
the end of the year 15,203,920 26,383,690
--------------------------------------- ------------ -----------
Cash and cash equivalents consists
of
Cash at bank and in hand 15,203,920 26,383,690
--------------------------------------- ------------ -----------
Cash and cash equivalents 15,203,920 26,383,690
--------------------------------------- ------------ -----------
Notes to the consolidated financial statements
For the year ended 31 December 2018
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 2018 or
2017 but is derived from those accounts. The balances as at 31
December 2018 are unaudited. Statutory accounts for 2017 have been
delivered to the registrar of companies, and those for 2018 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.
The accounting policies adopted are consistent with those of the
annual financial statements for the year ended 31 December
2017.
New Standards, amendments and interpretations not yet
adopted
The Group has applied the following standards and amendments for
the first time for their annual reporting period commencing 1
January 2018:
-- IFRS 9 - Financial Instruments
-- IFRS 15 - Revenue from Contracts with Customers
The new standards listed above did not have any material impact
on the amounts recognised in the current period and are not
expected to significantly affect future periods.
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 2018, and have not been applied in preparing these
financial statements. With the exception of IFRS 16, none of these
are expected to have a significant effect on the financial
statements of the Group or parent company, as set out below:
-- IFRS 16 "Leases" addresses the definition of a lease,
recognition and measurement of leases and establishes principles
for reporting useful information to users of historical financial
information about the leasing activities of both lessees and
lessors. A key change arising from IFRS 16 is that most operating
leases will be accounted for on the balance sheet for lessees. The
standard replaces IAS 17 "Leases" and related interpretations. The
standard is effective for annual periods beginning on or after 2019
and earlier adoption is permitted, subject to EU endorsement and
the entity adoption of IFRS 15 "Revenue from contracts with
customers" at the same time. The impact of IFRS 16 at 1 January
2019 is expected to lead to the creation of lease asset of
GBP820,612, a new lease liability value of GBP1,044,600 which is
offset by a GBP167,403 write back of a rent-free period accrual.
The cumulative impact on retained earnings is expected to be a
reduction of GBP56,585.
3. Segment information
Management mainly considers the business from a geographic
perspective since the same services are effectively being sold in
every Group entity. Therefore regions considered for segmental
reporting are where the Company and subsidiaries are based, namely
the UK, the USA, India, Brazil, China and 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 only income outside of the primary business activity relates
to income received from grants which is recognised in other
operating income.
The amount of revenue from external customers by location of the
Group billing entity is shown in the tables below.
2018 2017
Revenue GBP GBP
---------------------- ------- -------
Turnover by geography
China and Singapore 177,395 450,864
USA 109,541 43,733
Brazil 74,082 29,744
UK 40,062 101,494
India 14,806 248,356
---------------------- ------- -------
Total 415,886 874,191
---------------------- ------- -------
2018 2017
GBP GBP
---------------------- ------- -------
Turnover by category
Rendering of services 415,886 874,191
---------------------- ------- -------
Total 415,886 874,191
---------------------- ------- -------
2018 2017
Revenues from external customers by country, based on GBP GBP
the destination of the customer
------------------------------------------------------ ------- -------
China 198,863 455,962
USA 109,541 57,831
Brazil 74,083 29,744
India 14,806 251,023
Ireland 7,750 11,050
Germany 6,570 23,444
Other 4,273 12,101
Italy - 33,036
Total 415,886 874,191
------------------------------------------------------ ------- -------
4. Operating loss
The Group operating loss is stated after
charging/(crediting):
2018 2017
GBP GBP
------------------------------------------------- ---------- ----------
Employee benefits 6,879,256 6,905,025
Depreciation of property, plant and equipment 149,102 89,770
Amortisation and impairment of intangible assets 2,349,137 822,820
Foreign exchange movements (41,341) 166,523
Other general and administrative costs 5,680,119 4,263,842
Other operating income (171,433) (101,715)
-------------------------------------------------- ---------- ----------
Total cost of sales, administrative expenses
and other operating income 14,844,840 12,146,265
-------------------------------------------------- ---------- ----------
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 benefits cost are share based payments
for the year ended 31 December 2018 of GBP0.2m (2017: GBP1.7m)
5. Earnings per share
(a) Basic
Basic earnings per share is calculated by dividing the loss for
the year by the weighted average number of Ordinary Shares in issue
during the year. Potential Ordinary Shares are not treated as
dilutive as the Group is loss making and such shares would be
anti-dilutive.
Group 2018 2017
---------------------------------------------------- ------------ ------------
Loss attributable to owners of the parent (GBP) (14,328,769) (11,062,449)
Weighted average number of Ordinary Shares in issue
Number 104,124,043 58,030,338
---------------------------------------------------- ------------ ------------
The loss per share for the year was 14p (2017: 19p).
No dividends were paid during the year (2017: GBPnil).
(b) Diluted
Potential Ordinary Shares are not treated as dilutive as the
Group is loss making and such shares would be anti-dilutive.
6. Related party transactions
The Group is owned by a number of investors, the largest being
IP2IPO Portfolio (GP) Limited (as general partner for IP2IPO
Portfolio L.P), who owns approximately 26% 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 Limited - a company which shares a parent company with
IP2IPO Portfolio (GP) Limited, the largest shareholder in the
Group, and who also appoints a Director of the Group charged
Mirriad Advertising plc for the following transactions during the
year: (1) GBP20,000 for the services of Mark Reilly as a Director
during the year. GBP1,667 of this amount was accrued and unpaid as
at 31 December 2018. This outstanding amount was paid on 1 February
2019; (2) GBP12,390 for the services of Company Secretary during
the year. GBP3,000 of this amount was accrued and unpaid as at 31
December 2018. This outstanding amount was paid on 1 February 2019;
and (3) GBP986 for event hire and refreshments.
Top Technology Ventures Limited - a company which shares a
parent company with IP2IPO Portfolio (GP) Limited, the largest
shareholder in the Group, charged Mirriad Advertising plc for the
following transactions during the year: (1) GBP1,383 travel costs
for two employees attendance at IP Group events in China. This
amount was unpaid at 31 December 2018, but was subsequently paid on
1 February 2019.
Parkwalk Advisors Limited - a company which shares a parent
company with IP2IPO Portfolio (GP) Limited, the largest shareholder
in the Group, charged Mirriad Advertising plc for the following
transactions during the year: (1) GBP20,000 for the services of
Alastair Kilgour as a Director during the year. GBP1,667 of this
amount was accrued and unpaid as at 31 December 2018, but was
subsequently paid on 1 February 2019.
All the related party transactions disclosed above were settled
by 31 December 2018 except where stated.
During the year ended 31 December 2018, the Company entered into
transactions with its subsidiary companies for working capital
purposes, which net off on consolidation - these have not been
shown above.
The Directors have authority and responsibility for planning,
directing and controlling the activities of the Group and they
therefore comprise key management personnel as defined by IAS 24,
"Related party disclosures". Remuneration of Directors and senior
management is disclosed in the Remuneration Report.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR CKFDQABKDQPK
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