REG - Mirriad Advertising - Audited Results for year ended 31 December 2023
04/06/2024 07:00
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RNS Number : 9447Q Mirriad Advertising PLC 04 June 2024
This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 as it forms part of UK domestic law by virtue of
the European Union (Withdrawal) Act 2018 ("MAR"). Upon the publication of this
announcement, this inside information is now considered to be in the public
domain.
4 June 2024
Mirriad Advertising plc
("Mirriad" or the "Company")
Audited Results for the year ended 31 December 2023
Mirriad, a leading in-content advertising company, announces its audited
results for the year ended 31 December 2023 ("2023").
Financial highlights for the year
• Increase in revenue to £1.80m (2022: £1.51m)
following growth in US and EMEA markets
• Adjusted EBITDA* loss decreased to £10.4m (2022:
£14.0m) and cash consumption decreased to £10.5m (2022: £12.9m) following
significant restructuring in the year
• Statutory loss for the year £10.9m (2022: £15.3m)
• Completion of placing raising £5.75m (gross) together
with open offer raising a further £0.55m in June 2023
• Net cash at 31 December 2023 of £6.1m (2022: £11.3m)
• Net assets at 31 December 2023 of £6.6m (2022:
£11.1m), tracking cash holding
* Defined as operating loss adjusted for depreciation, amortisation and
share-based payment expense
KPIs
As in prior periods, the Company is reporting operational key performance
indicators ("KPIs"). The three "supply side" KPIs track the adoption of the
Mirriad platform across the media industry, and the three "demand side" KPIs
track the development of the engagement and activities of Mirriad with
agencies and advertisers. Overall, they act as leading indicators of future
revenue generation and overall progress in terms of market position and
acceptance of the ad format. We have seen positive progress across most KPIs,
with the only exception coming from partnership agreements with advertisers
and agencies. This KPI is most susceptible to small changes given its low base
due to the transition to the partner-led sales model, and its importance will
be reviewed.
The KPI data for 2022 has been presented excluding China operations.
KPI 2023 2022 % Change
Supply side:
1. Active supply partnerships* #49 #36 +36%
2. Supply partners represented #83 #60 +38%
3. Seconds of content available** 998,618 secs. 651,990 secs. +53%
Demand side:
1. Active agency relationships #31 #19 +63%
2. Number of advertisers who have run campaigns #68 #50 +36%
3. Strategic and commercials partnership agreements with advertisers and #1 #2 -50%
agencies
* Defined as the number of supply partners who ran a campaign during the
period
** Defined as the total number of seconds of advertising inventory available
for sale during the period
Post year end highlights
• Master Service Agreement ("MSA") with a further US
Major in March giving Mirriad access to c.39% of the US TV advertising market,
and a further c.48% in the pipeline with three further Majors
• Major brands and all six major agency holding groups
activated
• Working with partners and advertisers towards
activation of programmatic in Q2 2024
• Awarded the Trusted Partner Network ("TPN") Gold
Shield status in January (an industry recognition that is a critical enabler
of Mirriad's partnerships with leading US entertainment and media companies)
• Announced a strategic agreement with programmatic
exchange TripleLift Inc. in April 2024
• Placing, retail offer and directors' subscription to
raise £6.8m (gross) announced on 7 May 2024
• Further material cost savings identified to be
implemented in 2024/2025
Current trading and outlook
Consistent with prior years, revenue in the first quarter reflected the
traditionally quieter period for the advertising industry ahead of the impact
of US partner-led sales (expected in Q3) and the seasonal uptick in Q3/Q4.
Costs have reduced by c. 30% compared to the corresponding period, reflecting
both the significant cost saving exercise in H1 2023 as well as the Company's
continuing focus on expenditure.
This year for the first time we are expecting a growing contribution from
partners' sales, and the US Upfronts*, which take place in May and June and
are expected to contribute towards revenues from Q4. Discussions with the
remaining Majors in the US are promising, and we expect to close the majority
of these in 2024. We are encouraged by the level of determination of all the
major media partners to scale the new format with Mirriad, and the first
agency groups are signalling interest in allocating larger budgets to
in-content advertising/virtual product placement ("VPP") as a new ad category.
The sales pipeline** remains strong at around £3m, which pipeline excludes
potential Upfront revenue where spend budgets for Mirriad's format will now be
part of annual negotiations between media partners and leading agency groups.
On the technology front, our platform migration completed in 2023 (with
development support from Microsoft) towards an open architecture. The
integration of advanced AI capabilities and the inclusion of third-party tools
are paving the way to scale through platform "self-service" and access to a
wider client base via Microsoft's Marketplace. Crucially, we are actively
engaged with TripleLift and other adtech partners to initiate programmatic
activation in Q2 2024.
Cash holding at the end of April was approximately £3.9m, prior to the
receipt of c. £6.3m net proceeds from the placing and retail offer.
Stephan Beringer, CEO of Mirriad, said: "In 2023, the Company achieved
positive movement across almost all KPIs, alongside modest revenue progress.
Our cost-cutting decisions and successful fundraise means we now have the
ability to realise the potential of the huge content and sales power of our
recently signed Tier-One partners and new involvement in key set-pieces like
this year's Upfronts.
"At the same time the integration with our partners at TripleLift will lead to
a "plug and sell" proposition. Behind these developments are important
technical achievements that put our ad-solution at the forefront of the
streaming age and are paving the way to programmatic scale and long-term value
for Mirriad's shareholders."
* In TV advertising, the "Upfront" is the long-established practice of buying
and selling TV advertising time months in advance, typically in the Spring of
each year, for advertising space scheduled to air in the coming television
broadcast year. The most significant of these events is the Network Upfronts,
an annual, weeklong event in New York.
**Pipeline is defined as the unweighted sum of potential revenue contracts
which are rated as qualified or above.
For further information please visit www.mirriad.com
(http://www.mirriad.com/) or contact:
Mirriad Advertising plc c/o Charlotte Street Partners
Stephan Beringer, Chief Executive Officer
Nic Hellyer, Chief Financial Officer
Nominated Adviser, Broker & Joint Bookrunner: Tel: +44 (0)20 3328 5656
Allenby Capital Limited
James Reeve/Lauren Wright (Corporate Finance)
Guy McDougall/Matt Butlin (Sales and Corporate Broking)
Financial Communications: Tel: +44 (0) 7741 659021
Charlotte Street Partners
Tom Gillingham
Notes to Editors
About Mirriad
The leader in virtual product placement and in-content advertising, Mirriad's
multi-patented and award-winning platform dynamically inserts products and
brands into Television, SVOD/AVOD, Music, and Influencer content. Mirriad
creates net-new revenue opportunities for content owners with an ad format
that virtually integrates brands in entertainment content, drives exceptional
performance for advertisers and dramatically improves the viewing experience.
Mirriad currently operates in the US, Europe, and India.
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
Over the last year it has become increasingly clear that pressure on
traditional ad formats continues to ratchet up, just as content owners,
creators and distributors seek new revenue to offset rising costs. Consumers
around the world also reacted to the effects of acute inflation, and adjusted
discretionary spending accordingly. Already entrenched trends like ad
avoidance and ad skipping became more pronounced, and we saw large streamers
making moves to introduce advertising to support existing subscription models.
The move towards programmatic advertising - the use of automated technology
for media buying - across the industry is gathering real pace, which aligns
well with the Company's focus on rolling out this approach in the year ahead.
Management has worked hard after the strategic review and 2023 fundraise to
bed in the agreed principles, and it is positive to see this resulting in
significant new top-tier partnership agreements in the key US market, as well
as a prudent approach to ongoing operations.
As part of the strategic review, we were pleased to welcome Nic Hellyer as new
CFO in Q4 2023. I would like to reiterate my thanks to David Dorans, who
stepped down as CFO at the end of the year. He ensured a smooth transition
before his departure and contributed to the business hugely over the last
eight years. As the Company enters an important new phase after the most
recent fundraise, I have confirmed my plan to step down as Non-executive
Chairman, but remain as a Non-Executive Director following the 2024 AGM. James
Black will be the new Chairman, and he is well placed to work closely with
Stephan and the wider management team to drive the Company forward.
I would also like to thank Board members Alastair Kilgour and Lois Day for
their positive contributions during their time on the Mirriad Board, after
they did not stand for re-election at the AGM. I am confident that the
reshaped Board is well aligned with the Company's strategic objectives.
Mirriad is also committed to a clear and considered approach to Environmental,
Social and Governance ("ESG") matters, always ensuring a balance between our
corporate and ESG strategies. The Company continues to develop its policies in
this area, and since 2022 its estimated carbon emissions, including travel,
have been offset by purchasing carbon credits.
Despite the Company undergoing a number of staffing changes in the past 12
months, results from our recent employee engagement survey show that we have
maintained 99% of employees saying they agree, or strongly agree with the
statement 'I am proud to work at Mirriad'. This is really positive, and taking
into account other encouraging feedback from the survey Mirriad continues to
provide a culture which is rewarding, supportive and engaging. Giving back to
the communities in which we work and embracing an equitable and inclusive
culture have also remained a primary focus.
Looking ahead to 2024 in more detail, it is clear the advertising industry is
changing fast, and nowhere is this more true than our key market in the US.
Emerging technologies like AI and continuing viewer behavioural trends align
well with Mirriad's long-term objectives and capabilities, but as the leader
in a new vertical it is incumbent on us to keep making the case for the
format. Partnerships with top-tier US industry leaders in particular underline
that more and more organisations are understanding the opportunity the
in‑content format presents.
As I prepare to step down, I am confident in the management team and the
Board's ability to deliver against the Company's strategy, with the ultimate
aim of delivering long-term shareholder value, particularly for those who have
been steadfast in their understanding of the Company's vision.
John Pearson
Chairman
4 June 2024
Chief Executive Officer's Statement
The strategic review and fundraising in H1 2023 were significant undertakings,
that put us in a stronger position to deliver against our overall objectives.
As a result, we drove additional cost savings and recorded particular progress
on signing new agreements with US tier one partners in H2 2023.
Our initial US market-building phase was launched in 2020 and resulted in a
total Mirriad roster of over 60 partners, representing around 9% of the US TV
advertising market at that point. This phase was crucial in raising awareness
of the format, building a first wave of demand, demonstrating in content's
strong performance and establishing the solution as a differential option in
the future of advertising and the media.
Building on these strong fundamentals, we were able to significantly grow our
position in Q4 2023, with the addition of a further 17% share via agreements
with two significant new partners.
Until Q4, the Company was very much still operating in 'manual' mode with
around 9% of the key US market, ahead of the shift to programmatic delivery.
The Mirriad proposition in 2024 is already looking very different: The
majority of the market is now under contract or in serious discussions, there
is a firmer starting pipeline for revenue as well as multiple programmatic
integrations underway to enable automated transactions of the inventory.
The entire advertising market is operating in fluctuating macroeconomic
conditions, but Mirriad's stand-out difference comes in our ability to address
three strategic truths that still apply to every content owner, distributor,
and advertiser:
1. consumers are shifting to more ad-free or ad-light video environments, and
streamers in particular are still figuring out how to drive profitability into
their businesses, given the high cost for content and the limited ad revenue
and subscription growth;
2. ad clutter and over-exposure are driving ad-fatigue or avoidance; and
3. advertisers need more quality inventory to engage with audiences who may be
limiting discretionary spend
Over the last year Mirriad has also maintained its position as the in-content
category leader in the US, underlining the strength of our solution and our
commitment to continuous innovation in this space. This position was
recognised with further backing from investors in our May 2024 fundraise,
which will allow us to effectively capitalise on the opportunity ahead.
Strategic approach
The completion of the strategic review in 2023 and the resulting equity
fundraising plan resulted in an initial cash runway to Q3 2024. This has since
been extended following the most recent raise. In H2 this was used to secure
new tier one partnerships on the path to unlock the significant opportunity
that exists with programmatic selling starting in 2024 in the US in
particular.
Our pipeline conversion was strong towards the end of 2023, with further
interest and negotiation from the top players in the industry, beyond those
already signed. This is thanks to technological progress and proving our
solution's differential performance with some of the biggest advertisers,
networks and content owners as a true differentiator in a constrained and
saturated global ad market.
This approach is the route to scaling the Company in line with its full
potential, capitalising on the growing pressures in the multibillion dollar
media and marketing industries, and to creating long-term shareholder value.
We made changes at a leadership and Board level, and I would like to echo
John's sincere thanks to David, Alastair and Lois for their contributions to
the business. In addition, after announcing he will step down as Chairman
after the Company's AGM, I would like to call out the significant impact John
has had - and the considerable insight he has provided - both as a Mirriad
Board member since 2017, and as non-executive Chairman from 2019. I now look
forward to working with our incoming Chairman, James Black, as we move into
this important next phase for the Company.
Everyone at Mirriad is laser-focused on our objectives, and based on delivery
post-strategic review, I have every confidence in our re-shaped and highly
motivated team's ability to deliver. Following a smooth handover, Nic Hellyer,
our new CFO, has hit the ground running and is working effectively with our
entire team as we move forward.
We continue to control costs wherever possible, and the Company closed the
year with a cash balance of £6.1 million. Average monthly cash burn in the
second half slightly improved over management expectations, with efficiency
improvements achieved ahead of the plan outlined in the strategic review.
Business status, performance and technological progress
2023's revenue profile was based on a labour-intensive manual sales process,
and in 2024 we will initiate the transition from this first market building
and adoption phase to programmatic selling. Programmatic activation with the
first partner is expected to occur in H1 2024. We are now working with tier
one US partners as a priority, this approach is expected to open up increased
volumes, far shorter lead times, automated transactions and true scale.
These agreements, and those expected to be closed in 2024, mean the
'Mirriad-inside' strategy of integrating in-content advertising as a new
standard advertising format across the entire TV and video media ecosystem is
now gaining significant traction, ahead of plan.
Overall Company revenue for 2023 was up by 31% on FY 2022 on a like‑for-like
basis (excluding revenue from China operations, which formally closed in H1
2023). Over the same period, the Company increased the number of advertisers
it worked with from 59 to 68, an uplift of 15%. The number of repeat
advertisers also had a significant gain of 61%, from 13 to 21.
Technical progress continues at pace and our collaboration with Microsoft,
announced in May 2023, accelerated the development of our platform as an
enterprise level solution that is ready for programmatically sold inventory -
a key building block for tier one partnerships and prerequisite for the
increased scale we've been working towards.
In January 2024, Mirriad achieved the Trusted Partner Network ("TPN") Gold
Shield status. This recognition is key for working with top entertainment and
media companies in the US. It marks an important milestone in our growth, as
TPN is the go-to standard for TV and film content security, further confirming
our progress.
Outlook
At the outset of 2024 the Company was in active negotiations with two more
majors in the US, taking the Company to a position of potential majority
market share, with the prospect of further notable additions in the remainder
of H1. This progress represents a phase-shift in the scale of new partners -
Mirriad is now signing US 'majors' and 'super-majors'.
Our decision to raise new finance and restructure the business in 2023 gave us
the firepower to drive growth in areas that will maximise return, like
programmatic delivery. Now that we have raised additional funds in 2024, we
will continue to control costs, while leveraging the significant market power
of our new and existing partners to deliver true scale.
Continuing favourability towards the Mirriad format amongst consumers and
advertisers contrasts sharply with general results from traditional
advertising formats. Despite having entered the programmatic age over a decade
ago, the structural challenges with traditional advertising formats have
increased. Mirriad has the potential to be a real difference-maker in this
pressurised environment.
I would like to thank investors who have stood by us during the strategic
review and for their vision, and also for their constructive - and at times
forthright - engagement. Everyone at Mirriad is focused on the move to
programmatic to drive the Company forward and to generate long-term
shareholder value.
Last year I talked about the need to build further confidence in the format
and stay the course as we sought increased recognition amongst tier one
partners in the US in particular. These were always going to be the 'hardest
yards' for what was until recently considered an emerging technology. The tier
one agreements we have signed recently, and those we are negotiating towards
completion in 2024, speak to a sea-change in recognition for the Mirriad
difference, at the absolute highest levels of the industry.
Stephan Beringer
Chief Executive Officer
4 June 2024
Financial review
2023 was a year of significant change for the Group. In addition to the
planned final closure of the Chinese operations, the Group also undertook a
significant restructuring across the remaining business in the first half of
the year addressing both staff and non-staff costs. This resulted in staff
redundancies in all continuing operating companies including a material
reduction in headcount, with the US operations reducing from 15 to 11 staff at
the end of May 2023 and the technology team decreasing from 46 to 30. Overall
headcount in continuing operations reduced from 115 at the end of April to 93
at the end of the year (83 employees and 10 long-term contractors engaged by
the UK business and mainly based offshore). The restructuring resulted in a
one-off cost to the Group of £359k.
Notwithstanding these cost reductions, we continued to make targeted
investments in our technology stack which has resulted in "Mirriad 3.0", a
programmatic-ready enterprise-level version of our award-winning software
solution, based on Microsoft's Azure cloud-based open architecture. Mirriad
3.0 substantially streamlines the ad buying process and brings it into line
with digital advertising practices and is expected to open up increased
volumes, and result in far shorter lead times and automated transactions. This
ability to dynamically insert in-content ads in real-time is key to scaling
this format across the media buying ecosystem.
Our marketing efforts continued to be focused on our US operations as the
market with the highest opportunity. This focus began to pay off in 2023 with
a number of master licence and service agreements being signed with US-based
media and entertainment companies which, together with agreements signed after
the year end, take Mirriad's access to the US TV advertising market from less
than 10% to almost 40%.
2023 results
Revenue for the year was higher than the prior year at £1.8 million (2022:
£1.5 million) reflecting continued growth in the US and EMEA markets. During
the year revenues from the US increased to
£1.43 million (2022: £1.18 million) and now represent 79% of revenues. This
focus on the US is also reflected in the pipeline of opportunities for 2024
and beyond.
Overall EMEA revenues increased by 93% to £344k (2022: £178k). This growth
was largely driven by our focal point of Germany; we delivered multiple
campaigns, ranging from major global brands like McDonalds to retailers (such
as Aldi and Lidl) across Germany's largest broadcasters, RTL and ProSieben. We
also expanded operations into the Middle East as we delivered several
campaigns with a new partner, MBC.
There was a small increase in our cost of sales due to inflation and an
increase in production heads in India. As a result overall cost of sales
increased to £313k (2022: £286k). Given the increased revenues, there was an
uplift in gross profit to £1.5 million (2022: £1.2 million). The vast
majority of our cost of sales relates to our staff based in Mumbai.
The Group's principal operating cost remains staff, with the majority of these
costs arising from our technology and US teams. Over the course of 2023,
administrative expenses excluding depreciation decreased to £12.7 million
(2022 restated: £16.7 million), with around £8.0 million in the first half
compared to £4.7 million in the second half. This reduction was largely a
result of headcount which decreased year on year with full withdrawal from our
Chinese operations completed by the end of Q1 2023 and redundancies in all
other offices as described above.
The Group keeps costs under close review and, since the year end, has
identified potential further administrative cost savings of around £250k in
addition to a net annualised figure of around £450k which is expected to be
saved from July 2024 onwards as a result of non-renewal of the lease on the
Group's London office and a move to mostly remote working practices.
Trade and other receivables at the year end were £2.3 million (2022: £2.2
million) of which £1.7 million (2023: £1.7 million) related to trade
receivables. The significant majority of this balance related to revenue
recognised in the last quarter of the year and represents gross amounts billed
to end customers of which approximately £997k (2022: £1,098k) was due to be
paid to intermediaries (such creditor balances being recognised in trade
creditors and other payables and revenue recognised net). Mirriad contracts
usually provide that creditor balances on such contracts are only payable once
the gross receivable balance has been received. Since the year end £1.5
million of the gross amount has been received.
Capitalisation of development expenses
Mirriad has continued to review and monitor the application of IAS 38 with
respect to the capitalisation of development costs. At the present stage of
revenue growth, we take the view that it would be inappropriate to capitalise
any development costs in 2023. The income statement includes £3.3 million
(2022: £4.0 million) of staff costs and £0.9 million of IT and software
costs (2022: £1.2 million) related to research and development ("R&D")
activity, an overall decrease of 19% year on year, and this policy will be
kept under close review as revenues grow.
EBITDA and net profit
The decrease in operating costs and increase in gross margin fed through to
adjusted EBITDA (excluding share‑based payment expense) with the EBITDA loss
decreasing to £10.4 million (2022: £14.0 million). Likewise, the statutory
loss before tax decreased to £11.4 million (2022 restated: £15.8 million).
Taxation
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 decreased as a result of the decreased loss for the period on
an increased share capital. The loss per share for 2023 was 2.7p per share
(2022 restated: loss of 5.5p per share).
Dividend
No dividend has been proposed for the year ended 31 December 2023 (2022:
£nil).
Cash flow
Net cash used in operating activities was £10.5 million (2022: £12.9
million) as the decrease in operating costs flowed through to cash. The Group
expended £39k (2022: £76k) of capital expenditure on tangible assets in the
year. Net proceeds from the issue of Ordinary Shares in June 2023 totalled
£5.65 million following the successful fundraise.
Balance sheet
Net assets decreased to £6.6 million (2022: £11.1 million) as a result of
the losses for the year. Cash and cash equivalents at 31 December 2023 were
£6.1 million (2022: £11.3 million).
Accounting policies
The Group's consolidated financial information has been prepared in accordance
with UK-adopted
international accounting standards and with the requirements of the Companies
Act 2006 as applicable to companies reporting under those standards. The
Group's significant accounting
policies have been applied consistently throughout the year.
Going concern
The financial statements have been prepared on a going concern basis
notwithstanding the Group having made a loss for the year of £10.9 million
(2022 restated: £15.3 million). The going concern basis assumes that the
Group and Company will have sufficient funds available to continue to trade
for the foreseeable future and not less than 12 months from the date of
approving these financial statements. The Group's cash balance was £6.1
million at the year end and the Group remains debt free with no external
borrowing. The Group's cash balance was £4.5m as at 31 March 2024.
The Company announced a successful Placing, Retail Offer and Directors'
Subscription to raise approximately £6.2 million after expenses on 7 May
2024. The Company said at that time that the Directors anticipated that the
proceeds of this fundraise can provide sufficient funding to trade cash flow
break-even during 2025, based on base case forecasts which assume both revenue
growth and cost savings being achieved over the next 18 months. After making
enquiries and producing cash flow forecasts for the period up to 31 December
2025, the Directors have reasonable expectations, as at the date of approving
the financial statements, that the Company and the Group will have adequate
resources to fund the activities of the Company and the Group for at least the
next 12 months from the date of approving these financial statements.
The Group and Company's base case forecast suggests that the Group will not
require additional external funding to be able to continue as a going concern.
However, in a severe but plausible downside scenario if either the revenue
growth forecasts fall below expectations by 50% ( which is still considerable
growth on 2023) or cost saving initiatives are not achieved, additional
funding may be required, within 12 months of approving these financial
statements which is not currently committed.
While the financial statements are prepared on a going concern basis, under a
severe but plausible downside scenario the future of the Group and Company is
dependent on raising additional external funds from new equity, debt or
customer contracts within 12 months from the date of approving these financial
statements.
These conditions indicate the existence of a material uncertainty which may
cast significant doubt about the Group's and the Company's ability to continue
as a going concern. The financial statements do not include the adjustments
that would result if the Group and the Company were unable to continue as a
going concern.
Events after the reporting period
On 7 May 2024 the Company announced a successful Placing, Retail Offer and
Directors' Subscription to raise £6.8 million before fees, £6.2 million
after fees. With the exception of the Director subscription element, amounting
to £180,000, all of these funds were received prior to the approval of these
financial statements.
Nic Hellyer
Chief Financial Officer
4 June 2024
Consolidated statement of profit or loss
For the year ended 31 December 2023
Year ended Year ended
31 December 31 December
2023 2022 Restated*
Note £000 £000
Revenue 3 1,803 1,507
Cost of sales (313) (286)
Gross profit 1,490 1,221
Administrative expenses (12,967) (17,109)
Operating loss (11,477) (15,888)
Finance income 111 72
Finance costs (1) (23)
Finance income - net 110 49
Loss before income tax (11,367) (15,839)
Income tax credit 432 492
Loss for the year (10,935) (15,347)
Loss per Ordinary Share - basic 5 (3p) (6p)
*The prior year comparatives have been restated for a change in the share
based payment charge for the period.
All activities are classified as continuing.
Consolidated statement of comprehensive income
For the year ended 31 December 2023
Year ended Year ended
31 December 31 December
2023 2022 Restated*
£000 £000
Loss for the financial year (10,935) (15,347)
Other comprehensive loss
Items that may be reclassified to profit or loss:
Exchange differences on translation of foreign operations 3 44
Total comprehensive loss for the year (10,932) (15,303)
*The prior year comparatives have been restated for a change in the share
based payment charge for the period.
Items in the statement above are disclosed net of tax.
Consolidated balance sheet
At 31 December 2023
Group
As at As at
31 December 31 December
2023 2022 Restated*
£000 £000
Assets
Non-current assets
Property, plant and equipment 261 545
Trade and other receivables 20 188
281 733
Current assets
Trade and other receivables 2,285 2,220
Other current assets 457 529
Cash and cash equivalents 6,109 11,289
8,851 14,038
Total assets 9,132 14,771
Liabilities
Non-current liabilities
Lease liabilities - 207
- 207
Current liabilities
Trade and other payables 2,333 2,904
Provisions - 198
Current tax liabilities 14 14
Lease liabilities 210 322
2,557 3,438
Total liabilities 2,557 3,645
Net assets 6,575 11,126
Equity and liabilities
Equity attributable to owners of the parent
Share capital 55 53
Share premium 71,408 65,755
Share-based payment reserve 5,879 5,153
Retranslation reserve (313) (316)
Accumulated losses (70,454) (59,519)
Total equity 6,575 11,126
*The prior year comparatives have been restated for a change in the share
based payment charge for the period.
Consolidated statement of changes in equity
For the year ended 31 December 2023
Year ended 31 December 2022 Restated*
Share-based Retranslation Accumulated
Share capital Share premium payment reserve reserve losses Total equity
£000 £000 £000 £000 £000 £000
Balance at 1 January 2022 53 65,755 3,666 (360) (44,172) 24,942
Loss for the financial year - - - - (15,101) (15,101)
Other comprehensive income for the year - - - 44 - 44
Total comprehensive loss for the year - - - 44 (15,101) (15,057)
Restatement* - - - - (246) (246)
Total comprehensive loss for the year (restated*) - - - 44 (15,347) (15,303)
Share-based payments recognised as expense - - 1,241 - - 1,241
Total transactions with shareholders recognised directly in equity - - 1,241 - - 1,241
Restatement* - - 246 - - 246
Total transactions with shareholders recognised directly in equity (restated*) - - 1,487 - - 1,487
Balance at 31 December 2022 (Restated) 53 65,755 5,153 (316) (59,519) 11,126
*The prior year comparatives have been restated for a change in the share
based payment charge for the period.
Year ended 31 December 2023
Share-based Retranslation Accumulated
Share capital Share premium payment reserve reserve losses Total equity
£000 £000 £000 £000 £000 £000
Balance at 1 January 2023 53 65,755 5,153 (316) (59,519) 11,126
Loss for the financial year - - - - (10,935) (10,935)
Other comprehensive income for the year - - - 3 - 3
Total comprehensive loss for the year - - - 3 (10,935) (10,932)
Proceeds from shares issued 2 6,302 - - - 6,304
Share issue costs - (649) - - - (649)
Share-based payments recognised as expense
- - 726 - - 726
Total transactions with shareholders recognised directly in equity 2 5,653 726 - - 6,381
Balance at 31 December 2023 55 71,408 5,879 (313) (70,454) 6,575
Consolidated statement of cash flows
For the year ended 31 December 2023
Group
2023 2022
£000 £000
Cash flow used in operating activities (11,109) (14,016)
Tax credit received 558 1,116
Taxation paid (25) (40)
Interest received 111 72
Lease interest paid (1) (23)
Net cash used in operating activities (10,466) (12,891)
Cash flow from investing activities
Purchase of tangible assets (39) (76)
Proceeds from disposal of tangible assets 3 -
Net cash used in investing activities (36) (76)
Cash flow from financing activities
Proceeds from issue of Ordinary Share capital 5,655 -
(net of costs of issue)
Payment of lease liabilities (333) (245)
Net cash generated from/(used in) financing activities (5,322) (245)
Net decrease in cash and cash equivalents (5,180) (13,212)
Cash and cash equivalents at the beginning of the year 11,289 24,501
Cash and cash equivalents at the end of the year 6,109 11,289
Cash and cash equivalents consists of:
Cash at bank and short-term bank deposits 6,109 11,289
Cash and cash equivalents 6,109 11,289
Notes to the consolidated financial statements
For the year ended 31 December 2023
1. Corporate Information
Mirriad Advertising plc is a public limited company incorporated and domiciled
in the UK and registered in England with company registration number
09550311. The Company's registered office is 6th Floor, One London Wall,
London, EC2Y 5EB.
2. Basis of preparation
The financial information set out above does not constitute the Group's
statutory accounts for the years ended 31 December 2023 or 2022 but is derived
from those accounts. Statutory accounts for 2022 have been delivered to the
registrar of companies, and those for 2023 will be delivered in due course.
The auditor has reported on those accounts; their reports were (i)
unqualified, (ii) included a reference to material uncertainty related to
going concern which the auditor drew attention by way of emphasis without
qualifying their report and (iii) did not contain a statement under section
498 (2) or (3) of the Companies Act 2006.
The financial statements of Mirriad Advertising plc have been prepared in
accordance with UK-adopted international accounting standards and with the
requirements of the Companies Act 2006 as applicable to companies reporting
under those standards. The financial statements have been prepared under the
historical cost convention.
The accounting policies applied are consistent with those of the annual report
and accounts for the year ended 31 December
2022.
(a) New standards, amendments and interpretations
The Group has applied the following standards and amendments for the first
time for the annual reporting period commencing 1 January 2023:
• IFRS 17 Insurance Contracts;
• Definition of Accounting Estimates - amendments to IAS 8;
• International Tax Reform - Pillar Two Model Rules - amendments to IAS 12;
• Deferred Tax related to Assets and Liabilities arising from a Single
Transaction - amendments to IAS 12; and
• Disclosure of Accounting Policies - amendments to IAS 1 and IFRS Practice
Statement 2.
The amendments listed above did not have any impact on the amounts recognised
in prior periods and are not expected to
significantly affect the current or future periods.
(b) New standards, amendments and interpretations not yet adopted
A number of new standards and amendments to standards and interpretations are
effective for annual periods beginning after 1 January 2024, and have not been
applied in preparing these financial statements. These standards are not
expected to have a material impact on the entity in the current or future
reporting periods or on foreseeable future transactions.
3. Segment information
Management mainly considers the business from a geographic perspective since
the same services are effectively being sold in every Group entity. Therefore
regions considered for segmental reporting are where the Company and
subsidiaries are based, namely the UK, the USA, India and China. The revenue
is classified by where the sales were booked not by the geographic location of
the customer.
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision maker. The chief operating
decision maker, which is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the steering
committee that makes strategic decisions. The steering committee is made up of
the Board of Directors. There are no sales between segments. The revenue from
external parties reported to the strategic steering committee is measured in a
manner consistent with that in the income statement.
The parent company is domiciled in the United Kingdom. The amount of revenue
from external customers by location of the Group billing entity is shown in
the tables below.
2023 2022
Revenue £000 £000
Turnover by geography
USA 1,429 1,181
UK 357 178
China 17 148
Total 1,803 1,507
2023 2022
£000 £000
Turnover by category
Rendering of services 1,803 1,507
Total 1,803 1,507
2023 2022
Revenues from external customers by country, based on the destination of the £000 £000
customer
USA 1,383 1,101
Germany 168 68
United Arab Emirates 92 17
UK 65 28
Canada 46 80
China 17 148
Turkey 16 34
Japan 12 12
France 4 12
Belgium - 7
Total 1,803 1,507
4. Operating loss
The Group operating loss is stated after charging/(crediting):
2023 2022 Restated
£000 £000
Employee benefits excluding restructuring costs 8,422 11,447
Restructuring costs 359 -
Depreciation of property, plant and equipment 316 440
Foreign exchange movements 62 7
Other general and administrative costs 4,121 5,176
Office closure costs - 325
Total cost of sales, administrative expenses and other operating income 13,280 17,395
The Employee benefits numbers above include £3,260k (2022: £3,957k) related
to Research and Development activities.
Other general and administrative costs includes legal and professional fees,
IT infrastructure and software-related costs, of
which £947k (2022: £1,210k) is related to Research and Development
activities, property costs, marketing and research costs.
Office closure costs in the prior year includes employee redundancy and other
expenses related to the closure of the China office. Of this total £126k was
incurred in 2022 and £198k was provided for at the end of December 2022.
5. Loss per share
Basic loss per share is calculated by dividing the loss for the year by the
weighted average number of Ordinary Shares in issue during the year. Potential
Ordinary Shares are not treated as dilutive as the Group is loss making and
such shares would be anti-dilutive.
Group 2023 2022 Restated
Loss attributable to owners of the parent (£000) (10,935) (15,347)
Weighted average number of Ordinary Shares in issue (number) 400,076,713 279,180,808
The loss per share for the year was 2.7p (2022 restated: 5.5p).
No dividends were paid during the year (2021: £nil).
(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 Rathbones
Investment Management, which owns approximately 17% of the share capital of
the Company. At 31 December 2022 the largest shareholder was M&G
Investment Management which owned approximately 13% 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. No guarantees were given or received for any of these
transactions:
Transactions with Directors
As part of the fundraise in June 2023 the following Directors purchased
Ordinary Shares in the Company at a cost of £0.03 per share (2022: none).
Director Number of
shares
John Pearson 333,333
Stephan Beringer 833,333
Bob Head 135,267
Transactions with other related parties
IP2IPO Limited - a company which shares a parent company with IP2IPO Portfolio
(GP) Limited, a major shareholder in the
Group, and which also appointed a Director of the Group up until 30 June 2023,
charged Mirriad Advertising plc for the following transactions during the
year: (1) £10k for the services of Lois Day as a Director for the period from
1 January 2023 until 30 June 2023 (2022: £10k). All of this amount was
invoiced and paid as at 31 December 2023.
Parkwalk Advisors Limited - a company which shares a parent company with
IP2IPO Portfolio (GP) Limited, a major shareholder in the Group, charged
Mirriad Advertising plc for the following transactions during the year: (1)
£10k for the services of Alastair Kilgour as a Director for the period from 1
January 2023 until 30 June 2023 (2022: £20k). All of this amount was invoiced
and paid as at 31 December 2023.
All the related party transactions disclosed above were settled by 31 December
2023.
During the year ended 31 December 2023, the Company entered into transactions
with its subsidiary companies for working
capital purposes, which net off on consolidation - these have not been shown
above.
The Directors have authority and responsibility for planning, directing and
controlling the activities of the Group and they therefore comprise key
management personnel as defined by IAS 24 "Related party disclosures".
Remuneration of Directors and senior management is disclosed in the
Remuneration Report.
7. Events after the reporting period
On 7 May 2024 the Company announced a Placing, Retail Offer and Directors'
Subscription that raised £6.8 million before fees, £6.2 million after fees.
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