Final Results
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR").
Brave Bison Group plc
("Brave Bison" or the "Company")
Final Results for the year ended 31 December 2019
Brave Bison Group plc (AIM: BBSN), the social video company, today announces its audited results for the year ended 31 December 2019.
Financial highlights
- Adjusted EBITDA* loss of £0.4 million (2018: £0.8 million profit)
- Revenue down from £21.2 million in 2018, to £16.8 million as a result of the Facebook policy changes and subsequent temporary demonetisation of Facebook channels
- Performance in Asia has been strong. With a push into Japan and South Korea, revenue increased by 90%, from £2 million to £3.8 million
- YouTube channel management services showed revenue growth of 66% to £5.3 million (2018: £3.2 million)
* Earnings before interest, tax, depreciation, amortisation, share based payments and material one-off items
Operational highlights
- All Facebook channels remonetised, after being demonetised as a result of Facebook policy changes, rebranding of prioritised channels Launched on Snapchat with successful shows such as Slick, revenue from Snapchat has jumped 484% between H1 and H2 in 2019
- Became Snapchat Discover Partner
- Retained all largest contributors to YouTube network, including PGA Tour, Alofoke Radio, the USTA and World Chase Tag
- Grew channel for burgeoning sports partner World Chase Tag increasing views on their YouTube channel by 150%, and revenue by 210%
- Multiple successful branded content and influencer campaigns for clients such as Accor Hotels, LandRover, Al Nippon Airways (ANA) Connection, SK-II and Lego
- JAPAC team launch Brave Bison in South Korea with partner Unruly
- Brave Bison "highly commended" for "Independent Agency of the Year" at Mumbrella Asia 360
Strategic objectives / guiding principles 2020
- Owned and operated channels - prioritise a smaller number of high-performance channels, implement e-commerce and increase audience reach across all relevant social media platforms
- YouTube Network - continue to drive revenue from existing clients through successful audience development and monetisation strategies, upsell additional services within the channel management ecosystem
- JAPAC - focus on delivery of existing projects, rationalise team in line with market pressure. Continue to proactively chase deals in light of postponed Olympics.
- UK commercial - increase revenue via sales of multiple content related products
- Operations and technology - roll-out tools for increasing efficiency across the business
COVID-19
The emergence of Coronavirus over the last eight weeks has been unprecedented, and will indubitably have a major economic impact. We will only know the true effect of Coronavirus retrospectively but with the postponement of the Olympics until 2021 and the knock-on effect on marketing spend globally, we can expect our Branded Content and JAPAC to be affected. However, with more people now consuming content at home our YouTube Network and O&O (owned and operated) brands remain in a strong position. Our diversified business model and focus across multiple platforms have built resilience into the Company. We are constantly learning and adapting, regularly assessing our best current prospects in the situation and scenario planning accordingly.
Kate Burns, Chief Executive Officer, commented: "Brave Bison has performed admirably despite a turbulent year. We continued to progressively build resilience into our business and have effectively reviewed our strategy following a change in Facebook's policies outlined earlier this year. Through assessment of the management of our own publishing channels, and working closely with Facebook to meet their new requirements, we have been able to successfully create content fit for both the platform and our audience.
"We managed to drive performance forward across different elements of the business including our YouTube network which has remained a solid revenue contributor with advertising revenue increasing by 66%. We have seen some great success on Snapchat and are driving more content on TikTok and Instagram, as we demonstrate our strategy around the changing consumption habits of a younger audience.
"Data is our main focus of 2020, with investment in tools to improve our decision making and to drive efficiency across the business. Our priorities also include our publishing channels, implementing e-commerce and increasing audience reach across all relevant social media
Platforms.
"And finally, I am pleased to highlight the progress we've made in leadership team and board changes over the past year, as we prepare for continued success."
Extracts from the annual report are set out further below.
- ENDS -
For further information please contact:
Brave Bison Group plc
Kate Burns, Chief Executive Officer
Via Rebecca Abigail - 0207 849 4513
Allenby Capital Limited - AIM Nominated Adviser and Broker
Jeremy Porter / Asha Chotai
Tel: 020 3328 5656
Rebecca Abigail ltd
Sebastian Aristizabal-Oviedo, Director
Email: sebastian@rebeccaabigailpr.com
Telephone: 0207 849 4513
About Brave Bison:
Brave Bison is a social video company, specialising in cross-platform video content, connecting global audiences through social media. Its online communities reach over 135 million followers.
Brave Bison is one of the largest YouTube channel partners, with more than 700 channels offering targeted inventory opportunities, alongside in-house specialists that deliver audience development and optimisation. Brave Bison provides expertise across strategy, research, data driven insights, creative and production.
Brave Bison's cultural connections and extensive networks have built long-standing client relationships with brands including P&G, Land Rover and Lego. With more than 70 members of staff across London, Singapore, Japan and Korea, the eight-year-old business continues to stay at the forefront of this fast-moving digital age.
Final Results for the year ended 31 December 2019
Chairman's Report
2019 was a challenging year for Brave Bison. A change in Facebook's content policy and algorithm resulted in a number of our main Facebook channels being demonetised leaving us unable to serve advertising to our audience. With an over reliance on Facebook for publishing income, Group revenue declined. We have since been working closely with Facebook to meet their new requirements.
During the year the business saw wholesale change of its senior management team including a new CEO, Chief of Staff, CTO and Publishing Director as well as a new Board of Directors. I would like to thank all outgoing colleagues for their hard work and determination over the past 12-months. I would especially like to thank Sir Robin Miller and Paul Marshall for the help and support they have given me. Both remain wholly supportive of Brave Bison.
The year saw encouraging results from our marketing services division in JAPAC and from our channel management business. It is also reassuring to see that we have already implemented a more focused publishing strategy and have reduced the number of channels that we are investing in. In JAPAC we already have strong relationships with Tier 1 clients such as Samsung, Uniqlo, Lego, and Procter & Gamble and our work is at the cutting edge of social and digital marketing. With COVID-19 and competition in the region increasing we will continue to keep a close eye on our overheads and margin.
We have a distinct talent for growing, engaging and monetising YouTube audiences on behalf of our partners. During the year our YouTube channel management business saw revenue growth of 66% to £5.3m. With over 1.5bn users on YouTube and more and more customers starting their search for new products via the platform, the Google-owned video network continues to go from strength to strength. The recurring nature of our income from the platform gives us a base to grow and develop a robust business and we are exploring various strategies to grow this revenue stream. We have hired a new UK-based tech and sales team to optimise existing client accounts and to win more sports and music clients. The same sales team will support the brand partnerships effort in our publishing division.
We believe our publishing business has enormous potential. We have reduced the number of channels that we are investing in from 20 to 6 and are taking a test and learn approach with all new content formats and platforms. We try something new, look at data metrics around viewership and watch time and then optimise accordingly. We must not be afraid to try new things or fail but at the same time, we are not prepared to invest blindly or with little conviction. Our new show on Snapchat, Slick, which is centred around men's grooming, has had some initial success. Subscribers are growing and there is ample opportunity for brand sponsorship. We are working on similar shows with a view to rolling out pilots mid 2020. We believe the publishing part of our business acts as a flywheel for the wider Group - the bigger and more famous our channels are, the more brands want to work with us and the more revenue streams (commerce, events, licensing, research) we can develop.
With a refreshed Board and a new, highly experienced management team, we are committed to reversing the decline of 2019. There are lots of opportunities to grow our existing business and we will also consider bringing other synergistic businesses into the Group. We remain cautious yet committed to building a profitable business centred around social video and digital marketing.
Oliver Green
Interim Chairman, Brave Bison Group plc
CEO's report
Brave Bison has delivered admirable results given the turbulent year it has had. Helped by a full change in leadership, and despite changes in Facebook's monetisation policies, Brave Bison continues to build resilience into the business not only through concentrated efforts on quality of output for our clients and audiences, but also through diversification of our offering, relying less heavily on social media platforms to feed our bottom line. We finished the year at an adjusted EBITDA loss of £0.4m, which was significantly better than our forecast of an adjusted EBITDA loss of £0.7m.
This year also saw changes in our board. Sir Robin Miller, Chairman, Paul Marshall, and Miriam Mulchay, Non-Executive Directors stepped down, as well as Paul Campbell White shortly after the end of the year. We thank them for their contribution and commitment to the business. Whilst we continue our search for a new permanent Chairman and CFO, we were pleased to welcome Oliver Green as Interim Chairman, and Philippa Norridge as Interim CFO. We were also pleased to welcome Matt Law to the board in February 2020 and are also seeking to appoint a further independent non-executive director, which we hope to conclude in the short term.
Revenue Generating Activities
Over the last year Brave Bison has made strong progress in further defining its business activities. Our primary activity remains the monetisation of online video content. Within this, our social ecosystem consists of:
· Owned and Operated channels - These include our brands such as VTRND and Canvas which generate cash not only through advertising revenue but also through commissions from platforms.
· YouTube Network - Brave Bison manages over 700 channels on YouTube, delivering optimisation, audience development and strategy for partners such as European Tour, producing income through services fees and a share of advertising revenue.
· Licensing and distribution - We represent and broker the license and use of third party content owners for clients such as agencies and broadcasters. For this service we charge a management fee and split remaining revenue. We also distribute content to marketplaces where revenue is split between ourselves, the content owner and the platform.
· JAPAC - We serve multiple markets in the region through our branded content and influencer campaigns. Brave Bison acts as an agency taking fixed fees in return for delivered services.
Owned and Operated
Publishing has had its most challenging year to date, as changes to Facebook policies forced us to rethink our strategy, starting with how our publishing channels are managed. Having over 15 years of experience in media, broadcast, and digital, with leadership positions held at Netflix, ITV and the Telegraph Media Group we were delighted to welcome Ben Sinden as our Publishing Director to lead the charge on solidifying our brand foundations and rolling out our cross-platform strategy. Ben brings with him an industry network complete with strong platform relationships, in addition to expertise in data-led approaches to content creation and channel management.
As stated in the interim report in August 2019, Facebook stopped serving adverts and demonetised some of our largest pages including Supercrafty, Daily Viral Stories, VTRND and Bluntly. We have been working closely with Facebook to meet their new requirements for original and exclusive content, with series such as Bluntly Put and PAUSE proving that we can create content that is fit for both the platform and our audience. We are excited to announce that our efforts have paid off, with all channels having since been remonetised. However, the cost of complying with new regulations has been high, and the time to regrow our reach and views has taken longer than anticipated. In order to test and learn we have had to invest in increased resource, we are now moving into a period of content optimisation, paid support and A/B testing.
We have therefore taken some exciting and tough decisions. After thorough analysis we have prioritised 6 channels, Mutha, Bluntly, VTRND, Canvas, DIY & Crafts and Yellow Teeth which have the most potential and deprioritised Perk, Slash Football, Daily Viral Stories, Meow, Hollywood Virals and Sarah TV. We have also invested in rebranding some channels to have a new look and feel as well as a new direction for content which will appeal to our audience.
Brave Bison's over-reliance on Facebook pushed us to branch out into other platforms in order to diversify our risk. Internally we have reorganised our publishing team and appointed a Business Director to ensure that we have the strongest relationships with our platforms, such as Snapchat and TikTok, and also stay up-to-date with any policy changes. Consequently we have become one of Snapchat's Discover Partner's and we have seen some great success on the platform. With successful shows such as Slick, we have on boarded a new show every quarter, and seen revenue from Snapchat jump 484% between H1 and H2 in 2019. In the meantime we are also driving more content on to TikTok and Instagram, growing our audiences in advance of the platform's anticipated monetisation in 2020. As we seek to grow our new channels this year we shall be investing in data and putting paid and A/B testing behind our channels. The results from this investment will help to accelerate the growth of our audiences and provide valuable insight into the content they want to see. Engagement, content and growing audience numbers will drive revenue.
YouTube Network
Our YouTube network has remained a solid revenue contributor with advertising revenue increasing by 66%. In 2019 we retained all of our largest contributors including PGA Tour, Alofoke Radio and the USTA, and saw excellent growth from a burgeoning sport, World Chase Tag. Retention of key clients and growth of new ones is testament to the service our team provides. World Chase Tag is an example of where our expertise came into its own increasing views on their YouTube channel by 150% and revenue by 210%. A significant push on social media has seen World Chase Tag secure their first deal with broadcaster Channel 4 and exposure on NBC, Sky Sports and ESPN. Traditional broadcasters are seeking to understand the new and changing consumption habits of a younger audience and as we move into 2020, we will look to reproduce the success we have experienced across all our sports channels where we clearly understand the social-first market.
Licensing and Distribution
Our licensing and distribution business worked hard this year to enhance its operational efficiency, increasing its conversion rate for content acquisition and contracting, and we now own more content IP than ever before. We are focused on driving more growth this year through the relaunch of our library of content Viral Vault, which will have built-in self-serve functionality.
JAPAC
Our performance in Asia has been strong. With a push into Japan and South Korea, our JAPAC team have increased revenue by 90%, from £2 million to £3.8 million, through multiple successful branded content and influencer campaigns for clients such as Accor Hotels, LandRover, Al Nippon Airways (ANA) Connection, SK-II and Lego. We have made a concerted effort to increase our brand awareness at multiple events, a particular highlight was our launch in South Korea with partner Unruly. These activities have paid off with Brave Bison being "highly commended" for "Independent Agency of the Year" at Mumbrella Asia 360.
2020
We have an ambitious year ahead of us. To ensure success across the business execution will be critical, and data is to become a main focus of 2020. We are investing in tools to improve our decision making and to drive efficiency across the business. Diversification of our revenue streams is vital, with efforts across our own O&O channels and our partners'. With a new UK sales team structure and better definition of products we have already begun to see success with new deals for both our YouTube network and branded content. To support our O&O channels we shall be pushing hard to attract more clients to partner with us for branded content and influencer campaigns.
COVID-19
The emergence of Coronavirus over the last eight weeks has been unprecedented, and will indubitably have a major economic impact. We will only know the true effect of Coronavirus retrospectively but with the postponement of the Olympics until 2021 and the knock-on effect on marketing spend globally, we can expect our Branded Content and JAPAC to be affected. However, with more people now consuming content at home our YouTube Network and O&O (owned and operated) brands remain in a strong position. Our diversified business model and focus across multiple platforms have built resilience into the company. We are constantly learning and adapting, regularly assessing our best current view of the situation and scenario planning accordingly.
Strategic objectives / guiding principles 2020
Brave Bison will continue on the offensive in 2020 with the following objectives and priority targets.
· Publishing - prioritise channels, implement e-commerce and increase audience reach across all relevant social media platforms.
· YouTube Network - increase revenue generated by clients already in the existing network through increased efficiency and upselling of new or additional services.
· JAPAC - rationalise team according to market pressure; continue to proactively pursue deals in light of postponed Olympics (to 2021).
· UK commercial sales team - increase revenue via sales of multiple products, from YouTube pre-roll branded content and channel management clients.
· Operations and technology - roll-out tools for increasing efficiency across the business.
I would like to take this opportunity to extend a warm welcome to the newest members of the board and to thank our teams in the UK and JAPAC for their dedication and hard work. I look forward to executing our plan for growth and am confident that this year we will continue to build resilience into Brave Bison.
Kate Burns
Chief Executive Officer, Brave Bison Group plc
CFO's Report
Trading Results
The Group continues to carry out, as its primary activity, the monetisation of online video content. Within this activity we recognise the main revenue streams as being from advertising revenue on our owned and operated channels, as well as from 3rd party channel management on YouTube, and fee-based revenue streams relating to branded content and influencer campaigns, as well as licensing our existing content.
2019 was a challenging year, and revenue decreased by 21% to £16.8 million (2018: £21.2 million). This reduction was primarily due to changes in Facebook's monetisation policies, resulting in a decline in advertising revenue from our Facebook channels of £7.3 million. All of our pages have since been re-monetised, however we have needed to shift our strategy to both invest in developing original content and ensure that we are not overly reliant on any one platform. Snapchat has proved a promising revenue stream within advertising revenue, with revenues increasing significantly in the second half of the year.
Advertising revenue from YouTube channel management services showed revenue growth of 66% to £5.3 million (2018: £3.2 million) through a combination of adding new channels and growing the advertising revenue from our existing channels.
Within the fee-based revenue stream, branded content revenues increased by 78% to £3.9 million (2018: £2.2 million) with our APAC region in particular seeing strong revenue growth. We delivered substantial influencer campaigns during the year for brands such as SK-II and Uniqlo.
Gross profit has decreased by 20% (£1.3 million) to £5.2 million (2018: £6.5 million) as a result of the reduction in overall revenues. The gross profit margin has increased slightly, primarily because a higher proportion of the revenue is branded content, which has higher gross profit margins than the advertising revenue from platforms.
The Group has incurred restructuring costs during the year of £0.6 million (2018: £nil). Administration costs have reduced slightly to £6.6 million (2018: £6.6 million). These costs include a foreign exchange loss of £0.1m compared to a foreign exchange gain of £0.1m in the previous year.
The operating loss of the Group has increased to £2.8 million (2018: £0.1 million loss). The loss before tax for the year was £2.7 million (2018: £0.1 million loss). This can be analysed as follows:
|
|
2019 |
2018 |
|
|
£000's |
£000's |
|
|
|
|
|
Adjusted EBITDA |
(410) |
802 |
|
Restructuring costs |
(649) |
- |
|
Equity settled share-based payments |
(165) |
(204) |
|
EBITDA |
(1,224) |
598 |
|
Finance costs |
(22) |
- |
|
Finance income |
85 |
28 |
|
Impairment charge |
(757) |
- |
|
Depreciation |
(178) |
(80) |
|
Amortisation |
(649) |
(649) |
|
Loss before tax |
(2,745) |
(103) |
It should be noted that a portion of the 2019 property costs fall into the finance costs and depreciation lines as a result of the introduction of IFRS 16 'Leases'. If the adjusted EBITDA is amended to factor in those property costs, then this would show an adjusted EBITDA loss of £0.6 million (2018: £0.8 million profit).
The Group stock option charge for the year was £0.2 million (2018: £0.2 million). The Group will continue to use stock options as a means of incentivising and retaining key talent going forward.
Headcount at year-end including contractors has increased to 70 (2018: 62). This is as a result of investment in the publishing team focussing on our owned and operated channels, and in JAPAC as a result of the increased revenues.
The Group has offices in London (to service the EMEA region) and Singapore (to service the JAPAC region).
The impairment charge of £0.8 million (2018: £nil) is from the impairment of intangible assets relating to the development of Slash Football, Mutha and Perk. Slash Football delivered no branded content revenue during the year and both Slash and Perk were deprioritised during the year as we narrowed our focus on a few channels. Mutha in its original format was not generating sufficient revenue streams to justify the value of the intangible asset. There was also a small impairment of the remaining value of the investment in Rebel FC Limited.
Statement of Financial Position
The Group ended the year with £4.2 million in cash and cash equivalents (2018: £5.4 million) and no overdraft or other borrowings. The Group had cash outflow of £1.1m in 2019 (2018: £0.5 million inflow) as result of £0.9 million cash outflow from operating activities (2018: £0.9 million inflow). The decrease in operating cashflows was primarily due to lower Facebook advertising revenues. The Group will be looking to reduce this cash outflow and return to cash inflow by 2021.
The Group is carrying Intangible Assets of £1 million (2018: £1.9 million). The Group capitalised R&D spend of £0.3 million (2018: £0.3 million) on the development of owned and operated intellectual property in 2018, however these amounts were then impaired in full. The 2018 spend was on the new multiplatform channels Mutha and Perk.
Key performance indicators
|
|
2019 |
2018 |
|
|
£000's |
£000's |
|
|
|
|
|
Revenue |
16,813 |
21,171 |
|
|
|
|
|
Operating loss |
(2,790) |
(112) |
|
|
|
|
|
Cash and cash equivalents |
4,249 |
5,362 |
|
|
|
|
|
Adjusted EBITDA |
(410) |
802 |
|
|
|
|
|
EBITDA |
(1,224) |
598 |
|
|
|
|
Non-financial KPIs include headcount numbers and multi-platform views (ie Facebook, YouTube).
Employees
At 31 December 2019, the Group had 70 full time employees (including contractors) of whom 36 were male and 34 were female. Of the senior members of management, 5 were male and 3 were female.
Philippa Norridge
Interim Chief Financial Officer, Brave Bison Group plc
CONSOLIDATED INCOME STATEMENT AND CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2019
|
|
|
31 |
31 |
|
|
Note |
December 2019 |
December 2018 |
|
|
|
£000's |
£000's |
|
|
|
|
|
|
Revenue |
6 |
16,813 |
21,171 |
|
Cost of sales |
|
(11,632) |
(14,709) |
|
Gross profit |
|
5,181 |
6,462 |
|
|
|
|
|
|
Administration expenses |
|
(6,565) |
(6,574) |
|
Restructuring costs |
8 |
(649) |
- |
|
Impairment charge |
13 |
(757) |
- |
|
Operating loss |
7 |
(2,790) |
(112) |
|
|
|
|
|
|
Share of loss from equity accounted investment |
15 |
(18) |
(19) |
|
Finance income |
|
85 |
28 |
|
Finance costs |
9 |
(22) |
- |
|
Loss before tax |
7 |
(2,745) |
(103) |
|
|
|
|
|
|
Analysed as |
|
|
|
|
EBITDA before restructuring costs |
|
(410) |
802 |
|
Restructuring costs |
8 |
(649) |
- |
|
Equity settled share-based payments |
22 |
(165) |
(204) |
|
EBITDA |
|
(1,224) |
598 |
|
Finance costs |
|
(22) |
- |
|
Finance income |
|
85 |
28 |
|
Impairment charge |
|
(757) |
- |
|
Depreciation |
14 |
(178) |
(80) |
|
Amortisation |
13 |
(649) |
(649) |
|
Loss before tax |
|
(2,745) |
(103) |
|
|
10 |
35 |
33 |
|
|
|
|
|
|
Loss attributable to equity holders of the parent |
|
(2,710) |
(70) |
|
|
|
|
|
|
Statement of Comprehensive Income |
|
|
|
|
Loss for the year |
|
(2,710) |
(70) |
|
Items that may be reclassified subsequently to profit or loss |
|
|
|
|
Exchange loss on translation of foreign subsidiaries |
|
(1) |
(1) |
|
Total comprehensive loss for the year attributable to owners of the parent |
|
(2,711) |
(71) |
|
|
|
|
|
|
Basic and diluted loss per ordinary share (pence) |
11 |
(0.45p) |
(0.01p) |
All transactions arise from continuing operations.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2019
|
|
|
|
|
|
|
|
At 31 December |
At 31 December |
|
|
Note |
2019 |
2018 |
|
|
|
£000's |
£000's |
|
|
|
|
|
|
Non-current assets |
|
|
|
|
Intangible assets |
13 |
826 |
1,928 |
|
Property, plant and equipment |
14 |
909 |
60 |
|
Investment in associates |
15 |
- |
56 |
|
|
|
1,735 |
2,044 |
|
|
|
|
|
|
Current assets |
|
|
|
|
Trade and other receivables |
17 |
2,611 |
5,766 |
|
Cash and cash equivalents |
|
4,249 |
5,362 |
|
|
|
6,860 |
11,128 |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
Trade and other payables |
18 |
(4,758) |
(7,684) |
|
Lease Liabilities |
19 |
(497) |
- |
|
|
|
(5,255) |
(7,684) |
|
|
|
|
|
|
Non-current Liabilities |
|
|
|
|
Deferred tax |
16 |
(142) |
(183) |
|
Lease Liabilities |
19 |
(403) |
- |
|
|
|
(545) |
(183) |
|
|
|
|
|
|
Net Assets |
|
2,795 |
5,305 |
|
|
|
|
|
|
Equity |
|
|
|
|
Share capital |
20 |
612 |
576 |
|
Share premium |
|
78,762 |
78,762 |
|
Capital redemption reserve |
|
6,660 |
6,660 |
|
Merger reserve |
|
(24,060) |
(24,060) |
|
Merger relief reserve |
|
62,624 |
62,624 |
|
Retained deficit |
|
(121,052) |
(118,507) |
|
Translation reserve |
|
(751) |
(750) |
|
Total equity |
|
2,795 |
5,305 |
|
|
|
|
|
The financial statements were authorised for issue by the Board of Directors on 14 April 2020 and were signed on its behalf by
Philippa Norridge
Director
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2019
|
|
|
|
|
|
2019 |
2018 |
|
|
£000's |
£000's |
|
Operating activities Loss before tax |
(2,745) |
(103) |
|
Adjustments: |
|
|
|
Depreciation, amortisation and impairment |
1,505 |
729 |
|
Finance income |
(43) |
(28) |
|
Finance costs |
- |
- |
|
Share based payment charges |
165 |
204 |
|
Decrease/(increase) in trade and other receivables |
3,155 |
(1,373) |
|
(Decrease)/increase in trade and other payables |
(2,924) |
1,439 |
|
Tax paid |
(7) |
(10) |
|
Cash (outflow)/inflow from operating activities |
(894) |
858 |
|
|
|
|
|
Investing activities |
|
|
|
Purchase of property plant and equipment |
(9) |
(52) |
|
Purchase of intangible assets |
(266) |
(309) |
|
Investments |
- |
- |
|
Interest received |
43 |
28 |
|
Cash outflow from investing activities |
(232) |
(333) |
|
|
|
|
|
Cash flows from financing activities |
|
|
|
Issue of share capital |
36 |
2 |
|
Interest paid |
(22) |
- |
|
Cash inflow from financing activities |
14 |
2 |
|
|
|
|
|
Net change in cash and cash equivalents |
(1,112) |
527 |
|
|
|
|
|
Movement in net cash |
|
|
|
Cash and cash equivalents, beginning of year |
5,362 |
4,821 |
|
(Decrease)/increase in cash and cash equivalents |
(1,112) |
527 |
|
Movement in foreign exchange |
(1) |
14 |
|
Cash and cash equivalents, end of year |
4,249 |
5,362 |
|
|
|
|
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2019
|
|
Share Capital |
Share premium |
Capital redemption Reserve |
Merger Reserve |
Merger relief Reserve |
Translation Reserve |
Retained deficit |
Total Equity |
|
|
£000's |
£000's |
£000's |
£000's |
£000's |
£000's |
£000's |
£000's |
|
|
|
|
|
|
|
|
|
|
|
At 1 January 2018 |
574 |
78,762 |
6,660 |
(24,060) |
62,624 |
(749) |
(118,641) |
5,170 |
|
|
|
|
|
|
|
|
|
|
|
Shares issued during the year |
2 |
- |
- |
- |
- |
- |
- |
2 |
|
Equity settled share based payments |
- |
- |
- |
- |
- |
- |
204 |
204 |
|
|
|
|
|
|
|
|
|
|
|
Transactions with owners |
2 |
- |
- |
- |
- |
- |
204 |
206 |
|
|
|
|
|
|
|
|
|
|
|
Other Comprehensive income |
|
|
|
|
|
|
|
|
|
Loss and total comprehensive income for the year |
- |
- |
- |
- |
- |
(1) |
(70) |
(71) |
|
|
|
|
|
|
|
|
|
|
|
At 31 December 2018 |
576 |
78,762 |
6,660 |
(24,060) |
62,624 |
(750) |
(118,507) |
5,305 |
|
|
|
|
|
|
|
|
|
|
|
Shares issued during the year |
36 |
- |
- |
- |
- |
- |
- |
36 |
|
Equity settled share based payments |
- |
- |
- |
- |
- |
- |
165 |
165 |
|
|
|
|
|
|
|
|
|
|
|
Transactions with owners |
36 |
- |
- |
- |
- |
- |
165 |
201 |
|
|
|
|
|
|
|
|
|
|
|
Other Comprehensive income |
|
|
|
|
|
|
|
|
|
Loss and total comprehensive income for the year |
|
- |
- |
- |
- |
(1) |
(2,710) |
(2,711) |
|
|
|
|
|
|
|
|
|
|
|
At 31 December 2019 |
612 |
78,762 |
6,660 |
(24,060) |
62,624 |
(751) |
(121,052) |
2,795 |
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2019
1 Brave Bison
Brave Bison Group PLC ("the Company") was incorporated in England and Wales on 30 October 2013 under the Companies Act 2006 (registration number 08754680) and its registered address is 79-81 Borough Road, London, SE1 1DN. On 12 November 2013 the Company entered into share exchange agreements to acquire 100% of the issued share capital of Brave Bison Limited, a company incorporated in England and Wales on 16 May 2011 and registered at the same address. On 12 November 2013 the Company was admitted to the Alternative Investment Market (AIM) where its ordinary shares are traded.
The financial information set out in these results does not constitute the Company's statutory accounts for 2019 or 2018. Statutory accounts for the years ended 31 December 2019 and 31 December 2018 have been reported on by the Independent Auditors; their report was (i) unqualified; (ii) did not draw attention to any matters by way of emphasis; and (iii) did not contain a statement under 498 (2) or 498 (3) of the Companies Act 2006.
Statutory accounts for the year ended 31 December 2018 have been filed with the Registrar of Companies. The statutory accounts for the year ended 31 December 2019 will be delivered to the Registrar in due course. Copies of the Annual Report 2019 will be posted to shareholders shortly.
2 Basis of preparation
2.1. Going Concern
The financial statements have been prepared on a going concern basis, which assumes that the Group will be able to meet its liabilities as they fall due for the foreseeable future. The Group is dependent for its working capital requirements on cash generated from operations, cash holdings and from equity markets. The cash holdings of the Group at 31 December 2019 were £4.2 million (2018: £5.4 million). The Group made a loss before tax of £2.7 million for the year ended 31 December 2019 (2018: £0.1 million) and generated a decrease in cash and cash equivalents in 2019 of £1.1 million (2018: £0.5 million increase).
The Directors have prepared detailed cash flow projections ("the Projections") which are based on their current expectations of trading prospects. The board forecasts that the Group will achieve positive cash inflows in 2021 and has sufficient cash on hand to reach that goal. Accordingly, the Directors have concluded that it is appropriate to continue to adopt the going concern basis in preparing these financial statements. The Directors are confident that the Group's forecasts are achievable and are committed to taking any actions available to them to ensure that any shortfall in forecast revenues is mitigated by cost savings.
The Directors have looked at the potential impact of the COVID-19 pandemic and have prepared scenario plans. They have looked at a six month lock down with recession, and recovery starting in the fourth quarter, and a 12 month lock down with a more severe recession and recovery pushed until early 2021. They have looked at the likely impact of such a downturn on the industry by using the 2008 global financial crisis as a benchmark. They remain confident that the Group has sufficient cash resources for a period of at least one year even in this downside scenario. The Directors are already taking mitigating actions around reducing capital expenditure and negotiating with suppliers, and are confident that they have identified cost saving actions to mitigate any impact this may have in revenue. We also have business continuity plans in place around home working and content production. Accordingly, the going concern basis of accounting has been adopted in preparing these consolidated financial statements.
2.2. Basis of consolidation
The consolidated financial statements consolidate the financial statements of Brave Bison Group plc and all its subsidiary undertakings up to 31 December 2019, with comparative information presented for the year ended 31 December 2018. No profit and loss account is presented for Brave Bison Group plc as permitted by section 408 of the Companies Act 2006.
Subsidiaries are all entities over which the Group has the power to control the financial and operating policies and is exposed to or has rights over variable returns from its involvements with the investee and has the power to affect returns. Brave Bison Group plc obtains and exercises control through more than half of the voting rights for all its subsidiaries. All subsidiaries have a reporting date of 31 December and are consolidated from the acquisition date, which is the date from which control passes to Brave Bison Group plc.
Entities other than subsidiaries or joint ventures, in which the Group has a participating interest and over whose operating and financial policies the Group exercises significant influence, are treated as associates. The results of associate undertakings are consolidated under the equity method of accounting. The Group applies uniform accounting policies and all intra-group transactions, balances, income and expenses are eliminated on consolidation.
Unrealised gains and losses on transactions between Group companies are eliminated. Where recognised losses on intra-group asset sales are reversed on consolidation, the underlying asset is also tested for impairment from a Group perspective.
Business combinations are dealt with by the acquisition method. The acquisition method involves the recognition at fair value of all identifiable assets and liabilities, including contingent liabilities of the subsidiary, at the acquisition date, regardless of whether or not they were recorded in the financial statements of the subsidiary prior to acquisition. On initial recognition, the assets and liabilities of the subsidiary are included in the consolidated statement of financial position at their fair values, which are also used as the basis for subsequent measurement in accordance with the Group accounting policies. Goodwill is stated after separating out identifiable intangible assets. Goodwill represents the excess of acquisition cost over the fair value of the Group's share of the identifiable net assets of the acquired subsidiary at the date of acquisition.
Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year are recognised from the effective date of acquisition, or up to the effective date of disposal, as applicable.
2.3. Adoption of new and revised standards
The only new and amended standard issued in the year that had a significant impact on the financial statements is IFRS 16 'Leases'. At the date of authorisation of these financial statements, certain new standards, amendments and interpretations to existing standards have been published by the IASB and adopted by the EU but are not yet effective, and have not been adopted early by the Group. Management anticipates that all of the relevant pronouncements will be adopted in the Group's accounting policies for the first period beginning after the effective date of the pronouncement. Information on new standards, amendments and interpretations that are expected to be relevant to the Group's financial statements is provided below. Certain other new standards and interpretations have been issued but are not expected to have a material impact on the Group's financial statements.
The Group has adopted the new accounting pronouncements which have become effective this year, and are as follows:
IFRS 16 'Leases' (effective 1 January 2019). This standard replaces IAS 17 'Leases' along with three interpretations (IFRIC 4 'Determining whether an Arrangement contains a lease', SIC 15 'Operating Leases-Incentives' and SIC 27 'Evaluating the Substance of Transactions Involving the Legal Form of a Lease').
The group has adopted the modified retrospective approach with the right of use asset equal to the lease liability at transition date. Under the modified retrospective transition approach, the comparative information is not restated. On transition, for leases previously accounted for as operating leases with a remaining lease term of less than 12 months and for leases of low-value assets the Group has applied the optional exemptions to not recognize right-of-use assets but to account for the lease expense on a straight line basis over the remaining lease term.
The adoption of IFRS 16 on 1 January 2019 had a nil impact on the net assets of the Group due to all of the existing leases having an initial term less than 12 months. The Group entered into a two year lease for an office on 1 October 2019. At the lease commencement date, the Group recognised a right-of-use asset and a corresponding liability on the statement of financial position amounting to £1m. Prior to this, the Group only had short terms leases. The weighted average incremental borrowing rate applied to the lease liability under IFRS 16 is 9%.
Under old standards, the Group would have recognized lease rental charge of £139,500 in the income statement. The group has instead recognized a depreciation charge of £127,231 and finance charge of £22,025.
Other Standards and amendments that are not yet effective and have not been adopted early by the Group include:
· IFRS 17 Insurance Contracts
· Definition of a Business (Amendments to IFRS3)
· Definition of Material (Amendments to IAS 1 and IAS 8)
· Conceptual Framework for Financial Reporting
3 Statement of compliance
The financial statements have been prepared in accordance with the accounting policies and presentation required by International Financial Reporting Standards (IFRS), and International Financial Reporting Interpretations Committee ("IFRIC") Interpretations as endorsed by the European Union. They are presented in pounds sterling. The financial statements have also been prepared in accordance with those parts of the Companies Act 2006 that are relevant to companies that prepare financial statements in accordance with IFRS.
4 Summary of accounting policies
The Group's presentation and functional currency is £ (Sterling). The financial statements are presented in thousands of pounds (£000's) unless otherwise stated.
4.1. Revenue
Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for services provided in the normal course of business, net of discounts and sales related taxes.
Revenue is recognised when the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity, the costs incurred or to be incurred can be measured reliably, and when the criteria for each of the Group's different activities has been met.
The determination of whether the Group is acting as a principal or an agent in a transaction involves judgment and is based on an assessment of who controls a specified good or service before it is transferred to a customer. Significant contracts are reviewed for the indicators of control. The Group is deemed to be acting as a principal in all significant contracts.
Where the Group's contractual performance obligations have been satisfied in advance of invoicing the client then unbilled income is recognised on the balance sheet. Where the Group's contractual performance obligations have been satisfied less than amounts invoiced then a contract liability is recognised.
The accounting policies specific to the Group's key operating revenue categories are outlined below:
Advertising revenue:
· Ad-funded YouTube channel management of third party content owners' videos. Revenue is recognised at the point in time when the performance obligation of delivering monetised views occurs;
· Monetisation of the Group's owned and operated brands and videos via platforms such as Facebook and Snapchat. Revenue is recognised at the point in time when the performance obligation of delivering monetised views occurs;
Fee Based Service revenue:
· Branded Content. Managing the creation of commissioned content and being responsible for procuring the talent and the associated production costs. The Group recognises revenue in line with the contractual obligation to deliver a completed episode. Revenue is recognised at the point in time when each completed episode is delivered. Production costs are deferred on the balance sheet as contract assets until each completed episode is delivered;
· Managing customer content on platforms such as Facebook and YouTube including rights management and audience development. Revenue from providing these services is recognised over the time that the performance obligation to provide services are satisfied;
· License fee revenues for the Group's own content and third parties' content are recognised at the point in time when the performance obligation of delivering the content is satisfied.
4.2. Interest and dividend income
Interest income and expenses are reported on an accrual basis using the effective interest method. Dividend income, other than from investments in associates, is recognised at the time the right to receive payment is established.
4.3. Foreign currency translation
Transactions in foreign currencies are translated at the exchange rate ruling at the date of the transaction. Monetary assets and liabilities in foreign currencies are translated at the rates of exchange ruling at the balance sheet date. Non-monetary items that are measured at historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.
Any exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were initially recorded are recognised in the profit or loss in the period in which they arise.
The assets and liabilities in the financial statements of foreign subsidiaries and related goodwill are translated at the rate of exchange ruling at the balance sheet date. Income and expenses are translated at the actual rate on the date of transaction. The exchange differences arising from the retranslation of the opening net investment in subsidiaries and on income and expenses during the year are recognised in other comprehensive income and taken to the "translation reserve" in equity. On disposal of a foreign operation the cumulative translation differences (including, if applicable, gains and losses on related hedges) are transferred to the income statement as part of the gain or loss on disposal.
4.4. Segment reporting
IFRS 8 Operating Segments requires operating segments to be identified on the same basis as is used internally for the review of performance and allocation of resources by the Group Chief Executive (chief operating decision maker - CODM).
The board has reviewed the Group and all revenues are functional activities of monetising online video content and these activities take place on an integrated basis. The senior executive team review the financial information on an integrated basis for the Group as a whole, with respective heads of business who are geographically located and in accordance with IFRS 8 Operating Segments, the Group will be providing a geographical split. The Group will also be providing a split between the Advertising and Fee based services. Segmental information is presented in accordance with IFRS 8 for all periods presented within Note 6.
4.5. Leasing
As described in Note 2, the Group has applied IFRS 16 using the modified retrospective approach and therefore comparative information has not been restated. This means comparative information is still reported under IAS 17 and IFRIC 4.
For any new contracts entered into on or after 1 January 2019, the Group considers whether a contract is, or contains a lease. A lease is defined as 'a contract, or part of a contract, that conveys the right to use an assed (the underlying asset) for a period of time in exchange for consideration'. To apply this definition the Group assesses whether the contract meets three key evaluations which are whether:
· The contract contains an identified asset, which is either explicitly identified in the contract or implicitly specified by being identified at the time the asset is made available to the Group
· The Group has the right to obtain substantially all of the economic benefits from use of the identified asset throughout the period of use, considering its rights within the defined scope of the contract
· The Group has the right to direct the use of the identified asset throughout the period of use. The Group assess whether it has the right to direct 'how and for what purpose' the asset is used throughout the period of use.
At lease commencement date, the Group recognises a right-of-use asset and a lease liability on the balance sheet. The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred by the Group, an estimate of any costs to dismantle and remove the asset at the end of the lease, and any lease payments made in advance of the lease commencement date (net of any incentives received).
The group depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The Group also assesses the right-of-use asset for impairment when such indicators exist.
At the commencement date, the Group measures the lease liability at the present value of the lease payments unpaid at that date, discounted using the interest rate implicit in the lease if that rate is readily available or the Group's incremental borrowing rate.
Lease payments included in the measurement of the lease liability are made up of fixed payments (including in substance fixed), variable payments based on an index or rate, amounts expected to be payable under a residual value guarantee and payments arising from options reasonably certain to be exercised.
Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is remeasured to reflect any reassessment or modification, or if there are changes in in-substance fixed payments.
When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset, or profit and loss if the right-of-use is already reduced to zero.
The Group has elected to account for short-term leases and leases of low-value assets using the practical expedients. Instead of recognising a right-of-use asset and lease liability, the payments in relation to these are recognized as an expense in the profit or loss on a straight-line basis over the lease term.
On the statement of financial position, right-of-use assets have been included in property, plant and equipment and lease liabilities have been included in trade and other payables.
4.6. Property, plant and equipment
Property, plant and equipment are stated at historical cost less accumulated depreciation and impairment. Depreciation is calculated to write down the cost less estimated residual value of all property, plant and equipment by equal annual instalments over their expected useful lives less estimated residual values, using the straight line method. The rates generally applicable are:
· Fixtures & Fittings - 3 years or over remaining lease term
· Computer Equipment - 3 years
The gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.
The assets' residual value and useful lives are reviewed, and adjusted if required, at each balance sheet date. The carrying amount of an asset is written down immediately to its recoverable amount if the carrying amount is greater than its estimated recoverable amount.
The group depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The Group also assesses the right-of-use asset for impairment when such indicators exist.
4.7. Impairment of property, plant and equipment
At each balance sheet date, the Group reviews the carrying amounts of its property, plant and equipment 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 Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Recoverable amount is the higher of fair value less costs of disposal 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.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.
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 (cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.
4.8. Intangible assets
An intangible asset, which is an identifiable non-monetary asset without physical substance, is recognised to the extent that it is probable that the expected future economic benefits attributable to the asset will flow to the Group and that its cost can be measured reliably. The asset is deemed to be identifiable when it is separable or when it arises from contractual or other legal rights.
Intangible assets acquired as part of a business combination, are shown at fair value at the date of the acquisition less accumulated amortisation. Amortisation is charged on a straight line basis through the profit or loss. The rates applicable, which represent the Directors' best estimate of the useful economic life, are:
· Customer relationships - 5 to 10 years
· Online channel content - 3 years
· Brands - 3 years
· Technology - 1 to 5 years
4.9. Impairment of intangible assets
At each balance sheet date, the Group reviews the carrying amounts of its intangible assets and goodwill 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 Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs of disposal 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.
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 profit or loss.
4.10. Development costs
Expenditure on the research phase of an internal project is recognised as an expense in the period in which it is incurred. Development costs incurred on specific projects are capitalised when all the following conditions are satisfied:
· Completion of the asset is technically feasible so that it will be available for use or sale;
· The Group intends to complete the asset and use or sell it;
· The Group has the ability to use or sell the asset and the asset will generate probable future economic benefits (over and above cost);
· There are adequate technical, financial and other resources to complete the development and to use or sell the asset; and
·
The expenditure attributable to the asset during its development can be measured reliably.
Development costs not meeting the criteria for capitalisation are expensed as incurred. The cost of an internally generated asset comprises all directly attributable costs necessary to create, produce and prepare the asset to be capable of operating in the manner intended by management. Directly attributable costs include employee (other than Director) costs incurred along with third party costs.
Judgement by the Directors is applied when deciding whether the recognition requirements for development costs have been met. Judgements are based on the information available at the time when costs are incurred. In addition, all internal activities related to the research and development of new projects is continuously monitored by the Directors.
4.11. Investments in associates and joint ventures
Investments in associates and joint ventures are accounted for using the equity method. The carrying amount of the investment in associates and joint ventures is increased or decreased to recognise the Group's share of the profit or loss and other comprehensive income of the associate or joint venture, adjusted where necessary to ensure consistency with the accounting policies of the Group.
4.12. Taxation
Tax expenses recognised in profit or loss comprise the sum of the tax currently payable and deferred tax not recognised in other comprehensive income or directly in equity.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the statement of comprehensive income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.
Deferred tax
Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and are accounted for using the liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences, and deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be recognised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to recognise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.
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 profits will be available to allow all or part of the asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset recognised based on tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.
4.13. Financial Instruments
Recognition and derecognition
Financial assets and financial liabilities are recognised with the Group becomes a party to the contractual provisions of the financial instrument. Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and substantially all the risks and rewards are transferred. A financial liability is derecognised when it is extinguished, discharged, cancelled or expires.
Loan and other receivables
The Group accounts for loan and other receivables by recording the loss allowance as lifetime expected credit losses. These are shortfalls in contractual cash flows, considering the potential for default at any point during the life of the financial instrument. The Group uses its historical experience, external indicators and forward-looking information to calculate expected credit losses.
Trade and other payables
Trade and other payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest method.
4.14. Equity, reserves and dividend payments
Share capital
Share capital represents the nominal value of shares that have been issued.
Share premium
Share premium includes any premiums received on issue of share capital. Any transaction costs associated with the issuing of shares are deducted from share premium arising on those shares, net of any related income tax benefits.
Retained deficits
Retained deficits include all current and prior period retained profits or losses. It also includes credits arising from share based payment charges.
Translation reserve
Translation reserve represents the differences arising from translation of investments in overseas subsidiaries.
Merger reserve
The merger reserve is utilised when group reconstruction accounting is applied. The difference between the cost of investment and the nominal value of the share capital acquired is recognised in a merger reserve.
Merger relief reserve
Where the following conditions are met, any excess consideration received over the nominal value of the shares issued is recognised in the merger relief reserve:
· the consideration for shares in another company includes issued shares;
· on completion of the transaction, the company issuing the shares will have secured at least a 90% equity holding in the other company.
Capital redemption reserve
Where the Company purchases its own equity share capital, on cancellation, the nominal value of the shares cancelled is deducted from share capital and the amount is transferred to the capital redemption reserve.
Dividend distributions payable to equity shareholders are included in 'other liabilities' when the dividends have been approved in a general meeting prior to the reporting date.
4.15. Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks, together with other short-term highly liquid investments that are readily convertible into known amounts of cash having maturities of 3 months or less from inception and which are subject to an insignificant risk of change in value, and bank overdrafts.
4.16. Employee benefits
The Group operates two schemes on behalf of its employees, private healthcare and a defined contribution pension plan and amounts due are expensed as they fall due.
4.17. Share based payments
Employees (including Directors) of the Group received remuneration in the form of share-based payment transactions, whereby employees render services in exchange for rights over shares ('equity-settled transactions'). The Group has applied the requirements of IFRS 2 share-based payments to all grants of equity instruments. The transactions have been treated as equity settled.
The cost of equity settled transactions with employees is measured by reference to the fair value at the grant date of the equity instrument granted. The fair value is determined by using the Black-Scholes method. The cost of equity-settled transactions are recognised, together with a corresponding charge to equity, over the period between the date of grant and the end of a vesting period, where relevant employees become fully entitled to the award. The total value of the options has been pro-rated and allocated on a weighted average basis.
4.18. Restructuring Costs
Restructuring costs relate to corporate re-organisation activities previously undertaken or announced.
5 Critical accounting judgements and key sources of estimation uncertainty
The preparation of financial statements under IFRS requires the Group to make estimates and assumptions that affect the application of policies and reported amounts. Estimates and judgements are continually evaluated and are based on historical experience and other factors including expectations of future events that are believed to be reasonable under the circumstances. Actual results may differ from these estimates. The estimates and assumptions which have a risk of causing a material adjustment to the carrying amount of assets and liabilities are discussed below.
5.1. Critical accounting judgements
Intangible assets and impairment
The Group recognises the intangible assets acquired as part of business combinations at fair value at the date of acquisition. The determination of these fair values is determined by experts engaged by management and based upon management's and the Directors' judgement and includes assumptions on the timing and amount of future incremental cash flows generated by the assets and selection of an appropriate discount rate. Furthermore management must estimate the expected useful lives of intangible assets and charge amortisation on these assets accordingly.
Included within intangible assets are capitalised customer relationships. These were acquired as part of the acquisitions of Viral Management Limited and Base79 Limited. The Group continues to recognise revenue from these customer relationships through revenue share and licensing agreements.
Previously included within intangible assets were capitalised costs for online channel content associated with the development of Slash Football, Mutha and Perk. These assets were being amortised over a 3 year period on a straight line basis. However in 2019 these assets were fully impaired. Both Slash Football and Perk were deprioritised during the year, and so they are not expected to generate sustainable revenue streams in the future. Mutha did not prove attractive to audiences in its original incarnation and is therefore being rebranded and relaunched.
Investment in associate and impairment
During 2019 the Group continued to hold a 30% stake in Rebel FC Limited. This investment has been accounted for as an associate as the Group has significant control over this entity. As at 31 December 2019, the value of the investment in associates were assessed for impairment. The full carrying value of the investment was impaired resulting in a £37,966 impairment charge since the company is not expected to generate profits in the future.
Trade debtors' recovery
Within trade debtors there is a balance which is over one year in age which the Group has judged it not necessary to provide for. This is because it believes it is recoverable, since there is a similar trade creditor balance with the same company, and the Group is anticipating reaching agreement that these balances may be set off against each other.
Treatment of revenue as agent or principal
The determination of whether the Group is acting as a principal or an agent in a transaction involves judgment and is based on an assessment of who controls a specified good or service before it is transferred to a customer. Significant contracts are reviewed for the indicators of control. These include if the Group is primarily responsible for fulfilling the promise to provide the good or service, if the Group has inventory risk before the good or services has been transferred to the customer and if the Group has discretion in establishing the price for the good or service.
Deferred taxation
Deferred tax assets and liabilities have been recognised which are contingent and dependent upon future trading performance.
5.2. Estimates
Share based payment charges
The Group is required to measure the fair value of its share based payments. The fair value is determined using the Black-Scholes method which requires assumptions regarding exchange rate volatility, the risk free rate, share price volatility and the expected life of the share based payment. Exchange rate volatility is calculated using historic data over the past three years. The volatility of the Group's share price has been calculated as the average of similar listed companies over the preceding periods. The risk-free rate range used is between 0.39% and 0.98% and management, including the Directors, have estimated the expected life of most share based payments to be 4 years.
Bad debt provision
Recoverability of some receivables may be doubtful although not definitely irrecoverable. Where management feel recoverability is in doubt an appropriate provision is made for the possibility that the amounts may not be recovered in full. Provisions are made using past experience however subjectivity is involved when assessing the level of provision required.
6 Segment Reporting
As explained in the summary of Accounting Policies, management identify only one operating segment in the business, being monetising online video content. This single operating segment is monitored and strategic decisions are made on the basis of this segment alone.
As a result only the geographic reporting of revenue analysis has been included in this note. Three customers in 2019 (2018: Two) represented over 10% of the Group's total revenue.
Geographic reporting
Brave Bison has identified three geographic areas (United Kingdom & Europe, Asia Pacific and Rest of the world) and the information is presented based on the customers' location.
|
|
|
|
|
|
|
|
|
|
|
|
|
2019 |
2018 |
|
Revenue |
|
£000's |
£000's |
|
United Kingdom & Europe |
|
12,135 |
18,910 |
|
Asia Pacific |
|
3,835 |
1,956 |
|
Rest of the world |
|
843 |
305 |
|
Total revenue |
|
16,813 |
21,171 |
|
|
|
|
|
The Group identifies two revenue streams, Advertising and Fee based services. The analysis of revenue by each stream is detailed below, a detailed overview can be found in the Strategic Report.
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
2019 |
2018 |
|
|
|
£000's |
£000's |
|
Advertising |
|
12,396 |
17,800 |
|
Fee based services |
|
4,417 |
3,371 |
|
Total revenue |
|
16,813 |
21,171 |
|
|
|
|
|
|
Gross profit |
|
2019 |
2018 |
|
|
|
£000's |
£000's |
|
Advertising |
|
2,831 |
4,705 |
|
Fee based services |
|
2,350 |
1,757 |
|
Total gross profit |
|
5,181 |
6,462 |
|
|
|
|
|
|
|
|
|
|
|
Timing of revenue recognition |
|
|
|
|
|
|
|
|
|
The following table includes revenue from contracts disaggregated by the timing of recognition. |
|||
|
|
|||
|
|
|
2019 |
2018 |
|
|
|
£000's |
£000's |
|
Products and services transferred at a point in time |
|
16,079 |
20,312 |
|
Products and services transferred over time |
|
734 |
859 |
|
Total revenue |
|
16,813 |
21,171 |
7 Operating loss and loss before taxation
The operating loss and the loss before taxation are stated after:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2019 |
2018 |
|
|
£000's |
000's |
|
Auditor's remuneration: |
|
|
|
- Audit services |
84 |
70 |
|
- Audit related services |
10 |
10 |
|
- Tax advisory |
1 |
17 |
|
- Tax compliance |
12 |
11 |
|
Operating lease rentals - land and buildings on short term leases |
311 |
449 |
|
Depreciation: property, plant and equipment |
178 |
80 |
|
Impairment of intangible assets |
719 |
- |
|
Impairment of associate |
38 |
- |
|
Amortisation |
649 |
649 |
|
Foreign exchange loss/(gain) |
69 |
(114) |
|
|
|
|
8 Restructuring
|
|
2019 |
2018 |
|
|
£000's |
000's |
|
Restructuring costs |
649 |
- |
Restructuring costs relate to corporate re-organisation activities previously undertaken or announced.
9 Finance cost
|
|
|
|
|
|
2019 |
2018 |
|
|
£000's |
000's |
|
Interest expense for leasing arrangements |
22 |
- |
10 Tax expense
|
Major components of tax credit: |
|
|
|
|
2019 |
2018 |
|
|
£000's |
000's |
|
Current tax: |
|
|
|
UK corporation tax at 19.00% (2018: 19.00%) |
- |
- |
|
Overseas tax |
7 |
10 |
|
|
|
|
|
Total current tax |
7 |
10 |
|
|
|
|
|
Deferred Tax: |
|
|
|
Originations and reversal of temporary differences (Note 16) |
(41) |
(43) |
|
Tax credit on loss on ordinary activities |
(34) |
(33) |
UK corporation tax is calculated at 19.00% (2018: 19.00%) of the estimated assessable loss for the year. Taxation for other jurisdictions is calculated at the rates prevailing in those jurisdictions.
The credit for the year can be reconciled to the loss per the income statement as follows:
Reconciliation of effective tax rate:
|
|
|
|
|
|
2019 |
2018 |
|
|
£000's |
£000's |
|
Loss on ordinary activities before tax |
(2,745) |
(103) |
|
|
|
|
|
|
|
|
|
Income tax using the Company's domestic tax rate 19.00% (2018: 19.00%) |
(521) |
(20) |
|
Effect of: |
|
|
|
Expenses not deductible for tax purposes |
314 |
65 |
|
Deferred tax asset not recognised on timing differences |
60 |
62 |
|
Unutilised tax losses carried forward |
113 |
- |
|
Other movements |
- |
(140) |
|
Total tax credit for period |
(34) |
(33) |
11 Loss per share
Both the basic and diluted loss per share have been calculated using the loss after tax attributable to shareholders of Brave Bison Group plc as the numerator, i.e. no adjustments to losses were necessary in 2018 or 2019. The calculation of the basic loss per share is based on the loss attributable to ordinary shareholders divided by the weighted average number of shares in issue during the year. All share options have been excluded when calculating the basic diluted EPS as they were antidilutive.
|
|
|
|
|
|
2019 |
2018 |
|
|
£000's |
£000's |
|
Loss for the year attributable to ordinary shareholders |
(2,710) |
(70) |
|
|
|
|
|
Equity settled share based payments |
165 |
204 |
|
Amortisation, depreciation and impairment |
1,584 |
729 |
|
|
|
|
|
Adjusted profit for the period attributable to the equity shareholders |
(961) |
863 |
|
|
|
|
|
Weighted average number of ordinary shares |
605,510,566 |
574,794,591 |
|
Dilution due to share options |
41,488,760 |
75,035,564 |
|
Total weighted average number of ordinary shares |
646,999,326 |
649,830,155 |
|
|
|
|
|
Basic and diluted (loss) per ordinary share (pence) |
(0.45p) |
(0.01p) |
|
Adjusted basic (loss)/profit per ordinary share (pence) |
(0.16p) |
0.15p |
|
Adjusted diluted (loss)/profit per ordinary share (pence) |
(0.15p) |
0.13p |
12 Directors and employees
The average number of persons (including Director's) employed by the Group during the year was:
|
|
|
|
|
|
2019 |
2018 |
|
|
Number |
Number |
|
Sales, production and operations |
55 |
48 |
|
Support services and senior executives |
15 |
12 |
|
|
70 |
60 |
The aggregate cost of these employees was:
|
|
|
|
|
|
2019 |
2018 |
|
|
£000's |
£000's |
|
|
|
|
|
Wages and salaries |
2,989 |
3,644 |
|
Payroll taxes |
372 |
338 |
|
Pension contributions |
208 |
105 |
|
|
3,569 |
4,087 |
Director's emoluments paid during the period and included in the above figures were:
|
|
|
|
|
|
2019 |
2018 |
|
|
£000's |
£000's |
|
Emoluments (including compensation for loss of office) |
832 |
763 |
The highest paid Director received emoluments totalling £0.4 million (2018: £0.4 million). The amount of share based payments charge (see Note 21) which relates to the Directors was £0.1 million charge (2018: £0.1 million charge). The key management of the Group are the executive members of Brave Bison Group plc's Board of Directors. Key management personnel remuneration includes the following expenses:
|
|
|
|
|
|
2019 |
2018 |
|
|
£000's |
£000's |
|
Salaries including bonuses |
729 |
650 |
|
Social security costs |
101 |
90 |
|
Total Emoluments |
830 |
740 |
13 Intangible assets
|
|
|
Goodwill |
Online Channel Content |
Technology |
Brands |
Customer Relation-ships |
Total |
|
|
|
|
£000's |
£000's |
£000's |
£000's |
£000's |
£000's |
|
|
Cost |
|
|
|
|
|
|
|
|
|
At 31 December 2017 |
|
35,075 |
1,293 |
5,213 |
273 |
19,332 |
61,186 |
|
|
Additions |
|
|
- |
309 |
- |
- |
- |
309 |
|
At 31 December 2018 |
|
35,075 |
1,602 |
5,213 |
273 |
19,332 |
61,495 |
|
|
|
|
|
|
|
|
|
|
|
|
Additions |
|
- |
266 |
- |
- |
- |
266 |
|
|
At 31 December 2019 |
|
35,075 |
1,868 |
5,213 |
273 |
19,332 |
61,761 |
|
|
|
|
|
|
|
|
|
|
|
|
Amortisation and impairment |
|
|
|
|
|
|||
|
At 31 December 2017 |
|
35,075 |
287 |
5,213 |
273 |
18,070 |
58,918 |
|
|
Charge for the year |
|
- |
431 |
- |
- |
218 |
649 |
|
|
Impairment charge |
|
- |
- |
- |
- |
- |
- |
|
|
|
|
|
|
|
|
|
|
|
|
At 31 December 2018 |
|
35,075 |
718 |
5,213 |
273 |
18,288 |
59,567 |
|
|
|
|
|
|
|
|
|
|
|
|
Charge for the year |
|
- |
431 |
- |
- |
218 |
649 |
|
|
Impairment charge |
|
- |
719 |
- |
- |
- |
719 |
|
|
At 31 December 2019 |
|
35,075 |
1,868 |
5,213 |
273 |
18,506 |
60,935 |
|
|
|
|
|
|
|
|
|
|
|
|
Net Book Value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 December 2017 |
|
- |
1,006 |
- |
- |
1,262 |
2,268 |
|
|
|
|
|
|
|
|
|
|
|
|
At 31 December 2018 |
|
- |
884 |
- |
- |
1,044 |
1,928 |
|
|
|
|
|
|
|
|
|
|
|
|
At 31 December 2019 |
|
- |
- |
- |
- |
826 |
826 |
|
|
|
|
|
|
|
|
|
|
|
During the year Brave Bison had capitalised costs of £0.3 million (2018: £0.3 million) relating to the development of Mutha and Perk, two new social media channels and content that are owned and operated by Brave Bison. However these were subsequently fully impaired during the year.
Goodwill is not amortised, but tested annually for impairment with the recoverable amount being determined from value in use calculations.
The recoverable amount of the intangible asset has been determined based on value in use. Value in use has been determined based on future cash flows after considering current economic conditions and trends, estimated future operating results, growth rates and anticipated future economic conditions.
As at 31 December 2019, the intangible assets were assessed for impairment. The impairment charge was £0.7m (2018: £nil). Online channel content has been fully impaired as the Slash Football and Perk channels were deprioritised, and Mutha did not prove attractive to audiences in its original incarnation and is therefore being rebranded and relaunched.
The estimated cash flows for a period of 5 years were developed using internal forecasts, and a pre-tax discount rate of 15%. The cash flows beyond 5 years have been extrapolated assuming nil growth rates. The key assumptions are based on growth of existing and new customers and forecasts, which are determined through a combination of management's views, market estimates and forecasts and other sector information.
14 Property, plant and equipment
|
|
Right of Use asset |
Computer Equipment |
Fixtures & Fittings |
Total |
|
|
£000's |
£000's |
£000's |
£000's |
|
Cost |
|
|
|
|
|
At 31 December 2017 |
- |
898 |
163 |
1,061 |
|
Additions |
- |
4 |
48 |
52 |
|
At 31 December 2018 |
- |
902 |
211 |
1,113 |
|
|
|
|
|
|
|
Additions |
1,018 |
- |
9 |
1,027 |
|
At 31 December 2019 |
1,018 |
902 |
220 |
2,140 |
|
|
|
|
|
|
|
Depreciation and impairment |
|
|
|
|
|
At 31 December 2017 |
- |
846 |
127 |
973 |
|
Charge for the year |
- |
28 |
52 |
80 |
|
At 31 December 2018 |
- |
874 |
179 |
1,053 |
|
|
|
|
|
|
|
Charge for the year |
127 |
22 |
29 |
178 |
|
At 31 December 2019 |
127 |
896 |
208 |
1,231 |
|
|
|
|
|
|
|
Net Book Value |
|
|
|
|
|
At 31 December 2017 |
- |
52 |
36 |
88 |
|
|
|
|
|
|
|
At 31 December 2018 |
- |
28 |
32 |
60 |
|
|
|
|
|
|
|
At 31 December 2019 |
891 |
6 |
12 |
909 |
Included in the net carrying amount of property, plant and equipment are right-of-use assets as follows:
|
|
|
2019 |
|
|
|
£000's |
|
Right of use asset |
|
|
|
Total right-of-use asset |
|
891 |
15 Investment in associates
|
|
2019 |
2018 |
|
|
£000's |
£000's |
|
|
|
|
|
Investment in associates |
- |
56 |
During 2019 the Group continued to hold a 30% stake in Rebel FC Limited. The company made a loss in 2019 of £59,476 (2018: £62,777). This investment has been accounted for as an associate as the Group has significant control over this entity.
As at 31 December 2019, the value of the investment in associates were assessed for impairment. The full carrying value of the investment were impaired resulting in a £37,966 impairment charge.
16 Deferred taxation assets and liabilities
Deferred tax recognised:
|
|
2019 |
2018 |
|
|
£000's |
£000's |
|
Deferred tax liabilities |
|
|
|
Deferred tax on intangible assets |
(142) |
(183) |
|
|
(142) |
(183) |
Unutilised tax losses carried forward which have not been recognised as a deferred tax asset at 31 December 2019 were £49.4 million (2018: £49.1 million).
Reconciliation of movement in deferred tax
|
|
|
Deferred tax on intangible assets |
|
|
|
£000's |
|
|
|
|
|
As at 31 December 2017 |
|
(226) |
|
|
|
|
|
Recognised in the income statement |
|
43 |
|
As at 31 December 2018 |
|
(183) |
|
|
|
|
|
Recognised in the income statement |
|
41 |
|
As at 31 December 2019 |
|
(142) |
17 Trade and other receivables
|
|
|
2019 |
2018 |
|
|
|
£000's |
£000's |
|
Trade receivables |
|
1,687 |
4,819 |
|
Less allowance for credit losses |
(59) |
(139) |
|
|
Net trade receivables |
|
1,628 |
4,680 |
|
Unbilled income |
|
545 |
379 |
|
Contract assets |
|
16 |
405 |
|
Other receivables |
|
422 |
302 |
|
|
|
2,611 |
5,766 |
The contractual value of trade receivables is £1.7 million (2018: £4.8 million). Their carrying value is assessed to be £1.6 million (2018: £4.7 million) after assessing recoverability. The contractual value and the carrying value of other receivables are considered to be the same. The Group's management considers that all financial assets that are not impaired or past due are of good credit quality.
The aging analysis of these trade receivables showing fully performing and past due but not impaired is as follows:
|
|
|
2019 |
2018 |
|
|
|
£000's |
£000's |
|
Not overdue |
|
807 |
3,678 |
|
Not more than three months |
|
10 |
207 |
|
More than three months but not more than six months |
- |
34 |
|
|
More than six months but not more than one year |
2 |
37 |
|
|
More than one year |
|
809 |
724 |
|
|
|
1,628 |
4,680 |
The movement in provision for impairment of trade receivables can be reconciled as follows:
|
|
|
2019 |
2018 |
|
|
|
£000's |
£000's |
|
Opening provision |
|
(139) |
(211) |
|
Receivables provided for during period |
- |
(10) |
|
|
Reversal of previous provisions |
80 |
82 |
|
|
|
|
(59) |
(139) |
Provisions are created and released on a specific customer level on a monthly basis when management assesses for possible impairment. At each half year and year end, management will assess for further impairment based upon expected credit loss over and above the specific impairments noted throughout the year. Within trade debtors there is a balance which is over one year in age which the Group has judged it not necessary to provide for. This is because it believes it is recoverable, since there is a similar trade creditor balance with the same company, and the Group is anticipating reaching agreement that these balances may be set off against each other.
The other classes within trade and other receivables do not contain impaired assets.
Contract assets are utilised upon satisfaction of the associated contract performance obligations. The 2019 contract asset of £16,000 is expected to be utilised in the next reporting periods upon satisfaction of the associated performance obligation. The 2018 contract asset of £405,000 was recognised within cost of sales during 2019 upon satisfaction of the associated performance obligation.
18 Trade and other payables
|
|
2019 |
2018 |
|
|
£000's |
£000's |
|
|
|
|
|
Trade payables |
1,209 |
836 |
|
Other payables |
72 |
76 |
|
Other taxation and social security |
20 |
174 |
|
Contract liabilities |
88 |
1,098 |
|
Accruals |
3,369 |
5,500 |
|
|
4,758 |
7,684 |
All amounts are short term and the Directors consider that the carrying value of trade and other payables are considered to be a reasonable approximation of fair value.
The average credit period taken for trade purchases was 39 days (2018: 21 days).
Contract liabilities are utilised upon satisfaction of the associated contract performance obligations. The 2019 contract liability of £88,000 is expected to be utilised in the next reporting periods upon satisfaction of the associated performance obligation. The 2018 contract liability of £1,098,000 was recognised within revenue during 2019 upon satisfaction of the associated performance obligations.
19 Leases
Lease liabilities are presented in the statement of financial position as follows:
|
|
2019 |
2018 |
|
|
£000's |
£000's |
|
|
|
|
|
Current |
497 |
- |
|
Non-current |
403 |
- |
|
|
900 |
- |
The group entered into a two year lease for an office on 1 October 2019. With the exception of short-term leases and leases of low-value underlying assets, each lease is reflected on the balance sheet as a right-of-use asset and a lease liability.
The table below describes the nature of the Group's leasing activities by type of right-of-use asset recognised on the statement of financial position:
|
|
No. of right-of-use assets leased |
Range of remaining term |
Average remaining lease term |
No. of leases with extension options |
No. of leases with termination options |
|
Office building |
1 |
2 years |
2 years |
- |
- |
The lease liabilities are secured by the related underlying assets. Future minimum lease payments at 31 December 2019 were as follows:
|
|
|
Within one year |
One to two years |
Total |
|
|
|
£000's |
£000's |
£000's |
|
Lease payments |
|
558 |
418 |
976 |
|
Finance charges |
|
(61) |
(15) |
(76) |
|
Net present values |
|
497 |
403 |
900 |
The group has elected not to recognise a lease liability for short terms leases (leases with an expected term of 12 months or less). Payments made under such leases are expensed on a straight-line basis.
The expense relating to payments not included in the measurement of the lease liability is as follows:
|
|
|
2019 |
|
|
|
£000's |
|
|
|
|
|
Short-term leases |
|
55 |
|
|
|
55 |
At 31 December 2019 the Group was committed to one short-term lease and the total commitment at that date was SGD $101,000.
At 31 December 2019 the Group had not committed to any leases which had not yet commenced excluding those recognised as a lease liability.
20 Share capital
|
21 Ordinary share capital |
|
At 31 December 2019 |
At 31 December 2018 |
||||||
|
|
|
Number |
£000's |
Number |
£000's |
||||
|
Ordinary shares of £0.001 |
612,342,970 |
612 |
576,140,030 |
576 |
|||||
|
|
|
|
|
|
|||||
|
Total ordinary share capital of the Company |
612 |
|
576 |
||||||
|
|
|
|
|
|
|
||||
Rights attributable to ordinary shares
The holders of ordinary shares are entitled to receive notice of and attend and vote at any general meeting of the Company.
A reconciliation of the movement in share capital during the year is detailed in Note 21.
21 Reconciliation of share capital
|
|
|
|
|
|
||
|
|
2019 |
2018 |
||||
|
|
Ordinary |
Ordinary Share |
Ordinary |
Ordinary Share |
||
|
|
Shares |
Capital |
Shares |
Capital |
||
|
|
Number |
£000's |
Number |
£000's |
||
|
|
£0.0000001 |
|
£0.0000001 |
|
||
|
|
|
|
|
|
||
|
Opening balance |
576,140,030 |
576 |
573,909,229 |
574 |
||
|
Issue of ordinary shares |
36,202,940 |
36 |
2,230,801 |
2 |
||
|
Closing balance |
612,342,970 |
612 |
576,140,030 |
576 |
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
22 Share options
In September 2013 Brave Bison Limited introduced an approved EMI share option scheme for employees. The first options were granted in September and October 2013, where options were issued in replacement for options issued under the original Brave Bison Limited unapproved scheme, vesting periods were deemed to have commenced from 30 May 2013. The replacement share options issued by Brave Bison Group plc were treated as modification of the original scheme, in accordance with IFRS 2.
Options vest as follows:
· 25% 12 months from grant date
· 2.08% each month commencing 13 months from grant date until the options are fully vested at the end of the four year vesting period.
In November 2017 Brave Bison Limited introduced a new Restricted Share Unit ("RSU") plan under the existing EMI share option scheme. RSUs were granted at nominal value in 2017 which vest monthly on a straight-line basis between 2 and 3 years. During 2018 RSU's were granted which vest annually over a 3 years period. During 2019 RSU's were granted which vest annually between 2 and 3 years.
The options were valued using the Black-Scholes valuation model, using the following assumptions.
|
|
2019 |
2018 and prior |
|
Expected option life |
4 years |
4 years |
|
Expected volatility |
50% |
50% |
|
Weighted average volatility |
50% |
50% |
|
Risk-free interest rate |
0.39% - 0.98% |
0.73% - 2.74% |
|
Expected dividend yield |
0% |
0% |
Within the assumptions above, a 50% share price volatility has been used, the assumption is based on the average volatility of similar listed companies over the preceding periods.
The charge included within the financial statements for share options for the year to 31 December 2019 is £0.2 million (2018: £0.2 million).
|
Details of the options issued under the approved scheme are as follows: |
Number |
|
Weighted average exercise price |
|
Outstanding at the beginning of the year |
76,228,423 |
|
2.1p |
|
Granted during the year |
27,012,390 |
|
0.1p |
|
Exercised during the year |
(36,202,940) |
|
(0.1)p |
|
Cancelled during the year |
(24,356,253) |
|
(0.9)p |
|
Outstanding at the end of the year |
42,681,619 |
|
1.3p |
|
Exercisable at the end of the year |
26,988,748 |
|
0.3 |
The weighted average share price on the date options were exercised was 1.05p.
Share options expire after 10 years, the options above expiring between August 2024 and December 2029.
23 Undertakings included in the financial statements
The consolidated financial statements include:
|
|
Class of share held |
Country of incorporation |
Proportion held |
Nature of business |
|
Subsidiaries |
|
|
|
|
|
Brave Bison Limited |
Ordinary |
UK |
100% |
Online video distribution |
|
Rightster Inc. |
Ordinary |
USA |
100% |
Non-trading |
|
Rightster India LLP |
Ordinary |
India |
100% |
Non-trading |
|
Viral Management Limited |
Ordinary |
UK |
100% |
Non-trading |
|
Base 79 Limited |
Ordinary |
UK |
100% |
Non-trading |
|
Base 79 Inc. |
Ordinary |
USA |
100% |
Non-trading |
|
Base 79 Iberia SL |
Ordinary |
Spain |
100% |
Non-trading |
|
Base 79 GMBH |
Ordinary |
Germany |
100% |
Non-trading |
|
Brave Bison Asia Pacific Pte |
Ordinary |
Singapore |
100% |
Online video distribution |
|
|
|
|
|
|
|
Associates |
|
|
|
|
|
Rebel FC Limited |
Ordinary |
UK |
30% |
Influencer football team |
24 Financial Instruments
|
Categories of financial instruments |
|
As at 31 December 2019 |
As at 31 December 2018 |
|
|
|
£000's |
£000's |
|
Financial assets |
|
|
|
|
Loans and other receivables |
|
2,611 |
5,766 |
|
Cash and bank balances |
|
4,249 |
5,362 |
|
|
|
6,860 |
11,128 |
|
|
|
|
|
|
Financial liabilities at amortised cost |
|
|
|
|
Trade and other payables |
|
(4,758) |
(7,684) |
|
Lease liabilities |
|
(497) |
- |
|
|
|
(5,255) |
(7,684) |
Financial risk management
The Group's financial instruments comprise cash and liquid resources and various items, such as trade receivables and trade payables that arise directly from its operations. The main purpose of these financial instruments is to raise finance for the Group's operations. The principal financial risks faced by the Group are liquidity, foreign currency and credit risks. The policies and strategies for managing these risks are summarised as follows:
Foreign currency risk
Transactional foreign currency exposures arise from both the export of services from the UK to overseas clients, and from the import of services directly sourced from overseas suppliers. The Group is primarily exposed to foreign exchange in relation to movements in sterling against the US Dollar, the Euro and the Singapore Dollar.
The Group does not use derivatives to hedge translation exposures. All gains and losses are recognised in profit or loss on translation at the reporting date. The Group's current exposures in respect of currency risk are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
Sterling |
US Dollar |
Singapore Dollar |
Euro |
Other |
Total |
|
|
|
£000's |
£000's |
£000's |
£000's |
£000's |
£000's |
|
|
|
|
|
|
|
|
|
|
Financial assets |
|
4,455 |
6,407 |
142 |
72 |
52 |
11,128 |
|
Financial liabilities |
|
(3,853) |
(3,716) |
(134) |
20 |
(1) |
(7,684) |
|
Total exposure at 31 December 2018 |
|
602 |
2,691 |
8 |
92 |
51 |
3,444 |
|
|
|
|
|
|
|
|
|
|
Financial assets |
|
4,556 |
2,172 |
45 |
86 |
1 |
6,860 |
|
Financial liabilities |
|
(2,165) |
(2,857) |
(134) |
(26) |
(73) |
(5,255) |
|
Total exposure at 31 December 2019 |
|
2,391 |
(685) |
(89) |
60 |
(72) |
1,605 |
Sensitivity analysis
The table below illustrates the estimated impact on profit or loss as a result of market movements in the US Dollar, Singapore Dollar, Euro and Sterling exchange rate.
|
|
10% |
10% |
10% |
10% |
10% |
10% |
|
Impact on loss and equity |
Increase US Dollars |
Decrease US Dollars |
Increase Singapore Dollars |
Decrease Singapore Dollars |
Increase Euro |
Decrease Euro |
|
|
£000's |
£000's |
£000's |
£000's |
£000's |
£000's |
|
|
|
|
|
|
|
|
|
For the year to 31 December 2018 |
269 |
(269) |
1 |
(1) |
9 |
(9) |
|
|
|
|
|
|
|
|
|
For the year to 31 December 2019 |
(69) |
69 |
(9) |
9 |
6 |
(6) |
Credit risk
The Group's principal financial assets are cash and cash equivalents and trade and other receivables. The Group has no significant concentration of credit risk. The maximum exposure to credit risk is that shown within the balance sheet. All amounts are short term and management consider the amounts to be of good credit quality.
Liquidity/funding risk
The Group's funding strategy is to ensure a mix of funding sources offering flexibility and cost effectiveness to match the requirements of the Group. Operating subsidiaries are financed by retained profits.
Contractual maturities
The Group manages liquidity risk by maintaining adequate reserves.
Interest rate risk
The Group holds the majority of its cash and cash equivalents in corporate current accounts. These accounts offer a competitive interest rate with the advantage of quick access to the funds.
Capital policy
The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain a capital structure that optimises the cost of capital.
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance. The capital structure of the Group consists of cash and cash equivalents as disclosed in the statement of financial position and equity attributable to equity holders of the parent, comprising issued capital, reserves and retained earnings as disclosed in the consolidated statement of changes in equity.
Debt is defined as long and short-term borrowings (excluding derivatives). Equity includes all capital and reserves of the Group that are managed as capital.
Financial instruments measured at fair value
Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into three levels of fair value hierarchy. This grouping is determined based on the lowest level of significant inputs used in fair value measurement, as follows:
· level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities
· level 2 - inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)
· level 3 - inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Brave Bison categorises all financial assets and liabilities as level 1.
Maturity analysis
Set out below is a maturity analysis for non-derivative financial liabilities. The amounts disclosed are based on contractual undiscounted cash flows. The table includes both interest and principal cash flows. The Group had no derivative financial liabilities at either reporting date.
|
|
Total |
Less than 1 Year |
1-3 Years |
3-5 Years |
|
|
£000's |
£000's |
£000's |
£000's |
|
|
|
|
|
|
|
As at 31 December 2018 |
|
|
|
|
|
Trade and other payables |
7,684 |
7,684 |
- |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
As at 31 December 2019 |
|
|
|
|
|
Trade and other payables |
4,758 |
4,758 |
- |
- |
|
|
|
|
|
|
25 Financial commitments
The present value of future minimum rentals payable under non-cancellable operating leases is as follows:
|
|
|
At 31 December |
At 31 December |
|
|
|
|
2019 |
2018 |
|
|
|
|
£000's |
£000's |
|
|
57 |
305 |
||
|
Between 1 and 5 years |
- |
40 |
||
|
More than 5 years |
- |
- |
||
|
|
|
57 |
345 |
|
The Group entered into a new 12 month rental lease agreement commencing on 1 September 2019.
26 Transactions with Directors and other related parties
Transactions with associates during the year were:
|
|
|
|
|
|
|
|
|
2019 |
2018 |
|
|
|
|
£000's |
£000's |
|
|
134 |
77 |
||
|
|
|
At 31 December |
At 31 December |
|
|
|
|
2019 |
2018 |
|
|
|
|
£000's |
£000's |
|
|
- |
31 |
||
27 Post balance sheet events
On 5 February 2020 Philippa Norridge was appointed interim CFO replacing Paul Campbell-White. On 17 February 2020 Matthew Law was appointed Non-Executive Director.
The outbreak of the coronavirus pandemic is considered to be a non-adjusting post balance sheet event. The Board have considered, and continue to consider, the impact of the virus on the business and have included details in the strategic and directors' reports. It is too early for the Board to quantify the potential financial impact on the Group. However, an analysis has been performed in regards to Going Concern. Refer to the Note 2.1 in the Accounting Policies.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
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