REG - Silver Bullet Data - Final Results for the year ended 31 December 2023
29/05/2024 07:00
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RNS Number : 1729Q Silver Bullet Data Services Grp PLC 29 May 2024
29 May 2024
Silver Bullet Data Services Group plc
("Silverbullet" or the "Company", or, together with its subsidiaries, the
"Group")
Final Results for the year ended 31 December 2023
Silverbullet (AIM: SBDS), a provider of AI driven digital transformation
services and products, is pleased to announce its audited results for the
year ended 31 December 2023.
FINANCIAL HIGHLIGHTS.
YE December 2023 YE December 2022 Y-O-Y
Revenue £8.36m £5.82m +44%
Gross Profit £6.36m £4.22m +51%
Headline Loss before tax* £3.31m £6.10m -46%
Reported Loss before tax £3.45m £7.54m -54%
Loss Per Share £0.20 £0.49 -61%
* Headline results are calculated before exceptional items and share option
charges, reconciliation per note 5 of the consolidated financial statements.
Operational Highlights:
· Group revenue increased 44% to £8.36m (2022: £5.82m).
· Services revenue increased 29% to £5.55m (2022: £4.30m).
· 4D revenue increased 85% to £2.81m (2022: £1.52m) driven by US demand for
the product.
· US and globally operating clients now account for more than 50% of total Group
revenues.
· Losses significantly reduced due to revenue acceleration and cost reductions.
Post-Period End Highlights
· Total Group bookings year to date are approximately £6.2m.
· Committed and earned services revenues represent 69% of targeted revenues for
the year to date.
· 4D bookings more than doubled in Q1 24 compared to Q1 23.
· Growth in services top two clients has increased (2024 vs 2023) by 43% and 26%
respectively, reflecting growing demand and increased client spending on data
transformation.
· US and global clients contribute approximately 73% of total revenue (2023:
50%).
· Net margin year to date has increased by 35% versus the corresponding period
in FY 23.
· Group overheads and costs remain flat year over year.
· A robust pipeline of over £4m providing strong confidence for the rest of the
year.
· Silverbullet expects to achieve its objective of an EBITDA positive run rate
entering the second half and commence generating positive operating cashflow
in the current financial year.
· Based on current demand for the Group products and services, the Board views
the future of the business with confidence.
Ian James, Chief Executive Officer of Silverbullet, commented: "I am delighted
to see Silverbullet's remarkable growth trajectory. Our revenue increase of
44% to £8.36m underscores the growing demand for our AI-driven digital
transformation services and products. Notably, our 4D revenue increased by
85%, a testament to the continued interest in our products, particularly in
the US market. Moreover, with over 50% of our revenue now stemming from US and
global clients, we are solidifying our position as a key player in the
international arena.
"Looking ahead, our post-period end highlights paint a promising picture, with
total bookings at approximately £6.2m and a robust pipeline exceeding £4m.
With our sights set on achieving an EBITDA positive run rate entering the
second half of the year and positive operating cashflow in the current
financial year, I am very excited about the future prospects of Silverbullet.
Our unwavering confidence in the Group's trajectory is grounded in our
steadfast commitment to innovation, client satisfaction, and sustained
growth."
Annual Report
The Annual Report for the year ended 31 December 2023 will be available to
shareholders and investors on the Company's website from Friday 31(st) May
2024 at:
https://investors.wearesilverbullet.com/investors/financial-reports
(https://investors.wearesilverbullet.com/investors/financial-reports) .
For further information please contact:
Silverbullet via IFC
Ian James (CEO) / Chris Ellis (CFO)
Strand Hanson Limited - Financial and Nominated Adviser 0207 409 3494
James Spinney / James Bellman / Robert Collins
Oberon Capital - Joint Broker 0203 179 5344
Mike Seabrook / Chris Crawford / Nick Lovering
CMC Markets - Joint Broker 0203 003 8632
Douglas Crippen
IFC Advisory 020 3934 6630
Graham Herring / Tim Metcalfe / Florence Chandler 07793 839 024
About Silverbullet
Silverbullet's proprietary 4D AI advertising solution is designed to help
advertisers target consumers in a "post cookie world". The product is a
natural extension to its existing services business which already serves a
blue-chip client base such as a leading UK hospitality brand and a Global
Brewing company, amongst many others. The removal of third-party cookies has
already been implemented by web browsers such as Firefox and Safari, with
Google expected to phase out the use of cookies in 2025.
Headquartered in London, the Group employs 75+ data specialists across five
regions across the globe, including, the UK, Italy, Australia, USA and Latin
America. The Group continues to look at other opportunities for expansion
worldwide.
The Company has an established and growing solutions business with significant
accumulated industry experience and a proven track record of delivering
strategic digital transformation and activation services to its clients. The
majority of the Board have held senior positions at global software companies
and have significant industry experience across data engineering, SAAS product
development and marketing.
The Group has close technical and commercial partnerships with multiple global
technology providers, all of which have existing sales channels and are
already delivering to clients.
The Group has established a strategic partnership and an entity with Local
Planet, a scaled network of over 60 agencies across the globe. Local Planet
Data Services Limited was established in December 2020 and presents a
significant opportunity to provide data services and the 4D product to the
Local Planet agency network.
CHAIRMAN'S STATEMENT
It is my pleasure to present the annual results of Silverbullet Data Services
Group Group PLC ("Silverbullet", the "Company" or, together with its
subsidiaries, the "Group"). I am very pleased with the development made in in
2023, yet again delivering impressive revenue growth but also significantly
reducing our cost base. I am delighted with how the management team have grown
the business and the tightly controlled costs in what remained a challenging
global economic environment in 2023.
4D, our AI contextual data platform that sits within our CX Product Studio is
showing true maturity and it is starting to generate the interest and activity
that we anticipated when we decided to launch the product. Equally, our
strategic managed services within our CX Solutions Suite continue to grow and
develop delivery first-class results and service to significant blue chip
client base.
Results
Revenue for the year was £8.36m (2022: £5.82m), driven primarily by growth
in our data-driven transformation services business, providing data
consultancy advice to numerous clients across the world. Loss before tax was
£3.45m (2022: £7.54m) leading to a loss per share of 20p (2022: 49p). Cash
as at 31 December 2023 was £0.68m (2022: £1.35m).
People.
I have the honour of leading an excellent Board of Directors for the Group.
With respect to our non-executive directors, Steven Clarke and Martyn Rattle
both provide a raft of industry insights and experience, as well as relevant
governance experience. Following the Keith Sadler's departure as an
Non-Executive Director in 2023, AnnaMaria Khan-Rubalcaba joined the Board as
an Independent NED in April 2024 (post period end). AnnaMaria brings further
industry experience to the board, having served as Chief Executive of HYD, an
Omnicom Group Digital Product Agency, for over five years. AnnaMaria has
joined Steven Clarke on the audit and remuneration committee and will focus on
Board governance in the privacy first era and on the adoption of AI into our
own and client's organisations.
During 2023, our three executive directors, Ian James, Chief Executive
Officer, Umberto Torrielli, Chief Strategy Officer and Darren Poynton, Chief
Financial Officer showed true focus and commitment in leading the Group and
driving growth and successfully executing the agreed strategy of business. On
9th April 2024, we announced that Darren Poynton would be stepping down as
Group CFO and Company Secretary to move to a new role and opportunity. Darren
has been an integral part of the business for the past five years, playing a
crucial role in driving business growth. Under his financial leadership, the
Group successfully navigated an IPO in June 2021 and maintained a trajectory
of strong financial performance. I would like to thank Darren for his
significant contribution and commitment to the Company.
On the 8(th) April 2024 we were delighted to announce that Chris Ellis joined
the Group as Group CFO and Company Secretary. Chris Ellis is a qualified
chartered accountant and an accomplished, target-driven senior executive with
extensive experience gained from leading complex global private equity and
publicly owned businesses. I would like to welcome Chris to the board at this
exciting time for the Group.
I would like to thank all our employees across the world for their dedication,
expertise, and commitment to generating significant growth and delivering
excellent work for all of our clients.
Overview.
In an environment where global clients are seeking innovative solutions to
data driven customer experience challenges, I believe Silverbullet is
perfectly placed to deliver truly bespoke and agile solutions. The success
that the Group has achieved to date and the significant historic investment in
product, people and processes put the Company in an ideal position to continue
to be successful and grow in the future. The Board will continue to work with
the executive and management teams in 2024 to develop and deliver on the
strategy and to create value for our shareholders.
Nigel Sharrocks
Non-Executive Chairman
28(th) May 2024
CEO STATEMENT
I am delighted to report our Annual Accounts for 2023. Our full year results
show strong, sustained growth on the backdrop of a once in a generation shift
to data and AI driven marketing transformation. The demise of a generation-old
AdTech ecosystem which is based on non-compliant data sources (such as the
third-party cookies), is being rapidly replaced by a first-party data driven,
privacy-first marketing environment.
98 per cent. of marketers
(https://www.adexchanger.com/privacy/google-plans-to-ring-in-the-new-year-with-third-party-cookie-deprecation-for-real/)
report they're concerned about the disappearance of the third-party cookie, as
traditional ways of working are no longer fit for purpose. We have reached an
inflection point in the industry where first-party data marketing methods,
accelerated by AI, are radically transforming marketing insights targeting,
measurement, and organisational efficiencies.
This transformation requires clients and their agencies to seek new solutions
driven by a combination of innovative new enterprise MarTech and AdTech
platforms, and the guidance and support of specialist human expertise, to lead
them through the data integrations and engineering required to evolve their
organisational set-up to remain competitive.
Silverbullet has continually evolved its offering to meet this global client
demand for bespoke solutions rather than individual data products. By
combining the proprietary data platforms of 4D AI and Silverbullet Cloud with
specialist skillsets in data strategy, technology implementation, and data
integration; Silverbullet provides a one-stop shop for data driven marketing
transformation and is trusted by some of the world's biggest brands.
With its unique blend of products and services, Silverbullet is perfectly
positioned to deliver this transformation, at global scale. 4D AI has grown
significantly in the last 12 months, with the final demise of the third-party
cookie and a continued tightening of global data regulations presenting a
perfect backdrop to unlock new value for our global client base.
Business Growth:
As more global clients shift towards adopting transformational strategies to
adapt to the new marketing era, Silverbullet continues to grow. We have
witnessed a rise in the employment of customer-experience led infrastructures
with the core goal of unlocking data to improve marketing ROI and the overall
customer experience.
Furthermore, as more businesses seek cookieless, privacy-first and brand-safe
solutions to solve for the new digital advertising era, contextual insights
and targeting continues to rise in importance. The Company's proprietary
product, 4D AI, is positioned perfectly to support leading brands with scaled
AI accelerated post-cookie digital advertising.
Total Group revenue increased by 44% to £8.36m (FY22: £5.82m) and revenue
from 4D increased by 85% to £2.81m (FY22: £1.52m), with US and Global
clients now accounting for more than 50% of total Group revenue. This growth
can be attributed to the expanding number of global brands adopting 4D and
other AI-driven marketing models to structure customer data in a way that
improves direct customer experience and marketing ROI.
Silverbullet has strategically consolidated key global client relationships
such as Mars and Heineken to position itself for accelerated growth and
scalable cross-pollination of 4D AI in 2024. Clients worked with during the
year include, Disney, Progressive, Thomson Reuters, Aramco, Heineken, ITV and
Mars.
As a result of the significant increase in revenues and a reduced cost base,
Silverbullet has significantly reduced losses for the year ended 31 December
2023, compared to the prior year.
4D Highlights:
4D AI is now available for brands and agencies to use in a variety of ways,
from "self-service" and private data marketplaces for sophisticated media
agencies, to a full managed service for those brands who would prefer to
outsource the execution of full insights, targeting and measurement of
campaigns.
Since inception, a key strategy for 4D AI is to embed its proprietary data and
technology into partner platforms who have established market scale and client
demand. In 2023, the Company successfully achieved several 4D AI technology
integrations, including a leading contract with OpenX Technologies, Inc., and
PubMatic, Inc., two of the world's leading independent supply-side platforms
(SSPs) for audience, data and identity led digital advertising targeting.
In line with the final deprecation of the third-party cookie in the near
future, Open X has recently launched its Cookieless Deal Library
(https://www.adweek.com/media/openx-library-makes-testing-cookieless-targeting-solutions-easier-for-buyers/)
, allowing advertisers to easily test and scale campaigns against the full
universe of cookieless targeting options and activate in their Demand-Side
Platform (DSP) of choice. Contextual Deals in the Open X Cookieless Deal
Library will be powered by 4D AI.
These integrations have enhanced the technological capabilities of 4D AI,
expanding its recurring revenue generating distribution. This in turn has set
the foundations for continued partnership deals and 4D AI platform development
moving forwards in line with market demand.
Geographical and Network Expansion:
During 2023, the Company successfully delivered on its goal to expand the
business in the US and Latin America, predominantly driven by the expansion
key global client relationships and the US growth of 4D. During FY23 we
successfully launched a client delivery hub in Mexico City. The team of data
specialists in Mexico City will enable continued growth in the US and LATAM in
a cost-efficient scalable way.
The Company's strong enterprise technology partner relationships continue to
grow, with key partners Salesforce and Treasure Data. In fact, the 2024
Gartner® Magic Quadrant™ for Customer Data Platforms sees Treasure Data
recognized as a Leader within the MarTech ecosystem. Silverbullet has been
certified with Gold Partnership status with Treasure Data, and has also seen
further recognition with Salesforce, being awarded the Salesforce ANZ
Innovation & Impact Partner of the Year in 2023.
Information security management
During the year, the Company successfully achieved ISO 27001 certification.
This ensures that the Company's information security management system and
information security controls have been thoroughly reviewed and updated to the
latest requirements and expectations. This ensures that the Company's
information security needs are met and closely monitored on an ongoing basis.
Outlook.
The business is perfectly aligned to the market's need for first-party data
and privacy-first future.
In January 2024, Google announced the launch of its third-party cookie
deprecation initiative to be completed in Q1 FY25. Meanwhile, Apple continues
to tighten their regulation on the use of individuals data in their ecosystem,
setting a high bar of consumer privacy expectation for the industry at large
to meet. These radical changes in privacy regulation and approach accelerates
the importance of alternative privacy-safe insight and targeting tools such as
4D AI and a brands first-party data enablement, making Silverbullet's position
in the market stronger than ever.
This backdrop ultimately requires brands to transform their customer
experience. 4D AI combined with first-party data transformation demand is
already accelerating, with a strong start to 2024 in terms of committed
revenue with has bookings of over £6.2m.
Clients are increasingly expecting their partners to offer more customised
approaches to meet their specific business transformation needs. Silverbullet
is well placed to adapt its proprietary products, partnerships, and core human
capital to evolve data solutions which meet its clients needs whilst
maintaining a solid business model through an increase in the adoption of AI
to enable organisational efficiency for repeatable tasks, ultimately reducing
cost base and improving margins.
The business continues to manage its cost base tightly whilst investing in
talent to secure and deliver outstanding work to our clients. This, together
with the increase in revenues, allows the business to continue to move towards
a position of profitability.
Ian James,
CEO Silverbullet
28(th) May 2024
FINANCIAL REVIEW
Year ended Year ended
December 2023 December 2022
£ £
Revenue 8,356,090 5,818,255
Cost of sales (1,994,497) (1,598,973)
Gross Profit 6,363,593 4,219,282
Personnel costs (6,010,035) (8,092,999)
Depreciation and amortisation (836,403) (790,274)
Other operating expenditure (2,476,278) (2,726,385)
Exceptional Items - 42,154
Operating Loss (2,959,123) (7,348,222)
Finance Expense (488,653) (188,551)
Loss before taxation (3,447,776) (7,536,773)
Tax 276,092 314,740
Loss after taxation (3,171,684) (7,222,033)
Currency translation differences (48,874) (84,236)
Total Comprehensive Loss for the year (3,220,558) (7,306,269)
Revenue and Gross Profit
Overall revenue of £8.36m represents growth of 44 per cent. compared to 2022.
During 2023, our customer experience services division continued to grow and
expand with revenue increasing by 29 per cent to £5.55m. We added nine new
clients during the year and expanded the remit with our most significant
clients including Mars, Heineken and Sony. Our 4D division continues to show
significant momentum and revenues have increased by 85 per cent in the year to
£2.81m. The managed service 4D offering is the key element that is driving
this growth, with strong demand in the US for this type of service. The
self-service 4D offering continues to gain traction, with increased take up
from Global Media Agencies and direct client usage, and we expect this to
provide increasing contribution to revenues going forward.
Gross profit of £6.36m represents growth of 51 per cent compared to 2022.
Gross profit margin has improved from 73% to 76%. The growth in services
revenue which has little cost of sales and the reductions that have been
achieved in 4D hosting costs have helped to deliver this improvement.
Operating Expenditure
Total Adjusted Operating Expenditure (Adjusted to exclude depreciation,
amortisation, share option expenses, exceptional items) was £8.27m, which
represents a reduction of 11.5% compared to 2022 (£9.43m).
Year ended Year ended
December 2023 December 2022
£ £
Operating Expenses 9,322,716 11,567,504
Less
Depreciation (28,117) (29,208)
Amortisation (808,287) (761,065)
Share option Charge (217,921) (1,476,183)
Exceptional items - 42,154
Adjusted Operating Expenses 8,268,391 9,343,202
Staff costs of £5.79m (excluding share option expenses) continue to make up
most of the operating expenses, this is a reduction of 12.5 per cent. on 2022
(£6.62m). The reduction in staff cost is largely a result of reducing the 4D
product, engineering and support team following the completion of the core
product in 2022 and the product reaching development maturity. The core 4D
engineering team continue to develop key enhancements to the product as well
as working on specific AI and development work for our CX services client when
requested. By the start of 2024, the Company has 75 employees world-wide.
Other operating expenses have fallen 9.2 per cent. to £2.48m from £2.73m in
2022, which reflects management tightly controlling costs in 2023 whilst
delivering significant revenue growth.
Taxation
As a loss-making Group, we do not currently incur corporation tax. We do
however benefit from a research and development tax relief related to the
continued development of 4D. The total tax relief for the year was £0.28m.
Balance Sheet and cashflow
The development and investment in 4D AI, our privacy-first contextual
targeting and insights platform, has significantly reduced in 2023 due to the
product reaching development maturity. We have enhanced the product during
2023 and these costs £0.23m (2022 £1.10m) have been capitalised as an
intangible asset in the year. Goodwill relates to the acquisition of Silver
Bullet Data Services Limited and Videobeet Italia Srl. We have reviewed the
carrying value of these investments and we are comfortable that no impairment
is required against these assets.
• In November 2023, the Group announced it had successfully raised
£1m through a placing of 1,428,571 new ordinary shares of 1 pence each in the
Company.
• Net cash flow used in operating activities was £2.16m (2022:
£5.14m). The decrease versus the prior year relates to the reduction in
losses during the period.
• The Group's cash balance decreased by £0.67m to £0.68m at 31
December 2023 (2022: £1.35m).
Chris Ellis
Chief Financial Officer
28(th) May 2024
Consolidated statement of comprehensive income
As at 31 December 2023
Group
Note 2023 2022
Continuing operations £ £
Revenue 3, 4 8,358,090 5,818,255
Cost of sales (1,994,497) (1,598,973)
Gross profit 6,363,593 4,219,282
Personnel costs (6,010,035) (8,092,999)
Depreciation and amortisation (836,403) (790,274)
Other operating expenditure (2,476,278) (2,726,385)
Exceptional items 5 - 42,154
Operating (loss) 6 (2,959,123) (7,348,222)
Finance expense 9 (488,653) (188,551)
(Loss) before taxation (3,447,776) (7,536,773)
Taxation 10 276,092 314,740
(Loss) after taxation (3,171,684) (7,222,033)
Other comprehensive income / (loss) net of taxation
Currency translation differences (48,874) (84,236)
Total comprehensive (loss) for the year (3,220,558) (7,306,269)
Total comprehensive (loss) attributable to:
Equity shareholders of the company (3,218,024) (7,307,215)
Non-controlling interest (2,534) 946
(3,220,558) (7,306,269)
(Loss) after taxation attributable to:
Equity shareholders of the company (3,169,150) (7,222,979)
Non-controlling interest (2,534) 946
(3,171,684) (7,222,033)
Earnings per share
Basic earnings 25 (0.20) (0.49)
Diluted earnings 25 (0.20) (0.49)
Consolidated and company statement of financial position
Year ended 31 December 2023
Group Company
2023 2022 2023 2022
Note £ £ £ £
Non-current assets
Goodwill 11 4,349,662 4,349,662 - -
Intangible assets 11 1,963,343 2,544,739 - -
Investments 12 4,999 4,999 8,572,015 8,354,094
Tangible assets 13 35,269 53,809 - -
Total non-current assets 6,353,273 6,953,209 8,572,015 8,354,094
Current assets
Trade and other receivables 15 3,333,562 2,487,844 298,222 285,574
Cash and cash equivalents 16 677,855 1,352,221 152,477 8,572
Total current assets 4,011,417 3,840,065 450,699 294,146
Total Assets 10,364,690 10,793,274 9,022,714 8,648,240
Current liabilities
Trade and other payables 17 2,833,856 2,311,754 4,174,316 3,827,085
Loans and other borrowings 18 425,002 41,227 233,862 -
Total current liabilities 3,258,858 2,352,981 4,408,178 3,827,085
Non-current liabilities
Loans and borrowings 18 2,621,472 1,797,992 2,554,673 1,687,697
Deferred tax liability 19 487,991 632,190 - -
Total non-current liabilities 3,109,463 2,430,182 2,554,673 1,687,697
Total liabilities 6,368,321 4,783,163 6,962,851 5,514,782
Net assets 3,996,369 6,010,111 2,059,863 3,133,454
Equity
Share capital 21 173,908 159,367 173,908 159,367
Share premium 11,742,897 10,821,021 11,742,897 10,821,021
Share option reserve 22 2,433,195 2,396,396 2,433,195 2,396,396
Other reserves 23 451,432 398,954 451,432 398,954
Retained earnings (10,667,211) (7,679,183) (12,741,619) (10,642,334)
Capital redemption reserve 50 50 50 50
Foreign exchange reserve (141,615) (92,741) - -
Equity attributable to the equity shareholders of the company 3,992,656 6,003,864 2,059,863 3,133,454
Non-controlling interest 3,713 6,247 - -
Total equity 3,996,369 6,010,111 2,059,863 3,133,454
The loss for the company for the year was £2,280,407 (2022: £5,850,480). The
financial statement were approved by the Board for issue on 28(th) May 2024.
Ian
James
Company Number: 08525481
Chief Executive Officer
Consolidated statement of cash flows
Group Company
2023 2022 2023 2022
Note £ £ £ £
Cash flows from operating activities
(Loss) after tax from continuing operations (3,171,684) (7,222,033) (2,280,410) (5,850,480)
Adjustments for:
Depreciation 13 28,117 29,209 - -
Amortisation 11 808,287 761,065 - -
Impairments 24 - - 1,156,223 5,450,737
Finance expense 9 488,653 188,551 450,033 166,650
Share option charge 22 217,921 1,476,183 - -
Taxation credit 10 (276,092) (314,740) - -
(Increase) in trade and other receivables 15 (863,438) (80,151) (30,368) (64,332)
(Decrease) / increase in trade and other payables 17 397,385 (467,779) 269,897 (195,363)
Increase / (decrease) in deferred tax liability 19 (144,199) 84,298 - -
Cash used in operations (2,515,050) (5,545,397) (434,625) (492,788)
Taxation refunded 351,936 401,008 - -
Net cash used in operating activities (2,163,114) (5,144,389) (434,625) (492,788)
Cash flows from investing activities
Purchase of tangible assets 13 (9,577) (40,903) - -
Purchase of intangible assets 11 (226,891) (1,099,062) - -
Purchase of investments 12 - (4,999) - (4,999)
Net cash used in investing activities (236,468) (1,144,964) - (4,999)
Cash flows from financing activities
Proceeds from borrowings 18 1,334,595 1,516,126 1,133,861 -
Repayment of borrowings 18 (546,795) (3,263) (452,478) -
Equity in convertible loan notes issued 23 52,478 398,954 52,478 -
New equity issued (net of transaction costs) 21 954,137 2,063,848 954,137 -
Intercompany transactions - - (1,078,889) 506,299
Interest paid (69,199) (21,900) (30,579) -
Net cash from financing activities 1,725,216 3,953,765 578,530 506,299
Net increase / (decrease) in cash and cash equivalents (674,366) (2,335,588) 143,905 8,512
Cash and cash equivalents at beginning of period 1,352,221 3,687,809 8,572 60
Cash and cash equivalents at end of period 677,855 1,352,221 152,477 8,572
Year ended 31 December 2023
Consolidated statement of changes in equity attributable to the shareholders
Year ended 31 December 2023
Group
Share Capital Share premium Share Option Reserve Other reserves Retained earnings Capital redemption reserve Foreign exchange reserve Total equity attributable to shareholders Non-controlling interest Total equity
£ £ £ £ £ £ £ £ £ £
As at 1 January 2022 134,227 8,639,593 1,275,363 - (811,354) 50 (8,505) 9,229,374 5,301 9,234,675
Total comprehensive loss for the year - - - - (7,222,979) - (84,236) (7,307,215) 946 (7,306,269)
Convertible loan notes issued - - - 398,954 - - - 398,954 - 398,954
Share option charge - - 1,476,183 - - - - 1,476,183 - 1,476,183
Share option exercised 200 - (46,739) - 46,739 - - 200 - 200
Share options lapsed - - (308,411) - 308,411 - - - - -
Shares issued during period (net of transaction costs) 24,940 2,181,428 - - - - - 2,206,368 - 2,206,368
As at 31 December 2022 159,367 10,821,021 2,396,396 398,954 (7,679,183) 50 (92,741) 6,003,864 6,247 6,010,111
Total comprehensive loss for the year - - - - (3,169,150) - (48,874) (3,218,024) (2,534) (3,220,558)
Convertible loan notes issued - - - 52,478 - - - 52,478 - 52,478
Share option charge - - 217,921 - - - - 217,921 - 217,921
Share option exercised 255 - (65,316) - 65,316 - - 255 - 255
Share options lapsed - - (115,806) - 115,806 - - - - -
Shares issued during period (net of transaction costs) 14,286 921,876 - - - - - 936,162 - 936,162
As at 31 December 2023 173,908 11,742,897 2,433,195 451,432 (10,667,211) 50 (141,615) 3,992,656 3,713 3,996,369
Company
Share Capital Share premium Share Option Reserve Other reserves Retained earnings Capital redemption reserve Total equity
£ £ £ £ £ £ £
As at 1 January 2022 134,227 8,639,593 1,275,363 - (5,147,004) 50 4,902,229
Total comprehensive loss for the year - - - - (5,850,480) - (5,850,480)
Convertible loan notes issued - - - 398,954 - - 398,954
Share option charge - - 1,476,183 - - - 1,476,183
Share options exercised 200 - (46,739) - 46,739 - 200
Share options lapsed - - (308,411) - 308,411 - -
Shares issued during period (net of transaction costs) 24,940 2,181,428 - - - - 2,206,368
As at 31 December 2022 159,367 10,821,021 2,396,396 398,954 (10,642,334) 50 3,133,454
Total comprehensive loss for the year - - - - (2,280,407) - (2,280,407)
Convertible loan notes issued - - - 52,478 - - 52,478
Share option charge - - 217,921 - - - 217,921
Share options exercised 255 - (65,316) - 65,316 - 255
Share options lapsed - - (115,806) - 115,806 - -
Shares issued during period (net of transaction costs) 14,286 921,876 - - - - 936,162
As at 31 December 2023 173,908 11,742,897 2,433,195 451,432 (12,741,619) 50 2,059,863
Notes to the financial statements
1. Description of business, basis of preparation and going concern
GENERAL INFORMATION
Silver Bullet Data Services Group PLC ("SBDS") was incorporated on 13 May
2013. SBDS is a public limited company incorporated in England and Wales and
domiciled in the UK. The address of the registered office is The Harley
Building, 77 New Cavendish Street, London, England, W1W 6XB.
SBDS is the ultimate parent company to the subsidiaries listed at Note 14,
together referred to as "the Group". The principal activity of the SBDS Group
is marketing services through the application of big data technologies to
reduce friction.
Silver Bullet Data Services Group PLC is registered with Companies House
(Company Number: 08525481).
BASIS OF PREPARATION
These financial statements have been prepared in accordance with UK-adopted
International Accounting Standards, interpretations issued by the
International Financial Reporting Standards Interpretations Committee
("IFRIC"), and the Companies Act 2006. The accounting policies have been
applied consistently throughout the period.
The Company has taken advantage of the exemption under S408 of the Companies
Act 2006 not to include a separate Statement of Comprehensive Income as group
statements have been prepared.
The consolidated financial statements have been prepared under the historical
cost convention. Historical cost is generally based on the fair value of the
consideration given in exchange for assets.
The presentational currency of the Group is GBP with functional currencies of
the subsidiaries disclosed at Note 14 being GBP, EUR, AUD, and USD.
GOING CONCERN
The Directors have prepared and reviewed detailed budgets and forecasts
covering the period to 31 December 2026 which are based on the strategic
business plan. These consider all reasonably foreseeable circumstances and
include consideration of trading results, cash flows and the level of
facilities the Group requires on a month-by-month basis.
Management is in the process of completing a working capital facility. The
directors are confident that the Group will be able to raise any required
funds to meet their strategic objectives however there is an uncertainty over
how much funding may be raised when required. However as securing new funding
cannot be assured, a material uncertainty exists related to the Group or
Company's ability to continue as a going concern.
Based on their enquiries and the information available to them and considering
the other risks and uncertainties set out herein, the Directors have a
reasonable expectation that the Company and the Group has or will be able to
secure adequate resources to continue operating for the foreseeable future.
Thus, they continue to adopt the going concern basis of accounting in
preparing this financial information.
2. Material accounting policies
REVENUE RECOGNITION
IFRS 15 - Revenue from Contracts with Customers has been applied for all
periods presented within the financial statements. The timing of all revenue
recognised by the Group during the reporting period was satisfied over time in
accordance with IFRS 15 recognition criteria. None of the Group's activities
result in the transfer of control of a product at a point in time for revenue
recognition purposes.
During the period under review the Group recognised revenue from the following
activities:
Customer Experience Services
Revenue relating to service contracts is invoiced according to milestones
defined within each contract, the terms of which vary on a case-by-case basis.
In all cases the revenue is recognised in line with the provision of the
services or, where the quantum and timing of the services cannot be reliably
predicted, rateable over the period of the agreement.
Invoices against services contracts are raised on a monthly basis with
adjustments for accrued or deferred income where the agreed invoicing
timescale does not match the valuation of provision of services.
4D contextual targeting and insights platform
Amounts received or receivable for campaigns, typically invoiced on a monthly
basis, recognise revenue in proportion to the quantum of advertising units
delivered according to the contracted service. Units and metrics deliverable
under each contracted services will vary on a case-by-case basis.
Contract liabilities
Contract liabilities are recognised when payment from a customer is received
in advance of performance obligations being satisfied. Contract liabilities
are recognised in trade and other payables.
Contract assets
Contract assets are recognised when revenue is recognised but payment is
conditional on a basis other than the passage of time. Contract assets are
included in trade and other receivables.
BUSINESS COMBINATIONS
Silver Bullet Data Services Group PLC applies the acquisition method of
accounting to account for business combinations in accordance with IFRS 3,
'Business Combinations'.
The consideration transferred for the acquisition of a subsidiary is the fair
values of the assets transferred, the liabilities incurred and the equity
interests issued by Silver Bullet Data Services Group PLC. The consideration
transferred includes the fair value of any asset or liability resulting from a
contingent consideration arrangement. Identifiable assets acquired and
liabilities and contingent liabilities assumed in a business combination are
measured initially at their fair values at the acquisition date. The excess of
the consideration transferred over the fair value of Silver Bullet Data
Services Group PLC's share of the identifiable net assets acquired is recorded
as goodwill. All transaction-related costs are expensed in the period they are
incurred as exceptional operating expenses.
TAXES
Corporation tax, where payable, is provided on taxable profits at the current
rate.
Deferred tax is provided on all temporary differences at the reporting date
between the tax bases of assets and liabilities and their carrying amounts for
financial reporting purposes.
Deferred tax assets are recognised for all deductible temporary differences,
carry-forward of unused tax assets and unused tax losses, to the extent that
it is probable that taxable profit will be available against which the
deductible temporary differences, and the carry-forward of unused tax assets
and unused tax losses can be utilised. The carrying amount of deferred tax
assets is reviewed at each reporting date and reduced to the extent that it is
no longer probable that sufficient taxable profit will be available to allow
all or part of the deferred tax asset to be utilised.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to offset current tax assets against current tax
liabilities, and when the deferred tax assets and liabilities relate to taxes
levied by the same taxation authority on either the taxable entity or
different taxable entities where there is an intention to settle the balances
on a net basis.
Deferred tax assets and liabilities are measured at the tax rates that are
expected to apply to the year when the asset is realised or the liability is
settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date.
FOREIGN CURRENCY TRANSLATION
Transactions in currencies other than the functional currency (foreign
currencies) are initially recorded at the exchange rate prevailing on the date
of the transaction.
Monetary assets and liabilities denominated in foreign currencies are
translated at the rate of exchange ruling at the reporting date. Non-monetary
assets and liabilities denominated in foreign currencies are translated at the
rate ruling at the date of the transaction.
All translation differences are taken to profit or loss, except to the extent
that they relate to gains or losses on non-monetary items recognised in other
comprehensive income, when the related translation gain or loss is also
recognised in other comprehensive income.
Subsidiaries using a functional currency other than the presentation currency
of the group are retranslated at each period end. Any translation differences
are held within the group foreign exchange reserve.
INTANGIBLE ASSETS AND GOODWILL
Goodwill
Goodwill is initially measured as the excess of the aggregate of the
consideration transferred over the fair value of the net assets acquired, and
any previous interest held over the net identifiable assets acquired and
liabilities assumed. After initial recognition, goodwill is measured at cost
less any accumulated impairment losses. The goodwill is tested annually for
impairment irrespective of whether there is an indication of impairment.
For the purposes of impairment testing, goodwill is allocated to the
cash-generating units expected to benefit from the acquisition.
Cash-generating units to which goodwill has been allocated are tested for
impairment at least annually, or more frequently when there is an indication
that the unit may be impaired. If the recoverable amount of the
cash-generating unit is less than the carrying amount of the unit, the
impairment loss is allocated first to reduce the carrying amount of any
goodwill allocated to the unit and then to the other assets of the unit
pro-rata on the basis of the carrying amount of each asset in the unit.
Intangible assets (other than goodwill)
Intangible assets acquired separately from a business combination are
recognised at cost and are subsequently measured at cost less accumulated
amortisation and accumulated impairment losses. Intangible assets acquired on
business combinations are recognised separately from goodwill at the
acquisition date if the fair value can be measured reliably.
Amortisation is recognised so as to write off the cost or valuation of assets
less their residual values over their useful lives on the following bases:
Development costs
- Straight line basis over 5 years
Customer
lists
- Straight line basis over 4 years
PROPERTY PLANT AND EQUIPMENT
Property, plant and equipment are stated at cost net of accumulated
depreciation and accumulated impairment losses. Cost comprises purchase cost
together with any incidental costs of acquisition.
Depreciation is provided to write down the cost less the estimated residual
value of all tangible fixed assets by equal instalments over their estimated
useful economic lives on a straight-line basis. The following rates are
applied:
Computer equipment
- Straight line over 3 years
Fixtures, fittings and equipment
- Reducing balance over 4 years
INVESTMENTS
All investments are accounted for at cost and reviewed for impairment at each
reporting period end date. Where share options are issued to employees of
subsidiary companies this is treated as a capital contribution in the
subsidiary with a corresponding increase in the cost of investment in the
parent company.
IMPAIRMENT OF NON-CURRENT ASSETS
At each reporting period end date, the Group reviews the carrying amounts of
its tangible and intangible assets to determine whether there is any
indication that those assets have suffered an impairment loss. If any such
indication exists, the recoverable amount of the asset is estimated in order
to determine the extent of the impairment loss (if any). Where it is not
possible to estimate the recoverable amount of an individual asset, the
company estimates the recoverable amount of the cash-generating unit to which
the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in
use. In assessing value in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the
asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset is estimated to be less than its
carrying amount, the carrying amount of the asset is reduced to its
recoverable amount. An impairment loss is recognised immediately in the
statement of comprehensive income.
Recognised impairment losses are reversed if, and only if, the reasons for the
impairment loss have ceased to apply. Where an impairment loss subsequently
reverses, the carrying amount of the asset (or cash-generating unit) is
increased to the revised estimate of its recoverable amount, but so that the
increased carrying amount does not exceed the carrying amount that would have
been determined had no impairment loss been recognised for the asset (or
cash-generating unit) in prior years. A reversal of an impairment loss is
recognised immediately in profit or loss.
RESEARCH AND DEVELOPMENT EXPENDITURE
Research expenditure is written off against profits in the year in which it is
incurred. Identifiable development expenditure is capitalised to the extent
that the technical, commercial and financial feasibility can be demonstrated.
Development costs relate to the 4D Platform developed internally by the group
which are continuing to generate revenue streams.
FINANCIAL INSTRUMENTS
Silver Bullet Data Services Group PLC classifies financial instruments, or
their component parts, on initial recognition as a financial asset, a
financial liability or an equity instrument in accordance with the substance
of the contractual arrangement. Financial instruments are recognised on the
date when the Group becomes a party to the contractual provisions of the
instrument. Financial instruments are recognised initially at fair value plus,
in the case of a financial instrument not a fair value through profit and
loss, transaction costs that are directly attributable to the acquisition or
issue of the financial instrument. Financial instruments are derecognised on
the settlement date when the Group is no longer a party to the contractual
provisions of the instrument.
Non-derivative financial instruments comprise trade and
other receivables, cash and cash equivalents, loans and borrowings, and trade
and other payables.
Trade and other receivables and trade and other payables
Trade and other receivables are recognised initially at transaction price less
attributable transaction costs. Trade and other payables are recognised
initially at transaction price plus attributable transaction costs. Subsequent
to initial recognition they are measured at amortised cost using the effective
interest method, less any expected credit losses in the case of trade
receivables. Impairments of the trade receivable balances are based on a
review of individual receivable balances, their ageing and management's
assessment of realisation.
If the arrangement constitutes a financing transaction, for example if payment
is deferred beyond normal business terms, then it is measured at the present
value of future payments discounted at a market rate of interest for a similar
debt instrument.
Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at the present value of
future payments discounted at a market rate of interest. Subsequent to initial
recognition, interest-bearing borrowings are stated at amortised costs using
the effective interest method.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits. Bank
overdrafts that are repayable on demand form an integral part of the Group's
cash management and are included as a component of cash and cash equivalents
for the purpose only on the cash flow statement.
EMPLOYEE BENEFITS
During the period the Group operated a defined contribution money purchase
pension scheme under which it pays contributions based upon a percentage of
the members' basic salary. The Group also paid other employee benefits
including medical insurance.
All employee benefits are charged to the Statement of Comprehensive Income and
differences between contributions payable in the year and contributions
actually paid are shown as either accruals or prepayments.
LEASES
The Group leases a number of properties in various locations in Europe,
Australia, USA, and the UK from which it operates.
All leases are accounted for by recognising a right-of-use asset and a lease
liability except for:
- Leases of assets below £1,000; and
- Leases with a duration of twelve months or less.
All leases signed by the Group during the reporting period were for a period
of less than twelve months so no right-of-use assets have been recognised.
GRANT INCOME
Grant income is recognised where there is reasonable assurance that the grant
will be received, and all attached conditions will be complied with. When the
grant relates to an expense item, it is recognised as income on a systematic
basis over the periods that the related costs, for which it is intended to
compensate, are expensed. When the grant relates to an asset, it is recognised
as income in equal amounts over the expected useful life of the related asset.
SHARE-BASED PAYMENTS
The Group operates a share option programme which allows employees of the
subsidiary companies to be granted options to purchase shares in this company.
The fair value of options granted is recognised as an employment expense in
the corresponding subsidiary company. The Group recognises a corresponding
increase in subsidiary investment value and equity to recognise the capital
contribution made for share option charges.
The fair value of the options is measured at the grant date and spread over
the vesting period. The fair value is measured based on an option pricing
model taking into account the terms and conditions upon which the instruments
were granted.
Vesting periods in each share option agreement vary from vesting immediately
on grant date to vesting over a period of four years.
EXCEPTIONAL ITEMS
Where items of income and expense included in the statement of comprehensive
income are considered to be material and exceptional in nature, separate
disclosure of their nature and amount is provided in the financial statements.
These items are classified as exceptional items. The Group considers the size
and nature of an item both individually and when aggregated with similar items
when considering whether it is material, for example impairment of intangible
assets or restructuring costs.
FINANCE INCOME AND EXPENSES
Finance expenses comprise interest payable recognised in the statement of
comprehensive income using the effective interest method.
Interest income and interest payable are recognised in the statement of
comprehensive income as they accrue, using the effective interest method.
ADOPTION OF NEW AND REVISED STANDARDS
The following standards and interpretations relevant to the Group are in issue
but are not yet effective and have not been applied in the financial
statements. In some cases these standards and guidance have not been endorsed
for use in the United Kingdom.
· IAS 1 Presentation of liabilities as current or non-current
The above standards are not expected to materially impact the Group.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of these financial statements requires the Directors to make
estimates and judgements that affect the reported amounts of assets,
liabilities, costs and revenue in the financial statements. Actual results
could differ from these estimates. The judgements, estimates and associated
assumptions are based on historical experience and other factors that are
considered to be relevant.
Key sources of estimation uncertainty that could cause an adjustment to be
required to the carrying amount of assets or liabilities within the next
accounting period are:
Critical accounting estimates:
Impairment of intangible fixed assets
Impairment tests have been undertaken in respect of goodwill and intangible
fixed assets using an assessment of the value in use of the respective cash
generating units (CGUs). This assessment requires a number of assumptions and
estimates to be made including the allocation of assets to CGUs, the expected
future cash flows from each CGU and also the selection of a suitable discount
rate in order to calculate the present value of those cash flows. Impairments
of intangible assets are explained in more detail at note 11.
Critical accounting judgements:
Amortisation
The assessment of the useful economic lives, residual values and the method of
depreciating or amortising intangible (excluding goodwill) fixed assets
requires judgement. Amortisation is charged to profit or loss based on the
useful economic life selected, which requires an estimation of the period and
profile over which the group expects to consume the future economic benefits
embodied in the assets. Useful economic lives and residual values are
re-assessed, and amended as necessary, when changes in their circumstances are
identified.
Capitalised development costs
Development costs incurred in building the Group's key platform for future
expansion have been capitalised in accordance with the requirements of IAS38.
The majority of these costs consist of salary expenses to which an estimated
proportion of development time has been applied.
Convertible loan notes
The equity portion of the convertible loan notes have been valued using the
Black-Scholes model. This gives equivalent discount rates on the liability
components ranging from 14% to 21%. The directors consider this rate to be an
approximation of the rate on a similar loan without the conversion feature.
The directors consider this method is used as a practical measure to estimate
the value of the debt.
Going concern
As discussed more fully in the Directors' Report these financial statements
have been prepared on the going concern basis. This treatment is based on
management's judgement that cashflow requirements for the continued
development can be achieved through operating activities and through
additional fundraising if required.
3. Operating segments
IFRS 8 requires that operating segments be identified on the basis of internal
reporting and decision-making. The Board of Directors is the chief operating
decision maker for the Group.
The Group has two business segments outlined below. The business analyses
these streams by revenue and gross profit. Overheads, assets and liabilities
are not separately allocated across the business streams.
The business monitors operating segments using gross profit as the key
measurement. Group profitability is measured using earnings before interest,
tax, depreciation and amortisation (EBITDA) which is used to represent
operating cashflow generated by the business.
2023 2022
Revenue Gross profit Revenue Gross profit
£ £ £ £
Customer Experience Services 5,551,586 5,314,225 4,302,431 4,011,972
4D Platform 2,806,504 1,049,368 1,515,824 207,310
Total 8,358,090 6,363,593 5,818,255 4,219,282
EBITDA from continuing operations
Operating (loss) (2,959,124) (7,348,222)
Depreciation and amortisation 836,403 790,274
Total (2,122,721) (6,557,948)
4. Geographical analysis
Revenue analysed by geographical market:
2023 2022
£ £
United Kingdom 2,126,778 1,066,801
Rest of Europe 1,158,692 1,553,243
Rest of the world 5,072,620 3,198,211
8,358,090 5,818,255
The timing of all revenue recognised by the Group during the reporting period
was satisfied over time in accordance with IFRS 15 recognition criteria. None
of the Group's activities result in the transfer of control of a product at a
point in time for revenue recognition purposes.
Three major customers are included within revenue totalling £3,805,304
representing 13%, 16%, and 17% of total group revenue respectively (2022: two
major customer totalling £1,512,875, each representing 13%).
Non-current assets analysed by geographical market:
2023 2022
£ £
United Kingdom 6,341,362 6,934,199
Rest of Europe - 4,506
Rest of the world 11,911 14,504
6,353,273 6,953,209
5. Exceptional items
Group
2023 2022
£ £
Amounts recovered relating to a historic fraud - (42,154)
- (42,154)
Reported loss before tax for the group is reconciled to the
headline loss before tax below. This figure is a non-GAAP measure used for
internal purposes and may not be comparable to other non-GAAP measures.
Group
2023 2022
£ £
Reported (loss) before tax (3,447,776) (7,536,773)
Share option charges 217,921 1,476,183
Amounts recovered relating to a historic fraud - (42,154)
Headline (loss) before tax (3,229,855) (6,102,744)
6. Operating (loss)
The operating loss is arrived at after charging:
Group
2023 2022
£ £
Depreciation of property plant and equipment 28,117 29,209
Amortisation of intangible assets 808,287 761,065
Short-term leases 259,330 237,388
Foreign exchange losses 83,763 24,334
Auditor's remuneration in respect of:
- audit of the consolidated financial statements 79,200 72,000
- other audit related assurance services 2,500 5,000
7. Staff costs
Group
2023 2022
£ £
Wages and salaries 5,006,201 5,594,877
Share-based payments 217,921 1,476,183
Social security costs 497,419 786,795
Pension costs - defined contribution 260,639 215,546
Termination payments 27,855 19,598
6,010,035 8,092,999
Average number of staff
Group Company
2023 2022 2023 2022
Customer Experience Services 36 36 - -
4D Platform 23 32 - -
Central 9 12 - -
68 80 - -
8. Directors' remuneration
Key management personnel are considered to be the directors
and their remuneration, employer's national insurance, and pension
contributions are disclosed below:
Group
2023 2022
£ £
Directors' remuneration 691,728 763,237
Share-based payments 175,773 637,430
Social security costs 67,520 79,133
Pension costs - defined contribution 20,533 20,526
Invoiced services - 17,920
955,554 1,518,246
The directors are remunerated, in respect of their services to the Group,
through subsidiary companies. During the year three directors (2022: three)
were accruing benefits under the company defined contribution pension scheme.
Remuneration disclosed above includes the following amounts paid to the
highest paid director:
Group
2023 2022
£ £
Directors' remuneration 225,000 225,000
Share-based payments 71,552 229,757
Social security costs 28,243 29,744
Pension costs - defined contribution 6,750 6,750
9. Finance expenses
Group
2023 2022
£ £
On convertible loan notes 419,455 166,651
On bank loans 69,198 21,900
488,653 188,551
10. Income tax provision
A deferred tax asset in respect of the Group's losses to
date has not been recognised due to the uncertainty of the timing of future
loss relief.
Group
2023 2022
Current tax £ £
UK corporation tax charge from prior periods 698 -
UK corporation tax charge/(credit) for R&D from prior years 8,064 (41,009)
UK corporation tax credits for R&D for current year (143,676) (360,000)
Foreign taxation 3,021 1,971
Total current tax (131,893) (399,038)
Deferred tax (144,199) 84,298
Total tax credit (276,092) (314,740)
Reconciliation of tax expense
The tax assessed on the loss on ordinary activities for the year is lower than
the standard rate of corporation tax in the UK of 19% (2022: 19%).
Group
2023 2022
£ £
Loss on ordinary activities before taxation (3,447,777) (7,512,440)
Loss on ordinary activities by rate of tax (655,077) (1,427,364)
Non-allowable expenses 158,917 150,152
Enhanced R&D expenditure (143,676) (360,000)
Deferred tax movement on intangible assets (144,199) 84,298
Movement in deferred tax not recognised 496,160 1,277,212
Adjustments in respect of prior periods 8,762 (41,009)
Foreign taxation 3,021 1,971
Tax on loss (276,092) (314,740)
Deferred tax assets have not been recognised on cumulative losses for the
group totalling £43,151,563 (2022: £40,012,779).
11. Goodwill and intangible assets
Customer lists Development Costs Goodwill Total
£ £ £ £
COST
At 1 January 2022 595,708 2,498,004 4,349,662 7,443,374
Additions - 1,099,062 - 1,099,062
At 31 December 2022 595,708 3,597,066 4,349,662 8,542,436
At 1 January 2023 595,708 3,597,066 4,349,662 8,542,436
Additions - 226,891 - 226,891
At 31 December 2023 595,708 3,823,957 4,349,662 8,769,327
AMORTISATION
At 1 January 2022 362,790 524,180 - 886,970
Amortisation charge 148,927 612,138 - 761,065
At 31 December 2022 511,717 1,136,318 - 1,648,035
At 1 January 2023 511,717 1,136,318 - 1,648,035
Amortisation charge 83,991 724,296 - 808,287
At 31 December 2023 595,708 1,860,614 - 2,456,322
NET BOOK VALUE
At 31 December 2022 83,991 2,460,748 4,349,662 6,894,401
At 31 December 2023 - 1,963,343 4,349,662 6,313,005
Amortisation is charged within administrative expenses in
the Statement of Comprehensive Income.
Cash Generating Unit (CGU) impairment reviews
The Group has identified two CGUs: Customer Experience Services and 4D
Platform (as reported in Note 3). The intangible assets are allocated to these
CGUs as follows:
Goodwill Development costs Total
Customer Experience Services 3,076,826 - 3,076,826
4D Platform 1,272,836 1,963,343 3,236,179
4,349,662 1,963,343 6,313,005
1. Customer Experience Services
The key assumptions for the value in use calculation are considered separately
below.
Number of years of cash flows used and budgeted growth rate
The recoverable amount is based on a value in use calculation using specific
cash flow projections over a five-year period with a growth rate of 2% for a
further 3 years. The five-year forecast is prepared considering the directors'
expectations based on market knowledge, numbers of new engagements and the
pipeline of opportunities.
Discount rate
The Group's pre-tax weighted average cost of capital has been used to
calculate a discount rate, which reflects current market assessments of the
time value of money for the period under review and the risks specific to the
Group. A discount rate of 19% was applied for each of the periods under
review.
Future growth rate
An appropriate growth rate is selected, based on the directors' expectations
of growth beyond the budgeted period. The growth rate used for the period
following the detailed forecast period is 2%, which is within the expected
growth for the industry.
The discounted cashflows expected compares to the carrying value as follows:
Net Book Value Recoverable Amount Impairment Headroom
As at 31 December 2022 3,160,817 13,788,238 10,627,421
As at 31 December 2023 3,076,826 8,732,408 5,655,582
Sensitivity analysis has been conducted on each of management's key
assumptions to assess the volatility of the impairment head room against the
Group's Cash Generating Units.
A discount factor of 19% has been applied by management in order to calculate
the net present value of each CGUs recoverable amount. For the Impairment
Headroom to reduce to £nil this discount factor would need to increase to
74%. This discount factor is an estimate of the Group's cost of capital based
on the capital asset pricing model using the beta value from similar listed
businesses.
Management have used a sales pipeline to assess likely revenue for the
proceeding three years, with a medium-term sales growth rate at 5% for three
financial years with a growth rate forecast at 2% for years 2029 to 2031.
Sensitivity analysis on these revenue estimates show that a reduction in
forecast revenue of 17% would not result in any impairment.
For the purposes of reviewing goodwill impairments, the tangible fixed assets
acquired in business combinations are not considered to be material.
2. 4D Platform
The carrying value of amortised intangible assets and the key assumptions used
in performing the annual impairment assessment and sensitivities are disclosed
below:
Net Book Value Recoverable Amount Impairment Headroom
£ £ £
As at 31 December 2022 3,733,584 4,557,679 824,095
As at 31 December 2023 3,236,179 4,066,574 830,395
The key assumptions applied by management in assessing these recoverable
amounts are:
- a discount rate of 19% to calculate the present value of future
cashflows;
- revenue growth assumptions used in development costs averaging 50%
per year over the first two years to 31 December 2025.
Sensitivity analysis has been conducted on these management assumptions to
show that an increased discount rate of 24% would not result in any
impairments being recognised.
Cashflow forecasts used in this analysis have been prepared by management
based on best estimates of future activity and expected profit margins.
Reduction of future revenue streams by a factor of 6% would not result in any
impairment without considering any cost control measures.
12. Investments
All investments held by the group relate to investments in
trading companies as detailed in Note 14.
COST Group Company
At 1 January 2022 - 6,872,911
Additions 4,999 1,481,183
At 31 December 2022 4,999 8,354,094
At 1 January 2023 4,999 8,354,094
Additions - 217,921
At 31 December 2023 4,999 8,572,015
Impairment review of investments
Using the assumptions applied in reviewing intangible assets for impairment
(see Note 11) the Company's investments in subsidiaries have also been
compared to the discounted future cashflows expected from the subsidiary CGUs.
At the period end no impairment charges (2022: £nil) were necessary given the
headroom below:
Net Book Value Recoverable Amount Impairment Headroom
As at 31 December 2022 £ £ £
Investments in subsidiaries 8,354,094 18,345,917 9,991,823
8,354,094 18,345,917 9,991,823
As at 31 December 2023
Investments in subsidiaries 8,572,015 12,798,982 4,226,967
8,572,015 12,798,982 4,226,967
13. Tangible assets
Fixtures, fittings and equipment Computer equipment Total
£ £ £
COST
At 1 January 2022 8,297 142,725 151,022
Additions 11,814 29,089 40,903
At 31 December 2022 20,111 171,814 191,925
At 1 January 2023 20,111 171,814 191,925
Additions 471 9,106 9,577
At 31 December 2023 20,582 180,920 201,502
DEPRECIATION
At 1 January 2022 4,973 103,934 108,907
Charge for the period 4,237 24,972 29,209
At 31 December 2022 9,210 128,906 138,116
At 1 January 2023 9,210 128,906 138,116
Charge for the period 4,868 23,249 28,117
At 31 December 2023 14,078 152,155 166,233
NET BOOK VALUE
At 31 December 2022 10,901 42,908 53,809
At 31 December 2023 6,504 28,765 35,269
Depreciation is charged to administrative expenses within the Statement of
Comprehensive Income.
14. Investments in subsidiaries
As at 31 December 2023 Silver Bullet Data Services Group PLC owned an interest
in the ordinary share capital of the companies below.
All companies are 100% owned with the exceptions of Local Planet Data Services
Ltd (51% owned) and Silver Bullet Data Science Limited (49.99% owned).
Silver Bullet Data Science Limited has not been consolidated into these
financial statements as the Group does not exercise control over the company's
activities.
During the period steps were taken to close and liquidate the
German-registered subsidiary Silver Bullet Data Services GmbH which is
expected to be completed during 2024.
Subsidiary undertaking Country of incorporation Registered office Principal activity
Silver Bullet Media Services Limited England and Wales The Harley Building, 77 New Cavendish Street, London, W1W 6XB Marketing services and data technologies
IOTEC Native Limited England and Wales The Harley Building, 77 New Cavendish Street, London, W1W 6XB Dormant
Silver Bullet Data Services Limited England and Wales The Harley Building, 77 New Cavendish Street, London, W1W 6XB Marketing services and data technologies
Silver Bullet Data Services GmbH Germany Herzogspitalstraße 24, 80331, Munich Dormant
Silver Bullet Data Services Pty Ltd Australia 452 Flinders St, Melbourne, 3000, Victoria Marketing services and data technologies
Silver Bullet Data Services S.r.l Italy 20161, Via Gian Rinaldo, Carli n. 47, Milan Marketing services and data technologies
Technobeet S.r.l. Italy 20161, Via Gian Rinaldo, Carli n. 47, Milan Dormant
Silver Bullet USA Inc. United States of America 1250 Broadway, 36th Floor, New York, New York, 10001 Marketing services and data technologies
Local Planet Data Services Ltd England and Wales The Harley Building, 77 New Cavendish Street, London, W1W 6XB Marketing services and data technologies
15. Trade and other receivables
Group Company
2023 2022 2023 2022
£ £ £ £
Trade receivables 2,202,850 1,307,790 - -
Other receivables 440,560 448,798 177,827 227,439
Prepayments 249,292 225,537 120,395 58,135
Contract assets 297,184 170,855 - -
Corporation tax receivable 143,676 334,864 - -
3,333,562 2,487,844 298,222 285,574
In determining the recoverability of accounts receivable, the Group considers
any changes in the credit quality of the accounts receivable from the date
credit was initially granted up to the reporting date.
Those receivable balances that are passed due have been assessed by management
on an individual basis and provisions for bad debts has been made as
necessary.
Contract assets represent agreements with customers against which revenue has
been recognised but not yet invoiced in accordance with the contract terms.
All accrued revenue at each period end has been invoiced within a maximum of
three months of the reporting period.
16. Cash and cash equivalents
Group Company
2023 2022 2023 2022
£ £ £ £
Cash at bank 677,855 1,352,221 152,477 8,572
677,855 1,352,221 152,477 8,572
Cash at bank earns interest at floating rates based on daily bank deposit
rates. Bank interest received is not material.
17. Trade and other payables
Group Company
2023 2022 2023 2022
£ £ £ £
Trade payables 1,221,776 530,257 166,823 34,448
Tax and social security 551,163 497,631 21,027 20,613
Other payables 339,670 345,496 10,051 5,050
Accruals 516,847 647,382 1,464 4,607
Contract liabilities 204,400 290,988 - -
Amounts owed to group undertakings - - 3,974,951 3,762,367
2,833,856 2,311,754 4,174,316 3,827,085
The fair value of trade and other payables approximates to book value at each
year-end. Trade payables are non-interest bearing and are normally settled
monthly.
Contract liabilities represent agreements with customers against which revenue
has not yet been recognised for payments that have been received in advance
during the report period. All such deferred revenue at each period end has
been released to the Statement of Comprehensive Income within a maximum of
three months of the reporting period.
18. Loans and borrowings
Group Company
2023 2022 2023 2022
£ £ £ £
Current liabilities
Bank loans 75,002 41,227 33,862 -
Term loans 350,000 - 200,000 -
425,002 41,227 233,862 -
2023 2022 2023 2022
£ £ £ £
Non-current liabilities
Convertible loan notes 2,554,672 1,687,697 2,554,673 1,687,697
Bank loans 66,800 110,295 - -
2,621,472 1,797,992 2,554,673 1,687,697
As at 31 December 2023 the Group had two bank loans of £141,801 (2022:
£151,522). One loan accrues interest at 1.95% repayable over six years to
2026. Other loan balances are payable in equal instalments over a period of
six months accruing annual interest rate of 11.2%.
As at 31 December 2023 the group had two short-term loan facilities totalling
£350,000 (2022: £nil). The loans were lent without security and accrue
interest at rates of 8.5% and 12%.
Convertible loan notes are in issue which are convertible by the option holder
into new ordinary shares at any point during the three-year term of the loan,
the latest of which expires 31 May 2026. Conversion prices are fixed at £1.10
for the June 2022 convertible loan note instruments and £0.50 for the May
2023 convertible loan note instrument.
The loan notes attract interest at a rate of 12% per annum, which is payable
commencing on the date of issue either:
i) at the Company's option of 8% per annum paid monthly plus
4% payable via the issue of additional Convertible Loan Notes as payment in
kind.
ii) 12% payable via the issue of additional Convertible Loan
Notes as payment in kind.
The loan notes may be redeemed in cash at the option of company at any point
at a premium equal to 15% of the principal amount of the Notes.
The equity element of the convertible loan note is recognised within other
reserves (see Note 23). Market interest rates of between 14% and 21% have been
applied to calculate the residual equity value of the financial instrument.
19. Deferred tax liability
Group Company
2023 2022 2023 2022
£ £ £ £
Movements in the year:
Liability brought forward 632,190 547,892 - -
Charge / (credit) to profit or loss (144,199) 84,298 - -
Liability carried forward 487,991 632,190 - -
All deferred tax liabilities are recognised in respect of intangible and
tangible asset timing differences. No deferred tax assets have been recognised
by the Group.
20. FINANCIAL INSTRUMENTS
Financial instruments and risk management
The Group's financial instruments may be analysed as follows:
Group Company
2023 2022 2023 2022
£ £ £ £
Financial assets measured at amortised cost
Cash and cash equivalents 677,855 1,352,221 152,477 8,571
Trade receivables 2,202,850 1,307,790 - -
Contract assets 297,184 170,855 - -
Other receivables 440,560 448,798 177,827 227,439
3,618,450 3,279,664 330,304 236,010
Financial liabilities measured at amortised cost
Trade payables 1,221,776 530,257 166,823 34,448
Accruals 516,847 647,382 1,467 4,609
Other payables 339,670 345,496 3,985,002 3,767,417
Loans 3,046,474 1,839,219 2,554,673 1,687,697
5,124,767 3,362,354 6,707,964 5,494,171
Financial assets measured at amortised cost comprise cash, trade receivables,
contract assets and other receivables.
Financial liabilities measured at amortised cost comprise bank loans and
overdrafts, other loans, trade payables, convertible loan notes and other
payables.
The debt instruments, excluding convertible loan notes, were initially
recognised at fair value, and subsequently they were measured at amortised
cost using the effective interest rate method, whereby the fair value of the
debt approximates their carrying value.
The Group is exposed to a variety of financial risks through its use of
financial instruments which result from its operating activities. All of the
Group's financial instruments are classified as loans and receivables.
The Group does not actively engage in the trading of financial assets for
speculative purposes. The most significant financial risks to which the Group
is exposed are described below:
Credit risk
Generally, the Group's maximum exposure to credit risk is limited to the
carrying amount of the financial assets recognised at the reporting date, as
summarised above.
Credit default risk is the financial risk to the Group if a counter party to a
financial instrument fails to meet its contractual obligation. The nature of
the Group's receivable balances, the time taken for payment by entities and
the associated credit risk are dependent on the type of engagement.
Credit risk is minimised substantially by ensuring the credit worthiness of
the entities with which it carries on business. Credit terms are provided on a
case-by-case basis. The Group's trade and other receivables are actively
monitored. The Group has not experienced any significant instances of
non-payment from its customers.
Unbilled revenue is recognised by the Group only when all conditions for
revenue recognition have been met in line with IFRS 15.
Liquidity risk
Liquidity risk represents the contingency that the Group is unable to gather
the funds required with respect to its financial obligations at the
appropriate time and under reasonable conditions in order to meet their
current obligations. The Group attempts to manage this risk so as to ensure
that it has sufficient liquidity at all times to be able to honour its current
and future financial obligations under normal conditions and in exceptional
circumstances. Financing strategies to ensure the management of this risk
include the issuance of equity or debt securities as deemed necessary.
The group's financial liabilities mature to the following profile:
2024 2025 2026 Total
£ £ £ £
Trade payables 1,221,776 - - 1,221,776
Accruals 516,847 - - 516,847
Other payables 339,670 - - 339,670
Loans 425,001 2,102,482 518,990 3,046,474
2,503,294 2,102,482 518,990 5,124,767
Foreign currency risk
The Group operates internationally and is exposed to foreign exchange risk
arising from various currency exposures, primarily Australian Dollars, United
States Dollars and Euros. The Group monitors exchange rate movements closely
and ensures adequate funds are maintained in appropriate currencies to meet
known liabilities.
The Group's exposure to foreign currency risk at the end of the respective
reporting periods were as follows:
2023 2022
AUD USD EUR AUD USD EUR
Assets and liabilities 172,852 1,681,089 (537,629) 299,236 244,995 (515,938)
Assets and liabilities include the monetary assets and liabilities of
subsidiaries denominated in foreign currency.
The Group is exposed to foreign currency risk on the relationship between its
functional currencies and other currencies in which the Group's material
assets and liabilities are denominated. The table below summaries the effect
on reserves had the functional currencies of the Group weakened or
strengthened against these other currencies, with all other variables held
constant.
Group Company
2023 2022 2023 2022
£ £ £ £
10% strengthening of functional currency 85,952 (7,876) - -
10% weakening of functional currency (180,498) 16,539 - -
The impact of a change of 10% has been selected as this has been considered
reasonable given the current level of exchange rates and the volatility
observed both on a historical basis and market expectations for future
movements.
21. Share capital and premium
Ordinary share capital
Issued and fully paid No. £
As at 1 Jan 2023 15,936,687 159,367
Shares issued 1,454,081 14,541
As at 31 Dec 2023 17,390,768 173,908
In December 2023 investment funding was raised for 1,428,571 new shares issued
at £0.70. At the reporting date deferred share subscriptions were outstanding
of £125,000 (2022: £142,720) and are held within other receivables.
22. Share Option Reserve
The Group operates a programme for employees of its subsidiaries to acquire
shares in the company under an EMI scheme. All options are settled by the
physical delivery of shares once the options have vested and are exercised.
The number and weighted average exercise price of share options during the
year were as follows:
2023 2022
Weighted average exercise price Share options Weighted average exercise price Share options
£ No. £ No.
Outstanding at start of period 1.49 1,569,620 1.56 1,679,607
Forfeited/expired during period 1.01 (196,626) 1.50 (198,987)
Granted during period 0.04 111,000 0.27 109,000
Exercised during period 0.01 (25,510) 0.01 (20,000)
Outstanding at end of period 1.47 1,458,484 1.49 1,569,620
Share options have been valued at grant date based on the Black Scholes
valuation model using an estimated volatility of 40%. Options vest over
varying terms according to individual option agreements from vesting in full
on grant date to a period of three years.
All options expire after seven years and an expected take-up rate of 100% has
been applied. A dividend yield of 0% has been applied to option valuation
models as the Group focuses on capital growth through this period. Risk-free
rates have been applied ranging from 0.26% to 3.62% based on UK 10-year gilt
rates since 2014.
The movement in option valuation during the year ended 31 December 2023
resulted in a staffing cost being recognised by the Group of £217,921 (2022:
£1,476,183), with a corresponding increase in the Group's equity.
The valuation of options exercised, lapsed, and forfeited during the year
totalled £181,122 (2022: £355,150) which has been transferred to Retained
Earnings.
The contractual life for outstanding options runs for a number of periods, the
latest of which being to 26(th) October 2030.
23. Other reserves
2023 2022
£ £
Convertible loan notes 451,432 398,954
451,432 398,954
Loan notes are in issue which are convertible into new ordinary shares at
prices ranging from £0.50 to £1.10 per new ordinary share at any point
during the three-year term of the loan.
The equity element of the convertible loan note is recognised within other
reserves. Market interest rates varying from 14% to 21% have been applied to
calculate the residual equity value of the financial instrument.
24. Related party transactions
Key management personnel and directors' remuneration is detailed at note 8.
Local Planet International Limited: is a related party to the group by virtue
of having Directors in common. Ian James, Martyn Rattle and Nigel Sharrocks
are directors of both companies.
Recharges for shared services totalling £124,668 (2022: £146,293) are
included in revenue for the year ended 31 December 2023. Amounts outstanding
at the year end included in trade receivables totals £9,857 (2022: £29,611).
Recharges for direct costs incurred were processed during the year ended 31
December 2023 totalling £100,100 (2022: £114,009). Amounts outstanding at 31
December 2023 totalled £37,800 (2022: £32,400).
Marmalade Consultants Limited: is a related party to the group by virtue of
having Directors in common. Martyn Rattle is a director of both companies
Consultancy services were provided during the year ended 31 December 2023
totalling £nil (2022: £17,920).
Educated Solutions Limited: is a related party to the group by virtue of
having Directors in common. Ian James and Martyn Rattle are directors of both
companies. Costs of £nil (2022: £3,462) were recognised in respect of a
profit share agreement.
Umberto Torrielli: A director of the Group company relocated to the USA in
order to establish a new presence in this territory in 2020. For this purpose
a loan was issued of £151,969 which is held within other debtors at the end
of the reporting period (2022: £150,000). The loan is repayable within 12
months and attracts interest at the Bank of England interest rate.
Transactions with group companies
As a holding company for the subsidiaries listed at Note 14, all funds raised
are distributed to subsidiary companies as required. A summary of balances
outstanding at the period end are provided below. All balances are repayable
on demand and are lent without security or accruing any interest.
A provision for bad debts has been included in the Company financial
statements for all amounts receivable from subsidiaries in both the current
and previous year.
Amounts owed to subsidiary companies 2023 2022
£ £
Silver Bullet Media Services Limited 2,921,809 2,960,236
Iotec Native Limited 802,131 802,131
Silver Bullet Data Services Limited 196,011 -
Local Planet Data Services Ltd 55,000 -
3,974,951 3,762,367
25. Earnings per share
Earnings per share (EPS) is calculated on the basis of profit attributable to
equity shareholders divided by the weighted average number of shares in issue
for the year. The diluted EPS is calculated on the treasury stock method and
the assumption that the weighted average EMI share options outstanding during
the period are exercised.
2023 2022
£ £
Loss after taxation (3,171,684) (7,222,033)
Non-controlling interest (2,534) 946
Loss after taxation attributable to shareholders (3,169,150) (7,222,979)
Number of shares
Weighted average number of ordinary shares in issue 16,057,860 14,889,187
Dilutive effect of in-the-money share options 656,832 589,590
Diluted weighted average number of shares 16,714,692 15,478,777
Earnings per share
Basic earnings per share (0.20) (0.49)
Diluted earnings per share (0.20) (0.49)
As there is a loss for the year the options are antidilutive and therefore the
basic and the diluted EPS are the same.
26. Other financial commitments
The Company has provided a guarantee in respect of the
outstanding liabilities of the subsidiary companies listed below in accordance
with Sections 479A - 479C of the Companies Act 2006, as these subsidiary
companies of the Group are exempt from the requirements of the Companies Act
2006 relating to the audit of the accounts by virtue of Section 479A of this
Act.
Silver Bullet Media Services Limited (06216702)
IOTEC Native Limited (08286180)
Silver Bullet Data Services Limited (10081847)
Local Planet Data Services Ltd (13123941)
27. Subsequent events
No other significant events have occurred between the end
of the reporting period and the date of signature of the Annual Report and
Accounts.
28. Ultimate controlling party
Management consider there is no ultimate controlling party of the Group.
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. END FR GZGZKMRDGDZZRecent news on Silver Bullet Data Services
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