Half Yearly Report

RNS Number : 9623P

Audioboom Group PLC

26 August 2014

 



Audioboom Group plc

("Audioboom" or the "Company")

Unaudited Interim Financial Statements for the period ended 31 May 2014

Audioboom (AIM: BOOM), the audio social media platform, announces its unaudited interim financial results for the five month period ended 31 May 2014.

Period highlights

-       Acquired the entire issued share capital of Audioboo Limited through the issue of 174.5m new shares and 19m warrants in May 2014

-       Raised £3.5 million cash (gross) through the issue of 233m new shares in March 2014

Post-period highlights

-       Registered users up 100% in 12 months from 1.4m to 2.8m at 25 August 2014

-       Estimated 12m monthly active users across all content partner websites, apps and social media channels in July 2014

-       93 million page impressions served in July 2014 

-       Content partners increased from 150 to 1,200 in 12 months, including SkySports, BBC, Global Radio, Bauer Media Group, Aljazeera, talkSPORT and The Guardian

-       Opened offices in New York, San Francisco and Australia to continue platform roll out

-       Development of new Audioboom app, launching end of September 2014 on iOS and Android

-       Monetisation of platform commenced through media sales partnerships with talkSPORT, for sale of UK sports audio inventory, and Global Radio for UK news, current affairs and entertainment inventory

-       Major new content partner agreement with Essel Group

Rob Proctor, CEO of Audioboom, commented: "The admission of Audioboom to AIM in May has been a huge success for Audioboom. The funding and profile it has provided have seen a step change in our business development, size and ambitions in just a few short months.

"I believe the launch of the new app at the end of September will revolutionise the way audio is consumed, providing a seamless, automated way to search and consume news, sport and entertainment.  Monetisation of the platform continues, reflected by today's announcemet of a media sales agreement with Global Radio to sell UK news, current affairs and entertainment inventory.

"Today's announcement of the major new content deal with Essel Group continues Audioboom's international expansion; a key driver of growth in the future. We shall be releasing a Spanish language version of the platform and app, to target the lucrative Hispanic markets in North and South America. 

"Alongside our own development, the world of social media continues to flourish; strategic acquisitions by global players, both Western and Asian, continue with regularity and at high valuations. Audioboom is operating in a global market, if we continue to develop our platform and technology, the future will look very interesting for shareholders. I intend to make the most of these opportunities."

Enquiries:

Audioboom Group plc	www.audioboomplc.com
Rob Proctor	Tel: [phone]
Arden Partners plc - nomad and broker	Tel: [phone]
Chris Hardie & Katelin Kennish, Corporate Finance
Walbrook PR	Tel: [phone] or [e-mail]
Sam Allen / Paul McManus	Mob: [phone] / Mob: [phone]

About Audioboom (www.audioboo.fm)

Audioboom Group plc is a Saas based digital social media audio platform enabling the creation, broadcast and consumption of audio across multiple global media outlets. Audioboom works with some of the biggest names in broadcasting across sport, entertainment and current affairs to bring their content to millions of listeners worldwide via Facebook, Twitter and other media platforms.

The technology allows partners to embed playlists onto their sites and apps, use our mobile apps and functionality as listen again players and re-syndicate their content around the web. Audioboom allows the monetisation of audio via the dynamic insertion of pre and post roll advertising into content as a user is listening, allowing contemporary advertising selection, depending on content genre and geographic location of the user.

Audioboom has over 1,200 content partners, including the BBC, Telegraph, Guardian, Sky Sports, Premier League, Southern Cross Austereo, CNBC and Universal Music Group.

Introduction

I am pleased to present the unaudited interim results for the five month period ended 31 May 2014. During this period, the Company generated revenue of £24,000 and a loss before exceptional items of £698,000. It had net assets of £2,584,000, including cash reserves of £3,064,000. No dividend is proposed.

Due to the acquisition by Audioboom (formerly One Delta plc) of Audioboo Limited, which completed on 20 May 2014, being classed as a reverse, the comparative numbers in these accounts are those of Audioboo Limited only, which the Directors believe makes a more meaningful and useful comparison. The year-end of Audioboo Limited has been changed to 30 November. More details of these changes can be found in the Note 1 of these unaudited interim results.   

Acquisition of Audioboo

Following the Company's decision in December 2013 to change its investment strategy and focus on investment in the TMT sector, Audioboo was identified as a potential acquisition target.  Audioboo is a social media audio platform that allows content producers to create and broadcast audio content and syndicate it across the global social media platforms. Content partners include the BBC, the Telegraph, the Guardian and the Premier League. At the time of acquisition in May 2014, Audioboo had 2.3 million registered users.

The consideration payable for the Audioboo acquisition was 174.5m new shares and 19m warrants at 1.5p per share. The transaction was treated as a reverse takeover pursuant to Rule 14 of the AIM Rules for Companies. As a result, the acquisition required shareholders' approval, and following an admission document being sent to shareholders on 1 May 2014, resolutions were passed at the Annual General Meeting and the acquisition of Audioboo completed on 20 May 2014.  In March 2014 the Company also raised £3.5 million (gross) new cash via the issue of 233m new ordinary shares.  Following the acquisition of Audioboo, the cash is being used to fund the development expenditure and working capital requirements of the Audioboo social media platform.

Board changes

As a result of the acquisition I joined the Board as CEO, along with new non-executives Simon Cole and Rodger Sargent. Brian Southward and Mike Cooper subsequently joined the board as non-executives on 12^th June 2014.

Outlook

Since the period end, content partners and listens have continued to grow rapidly. The split of listens is c. 40% UK, 30% USA, 15% Australia and 15% ROW, reflecting the global appeal of audio and the wide spread of content hosted. A Hispanic version of the website and app is in development for H1 2015 launch, to target the huge untapped Spanish speaking markets in North and South America.

The new Audioboom offices recently opened in New York, San Francisco and Australia are allowing much greater engagement with content partners. They provide better servicing and customer support for existing relationships and importantly greatly improve the logistics of pitching for and winning new content. I hope to add further offices to our network in due course.

The key focus since the AIM admission has been the development of the SaaS platform and the continued acquisition of the world's best audio content. Despite this, and with no marketing spend whatsoever, our key audience metrics are growing rapidly, showing the increasingly viral and compelling nature of the Audioboom content. This focus on premium content has now laid the foundations for the next phase of development; the launch of the ground breaking new mobile consumer applications in September, which I believe will revolutionise the way people listen to audio. The app will feature unique algorithms that rapidly learn listeners' preferences, automatically creating a seamless and continuous listening experience. Unlike other current audio apps, the Audioboom app has been specifically designed to serve hands free, uninterrupted audio on the commute or for in-car listening. I believe the focus on this consumer experience and the new app will see our user metrics accelerate substantially from their already impressive growth rates.

The recently announced deal with talkSPORT to sell advertising on Audioboom's UK sport content illustrates the readiness of the platform for monetisation, the next step being the implementation of the agreement announced today with Global Radio to sell the UK news, current affairs and entertainment inventory. We continue to work on a number of similar agreements in the key markets of the USA and Australia with major media sales organisations. However, we still consider it vital to continue the rapid acquisition of content and users to ensure the platform becomes compelling and grows to a critical viral mass before full monetisation is implemented.

Rob Proctor

CEO

26 August 2014

Audioboom Group plc (formerly One Delta plc)

Condensed consolidated statement of comprehensive income

Five months ended 31 May 2014 (unaudited)

		Before exceptional items		Exceptional items		Unaudited five months to 31 May 2014		Unaudited five months to 31 May 2013		Audited full year to 31 Dec 2013
	Notes	£'000		£'000		£'000		£'000		£'000
Continuing operations
Revenue		24		-		24		22		45
Cost of sales		(5)		-		(5)		(8)		(16)
Gross profit		19		-		19		14		29
Administrative expenses	2	(758)		(1,380)		(2,138)		(522)		(1,564)
Depreciation		(3)		-		(3)		(4)		(8)
Amortisation		(3)		-		(3)		(7)		(9)
Operating loss		(745)		(1,380)		(2,125)		(518)		(1,553)
Interest		(1)		-		(1)		(1)		(10)
Loss before tax		(745)		(1,380)		(2,126)		(519)		(1,562)
Taxation on continuing operations		48		-		48		(0)		70
Loss for the financial year		(698)		(1,380)		(2,078)		(519)		(1,492)
Attributable to
Equity shareholders						(2,078)		(519)		(1,492)
Non-controlling interest						(0)		-		-
Loss for the financial year						(2,078)		(519)		(1,492)
Other comprehensive income
Foreign currency translation difference						2		(1)		18
Total comprehensive income for the year						(2,076)		(520)		(1,474)
Loss per share (pence)	3
From continuing operations
Basic						(13.40)		(157.79)		(121.68)
Diluted						(13.40)		(157.79)		(121.68)
From continuing and discontinued operations
Basic						(13.40)		(157.79)		(121.68)
Diluted						(13.40)		(157.79)		(121.68)

Audioboom Group plc (formerly One Delta plc)

Condensed consolidated statement of financial position

As at 31 May 2014 (unaudited)

	Notes	Unaudited five months ended 31 May 2014		Unaudited five months ended 31 May 2013		Audited full year ended 31 Dec 2013
		£'000		£'000		£'000
Assets
Non-current assets
Goodwill		-		1		-
Intangible assets		3		10		5
Property, plant and equipment		6		13		9
		9		23		14
Current assets
Trade and other receivables		110		44		146
Cash and cash equivalents		3,064		(201)		22
		3,173		(157)		167
Total assets		3,182		(134)		182
Current liabilities
Trade and other payables		(599)		(83)		(126)
Borrowings		-		(135)		-
		(599)		(218)		(126)
Net current assets		2,575		(375)		41
Non-current liabilities
Convertible Loan		-		(189)		-
Total liabilities		(599)		(407)		(126)
Net assets		2,584		(540)		55
Equity
Share capital		-		8		38
Share premium		11,931		2,148		2,888
Convertible loan		-		-		691
Issue cost reserve		(680)		-		-
Capital reserve		(706)		-		-
Foreign Exchange Translation Reserve		23		1		18
Reverse acquisition reserve	2	(2,334)		-		-
Retained earnings		(5,649)		(2,695)		(3,580)
Equity attributable to Owners of the Group		2,585		(539)		55
Non-controlling interest		(1)				-
Total Equity		2,584		(539)		55

Audioboom Group plc (formerly One Delta plc)

Condensed consolidated cash flow statement

Five months ended 31 May 2014 (unaudited)

 

		Unaudited five months ended 31 May 2014		Unaudited five months ended 31 May 2013		Audited full year ended 31 Dec 2013
	Notes	£'000		£'000		£'000
Loss from continuing operations		(2,078)		(610)		(1,492)
Loss for the year		(2,078)		(610)		(1,492)
Adjustments for:
Taxation		(48)		0		(70)
Interest		1		-		10
Amortisation of intangible assets		3		7		9
Adjustment on Acquisition	2	1,380		-		-
Depreciation of fixed assets		3		4		8
Share options		5		-		-
(Increase)/decrease in trade and other receivables		50		22		(45)
Increase/(decrease) in trade and other payables		(31)		36		1
Foreign exchange		12		-		18
Cash flows from operating activities		(702)		(542)		(1,561)
Taxation		48		(0)		70
Net cash used in operating activities		(654)		(542)		(1,491)
Investing activities
Interest paid		(0)		-		(3)
Purchase of property, plant and equipment		-		(2)		(4)
Acquisition costs		(60)		-		-
Acquisition of  subsidiary	2	3,379		-		-
Net cash used in investing activities		3,319		(2)		(7)
Financing activities
Loan received		150		-		-
Convertible loan received		-		91		501
Proceeds from issue of ordinary share capital		227		-		765
Net cash generated from financing activities		377		91		1,266
Net (decrease)/increase in cash and cash equivalents		3,042		(453)		(232)
Cash and cash equivalents at beginning of period		21		252		252
Cash and cash equivalents at end of period		3,063		(201)		22

Audioboom Group plc (formerly One Delta plc)

Condensed consolidated statement of changes in equity

Five months ended 31 May 2014 (unaudited)

	Notes	Share capital		Share premium		Other capital reserves (note 4)		Foreign exchange translation reserve		Retained earnings		Total		Non-controlling interest		Total Equity
		£'000		£'000		£'000		£'000		£'000		£'000		£'000		£'000
At 1 January 2013		8		2,148		189		-		(2,087)		258		-		258
Loss for the period		-		-		-		-		(610)		(610)		-		(610)
Other comprehensive income		-		-		-		1		-		1		-		1
At 31 May 2013		8		2,148		189		1		(2,697)		(352)		-		(352)
Loss for the period		-		-		-		-		(882)		(882)		-		(882)
Issue of shares		30		740		-		-		-		770		-		770
Issue of convertible		-		-		503		-		-		503		-		503
Other comprehensive income		-		-		-		18		-		18		-		18
At 1 January 2014		38		2,888		691		18		(3,579)		56		-		56
Loss for the period		-		-		-		-		(2,076)		(2,076)		-		(2,076)
Acquisition of subsidiary	2	(38)		9,043		(4,411)		-		-		4,594		-		4,594
Credit to equity for equity-settled share-based payments		-		-		-		-		5		5		-		5
Other comprehensive income		-		-		-		4		-		4		-		4
Adjustment arising from change in non-controlling interest		-		-		-		-		-		-		(1)		(1)
At 31 May 2014		-		11,931		(3,720)		23		(5,650)		2,584		(1)		2,583

Audioboom Group plc (formerly One Delta plc)

Notes to the financial statements

Five months ended 31 May 2014 (unaudited)

 

1.         Presentation of financial information and accounting policies

Basis of preparation

The condensed consolidated financial statements are for the five months to 31 May 2014. During the period under review Audioboom Group plc (formerly One Delta plc) completed the acquisition of Audioboo Limited. The directors determined that the transaction was akin to a reverse acquisition as per IFRS 3, Business Combinations. However, in order to fall under the category of a Business Combination under IFRS3, the purchase needs to be of a business. The directors have determined that One Delta plc did not consitute a business.Therefore the transaction did not appear to fall under the scope of IFRS3.

In the absence of a Standard that specifically applies to this transaction the Interpretations Committee observed in their IFRIC of March 2013 that such tansactions have some features of a reverse acquisition under IFRS 3. Consequently, it is appropriate to apply by analogy, in accordance with paragraphs 10-12 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors and the guidance in paragraphs B19-B27 of IFRS 3 for reverse acquisitions. Application of the reverse acquisitions guidance by analogy results in the non-listed operating entity being identified as the accounting acquiror and the listed non-operating entity being identified as the accounting acquiree. The Interpretations Committee noted that in applying the reverse acquisition guidance in paragraph B20 of IFRS 3 by analogy, the accounting acquiror is deemed to have issued shares to obtain control of the acquiree. Therefore for accounting purposes Audioboo should account as if it purchased Audioboom (One Delta plc). However, as no business has been acquired, any difference between the fair value of the assets required and the fair value of the shares issued should not be recognised as goodwill, but should be written off to the income statement, in accordance with IFRS 3.

Therefore the results contained herein treat Audioboo as the acquiring company. Therefore the historical comparatives are the comparatives of Audioboo Limited, rather than those of One Delta plc. Audioboo Limited had a 31 December year end. As part of the transaction it   has changed its year end to 30 November. Therefore the year end results will be for the 11 months from 1 January 2014 to 30 November 2014. The directors have determined that the interims should be the 5 months to the 31 May 2014, as 31 May 2014 will be the interim date going forward. Therefore the current year interim contains 5 months of Audioboo, and the post-acquisition results of Audioboom (formerly One Delta plc).

The consolidated interim financial statements have been prepared under the historical cost convention and in accordance with applicable Accounting Standards as adopted by the European Union. Applicable Accounting Standards for these purposes are International Financial Reporting Standards ("IFRS"), as adopted by the European Union.

The interim financial information has been prepared in accordance with IAS 34 "Interim financial reporting" as adopted by the European Union.

Going concern

The directors have prepared and reviewed projected cash flows for the Group reflecting its current level of activity and anticipated future plan for the next 12 months. The Group is currently loss-making and will continue to be so for the foreseeable future, as the Group continues to invest in the business. The business continues to grow the number of users of the business and continues to review the long-term business model of the company by which the company becomes profitable.

On 17 March 2014 the Group raised £3,500,000 (gross) through the issue of new ordinary shares in order to fund Audioboo in the next stage of its development. Therefore The Board has concluded that no matters have come to their attention which suggest that the Group will not be able to maintain its current terms of trade with customers and suppliers. The Group's forecasts for the newly combined Group, including due consideration of the continued operating losses of the Group, taking account of possible changes in trading performance, indicate that the Group has sufficient cash available to continue in operational existence throughout the forecast period and beyond. The Board has considered various alternative operating strategies should these be necessary and are satisfied that revised operating strategies could be adopted if and when necessary. As a consequence, the Board believes that the Group is well placed to manage its business risks and longer term strategic objectives, successfully. Accordingly, they continue to adopt the going concern basis in preparing these unaudited interim financial statements.

Estimates and judgments

The preparation of a condensed set of financial statements requires management to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities at each period end. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis.

In preparing these condensed set of consolidated financial statements, the significant judgments made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were principally the same as those applied to the Group's consolidated financial statements for the year ended 31 December 2013. The seasonality or cyclicality of the operations does not impact on the interim financial information.

2.          Acquisition

   On 20 May 2014, One Delta plc acquired Audioboo Limited and subsequently changed its name to Audioboom Group plc. On a legal basis the transaction was an acquisition by Audioboom Group plc (formerly One Delta plc) of Audioboo Limited. However, from an accounting and AiM Listing rules basis, the transaction was a reverse acquistion.

The amounts recognised in respect of the identifiable assets acquired and liabilities assumed are set out in the table below:

	Book value		Fair value adjustments		Fair value
	£		£		£
Cash	3,229		-		3,229
Investment	5		(5)		-
Accounts Receivable	14		-		14
Loan to Audioboo	150		-		150
Intangible asset	25		(25)		-
Director Loans	5		-		5
Accounts Payable	(421)		-		(421)
Accruals	(49)		-		(49)
Stock	(9)		9		-
VAT Control	(2)		-		(2)
Taxation	(17)		-		(17)
	2,930		(21)		2,909
Plus non-controlling interest share of net liabilities					1
Equity attributable to shareholders					2,909
Adjustment on Acquisition					1,380
Total consideration					4,290

The transaction was satisfied by 285,974,355 ordinary shares at 1.5p each and 19,003,696 warrants exercisable at 1.5p each. The difference between the total consideration and the fair value of the assets purchased was taken the income statement and has been classified as an exceptional item.  The directors believe that this value, if it had been allowable to be capitalised as a goodwill balance under IFRS, would have represented the goodwill relating to the AIM Listing of One Delta plc.

The 19,003,696 warrants are entitled to be exercised between 20 May 2015 and 20 May 2017 at a price of 1.5p each. Under the terms of the acquisition, the Directors entered into an agreement not to dispose of any shares for a period of 12 months under Rule 7 of the AIM Rules. 7Digital plc has entered into the same agreement but it is outside of Rule 7 of the AIM Rules. 

The acquisition of subsidiary recognised in the cash flow is in respect to the cash acquired along with the cancellation of a £150,000 pre-acquisition loan between One Delta plc and Audioboo Limited.

3.          Loss per share

Basic earnings per share is calculated by dividing the loss attributable to shareholders by the weighted average number of ordinary shares in issue during the period.  

IAS 33 requires presentation of diluted EPS when a company could be called upon to issue shares that would decrease earnings per share, or increase the loss per share. For a loss-making company with outstanding share options, net loss per share would be decreased by the exercise of options. Therefore, as per IAS33:36, the antidilutive potential ordinary shares are disregarded in the calculation of diluted EPS. 

Reconciliation of the profit and weighted average number of shares used in the calculation are set out below:

	31 May 2014
	Loss		Weighted average number of shares		Per share amount
Basic and Diluted EPS	£'000		Thousand		Pence
Profit/(Loss) attributable to shareholders:
- Continuing and discontinued operations	(2,078)		15,507		(13.40)
- Continuing operations	(2,078)		15,507		(13.40)
- Discontinued operations	-		15,507		-
	31 May 2013
Basic and Diluted EPS	£'000		Thousand		Pence
Profit/(Loss) attributable to shareholders:
- Continuing and discontinued operations	(519)		329		(157.79)
- Continuing operations	(519)		329		(157.79)
- Discontinued operations	-		329		-
	31 Dec 2013
Basic and Diluted EPS	£'000		Thousand		Pence
Profit/(Loss) attributable to shareholders:
- Continuing and discontinued operations	(1,492)		1,227		(121.68)
- Continuing operations	(1,492)		1,227		(121.68)
- Discontinued operations	-		1,227		-

4.          Other capital reserves

	Convertible loan		Issue cost reserve		Capital reserve		Reverse acquisition reserve		Other capital reserves
	£'000		£'000		£'000		£'000		£'000
At 1 January 2013	189		-		-		-		189
Loss for the period	-		-		-		-		-
Other comprehensive income	-		-		-		-		-
At 31 May 2013	189		-		-		-		189
Loss for the period	-		-		-		-		-
Issue of shares	-		-		-		-		-
Issue of convertible	503		-		-		-		503
Other comprehensive income	-		-		-		-		-
At 1 January 2014	691		-		-		-		691
Loss for the period	-		-		-		-		-
Acquisition of subsidiary	(691)		(680)		(706)		(2,334)		(4,411)
Credit to equity for equity-settled share-based payments	-		-		-		-		-
Other comprehensive income	-		-		-		-		-
Adjustment arising from change in non-controlling interest	-		-		-		-		-
At 31 May 2014	-		(680)		(706)		(2,334)		(3,720)

 

5.          Related party transactions

Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed within the financial statements or related notes.

 

During the period, the company was charged £10,982 (2013: £11,127) by The New Unique Broadcasting Company, a company associated with Mr S A Cole, a director of the company. Transactions were in respect of expense recharges and accounting services provided. At 31 May 2014, £nil (2013: £9,687) was owed by the company to The New Unique Broadcasting Company.

 

END

 

 

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