2021 Preliminary Results

RNS Number : 9115N

Immediate Acquisition PLC

07 June 2022

 

The information contained within this announcement is deemed by the Company to constitute inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014.  Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.

Tuesday, 7 June 2022

Immediate Acquisition Plc

("IME" or "the Group" or "the Company")

2021 Preliminary Results

Immediate Acquisition Plc (AIM: IME) today announces its preliminary results for the year ended 31 December 2021.

FINANCIAL HIGHLIGHTS	2021 £
Revenue	2,940,692
Gross profit	1,941,667
EBITDA	(359,454)
Profit / (Loss) after taxation	(438,597)
Debt (loans plus lease liabilities)	53,959
Net funds (cash less debt)	568,829

Post period end highlights

·     Disposal of wholly owned subsidiary, Immedia Broadcast Limited, for a total consideration of £2.0 million comprising of £1.718 million paid on completion of the disposal on 9 May 2022 with the balance of £282,000 payable in 12 equal monthly instalments, beginning one month after completion.

·     Executive Directors, Ross Penney and John Trevorrow, stepped down from the Board on 9 May 2022.

·     Change of Company name to Immediate Acquisition Plc.

·     Disposal of the Sprift Loan for cash consideration of £1.05m.

·     Including investment in Audioboom, at the date of this report the Company has unaudited net assets in excess of £3.8m, of which all are cash or liquid investments. 

·     The Directors continue to investigate a number of potential acquisitions in the technology and fintech sector; none of which they have yet committed to pursue at this time.

Tim Hipperson, Non-executive Chairman, commented:

"With the disposal of Immedia Broadcast Limited now complete we are absolutely focused on our capital growth strategy including the monetisation of the Company's remaining assets, of which we have already disposed of the Sprift Loan, and the pursuit of an acquisition of a company in the technology or fintech sectors which would constitute a reverse takeover under the AIM Rules for Companies. 

"The Board has already identified a number of exciting opportunities in our target sectors and is confident that any acquisition will deliver meaningful shareholder value.  We will report on further progress as soon as we are in a position to do so."

For further information please contact:
Immediate Acquisition Plc Tim Hipperson, Non-executive Chairman Simon Leathers, Non-executive Director	Tel:  [phone]
SPARK Advisory Partners Limited (Nomad) Mark Brady Neil Baldwin	Tel: [phone]
SP Angel Corporate Finance LLP (Broker) Abigail Wayne	Tel: [phone]
Buchanan Communications Chris Lane	Tel: [phone]

Chairman's Statement

In my statement in the 2020 preliminary results I expressed the expectation that 2021 would offer significant opportunities as well as challenges.  As predicted, that has turned out to be the case.

In an eventful period we raised more funds at the start of the year with a view to bolstering our working capital and transactional capabilities. The original transaction that was under consideration in the early part of the year, with Sprift Technologies Ltd, did not complete although we remained invested via a loan note as announced on 26 March and 15 July 2021 until the recently announced disposal and focus on monetising our remaining assets. We do however continue to investigate suitable opportunities to enhance shareholder value through a strategic acquisition or reverse takeover and have already identified a number of exciting opportunities in our target sectors: technology and fintech .

Our trading business, Immedia Broadcast Ltd, continued to suffer depressed demand in H1 because of the continuing Covid pandemic before enjoying a well-deserved period of success in the second half of the year.  I commend the entire team for their talent, commitment and perseverance in materially turning round the 2021 outturn.  I offer every one of them my heartfelt thanks.

Financial highlights

Revenue increased 27% from the previous year to £2,940,692 (2020: £2,310,872), producing an improved loss before tax of £438,597 (2020: loss of £733,181) - because of increased sales and margin improvements as well as a full year of the cost reduction and financial efficiency measures implemented in 2020.

Immedia Broadcast Ltd (IBL)

Owing to the cost of operation, it remained the view of the Board that IBL would trade more efficiently without the financial and regulatory burden of the AIM listing and the Group therefore sought expressions of interest from third parties.  None of these was at a level commensurate with the trading prospects of IBL so, having received shareholder approval, on 9 May 2022 the Group sold IBL to AVC Immedia Limited, a company led by CEO Ross Penney.

Trading and profitability were on an upward curve throughout 2021, and we are pleased that in H2 2021 we achieved not only profitability at the EBITDA level in every month but also two of the most successful months the company has ever posted.  Whilst the upturn in trade was significant and trading in Q1 2022 was promising, the operations remain too small to readily absorb the costs of being a PLC and generate a return for investors. Accordingly, the Independent Directors believe that, despite the UK's apparent recovery from the pandemic, there remains significant uncertainties in the economy and the growth of the Group would continue to be limited in the foreseeable future.  This conviction led to the disposal of IBL which completed on 9 May 2022.

Capital

In January 2021 the Group raised further gross proceeds of £3.0 million via the placing of 10,400,000 new Ordinary Shares at £0.25 per share and a subscription for 1,600,000 new Ordinary Shares at £0.25 per share. 

AudioBoom

I am delighted that the Company's investment in AudioBoom Group plc (AIM:BOOM) has proved to be of long term strategic benefit.  I commend AudioBoom's management on the huge progress made and look forward to further developments.

Warrant Extension

On 8 January 2021, pursuant to a placing and subscription to raise £3 million, the Company announced the issue of 12,000,000 new warrants, exercisable at a price of 35 pence for a period of 12 months from admission, subsequently announced as 8 February 2021. In order to maintain the Company's access to capital and enable the Company to assess and complete potential corporate actions in a timely manner the Board has agreed to extend the final exercise date of the warrants to 30 June 2022 or, if the Company publishes an Admission Document prior to 30 June 2022 relating to a reverse takeover, the Business Day falling two Business Days prior to the date of the General Meeting relating to the reverse takeover. As part of the fundraising, Mark Horrocks subscribed for 1,600,000 subscription shares (and so received 1,600,000 new warrants). As Mark Horrocks is a Director and substantial shareholder, any extension of the new warrants was a related party transaction pursuant to AIM Rule 13. The directors, other than Mark Horrocks, having consulted with the Company's nominated adviser believed that the terms of the new warrant extension are fair and reasonable insofar as shareholders are concerned.

Sprift Loan

On 15 July 2021 the Company entered into a cost recovery agreement with Sprift Technologies Limited ("Sprift"). Driven largely by consecutive monthly growth in Estate Agent subscriptions and the provision of property data APIs, Sprift Technologies generated revenue growth of circa 100% in the eight months ended 30 September 2021 compared to the equivalent period last year. In the interest of facilitating further growth of the Borrower, on 20 December 2021 the Company entered a revised facility agreement ("Facility Agreement") with Sprift and Mark Horrocks that increased the facility size from £1.05m to £2.55m, defined equity conversion terms in the event of defined liquidity events and set out board participation rights. No further funding was provided by the Company under this agreement. Mark Horrocks is a party to the Facility Agreement and as such this is a related party transaction pursuant to AIM Rule 13. The directors independent of the Facility Agreement, having consulted with the Company's nominated adviser, believed that the terms of the Facility Agreement were fair and reasonable insofar as shareholders are concerned.

On 6 June 2022 the Company disposed of the £1.05m Sprift Loan to Mark Horrocks for £1.05m in cash consideration. This was a related party transaction pursuant to AIM Rule 13 and the directors independent of disposal, having consulted with the Company's nominated adviser, believed that the terms of the disposal are fair and reasonable insofar as shareholders are concerned.

Outlook

Immediate Acquisition plc

Post completion of the IBL disposal and the sale of the Sprift Loan, the Company name has been changed to Immediate Acquisition Plc and intends to adopt a capital growth strategy through the monetisation of its remaining investments, in an orderly manner, and the pursuit of an acquisition of a company in the technology or fintech sectors.  This is in line with the Company's ambition to deliver meaningful shareholder value.

Tim Hipperson

Chairman

Consolidated Statement of Profit or Loss

 

For the Year Ended 31 December	2021 £	2020 £
CONTINUING OPERATIONS
Revenue	2,940,692	2,310,872
Cost of sales	(999,025)	(924,824)
Gross profit	1,941,667	1,386,048
Administrative expenses	(2,458,683)	(2,126,783)
Other income	12,397	68,127
Operating profit/(loss)	(504,618)	(672,608)
Finance income	72,505	116
Finance costs	(6,483)	(60,689)
Loss before taxation	(438,597)	(733,181)
Tax on loss	-	-
Loss for the financial year	(438,597)	(733,181)

	2021	2020
Earnings/(loss) per share
Basic (pence per share)	(2.77)	(5.22)
Diluted (pence per share)	(2.77)	(5.22)

 

Consolidated Statement of Profit or Loss and Other Comprehensive Income

For the Year Ended 31 December	2021 £	2020 £
Loss for the year	(438,597)	(733,181)
Other comprehensive income
Item that will not be reclassified to profit or loss: Fair value gain on equity investments not held for trading designated as fair value through OCI	768,766	42,600
Total comprehensive income/(loss) for the year	330,168	(690,581)

Consolidated Statement of Financial Position

As at 31 December	2021 £	2020 £
ASSETS
NON-CURRENT ASSETS
Goodwill	191,018	191,018
Owned
Intangible assets	28,577	38,401
Property, plant and equipment	106,678	101,500
Right-of-use
Property, plant and equipment	9,230	74,408
Investments	1,175,349	157,500
	1,510,852	562,827
CURRENT ASSETS
Inventories	161,556	124,094
Trade and other receivables	2,254,937	575,449
Cash and cash equivalents	622,788	464,232
	3,039,281	1,163,775
TOTAL ASSETS	4,550,133	1,726,602
LIABILITIES
NON-CURRENT LIABILITIES
Financial liabilities	(39,716)	(45,663)
Provisions	(70,000)	(42,500)
	(109,716)	(88,163)
CURRENT LIABILITIES
Trade and other payables	(1,594,058)	(1,803,183)
Contract liabilities	(101,587)	(145,195)
Financial liabilities	(14,242)	(92,471)
	(1,709,887)	(2,040,849)
TOTAL LIABILITIES	(1,819,604)	(2,129,012)
Net assets/(liabilities)	2,730,529	(402,410)
EQUITY
Called up share capital	3,758,184	2,558,184
Share premium	5,189,313	3,586,541
Merger reserve	2,245,333	2,245,333
Share-based payment reserve	40,218	40,218
Investment valuation reserve	836,265	67,500
Retained losses	(9,338,784)	(8,900,186)
TOTAL EQUITY	2,730,529	(402,410)

Consolidated Statement of Changes in Equity

	Called up Share capital	Share premium	Retained losses	Merger reserve	Share-based payment reserve	Investment valuation reserve	Total equity
	£	£	£	£	£	£	£
Balance at 31 December 2020	2,558,184	3,586,541	(8,900,186)	2,245,333	40,218	67,500	(402,410)
Loss for the year	-	-	(438,597)	-	-	-	(438,597)
Other comprehensive income	-	-	-	-	-	768,765	768,765
Total comprehensive income for the year	-	-	(438,597)	-	-	768,765	330,168
Transactions with shareholders
Share options exercised	-	-	-	-	-	-	-
Share-based payments	-	-	-	-	-	-	-
Shares placed/subscribed	1,200,000	1,602,772	-	-	-	-	2,802,772
Total transactions with shareholders	1,200,000	1,602,772	-	-	-	-	2,802,772
Balance at 31 December 2021	3,758,184	5,189,313	(9,338,783)	2,245,333	40,218	836,265	2,730,529

Consolidated Statement of Cash Flows

For the Year Ended 31 December	2021 £	2020 £
Cash flows from operating activities
Cash used in operations	(1,251,072)	(366,488)
Net cash flow from operating activities	(1,251,072)	(366,488)
Cash flows from investing activities
Purchase of tangible fixed assets	(67,619)	(52,145)
Purchases of marketable securities	(249,083)	-
Investment loan	(1,050,000)	-
Interest received	72,504	-
Cash from sale of assets	42	116
Net cash flow from investing activities	(1,294,156)	(52,029)
Cash flows from financing activities
New loans in year	-	50,000
Loan principal repaid	(5,517)	(300,000)
Share issue	3,000,000	1,100,000
Costs of share issue	(197,228)	(50,800)
Exercise of share options	-	2,500
Repayment of lease liabilities	(86,986)	(111,208)
Interest paid	(6,483)	(45,317)
Net cash flow from financing activities	2,703,784	645,175
Increase/(decrease) in cash and cash equivalents	158,556	226,658
Cash and cash equivalents at beginning of year	464,232	237,574
Cash and cash equivalents at end of year	622,788	464,232

Immedia Group Plc

NOTES TO THE FINANCIAL INFORMATION

The financial information set out in this preliminary announcement does not constitute statutory accounts as defined in section 435 of the Companies Act 2006.

The financial information for the year ended 31 December 2021 is derived from the statutory accounts for that year.  The auditors reported on those accounts; their report was unqualified and did not contain a statement under either Section 498 (2) or Section 498 (3) of the Companies Act 2006 and included a reference by way of emphasis to the disposal of Immedia Broadcast Limited subsequent to the year end date.

The statutory accounts for the year ended 31 December 2020 have been delivered to the Registrar of Companies. The auditors reported on those accounts; their report was unqualified and did not contain a statement under either Section 498 (2) or Section 498 (3) of the Companies Act 2006 and did not include references to any matters to which the auditor drew attention by way of emphasis.

The statutory accounts for the year ended 31 December 2021 have not yet been delivered to the Registrar of Companies. The 2021 accounts will be delivered to the Registrar of Companies following the Company's Annual General Meeting.  The Annual Report and Notice of Annual General Meeting will be posted to the shareholders by 30 June 2022 and will be made available on the Company's website ( www.imeplc.com ) at that time.

This preliminary announcement was approved by the Board on 6 June 2022.

1.  ACCOUNTING POLICIES

Basis of preparation

Both the parent company financial statements and the consolidated financial statements have been prepared and approved by the Directors in accordance with UK-adopted international accounting standards. The total comprehensive income was £330,168 (2020 loss: £690,581), reflecting an increase in the carrying value of £768,766 in our strategic investment in the AIM-quoted spoken word audio platform Audioboom Group PLC (AIM:BOOM).  The Company's loss for the year was £649,784 (2020 loss: 341,928).

The financial statements were approved by the Board of Directors on the date as shown on the Consolidated and Company Statement of Financial Position.

Statement of compliance

The AIM Rules require that the consolidated financial statements of the Group be prepared in accordance with International Financial Reporting Standards.

Judgements made by the Directors in the application of these accounting policies that have a significant effect on the financial statements and estimates with a significant risk of material adjustment in the next year are discussed in note 2.

Measurement convention

The consolidated financial statements have been prepared on the historical cost basis except where explicitly stated otherwise.

Basis of consolidation

(i)  Subsidiaries

Subsidiaries are entities controlled by the Group. Control exists when the Group has power over the investee significantly to direct the activities; exposure, or rights, to variable returns from its involvement with the investee and the ability to use its power over the investee to affect the amount of the investor's returns. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. The Group also included an Employee Benefit Trust which is considered to be a quasi-subsidiary under the control of the Group.

(ii)  Acquisitions

Acquisitions are accounted for using the acquisition method. The cost of an acquisition is measured at fair value at the date of exchange of the consideration. Identifiable assets and liabilities of the acquired business are recognised at their fair value at the date of acquisition. To the extent that the cost of an acquisition exceeds the fair value of the net assets acquired the difference is recorded as goodwill. Where the fair value of the net assets acquired exceeds the cost of an acquisition the difference is recorded in profit and loss.

(iii)  Transactions eliminated on consolidation

Intra-group balances and any unrealised income and expenses arising from intra-group transactions are eliminated in preparing the consolidated financial statements.

(iv)  Merger

On 20 November 2003 a new holding company was brought into the Group. This was carried out by a share for share exchange and the existing shareholders of Immedia Broadcast Limited received 1,000 10p ordinary shares in Immedia Group Plc for every share held. There was no cash consideration. As part of its transition to IFRS on 1 January 2006 the Group did not restate the Group reconstruction which had been accounted for as a merger as permitted by UK GAAP.

Going concern

The Group meets its day to day working capital requirements through the combined use of its cash balances, the monetization of investments, receivable and payable balances.

Following the disposal of Immedia Broadcast Limited for cash consideration of £1.7m and the disposal of the Sprift Loan for cash consideration of £1.05m and the investment in Audioboom, at the date of this report the Company has net assets in excess of £3.8m, of which all are cash or liquid investments.  Accordingly the Directors believe that this represents more than adequate resources to continue to pay its liabilities as they fall due in the year ahead, including some headroom to deal with possible shortfalls against expectations judged reasonable. The Directors have also considered whether that headroom would be adequate to deal with any reasonable abortive costs associated with potential acquisitions should they not proceed and consider it adequate.

Accordingly, whether or not the transactions to change the make up of the Group are completed, the Directors believe there is reasonable assurance that the Group has adequate resources to continue in operation for the foreseeable future, being at least 12 months from the date of signing of the financial statements, and continue to adopt the going concern assumption.

Changes in accounting policies

There are no new standards or amendments to standards which are material to the accounts and mandatory for the first time for the financial year ended 31 December 2021.

Accounting policies

The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements, and have been applied consistently by all Group entities.

a)  Revenue

Revenue represents the amounts receivable by the Group for the provision of its goods and services, excluding value added tax.

Production services comprise the broadcasting of live and as live radio programmes to customers' premises using appropriate technologies, together with the production of advertising content for use in those programmes. Revenue from these services is billed on time-based subscriptions and recognised as the performance obligation is fulfilled. Additionally, the creation of digital web and app designs, digital solutions for audio visual content, 3D, virtual reality and augmented reality content provided by the AVC Immedia division are all included in production services. Revenue from these services is billed and recognised on completion as that is when the performance obligation is met.

Operations revenue from equipment sales which includes delivery and configuration is recognised over time; revenue from content delivery and equipment maintenance and hire services is billed on time-based subscriptions and is recognised monthly on completion when the performance obligation is met.

To the extent that invoices are raised to a different pattern from the revenue recognition described above, appropriate adjustments are made through contract assets and contract liabilities to account for revenue when underlying service has been performed or goods have transferred to the customer.

b)  Other income

The Company has other income for the sub-lease of its Aberdeen offices.

c)  Finance income and cost

Finance income comprises interest income on bank deposits and interest income from customers on deferred payment terms, both of which are recognised as accrued using the effective interest method.

Finance cost comprises interest expense on borrowings including leases which is recognised in profit or loss using the effective interest method.

d)  Taxation

The tax expense comprises current and deferred tax. Tax is recognised in the statement of profit or loss, except to the extent that it relates to items recognised in other comprehensive income. In this case, the tax is also recognised directly in other comprehensive income.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognised using the statement of financial position method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit, and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which temporary differences can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

e)  Research and development expenditure

Recognition and measurement

Expenditure on research (or the research phase of an internal project) is recognised as an expense in the period in which it is incurred.

Costs that are directly attributable to the development phase of new customised technologies are recognised as intangible assets provided they meet the following recognition requirements:

· completion of the intangible asset is technically feasible so that it will be available for use or sale;

· the Group intends to complete the intangible asset and use or sell it;

· the Group has the ability to use or sell the intangible asset;

· the intangible asset will generate probable future economic benefits. Among other things, this requires that there is a market for the output from the intangible asset or for the intangible asset itself, or, if it is to be used internally, the asset will be used in generating such benefits;

· there are adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and

· the expenditure attributable to the intangible asset during its development can be measured reliably. Development costs not meeting the criteria for capitalisation are recognised as expenses as incurred.

f)  Foreign currencies

Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the statement of financial position date are translated at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in profit or loss. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.

g)  Employee benefit

(i)  Defined contribution plans

Obligations for the contributions to defined contribution pension plans are recognised as an expense in profit or loss when they are due.

(ii)  Share-based payments options

The Group operated an equity settled compensation scheme which grants options to qualifying employees. The grant date fair value of options granted to employees is recognised as an employee expense, with a corresponding increase in equity, over the period in which the employees become unconditionally entitled to the options. The amount recognised as an expense is adjusted to reflect the expected number of share options that vest unless this adjustment is due to the share price not achieving the set thresholds for vesting.

(iii)  Share-based payments warrants

The Group also operated an equity settled compensations scheme which grants warrants. The warrants have a life of 5 years from grant date and expire if not exercised. The grant date fair value of warrants granted to employees is recognised as an employee expense, with a corresponding increase in equity, over the period in which the employees become unconditionally entitled to the warrants. The amount recognised as an expense is adjusted to reflect the expected number of share warrants that vest unless this adjustment is due to the share price not achieving the set thresholds for vesting.

(iv)  Employee benefit trust

The Group operates an employee trust ("EBT") for the benefit of its employees through Immedia Broadcasting Trustees Limited which acts as Trustee. Transactions for the EBT are treated as being those of the Group and are therefore reflected in the consolidated financial statements. The trust's purchases and sales of shares in the Company are debited and credited directly to equity.

h)  Goodwill

Goodwill arises on the acquisition of subsidiaries and is stated at cost less any accumulated impairment losses. Goodwill, which under IFRSs is not amortised, is tested annually for impairment.

For acquisitions on or after 1 January 2006, goodwill represents the excess of the cost of the acquisitions over the Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the acquiree.

i)  Amortisation of intangible assets

Amortisation is recognised as an administrative expense in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use. The estimated useful lives for intangible assets are as follows:

Brand -  ten years

Proprietary software -  five years

Customer contracts -  three to four years

Content delivery -  three years

j)  Investment in subsidiaries

Investments in subsidiaries held in the parent company accounts are stated at cost less impairment. Investments in subsidiaries are reviewed for impairment on an annual basis or when events or other changes in circumstances indicate that the investment carrying value may be impaired.

k)  Impairment

(i)  Non-financial assets

Assets that have indefinite lives (goodwill) are tested for impairment annually. Assets that are subject to amortisation or depreciation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable.

The test for impairment under IAS 36 compares the carrying value of an asset against its economic value (recoverable amount to the business), where economic value is defined as the higher of the asset's fair value less costs to sell or its value in use. (These measures are based on the net present value of future cash flows). If the carrying value exceeds the economic value, impairment exists.

An impairment loss is recognised if the carrying amount of an asset or the cash-generating unit in which the asset is used exceeds its recoverable amount. A cash-generating unit is the smallest identifiable asset group that generates cash flows that largely are independent from other assets and groups.

Impairment losses are recognised in consolidated statement of profit or loss. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit on a pro rata basis.

(ii)  Financial assets

All financial assets are subject to review for impairment at least at each reporting date to identify whether there is any objective evidence that a financial asset or a group of financial assets is impaired.

An impairment loss in respect of goodwill is not subsequently reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

l)  Property, plant and equipment

(i)  Recognition and measurement

Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses.

Cost includes expenditures that are directly attributable to the acquisition of the asset. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.

(ii)  Subsequent costs

The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company and its cost can be measured reliably. The carrying amount of any part that is replaced is derecognised. The cost of the day-to-day servicing of property, plant and equipment is recognised in income and expenditure as incurred.

(iii)  Depreciation

Depreciation is recognised as an expense in profit or loss on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives.

The estimated useful lives for the current and comparative periods are as follows:

Plant and equipment -  three to seven years

Fixture and fittings

Office and IT equipment -   three to ten years

Leasehold improvements -   unexpired period of original term of leases, ranging from 1.5 to eight years

Network equipment -  three to five years or contract term if shorter

Leasehold property -  length of property lease

Depreciation methods, useful lives and residual values are reviewed at each statement of financial position date.

m)  Financial instruments

Financial assets and financial liabilities are recognised in the statement of financial position when the Group becomes a party to the contractual provisions of the instrument.

Investments other than investments in subsidiaries are classified as either held-for-trading or not at initial recognition. At the year-end date all investments are classified as not held for trading. An irrevocable election has been made to recognise changes in fair value in other comprehensive income.

Trade receivables are held in order to collect the contractual cash flows and are initially measured at the transaction price as defined in IFRS 15, as the contracts of the Group do not contain significant financing components. Impairment losses are recognised based on lifetime expected credit losses in profit or loss.

Other receivables are held in order to collect the contractual cash flows and accordingly are measured at initial recognition at fair value, which ordinarily equates to cost and are subsequently measured at cost less impairment due to their short-term nature. A provision for impairment is established based on 12-month expected credit loses unless there has been a significant increase in credit risk when lifetime expected credit losses are recognised. The amount of any provision is recognised in profit or loss. Cash and cash equivalents comprise cash balances held by the Group and overnight call deposits.

Financial liability and equity instruments issues by the Group are classified in accordance with the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments issues by the Company are recorded at the proceeds received, net of direct issue costs.

n)  Inventories

Inventories include audio, screen and content delivery equipment and are measured at the lower of cost and net realisable value. In determining the cost of raw materials, consumables and goods purchased for resale, the weighted average purchase price is used. For work in progress and finished goods, cost is taken as production cost which includes an appropriate proportion of attributable overheads.

o)  Contract assets

When equipment supplied within an audio services contract is paid for over the contract term, the Group continues to recognise equipment sales revenues consistently with the revenue recognition policy in 2. a) Revenue .

p)  Trade and other payables

Trade and other payables are recognised at fair value on initial recognition and subsequently at amortised costs.

q)  Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

r)  Leases

A right of use asset and a lease liability have been recognised for all leases except leases of low value assets, which are considered to be those with a fair value below £4,500, and those with a duration of 12 months or less. Right of use assets have been 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.

The Group depreciates right of use assets on a straight-line basis from the lease commencement date to the earlier of the useful life of the right of use asset or the end of the lease term. Where impairment indicators exist, right of use assets will be assessed for impairment.

The lease liabilities are measured at the present value of the lease payments due to the lessor over the lease term, discounted using the interest rate implicit in the lease if that rate is readily available or the Group's incremental borrowing rate.

After initial measurement, any payments made will reduce the liability and the interest accrued will increase it. Any reassessment or modification will lead to a remeasurement of the liability. In such case, the corresponding adjustment will be reflected in the right of use asset, or profit and loss if the right of use asset is already reduced to zero.

s)  Provisions

Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated.  Amounts provided in respect of leasehold premises dilapidations are the only constituent of the provisions balance.

t)  Equity and reserves

Share capital represents the nominal value of shares that have been issued.

Share premium includes any premium received on issue of share capital. Any transaction costs associated with the issuing of shares are deducted from share premium, net of any related income tax benefits.

The Company also has warrants in issue following an equity fund raising process. The warrants had a life of 1 year from grant date, since extended to 30 June 2022, and will expire if not exercised. The grant date fair value of warrants granted to investors is recognised as an expense against Share Premium, with a corresponding increase in equity, The amount recognised as an expense is adjusted to reflect the expected number of share warrants that vest unless this adjustment is due to the share price not achieving the exercise price threshold.

Merger reserve represents the consolidation difference that arises under merger accounting. This consists of the difference between the cost of investment and the nominal value of the share capital acquired.

Other reserves include share-based payment charges.

The investment revaluation reserve includes accumulated gains and losses on financial assets.

Retained losses include retained profits and losses relating to current and prior years and purchases and sales of own shares by the Employee Benefit Trust.

All transactions with owners of the parent are recorded separately within equity.

u)  Earnings per share

Basic or diluted

The Group presents basic and diluted earnings per share ("EPS") data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shared outstanding for the effects of all dilutive potential ordinary shares, which comprise share options granted to employees.

v)  Segment reporting

In identifying its operating segments, management has historically followed the Group's service lines, which represent the main products and services by the Group. There were two operating segments: production and operations.

The Chief Operating Decision Maker, which is deemed to be the executive Board, reviews management information which is the same as is reported and prepared under IFRS.

The revenue streams in the production segment comprise the content created for customers, including audio based (live and recorded radio, music, advertising and branding) and visual based (video, music advertising and branding, digital web and app designs, and digital solutions for audio visual, 3D, virtual reality and augmented reality content), together with all applicable licensing charges.

The revenue streams in the operations segment comprise the supply, installation and sale or hire of equipment to deliver content to customers, the delivery of the content (including via broadband or satellite technologies), and the maintenance of the equipment.

2.  USE OF ESTIMATES AND JUDGEMENTS

The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these judgements and estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.

3.  REVENUE

a)  Segmental reporting

The Chief Operating Decision Maker, which is deemed to be the executive Board consider that the Group has just one operating segment, being the provision of audio visual communication products and services.

Analysis of sales and cost of sales between the two main service lines, production and operations is provided for information in the table below.  The production revenue streams comprise the content created for customers, including audio based (live and recorded radio, music, advertising and branding) and visual based (video, music advertising and branding, digital web and app designs, and digital solutions for audio visual, 3D, virtual reality and augmented reality content), together with all applicable licensing charges.  The operations revenue streams comprise the supply, installation and sale or hire of equipment to deliver content to customers, the delivery of the content (including via broadband or satellite technologies), and the maintenance of the equipment.

	2021			2020
	Production	Operations	Total	Production	Operations	Total
	£	£	£	£	£	£
Revenue	2,879,891	60,801	2,940,692	2,180,313	130,559	2,310,872
Cost of sales	(968,353)	(30,672)	(999,025)	(873,807)	(51,017)	(924,824)
Gross profit	1,911,538	30,129	1,941,667	1,306,506	79,542	1,386,048
Administrative expenses			(2,458,683)			(2,126,783)
Other income			12,397			68,127
Loss from operations			(504,618)			(672,608)
Finance income			72,505			116
Finance cost			(6,484)			(60,689)
Loss before tax			(438,597)			(733,181)

Geographical analysis:

	2021	2020
	£	£
UK	2,554,416	2,032,591
Europe excluding the UK	103,360	133,703
RoW	282,916	144,578
Total	2,940,692	2,310,872

*included in above are sales to Canada £177,969 (2020: 79,530) and USA £62,622 (2020: £61,373). There were no material sales to other countries.

Significant customers

There were three customers where revenue was greater than 10% of the total (2020: three). Revenue from each of these customers is derived from both production and operations segments.

Significant customer analysis:

	202 1		2020
	Revenue £	% of total revenue	Revenue £	% of total revenue
Customer 1	500,863	17.0	499,848	21.6
Customer 2	438,457	14.9	439,494	19.0
Customer 3	309,754	10.5	243,401	10.5

Analysis of revenue between goods and services:

	2021	2020
	£	£
Services	2,333,654	2,096,479
Goods	607,038	214,393
Total revenues	2,940,692	2,310,872

Analysis of revenue recognition

	2021	2020
	£	£
Recognised at a point in time	1,609,267	951,680
Recognised over time	1,331,425	1,359,192
Total revenues	2,940,692	2,310,872

b)  Contract liabilities

	2021	2020
	£	£
Current - Media services	101,587	145,195

During the year, the Company recognised revenue of £142,687 that was included in the contract liability at the beginning of the period.

Revenue recognised in relation to contract liabilities

Where media services are billed in advance, income is deferred until it can be recognised in accordance with the revenue recognition policy as detailed in note 2 .

Analysis of future obligations:

	2021	2020
	£	£
Performance obligations to be satisfied in the next year	1,033,274	753,542
Performance obligations to be satisfied in the subsequent year	202,788	3,420

4.  EMPLOYEES AND DIRECTORS

Staff costs

	Group		Company
	2021	2020	2021	2020
	£	£	£	£
Wages and salaries	1,166,184	1,066,787	-	163,278
Social security costs	124,538	127,496	-	30,660
Other pension costs	34,734	32,760	-	9,295
Total	1,325,456	1,227,043	-	203,233

The Group also made payments of fees to Non-Executive Directors of £81,510 (2020: £33,899).

The average number of employees during the year was as follows:

	Group		Company
	2021	2020	2021	2020
Administration and sales	12	13	-	2
Production and distribution	15	15	-	-
Total	27	28	-	2

Directors' remuneration

	2021	2020
	£	£
Directors' remuneration	211,677	200,385
Directors' pension contributions to money purchase schemes	8,200	7,515
Payments to Directors for loss of office	-	101,240

The number of directors to whom retirement benefits were accruing was as follows:

	202 1	2020
Money purchase schemes	2	3

Information regarding the highest paid director is as follows:

	2021	2020
	£	£
Emoluments etc	119,245	110,661
Pension contributions to money purchase schemes	4,600	4,280

Remuneration for each individual director, which is required to be disclosed under the AIM rules, is shown in the Directors' Report in the Report and Accounts.

 

END

 

 

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