Final Results
This announcement contains inside information as stipulated under the UK Market Abuse Regulations ("MAR").
25 April 2022
Audioboom Group plc
("Audioboom", the "Company" or the "Group")
Final audited results for the year ended 31 December 2021
Audioboom (AIM: BOOM), the leading global podcast company, is pleased to announce its final audited results for the year ended 31 December 2021.
Financial and operating highlights
· 2021 revenue of US$60.3 million, up 125% on 2020 (US$26.8 million). Year-on-year growth outpaced the predicted wider industry average growth by 108% (1)
· Maiden adjusted EBITDA( 2) profit of US$3.1 million (US$1.8 million loss), with the Company recording positive adjusted EBITDA ( 2) in every month of 2021
· Maiden annual net profit before tax of US$1.7 million (2020: US$3.3 million loss)
· Maiden total profit of US$7.0 million (2020: US$3.2 million loss), enhanced by recognition of deferred tax asset
· Average global monthly downloads for Q4 increased to 113 million, up 39% on Q4 2020 (81.7 million). Global downloads in October 2021 reached a record 115.7 million
· Average brand advertiser count for Q4 of 396, up 32% on Q4 2020 (301)
· Average global revenue per 1,000 downloads (eCPM) for Q4 increased to US$55.85, up 49% (Q4 2020: US$37.55)
· Group cash of US$3.0 million (31 December 2020: US$3.3 million)
Key commercial developments
· Continued development of our production arm, Audioboom Studios, with the commercial success of Dark Air with Terry Carnation, as well as the extension of our production partnership with Formula 1
· Enhanced our creator network through new commercial partnerships with leading podcasts, including Redhanded, The Way I Heard It with Mike Rowe, Zane & Heath Unfiltered, Dark History, Hacks on Tap, and Spitballers
· Launch of key advertising technology, including inventory creation tool, AdRip, and our global automated advertising marketplace, Showcase
Post year end highlights
· Record Q1 revenue of US$19.7 million, up 107% on Q1 2021 (US$9.5 million)
· Record Q1 adjusted EBITDA(2) profit of approximately US$0.9 million (Q1 2021: US$0.03 million)
· Average global monthly downloads increased for the ninth successive quarter to 126.2 million, up 45% on Q1 2021 (87.1 million). Global downloads in March 2022 reached a record 131.0 million
· Continued growth of Showcase, our global advertising marketplace. Revenue from advertising technology in Q1 2022 more than 151% greater than in Q1 2021, and now contributing more than 11% to Group revenue
· Strong pricing due to robust advertising demand, with an Average Unit Rate (AUR) during the quarter for our top 25 podcasts at US$14,295 vs Q1 2021's AUR of US$6,455
· Further expansion of Audioboom Studios with new title launches including National Park After Dark, Can I Get In Your Pantry?? and Devils in the Dark, which reached number 1 on the UK True Crime podcast chart and the Top 15 of Apple's overall podcast chart
· Long-term renewal of key content partnerships in our Premium Network, including Casefile True Crime, Mile Higher, Strange & Unexplained, Lights Out and The Sesh
· Launch of a new strategic partnership with leading radio and media company, NZME, to monetise Audioboom's advertising inventory in New Zealand
· To supplement available cash reserves, a £1.5 million overdraft with HSBC was implemented on 14 April 2022
· As of its trading update provided on 11 April 2022, the Company had contracted revenue in excess of US$60.5 million for 2022 through advance advertising bookings, underpinning expectations for the current financial year and higher than total revenue in 2021
1) Interactive Advertising Bureau's May 2021 Podcast Advertising Revenue Study stated that US podcast advertising revenue was expected to grow by 60% in 2021 relative to 2020
2) Earnings before interest, tax, depreciation, amortisation, share based payments, non-cash foreign exchange movements and material one-off items
Stuart Last, CEO of Audioboom, commented: "I am delighted to report on a defining year for the business which saw top-line growth of 125%, our maiden EBITDA and net profit, and the transformation of shareholder value. Our phenomenal performance has positioned us as the world's leading pure-play podcast business and increased our market-share significantly. Our innovation led to the launch of new best-in-class advertising technology tools, the scaling of our platform and new levels of success for our creator partners and advertisers.
Our ambition is to build the world's leading podcasting business, and I am delighted with the start we have made in 2022 and look forward to the future with confidence. I would like to thank our creators, clients, customers and partners, as well as our incredibly talented Audioboom team and our supportive shareholders as we look forward to another exciting and successful year."
Enquiries
|
Audioboom Group plc |
|
|
Stuart Last, Chief Executive Officer Brad Clarke, Chief Financial Officer
|
Tel: +44(0)20 3714 4285
|
|
|
|
|
finnCap Ltd (Nominated Adviser and Broker) |
|
|
Jonny Franklin-Adams/Abigail Kelly/Milesh Hindocha (Corporate Finance) Richard Chambers/Harriet Ward (ECM)
|
Tel: +44(0)20 7220 0500 |
About Audioboom
Audioboom Group plc ("Audioboom") is a global leader in podcasting - our shows are downloaded more than 126 million times each month by 34 million unique listeners around the world. Audioboom is ranked as the fourth largest podcast publisher in the US by Triton Digital.
Audioboom's ad-tech and monetisation platform underpins a scalable content business that provides commercial services for a premium network of 250 top tier podcasts, with key partners including 'Casefile True Crime' (US), 'Morbid' (US), 'True Crime Obsessed' (US), 'The Morning Toast' (US), 'No Such Thing As A Fish' (UK), and 'The Cycling Podcast' (UK).
Audioboom Studios is home to a slate of content developed and produced by Audioboom, including 'Dark Air with Terry Carnation', 'F1: Beyond The Grid', 'RELAX!', 'Covert', 'It's Happening with Snooki & Joey', 'Mafia', 'Huddled Masses' and 'What Makes A Killer'.
Audioboom operates internationally, with operations and global partnerships across North America, Europe, Asia and Australasia. The platform allows content to be distributed via Apple Podcasts, Spotify, Pandora, Amazon Music, Deezer, Google Podcasts, iHeartRadio, RadioPublic, Saavn, Stitcher, Facebook and Twitter as well as a partner's own websites and mobile apps.
For more information, visit audioboom.com.
CHAIRMAN'S STATEMENT
I am delighted to introduce these annual results which reflect upon the fantastic performance of 2021 and a very strong start to 2022.
As the Company bounced back from a somewhat Covid-constrained 2020, the strength of its business model was illustrated by 125% top-line growth (more than doubling the projected growth of the wider industry), a maiden annual profit and impressive growth across all of its KPIs and operational areas. Market expectations were regularly exceeded throughout the year.
It remains testament to the efforts of the management team and all staff that the Company's growth once again led to increased market share and further cemented its position as one of the world's largest independent podcast companies in an industry that continues its rapid maturity into mainstream media.
In his CEO Review, Stuart Last provides further detail around the Company's strategy and focus, component parts of the business, operational and financial performance, the strong start to 2022 and the outlook for the future.
I would like to take this opportunity to thank the entire Audioboom team for their continuing professionalism and commitment, and also to thank our shareholders and partners for their loyalty and vision in supporting Audioboom as it continues to grow. The Board and I look forward to the future with considerable optimism and excitement.
Michael Tobin OBE
Chairman
22 April 2022
CHIEF EXECUTIVE OFFICER'S REVIEW
Introduction
I am pleased to report on a defining year for the business which saw top-line growth of 125%, our maiden EBITDA and net profit, and the transformation of shareholder value. Our phenomenal performance has positioned us as the world's leading pure-play podcast business and increased our market-share significantly. Our innovation led to the launch of new best-in-class advertising technology tools, the scaling of our platform and new levels of success for our creator partners and advertisers.
In the first quarter of 2021 we felt the final effects of the Covid-19 pandemic, but advertisers returned to the medium quickly, driving strong demand and high pricing for our key content. At the same time we expanded our creator network significantly, with increased consumption of our shows driving us to 4th position on the Triton Digital podcast publisher ranker in the US.
During the second quarter we debuted Dark Air with Terry Carnation - our most successful original production to date - and we brought new top tier shows to the network, including Dark History, RedHanded and Zane & Heath Unfiltered.
The launch of our proprietary inventory creation tool, AdRip, in Q3 2021 had an immediate positive impact on the business. AdRip enables back catalogue content to be monetised efficiently by automating the removal of embedded premium advertising once an episode is 90 days old, and replacing it with fresh ads each time it is listened to in the future.
In the final quarter of 2021 we launched Showcase, our second advertising product, that enables brands to connect with audiences at scale using automated ad-tech to target advertising campaigns to listeners based on demographics, location, content types and keywords.
Momentum has continued into 2022, with our recent trading update highlighting strong revenue and EBITDA performance during Q1. I am pleased to provide a further update on the current year later in this report.
Strategy
Audioboom powers podcasting. Our platform connects the world's best podcast content with advertisers, and then distributes it to audiences globally. We are an indispensable component in podcasting's 3-sided marketplace of audience, advertiser and creator. Each is important to the successful growth of the medium individually - but they require Audioboom at the centre to connect them all, to ensure they operate effectively and to extract maximum value for all.
The Audioboom platform is fully scalable. Today it handles more than 8,000 content channels, 3,000+ advertisers, and receives more than 126 million episode downloads monthly by a unique audience of more than 34 million. With minimal additional investment, the platform could handle exponentially more podcast channels, advertising campaigns and listeners.
Audioboom's growth strategy continues to focus on the expansion of content within the platform, which happens in three ways:
1. content acquisition - securing exclusive commercial rights to monetise and distribute podcasts from leading creators;
2. content creation - developing and/or producing content through our Audioboom Studios production arm;
3. content access - utilising our Sonic Influencer Marketing unit to access advertising inventory outside of Audioboom's own network.
Commencing in 2017 Audioboom monetised this content through the development of a Premium advertising offering in which leading podcast hosts endorse products and brands to their engaged audience natively within their shows. These ads drive actions (in the form of attributable product sales) or awareness. This advertising product is highly effective - the combination of trusted influencers, engaged audiences, Audioboom's best-practice coaching for ad execution, and third-party attribution data - and enables campaigns to be sold at a premium price point.
In 2021 Audioboom added a secondary advertising offering through Showcase, an automated tech-driven marketplace. Showcase, which launched formally in November 2021 but was operational across the year, is focused on optimising revenue by monetising back catalogue content as well as the long-tail of smaller podcasts on the platform via Dynamic Ad Insertion (DAI). Our ad tech consolidates this large volume of advertising inventory and exposes it to a portfolio of demand channels which include international monetisation partners, a new self-serve campaign booking platform, and a programmatic ecosystem of more than 25 established demand side platforms (DSPs) used by the biggest advertising buyers in the world. Showcase offers advertisers the ability to target advertising to audience location, content genres, audience demographics or keywords.
To support the launch of Showcase, we developed a proprietary inventory creation tool called AdRip. This tool automates the removal of native Premium ad units once an episode is 90 days old, and replaces them with markers that enable Showcase to dynamically insert new, fresh advertising into the episode every time it is listened to in the future. Back catalogue content (episodes that are more than 90 days old) makes up around 50% of our consumption - approximately 58 million downloads per month. This vast catalogue will continue to grow, and can now be re-monetised efficiently.
In December 2021, Showcase achieved a key milestone, contributing revenue of more than US$1 million on a monthly basis to the business for the first time. We will continue to expand Showcase during 2022 by adding more demand channels to increase monetisation performance, including - as recently announced - a strategic partnership with leading radio and digital media company, NZME, who will monetise Audioboom's advertising inventory in New Zealand via our Showcase platform. On the supply side, we expect to expose more than 4 billion available impressions to advertisers in Showcase during 2022.
The result of this development work is two clear products for advertisers: a Premium offering, focused on the strongest performing 250 shows in our network which enables brands to utilise the powerful influence of the show's host to maximise impact of the advertising; and an efficient automated offering that offers advertisers scale and customisable audience targeting options.
Another area of focus in the latter part of 2021 was the expansion of our production business. In October we consolidated all of our creative and production services under the Audioboom Studios brand. This includes: our owned and operated original concepts, in which we fully develop and produce new shows with full intellectual property (IP) control; our co-productions, such as our work with Formula 1 on the official F1 podcast slate; production services including recording, engineering and post-production; and branded content, with shows and feature material being developed in partnership with our brand advertisers.
Audioboom Studios is strategically valuable to the business, delivering IP ownership and the strongest gross margin of any of our advertising-based revenue lines. Audioboom Studios content is our most premium product - its eCPM (revenue per 1000 downloads) is significantly higher than our creator network. An additional benefit is the direct audience connection that builds Audioboom as a creative production brand.
The expansion of Audioboom Studios is a key area of investment for us. In Q4 2021 we began building a production team in the UK, with the first UK-focused podcast launched in February this year. Devils in the Dark was an immediate hit, reaching number 1 on the UK's True Crime chart and the top 15 of Apple's overall podcast chart.
Overview of the Market
Audioboom's position as the world's leading pure-play podcast publisher is highlighted by three trusted measurement services - Triton Digital's Podcast Reports, Podtrac's Podcast Ranker, and Edison's Top Podcast Networks chart:
· In Triton Digital's US ranker Audioboom is the 4th largest publisher in terms of unique audience reach, and the 5th largest in terms of consumption (downloads);
· Audioboom also ranks as the 3rd largest publisher in both Triton's New Zealand and Australian reports;
· Audioboom would rank as the 3rd largest podcast publisher if the Company took part in Podtrac's industry ranker, on both metrics - US unique audience and global monthly downloads;
· In Edison Research's list of top podcast networks, Audioboom ranks as 6th for 2021 based on interviews with weekly podcast listeners.
On each measurement service Audioboom ranks as the highest independent podcast publisher, as well as the highest ranking pure-play podcast publisher.
The market continued to grow strongly in 2021. The Interactive Advertising Bureau's most recent revenue study, compiled by PwC, projects the US market to have reached $1.3 billion in 2021 - annual growth of 60%. Audioboom outperformed this growth significantly with our 125% revenue growth in 2021, outpacing the wider industry projections by 108%.
Audioboom has outperformed the industry's growth in each of the past four years - our average annual outperformance of the industry is 70%.
The clearest and most significant result of this performance is the growth of our market share over this four-year period. In 2017 our market share was 1.9%, growing to 4.5% in 2021.
The podcast market is expected to continue its expansion, with projected total growth of 62% over the next two years - Audioboom is well positioned to take maximum advantage of these industry tailwinds, and we expect to continue to grow at a faster rate than the wider market, further increasing our market share.
2021 saw more consolidation across the industry, although transactions in the past year were at lower price points than previous years and more focused on technology and data rather than content. Notable corporate activity in 2021 and Q1 2022 includes:
· Spotify's acquisition of audio tech platform Whooska, and data providers Chartable and Podsights;
· Amazon's acquisition of hosting platform Art19 and the finalisation of their acquisition of production house Wondery;
· iHeartMedia's acquisitions of ad tech and data business Triton Digital;
· Global Media's acquisition of podcast hosting platform Captivate; and
· Acast's IPO on Nasdaq North.
Audioboom's business model, structure and financial performance provides strong optionality on our future path. Our global scale and ownership of technology and content production will make us an attractive proposition for major media or technology businesses looking to fast-track a leadership position in podcasting. Alternatively, our profitable business model sees us funded for continued growth and a strong future as the leading independent player in the space.
Operational Review
I am pleased to report a strong year of operational progress across all areas of the business.
KPIs
1. Brand advertiser count of 396 in Q4 2021, up 32% on Q4 2020 (301)
Brand advertiser count measures Audioboom's active customers for our Premium advertising product. Key drivers of this KPI growth include: addition of new content genres to widen brand appeal; overall market growth and expansion of brands advertising in podcasts; optimal campaign performance with agency campaigns resulting in new agency clients being added.
2. Revenue per 1,000 downloads (eCPM) for Q4 2021 increased 49% to US$55.85 (Q4 2020: US$37.55)
e-CPM is a measure of the value we extract from every 1,000 downloads on the platform, and how we optimise the supply of available advertising inventory. Growth drivers for this KPI include: increasing fill rates; increasing pricing; expansion of Showcase to monetise back-catalogue content.
3. Global Monthly Downloads for Q4 2021 up 39% to 113 million (81.7 million in Q4 2020)
Global Monthly Downloads is an industry standard metric. It is a measure for the scale of our platform, and enables accurate comparisons to be drawn with our competitors. This data point is measured using the Interactive Advertising Bureau's most recent Podcast Measurement Standard, and is verified by Triton Digital - a leader in audio measurement.
Content Acquisition
Audioboom's creator network saw strong growth in 2021 as our dual advertising model delivered significant value to our content partners. Opportunities to develop new partnerships with top tier podcast creators gathered pace, driven by our strong relationships with Hollywood talent agencies and management companies.
Key new partnerships formed in 2021 included The Fantasy Footballers, The Way I Heard with Mike Rowe, RedHanded, Dark History, and Unfiltered with Zane & Heath. We also renewed major creator partnerships in 2021 and post period with True Crime Obsessed, Obsessed with Disappeared, Casefile, Mile Higher, The Sesh and Lights Out.
Content Creation
In 2021 we launched our biggest commercial hit to date from our original content and production arm - Dark Air with Terry Carnation, a show written and starring Rainn Wilson (from the US version of "The Office").
Earlier in the year we also announced the deepening of our production partnership with Formula 1, extending our role as their official podcast partner through to 2023. As well as producing their flagship show F1: Beyond The Grid, Audioboom now produces a second podcast for Formula 1, F1 Nation.
In the first half of 2021 investment into content creation was limited as we focused on ensuring the business reached its maiden profitability goal. As we moved into the second half of the year, with full confidence of achieving that goal, we began to invest into our production arm, relaunching the unit as Audioboom Studios, and expanding our development team with a particular focus on the UK market. This investment in H2 2021 has led to the successful launch of three new projects from Audioboom Studios in the first quarter of 2022 - National Park After Dark, Can I Get in Your Pantry?, and Devils in the Dark.
Audioboom Studios' revenue in 2021 was US$2.4 million (growth of 118% over 2020's US$1.1 million), with a gross margin of 40%.
Content Access
Sonic Influencer Marketing, our platform that enables brands to purchase advertising inventory across the entire podcast landscape, made significant progress in 2021, delivering revenue to the Group of US$11 million (116% growth over 2020's US$5.1 million).
In early 2021 we launched a new Salesforce-based inventory management platform and a Tableau-based data platform for Sonic. These platforms power new levels of intelligence around audiences, pricing and campaign performance, enabling Sonic to scale efficiently.
One key metric for Sonic is monthly revenue per client, which highlights both the commercial growth of the unit, and also its ability to scale effectively. In Q4 2021 this figure reached $63,184 vs $30,224 in the same period in 2020.
Sonic has experienced a strong start to 2022, having booked more advertising revenue for the year by the end of Q1, than they achieved in the entirety 2021.
Financial Review
In 2021, the Company recorded revenue growth that more than doubled the expected wider podcast industry growth. In tandem with this, we had to guide the market to increase their expectations of our performance over the year on seven occasions. We continued to take market share versus our competitors and the Company was profitable in every month of 2021. We continued to build on our strong operation and financial foundations and did so with an average headcount of 37 staff, the same as in the prior year, continuing to be an extremely efficient and focused organisation.
Revenue increased by 125% to US$60.3 million for 2021 from US$26.8 million in 2020. In 2021, 96% of Group revenue was generated in the United States - which is the largest and most developed market for podcasting, up from 94% in 2020 due to the continued growth in that territory - including the exceptional growth of Marketplace revenue in 2021, as well as the third full year of trading at Sonic Influencer Marketing.
Group gross margin decreased slightly to 22% in 2021 (2021: 23%) and Audioboom continues to have a mix of revenue streams, contributing different gross margins. Direct revenue, where advertising is placed on third party podcasts via the Audioboom sales teams, yielded a 22% gross margin in 2021. Marketplace contributed a 26% gross margin in 2021. Audioboom Studios contributed a 36% gross margin in 2021 and, due to the higher associated gross margin, is a key area of focus going forward for the Company. Sonic Influencer Marketing contributes a gross margin of 12% and therefore, despite the continued growth of this business, it does impact the overall Group gross margin.
The Company continued to control overheads and we have aligned staff globally to ensure that every employee contributes to the growth of the business. We continue to monitor the cost base closely and align it to the Company's operational demands and this will continue into 2022 as we increase focus on areas that we believe can drive further revenue growth, in Audioboom Studios, and further increased Marketplace monetisation.
The Company's overall trading for the period, as measured by adjusted EBITDA (earnings before interest, tax, depreciation, amortisation, share based payments, non-cash foreign exchange movements and before exceptional items) recorded a maiden profit of US$3.1 million, significantly improved from the US$1.7 million loss in 2020.
The total profit before tax for the year demonstrated a maiden profit of US$1.7 million, again significantly improved from the US$3.3 million loss in 2020. The total maiden net profit of US$7.0 million (2020: US$3.2 million loss) was due to the recognition of a US$5.3 million (2020: US$nil) deferred tax asset in relation to unutilised tax losses of US$22.5 million (2020: US$nil) which can be utilised to offset tax arising on future taxable profits. The cash outflow from operating activities fell to US$0.8 million from US$3.3 million in 2020, a 76% reduction.
The working capital cycle of the Company is now established in terms of processes built and refined over the last four years. Debtor collections continue to be good while we also continue to reduce average payable days. The implementation of the bespoke podcast advertising booking system in 2018, continued improved cash collection and sustained revenue growth has led to 2021 debtor days of 94 being comparable to the 87 reported in 2020. It should be noted that a record revenue quarter in Q4 of US$20.7 million contributed to the year-end debtor day total being above the 2020 total and the Company continues to incur very minimal bad debt write offs. Average payable days reduced from 65 days in 2020 to 55 days in 2021.
Post period end, the US$4 million loan facility with SPV Investments Limited ended in February 2022, and the Company has secured a £1.5 million overdraft with HSBC which will help towards any working capital requirements. The US$4 million content funding facility from SPV Investments Limited is due to expire in June 2022.
The financial results shown above illustrate that the drive to increase revenues whilst maintaining strong cost management is working and should deliver significant shareholder value as the Company continues to take market share in the growing podcast industry.
Trading Update and Outlook
2022 is set to be another successful year for Audioboom with continued revenue expansion and growth in profitability. Progress in the first quarter was strong - as recently announced, we achieved Q1 revenue of US$19.7 million, year-on-year revenue growth of 107% and adjusted EBITDA profit of US$0.9 million. Demand for our advertising inventory is high, with more than US$60.5 million of advertising bookings already contracted for 2022 - more than our total revenue for 2021. 2022 has started well in relation to renewing key content partnerships in our Premium Network, including new deals with Casefile True Crime, Mile Higher, Strange & Unexplained, Lights Out and The Sesh. We are working to renew further key content partnerships in the coming months, maintaining the financial discipline that is embedded in the contract renewal process. Should these renewals be successful, we will update the market expectations for 2022 at the appropriate time.
Showcase, our tech-based advertising product, is continuing to expand faster than other areas of the business with Q1 revenue 150% greater than the same period in 2021. During the first quarter Showcase contributed more than 11% of the Group's revenue. We also added NZME - a leading radio and media company in New Zealand - as a new monetisation partner for Showcase. NZME will deliver revenue against Audioboom's consumption in New Zealand. During Q1 2022, we made more than 1 billion impressions available to buyers within Showcase, delivering true global scale.
Our ambition is to build the world's leading podcasting business, and I am delighted with the start we have made in 2022, and look forward to the future with confidence. I would like to thank our creators, clients, customers and partners, as well as our incredibly talented Audioboom team and our supportive shareholders as we look forward to another exciting and successful year.
Stuart Last
Chief Executive Officer
22 April 2022
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2021
| 2021 | 2020 | |
Notes | US$'000 | US$'000 | |
|
|
| |
Continuing operations |
|
|
|
|
|
| |
Revenue | 2 | 60,317 | 26,782 |
Cost of sales |
| (47,066) | (20,581) |
|
| ----------------- | ----------------- |
Gross profit |
| 13,251 | 6,201 |
|
|
| |
Administrative expenses |
| (11,452) | (9,288) |
|
| ----------------- | ----------------- |
Adjusted operating profit / (loss) |
| 3,133 | (1,720) |
|
|
| |
- Share based payments | 17 | (1,174) | (715) |
- Depreciation |
| (55) | (60) |
- Corporate transaction costs |
| - | (167) |
- Depreciation - leases | 14 | (252) | (319) |
- Operating foreign exchange gain / (loss) |
| 163 | (106) |
- Restructuring costs |
| (16) | - |
| ---------------- | ---------------- | |
|
|
| |
Operating profit / (loss) | 3 | 1,799 | (3,087) |
|
|
| |
Finance costs | 6 | (87) | (210) |
| ---------------- | ---------------- | |
Profit / (loss) before tax |
| 1,712 | (3,297) |
|
|
| |
Taxation on continuing operations | 7 | 5,275 | - |
| ---------------- | ---------------- | |
Profit / (loss) for the financial period attributable to equity holders of the parent |
| 6,987 | (3,297) |
| ---------------- | ---------------- | |
Other comprehensive profit / (loss) |
|
|
|
|
|
| |
Foreign currency translation difference |
| 6 | 61 |
| ---------------- | ---------------- | |
Total comprehensive profit / (loss) for the period |
| 6,993 | (3,236) |
| ======== | ======== | |
|
|
| |
Profit / (loss) per share |
|
|
|
from continuing operations |
|
|
|
Diluted EPS | 8 | 40 cents | (23) cents |
Basic EPS | 8 | 45 cents | (23) cents |
| ============ | ============ |
All results for both periods are derived from continuing operations.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2021
| As at 31 December 2021 | As at 31 December 2020 | |||
Notes |
| US$'000 |
| US$'000 | |
|
|
|
|
| |
ASSETS |
|
|
|
|
|
|
|
|
|
| |
Non-current assets |
|
|
|
|
|
Property, plant and equipment | 9 | 77 |
| 90 |
|
Right of use asset | 14 | 576 |
| 822 |
|
Deferred tax asset | 7 | 4,650 |
| - |
|
| --------------- |
| --------------- |
| |
|
| 5,303 |
| 912 | |
Current assets |
|
|
|
|
|
|
|
|
|
| |
Trade and other receivables | 11 | 18,147 |
| 8,028 |
|
Cash and cash equivalents |
| 2,969 |
| 3,257 |
|
Deferred tax asset | 7 | 625 |
| - |
|
| --------------- |
| --------------- |
| |
|
| 21,741 |
| 11,285 | |
|
| ------------------- |
| ------------------- | |
TOTAL ASSETS |
|
| 27,044 |
| 12,197 |
|
| ------------------- |
| ------------------- | |
Current liabilities |
|
|
|
|
|
Trade and other payables | 12 |
| (12,167) |
| (5,415) |
Lease liability | 14 |
| (269) |
| (252) |
|
| ------------------- |
| ------------------- | |
NET CURRENT ASSETS |
|
| 9,305 |
| 5,618 |
|
| ------------------- |
| ------------------- | |
Non-current liabilities |
|
|
|
|
|
Lease liability | 14 |
| (358) |
| (636) |
|
| ------------------- |
| ------------------- | |
NET ASSETS |
|
| 14,250 |
| 5,894 |
|
| ========= |
| ========= | |
|
|
|
|
| |
EQUITY |
|
|
|
|
|
|
|
|
|
| |
Share capital | 13 |
| - |
| - |
Share premium | 13 |
| 61,011 |
| 60,822 |
Issue cost reserve |
|
| (2,048) |
| (2,048) |
Foreign exchange translation reserve |
|
| (377) |
| (276) |
Reverse acquisition reserve |
|
| (3,380) |
| (3,380) |
Retained earnings |
|
| (40,956) |
| (49,224) |
|
| ---------------- |
| ---------------- | |
TOTAL EQUITY |
|
| 14,250 |
| 5,894 |
|
| ======== |
| ======== | |
|
|
|
|
| |
The accompanying accounting policies and notes form an integral part of these financial statements.
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2021
| 2021 | 2020 | |
US$'000 | US$'000 | ||
|
|
| |
Profit / (loss) from continuing operations |
| 6,987 | (3,297) |
|
| ---------------- | ---------------- |
Profit / (loss) for the period |
| 6,987 | (3,297) |
|
|
|
|
Adjustments for: |
|
|
|
Deferred tax credit |
| (5,275) | - |
Interest payable |
| 87 | 210 |
Depreciation of fixed assets |
| 55 | 60 |
Share based payments |
| 1,174 | 715 |
Increase in trade and other receivables |
| (10,120) | (906) |
Increase in trade and other payables |
| 6,712 | 301 |
Decrease in lease liability |
| (348) | (411) |
Foreign exchange (loss) / gain |
| (80) | 76 |
| ---------------- | ---------------- | |
Cash flows from operating activities |
| (808) | (3,252) |
|
|
| |
Taxation received |
| - | 28 |
| ---------------- | ---------------- | |
Net cash used in operating activities |
| (808) | (3,224) |
| ---------------- | ---------------- | |
Investing activities |
|
|
|
Purchase of property, plant and equipment |
| (43) | (10) |
| ---------------- | ---------------- | |
Net cash used in investing activities |
| (43) | (10) |
| ---------------- | ---------------- | |
Financing activities |
|
|
|
SPV loan interest and fees | 6 | - | (113) |
Proceeds from SPV loan | 6 | - | 700 |
Repayment of SPV loan | 6 | - | (700) |
Proceeds from HSBC loan | 12 | 374 | - |
Proceeds from issue of ordinary share capital (net of issue costs) |
| 189 | 4,612 |
|
| ---------------- | ---------------- |
Net cash generated from financing activities |
| 563 | 4,499 |
| ======== | ======== | |
|
|
| |
Net (decrease) / increase in cash and cash equivalents |
| (288) | 1,265 |
| ---------------- | ---------------- | |
Cash and cash equivalents at beginning of period |
| 3,257 | 1,992 |
| ---------------- | ---------------- | |
Cash and cash equivalents at end of period |
| 2,969 | 3,257 |
| ======== | ======== |
The Group had no borrowings at the end of either financial period and therefore no reconciliation of net debt has been provided.
AUDIOBOOM GROUP PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
|
| Share capital | Share premium | Issue cost reserve | Reverse acquisition reserve | Foreign exchange translation reserve | Retained earnings | Total equity |
|
| US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 |
|
| ------------------- | ------------------- | ------------------- | ------------------- | ------------------- | ------------------- | ------------------- |
At 31 December 2019 |
| - | 56,210 | (2,048) | (3,380) | (337) | (46,783) | 3,662 |
|
| ------------------- | ------------------- | ------------------- | ------------------- | ------------------- | ------------------- | ------------------- |
Loss for the period |
| - | - | - | - | - | (3,297) | (3,297) |
Issue of shares |
| - | 4,612 | - | - | - | - | 4,612 |
Equity-settled share-based payments |
|
- | - | - | - | - | 856 | 856 |
Foreign exchange gain on translation of overseas subsidiaries |
| - | - | - | - | 61 | - | 61 |
|
| ------------------- | ------------------- | ------------------- | ------------------- | ------------------- | ------------------- | ------------------- |
At 31 December 2020 |
| - | 60,822 | (2,048) | (3,380) | (276) | (49,224) | 5,894 |
|
| ------------------- | ------------------- | ------------------- | ------------------- | ------------------- | ------------------- | ------------------- |
Profit for the period |
| - | - | - | - | - | 6,987 | 6,987 |
Issue of shares |
| - | 189 | - | - | - | - | 189 |
Equity-settled share-based payments |
|
- | - | - | - | - | 1,174 | 1,174 |
Foreign exchange gain on translation of overseas subsidiaries |
| - | - | - | - | 6 | - | 6 |
|
| ------------------- | ------------------- | ------------------- | ------------------- | ------------------- | ------------------- | ------------------- |
At 31 December 2021 |
| - | 61,011 | (2,048) | (3,380) | (270) | (41,063) | 14,250 |
|
| ------------------- | ------------------- | ------------------- | ------------------- | ------------------- | ------------------- | ------------------- |
Share premium
Share premium represents the consideration paid for shares in excess of par value (nil), less directly attributable costs.
Issue cost reserve
The issue cost reserve arose from expenses incurred on share issues.
Reverse acquisition reserve
The reverse acquisition reserve relates to the reverse acquisition of Audioboom Limited by Audioboom Group plc on 20 May 2014.
Foreign exchange translation reserve
The foreign exchange translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign operations.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
1. ACCOUNTING POLICIES
General information and basis of preparation
Audioboom Group plc is incorporated in Jersey under the Companies (Jersey) Law 1991. The Company's shares are traded on AIM, the market of that name, operated by the London Stock ExchangeThe Company is required under rule 19 of the AIM Rules for Companies to provide shareholders with audited consolidated financial statements.
The Group prepares its consolidated financial statements in accordance with International Accounting Standards ('IAS') and International Financial Reporting Standards ('IFRS') as adopted by the EU. The financial statements have been prepared on the historical cost basis. The consolidated financial statements have been prepared in accordance with and in compliance with the Companies (Jersey) Law 1991, and were approved by the Board on 22 April 2022
These results are audited, however the financial information set out in this announcement does not constitute the Group's statutory accounts for the period ended 31 December 2020, but is derived from the 2020 Annual Report & Accounts. The auditors have reported on those accounts; their report was unqualified.
The preparation of financial statements in accordance with IFRS requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Although these estimates are based on management's best knowledge of current events and actions, actual results may ultimately differ from those estimates.
The accounting policies used in completing this financial information have been consistently applied in all periods shown.
New standards adopted by the Group
The Group has not adopted any new standards for the period commencing 1 January 2021.
Standards, amendments and interpretations of published standards not yet effective
Certain standards, amendments to, and interpretations of, published standards have been published that are mandatory for the Group's accounting years beginning on or after 1 January 2022 or later years and which the Group has decided not to adopt early:
· Onerous Contracts - Cost of Fulfilling a Contract (Amendments to IAS 37) (effective for periods commencing on or after 1 January 2022);
· IFRS 17: Insurance Contracts (effective for periods commencing on or after 1 January 2023);
· Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16) (effective for periods commencing on or after 1 January 2022);
· Annual Improvements to IFRS Standards 2018-2020 (Amendments to IFRS 1, IFRS 9, IFRS 16 and IAS 41) (effective for periods commencing on or after 1 January 2022); and
· References to Conceptual Framework (Amendments to IFRS 3) (effective for periods commencing on or after 1 January 2022).
None of the above listed changes are anticipated to have a material impact on the Group's financial statements.
ACCOUNTING POLICIES (continued)
Key accounting policies
Going concern
The financial statements have been prepared on the going concern basis, which assumes that the Group will have sufficient funds to continue in operational existence for at least twelve months from the date of approval of the financial statements. The Group ended the year with access to US$6.3 million of capital, being US$3.0 million of cash and US$3.3 million remaining available to draw down under the loan facility arrangement with SPV Investments Limited announced in February 2020 subsequently ended in February 2022, and in its place the Company secured a £1.5 million overdraft facility with HSBC on 14 April 2022. The Board's forecasts for the Group, including due consideration of the business forecasting continuing positive EBITDA in 2022, projected increase in revenues and decreasing cash-burn of the Group and taking account of reasonable possible adverse changes in trading performance including changes outside of expected trading performance, indicate that the Group will have sufficient cash available to continue in operational existence for the next 12 months from the date of approval of the financial statements and beyond. Based on the Board's forecasts, the Group considers that it will not require additional funding for the foreseeable future for the purposes of meeting its liabilities as and when they fall due. The Board believes that the Group is well placed to manage its business risks, and longer-term strategic objectives, successfully.
Management has carried out sensitivity analyses of the Group's cash flow models to assess the impact of a range of possible outcomes, including lower than anticipated revenues, and the mitigations that the Group has available to it, including a reduction in overhead costs, active working capital management and the availability of finance from HSBC. Accordingly, the Directors are satisfied that the Group will continue to be able to meet its ongoing liabilities as and when they fall due in reasonably foreseeable circumstances.
Therefore, the Directors consider the going concern basis of preparation of these financial statements appropriate.
Revenue
Revenue represents amounts receivable for services provided in the normal course of business, and excludes intra-group sales, Value Added Tax and trade discounts.
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. Revenue comprises:
l Sale of advertising: the value of goods and services is recognised on broadcast of the podcast
l Sponsorship income: the value of goods and services is recognised over the time to which it relates
l Sale of subscriptions: the value of goods and services is recognised across the period of subscription
The Directors have considered the requirements of IFRS 15 in respect of multiple performance obligations within one contract and have not identified any such instances. There are no contracts which incorporate variable or contingent consideration.
The Group entities, Audioboom Limited and Sonic Influencer Marketing, are both considered to be the principal entity in terms of revenue recognition. The entities set or communicate the advertising pricing that is required to advertise on represented podcast content, contracts directly with the brand or agency to secure the advertising and confirms the date at which that advertising will be allocated. The entities are also responsible for invoicing and collecting payment from customers who have booked advertising slots and furthermore bear inventory risk associated with advertising slots acquired but not sold.
Content partner minimum revenue guarantees
In order to attract and retain leading podcast partners, the Group offers certain partners minimum revenue guarantees ("MG") over the life of the agreement between the parties. The MG offers guaranteed revenue over the life of the agreement in the form of monthly payments and/or an upfront advance payment, which is then recouped over the life of the agreement, thus reducing future expected payments proportionally. The MG's provided secure the right of access to future content and therefore the expenditure in relation to these guarantees is recognised over the term of the contract, as this is the period over which the content providers' obligations are discharged to the Group and accordingly the basis
ACCOUNTING POLICIES (continued)
on which the Group consumes the benefit of these obligations. In accordance with IFRS 9, no liability is recognised at the date of the contract as the MG relates to future performance obligations of the content provider.
Foreign currency
For the purpose of the consolidated financial statements, the results and financial position of each Group company are expressed in US Dollars, which is the presentational currency of the consolidated financial statements. The majority of trade in the Company is in the USA and therefore the Company's functional currency is US Dollars.
In preparing the financial statements of the individual companies, transactions in currencies other than the entity's functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates of the transactions. At each balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are included in profit or loss for the period.
For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group's foreign operations are translated at exchange rates prevailing on the balance sheet date. Income and expense items are translated at the average monthly rate of exchange ruling at the date of the transaction, unless exchange rates fluctuate significantly during that month, in which case the exchange rates at the date of the transactions are used.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses, if any.
Depreciation is calculated under the straight-line method to write off the depreciable amount of the assets over their estimated useful lives. Depreciation of an asset does not cease when the asset becomes idle or is retired from active use unless the asset is fully depreciated. The principal annual rates used for this purpose are between three and five years.
The depreciation method, useful lives and residual values are reviewed, and adjusted if appropriate, at the end of each reporting period to ensure that the amounts, method and years of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of the property, plant and equipment.
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when the cost is incurred, and it is probable that the future economic benefits associated with the asset will flow to the Group and the cost of the asset can be measured reliably. The carrying amount of parts that are replaced is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred. Costs also comprise the initial estimate of dismantling and removing the asset and restoring the site on which it is located for which the Group are obligated to incur when the asset is acquired, if applicable.
Leases
Leases of property for periods longer than one year are capitalised at the fair value of the leased property (disclosed as a right of use asset on the face of the statement of financial position) with the corresponding rental obligations, net of finance charges, included in current and non-current liabilities. The fair value of the lease asset and corresponding liability is calculated as the present value of the minimum value of lease payments for which the Group will become liable, discounted at a rate considered appropriate.
Lease rental payments are split between a reduction in the lease liability and finance cost, with depreciation charges of the right of use asset over its useful economic life recognised as an expense in the Group's income statement.
Payments made under operating leases, where the risks and rewards are not transferred to the Group, are recognised as an expense in the income statement.
ACCOUNTING POLICIES (continued)
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits and other short-term, highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.
Basis of consolidation
The consolidated financial statements consolidate the financial statements of Audioboom Group plc and all its subsidiary undertakings up to 31 December 2021, with comparative information presented for the year ended 31 December 2020. No profit and loss account is presented for Audioboom 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. Audioboom 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 Audioboom Group plc.
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
Share based payments
Where share options are awarded to employees, the fair value of the options at the date of grant is charged to the statement of comprehensive income on a straight-line basis over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of options expected to vest at each statement of financial position date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. The cumulative expense is not adjusted for failure to achieve a market vesting condition.
Warrants
Warrants issued to Directors, employees and third-party suppliers are measured at the fair value of the service provided with reference to comparable cash settled transactions or, where the value of the services provided is uncertain, with reference to an appropriate valuation methodology. Warrants are ascribed a value at the date of grant, with this value recognised as an expense in the statement of comprehensive income over the relevant vesting period.
Current and deferred taxation
Current tax is the expected tax payable on taxable income for the period, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustments to tax payable in respect of previous periods.
Deferred tax is the tax expected to be payable or recoverable 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 profits ('temporary differences') and is accounted for using the balance sheet liability method.
Deferred tax liabilities are generally recognised for all taxable temporary differences.
Deferred tax assets are generally recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Where there are deductible temporary differences arising in subsidiaries, deferred tax assets are recognised only where it is probable that they will reverse in the foreseeable future and taxable profits will be available against which the temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient tax profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited to the statement of income.
ACCOUNTING POLICIES (continued)
Financial Instruments
Financial assets
Trade receivables and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivable financial assets, using the effective interest method less impairment. Interest is recognised by applying the effective interest method, except for short-term receivables when the recognition of interest would be immaterial.
Financial liabilities
All financial liabilities are initially measured at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method, other than those categorised as fair value through profit or loss. Financial liabilities are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.
Equity instruments
Instruments classified as equity are measured at cost and are not remeasured subsequently.
Critical accounting judgements and key areas of estimation uncertainty
Share based compensation
The Group issues equity settled share based payments to certain Directors and employees, which have included grants of options in the current period. Equity settled share based payments are measured at fair value at the date of grant, with the charge being recognised within the statement of comprehensive income over the period of service to which the grant relates.
The fair value of share options is measured using a Black-Scholes framework. The Directors have used judgement in the calculation of the fair values of the share based compensation which has been granted during the period, and different assumptions in the model would change the financial result of the business.
Warrants
The Group issues warrants to certain Directors and third parties. Warrants are measured at the fair value of the service provided with reference to comparable cash settled transactions or appropriate valuation methodologies at the date of grant, with the charge being recognised within the statement of comprehensive income over the period of service to which the grant relates.
IFRS 16: Leases
The Group recognises lease liabilities at the present value of future cash flows. The determination of present value involves judgements and estimates, in particular in relation to the discount factor to be applied to those cash flows. In determining an appropriate discount factor the Directors considered a range of factors including the Group's cost of capital together with the interest rate charged on the Group's external debt facilities. Having considered these factors the Directors have assessed that 8% is an appropriate discount factor to determine the value of the Group's lease liabilities.
Recognition and measurement of deferred tax assets
The Group recognises deferred tax assets in relation to unutilised tax losses which can be utilised to offset tax arising on future taxable profits. Utilisation of these tax losses is dependent on the timing and extent of future taxable profits of the Group. Therefore the recognition and measurement of deferred tax assets is based on the judgement of the Directors as to this profitability and represents an area of material estimation uncertainty.
2. | REVENUE |
|
| 2021 | 2020 |
|
| US$'000 | US$'000 | ||
|
|
|
| ||
Subscription |
|
| 504 | 463 | |
Advertising |
|
| 59,813 | 26,319 | |
|
| -------------- | -------------- | ||
|
| 60,317 | 26,782 | ||
|
| ======= | ======= |
The Directors consider the Group to operate within one operating segment, content related revenue, and consequently expenditure and balance sheet analysis is not presented between subscription and advertising services.
Geographical information
The Group's operations are principally located in the UK and the USA. The main assets of the Group, cash and cash equivalents, are held in the UK.
The Group's revenue from external customers by geographical location is detailed below:
|
|
| 2021 | 2020 | |
|
| US$'000 | US$'000 | ||
|
|
|
| ||
United Kingdom |
|
| 2,536 | 1,638 | |
Rest of the World |
|
| - | 36 | |
USA |
|
| 57,781 | 25,108 | |
|
| -------------- | -------------- | ||
|
| 60,317 | 26,782 | ||
|
| ======= | ======= |
The Group invoiced 35% of its income to three customers who represented more than 10% of the reported revenues.
The Group currently has two material geographic revenue regions, however, as the Group's controlling operations are primarily based in the UK, there is no separation of income, expenditure and sections of the balance sheet for the purposes of segmental reporting.
3. | OPERATING PROFIT / (LOSS) |
|
| 2021 | 2020 |
|
| US$'000 | US$'000 | ||
Operating profit / (loss) for the period has been arrived at after charging the following: |
|
| |||
|
|
|
| ||
Depreciation of property, plant & equipment |
|
| 55 | 60 | |
Operating foreign exchange gain / (loss) |
|
| 163 | (106) | |
Staff costs (refer to note 5 for detail) |
|
| 7,599 | 5,781 | |
|
| ======= | ======= | ||
4. | AUDITOR'S REMUNERATION |
|
| 2021 | 2020 |
|
| US$'000 | US$'000 | ||
Audit services |
|
|
|
| |
Fees for the audit of the consolidated annual financial statements and the audit of the Company's subsidiaries pursuant to legislation | 89 | 74 | |||
|
|
| -------------- | -------------- | |
|
|
| 89 | 74 | |
|
| ======= | ======= | ||
5. | STAFF COSTS |
|
| 2021 | 2020 |
|
| Number | Number | ||
|
|
|
| ||
Average number of production, editorial and sales staff | 29 | 31 | |||
Average number of management and administrative staff | 8 | 6 | |||
|
|
| -------------- | --------------- | |
|
|
| 37 | 37 | |
|
| ======= | ======= | ||
|
|
|
| ||
|
| US$'000 | US$'000 | ||
|
|
|
| ||
Wages and salaries | 5,900 | 4,613 | |||
Social security costs | 419 | 362 | |||
Pension costs (defined contribution scheme) | 290 | 206 | |||
Share based payments | 990 | 600 | |||
|
|
| -------------- | --------------- | |
|
|
| 7,599 | 5,781 | |
|
| ======= | ======= | ||
6. | FINANCE COSTS |
|
| 2021 | 2020 |
|
| US$'000 | US$'000 | ||
|
|
|
| ||
Depreciation - lease interest (see note 14) | 87 | 97 | |||
SPV loan interest and arrangement fee | - | 113 | |||
|
|
| ------------ | ------------- | |
|
|
| 87 | 210 | |
|
| ======= | ======= | ||
On 7 February 2020, the Company announced that it had entered into a two-year US$4 million secured loan facility arrangement (the "Facility") with SPV Investments Limited. USS$0.7 million of the Facility was drawn down, and subsequently repaid in November 2020. As at 31 December 2021, US$3.3 million of the non-revolving loan facility remained undrawn and the Facility ended post period end. In the prior year, the Facility attracted an arrangement fee of US$80,000 and the Company incurred 8% interest annualised on amounts drawn (US$33,000). The Company has a £1.5 million overdraft facility with HSBC and this was not utilised as at the date of this report (see note 20).
7. TAXATION
Tax reconciliation
The taxation credit on the loss for the period differs from the amount computed by applying the corporation tax rate to the loss before tax for the following reasons:
|
| 2021 | 2020 | ||
| US$'000 | US$'000 | |||
|
|
| |||
Profit / (loss) on ordinary activities before tax |
| 1,712 | (3,297) | ||
|
| ---------------- | ---------------- | ||
|
|
|
| ||
Tax at UK corporation tax rate of 19.00% (2020: 19.00%) | 325 | (626) |
| ||
|
|
|
| ||
Expenses not deductible for tax purposes | 8 | 35 |
| ||
Utilisation of unrecognised tax losses brought forward |
| 4,785 | - | ||
Deferred tax not recognised |
| - | 453 | ||
Effect of share based payments |
| 157 | 138 | ||
|
| ---------------- | ---------------- | ||
Tax credit and effective tax rate for the period |
| 5,275 | - | ||
| ========= | ========= | |||
| 2021 | 2020 | ||
| US$'000 | US$'000 | ||
|
|
| ||
Current tax |
|
|
| |
|
|
|
| |
UK corporation tax on profit / losses in the current year | - | - |
| |
Deferred tax credit | 5,275 | - |
| |
|
| ---------------- | ---------------- | |
Tax credit recognised in the consolidated statement of income |
| 5,275 | - | |
| ========= | ========= | ||
The Group has carried forward UK losses amounting to US$31.9 million as of 31 December 2021 (2020: US$35.6 million). The gross amount of losses upon which the deferred tax asset has been recognised amounts to US$22.5 million (2020: US$nil). This is based on expected utilisation of future taxable profits as estimated by the Directors. The deferred tax asset is expected to be utilised within five years. Refer to the recognition and measurement of deferred tax assets accounting judgement detail in the accounting policies section for further disclosure.
There was a deferred tax liability of US$nil (2020: US$nil).
2021 | 2020 | ||
US$'000 | US$'000 | ||
|
| ||
Deferred tax current asset (unutilised tax losses) | 625 | - | |
Deferred tax non-current asset (unutilised tax losses) | 4,650 | - | |
----------------- | ----------------- | ||
Total deferred tax asset | 5,275 | - | |
======== | ======== |
8. PROFIT PER SHARE
Basic earnings per share is calculated by dividing the profit attributable to shareholders by the weighted average number of ordinary shares in issue during the period.
IAS 33 requires presentation of diluted EPS when a company could be called upon to issue shares that would decrease earnings per share, or increase the loss per share. For a loss-making company with outstanding share options, the net loss per share would be decreased by the exercise of options. Therefore for the year ended 31 December 2020, as per IAS33:36, the anti-dilutive potential ordinary shares are disregarded in the calculation of diluted EPS.
Reconciliation of the profit and weighted average number of shares used in the calculation are set out below:
Profit | Weighted average | Earnings per | ||
/ (Loss) | number of shares | share | ||
2021 | ||||
| ||||
US$'000 | Thousand | Cents | ||
Basic EPS |
|
|
| |
Profit attributable to equity holders | 6,987 | 15,695 | 45 | |
Diluted EPS |
|
|
| |
Profit attributable to equity holders | 6,987 | 17,353 | 40 | |
| ========= | ========= | ========= | |
|
|
|
| |
| 2020 | |||
|
| |||
| US$'000 | Thousand | Cents | |
Basic EPS |
|
|
| |
Loss attributable to shareholders: |
|
|
| |
- Continuing and discontinued operations | (3,297) | 14,276 | (23) | |
| ========= | ========= | ========= | |
9. PROPERTY, PLANT AND EQUIPMENT
Furniture & |
|
|
|
| ||
equipment | Computers | Technical | Studio | Total | ||
US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | ||
Cost |
|
|
|
|
| |
At 31 December 2019 | 53 | 224 | 3 | 124 | 404 | |
Additions | 2 | 4 | - | - | 6 | |
Disposals | (29) | - | - | - | (29) | |
Foreign exchange effect | - | (5) | - | - | (5) | |
-------------- | --------------- | --------------- | --------------- | ---------------- | ||
At 31 December 2020 | 26 | 223 | 3 | 124 | 376 | |
-------------- | --------------- | --------------- | --------------- | ---------------- | ||
Additions | - | 43 | - | - | 43 | |
-------------- | --------------- | --------------- | --------------- | ---------------- | ||
At 31 December 2021 | 26 | 266 | 3 | 124 | 419 | |
-------------- | --------------- | --------------- | --------------- | ---------------- | ||
Depreciation |
|
|
|
|
| |
At 31 December 2019 | 42 | 128 | 3 | 91 | 264 | |
Charge for the period | 5 | 37 | - | 18 | 60 | |
Disposals | (29) | - | - | - | (29) | |
Foreign exchange effect | (4) | (5) | - | - | (9) | |
---------------- | --------------- | --------------- | --------------- | ---------------- | ||
At 31 December 2020 | 14 | 160 | 3 | 109 | 286 | |
----------------- | --------------- | --------------- | --------------- | ---------------- | ||
Charge for the period | 4 | 34 | - | 17 | 55 | |
Foreign exchange effect | 1 | 2 | - | (2) | 1 | |
---------------- | --------------- | --------------- | --------------- | ---------------- | ||
At 31 December 2021 | 19 | 196 | 3 | 124 | 342 | |
----------------- | --------------- | --------------- | --------------- | ---------------- | ||
Net book value |
|
|
|
|
| |
At 31 December 2019 | 11 | 96 | - | 33 | 140 | |
========= | ========= | ========= | ========= | ========= | ||
At 31 December 2020 | 12 | 63 | - | 15 | 90 | |
========= | ========= | ========= | ========= | ========= | ||
At 31 December 2021 | 7 | 70 | - | - | 77 | |
========= | ========= | ========= | ========= | ========= |
10. SUBSIDIARIES
As at 31 December 2021, Audioboom Group plc held more than 20% of the share capital of the following companies:
| Registered office | Class of shares | % held by parent |
Audioboom Limited | 57 Southwark Street, City Bridge House, Southwark, SE1 1RU | Ordinary | 100% |
Audioboom Inc. | 251 Little Falls Drive, Wilmington, Delaware 1980, USA | Ordinary | 100% |
Austin Advertising Inc. | 1013 Centre Road, Suite 403S, Wilmington, Delaware 19805, USA | Ordinary | 100% |
Audioboom Inc is held through Audioboom Limited. Austin Advertising Inc is held through Audioboom Inc.
11. | TRADE AND OTHER RECEIVABLES | 2021 | 2020 |
US$'000 | US$'000 | ||
|
| ||
Amounts receivable for the sale of goods and services | 15,483 | 6,358 | |
Allowance for doubtful debts | (131) | - | |
| ---------------- | ---------------- | |
Net receivables | 15,352 | 6,358 | |
|
|
| |
Other receivables | 254 | 240 | |
Prepayments and accrued income | 2,456 | 1,383 | |
Taxes recoverable | 85 | 47 | |
---------------- | ---------------- | ||
18,147 | 8,028 | ||
========= | ========= |
The average credit period taken on sales of goods and services is 94 days (2020: 87 days). No interest is charged on receivables. Trade receivables are provided for based on estimated irrecoverable amounts from the sale of goods and services, determined by reference to past default experience and likelihood of recovery as assessed by the Directors.
Included in the Group's trade receivable balance are debtors with a carrying amount of US$2.5 million (2020: US$0.3 million) which are past due at the reporting date.
Having considered the Group's exposure to bad debts and the probability of default by customers, no expected credit losses have been recognised in accordance with IFRS 9 (2020: US$nil).
Accrued income carried forward into 2022, that will reverse fully in 2022, is US$2.0 million (2020: US$0.5 million).
12. | TRADE AND OTHER PAYABLES | 2021 | 2020 |
US$'000 | US$'000 | ||
Current liabilities |
|
| |
Trade payables | 7,653 | 4,158 | |
Other taxes and social security | 77 | 30 | |
Accruals | 3,880 | 1,216 | |
Other payables | 183 | 11 | |
Loan liability | 374 | - | |
| ---------------- | ---------------- | |
Trade and other payables due within less than one year | 12,167 | 5,415 | |
========= | ========= |
Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. The average credit period taken for trade purchases is 55 days (2020: 65 days). The Group has financial risk management policies in place to ensure that all payables are paid within the credit time frame.
The Group records negligible deferred income and therefore no analysis of contract liabilities has been provided.
On 17 February 2021, Audioboom Inc received a US$374,000 Paycheck Protection Program loan from HSBC Bank USA operating under the US Small Business Administration where financial support is given to US domiciled companies during the Covid-19 pandemic. The loan will be forgiven should Audioboom Inc not reduce headcount during the loan period.
13. STATED CAPITAL ACCOUNT
|
No. of |
Share |
Share | ||
| shares | capital | premium | ||
|
| US$'000 | US$'000 | ||
|
|
|
|
| |
At 31 December 2019 |
| 14,006,757 | - | 56,210 | |
|
|
|
|
| |
Shares issued in the period |
|
|
|
| |
Share options exercised |
| 267,737 | - | 539 | |
Shares issued at 225p each |
| 1,400,000 | - | 4,073 | |
|
| ---------------------- | ------------------- | --------------------- | |
At 31 December 2020 |
| 15,674,494 | - | 60,822 | |
|
| ---------------------- | ------------------- | --------------------- | |
|
|
|
|
| |
Shares issued in the period |
|
|
|
| |
Share options exercised |
| 93,523 | - | 189 | |
| -------------------- | --------------------- | ----------------------- | ||
At 31 December 2021 |
| 15,768,017 | - | 61,011 | |
| =========== | =========== | =========== |
There is no authorised share capital and all shares rank pari passu. All issued share capital is fully paid up. All ordinary shares have no par value.
14. RIGHT OF USE ASSET LEASES
Set out below are the carrying amounts of right-of-use assets recognised and the movements during the period:
|
|
|
| Office Lease Total |
| |
|
|
|
| US$'000 |
| |
At 31 December 2019 |
|
|
|
| 1,300 |
|
Disposals |
|
|
|
| (150) |
|
Depreciation expense |
|
|
|
| (319) |
|
Foreign exchange |
|
|
|
| (9) |
|
|
|
|
| ---------------- |
| |
At 31 December 2020 |
|
|
|
| 822 |
|
|
|
|
| ---------------- |
| |
Depreciation expense |
|
|
|
| (252) |
|
Foreign exchange |
|
|
|
| 6 |
|
|
|
|
| ---------------- |
| |
At 31 December 2021 |
|
|
|
| 576 |
|
|
|
|
| ========= |
|
Set out below are the carrying amounts of lease liabilities and the movements during the period:
2021 | 2020 | |
US$'000 | US$'000 | |
|
|
|
Balance at 1 January | 888 | 1,369 |
Payment of lease liabilities | (348) | (411) |
Imputed lease interest costs | 87 | 86 |
Disposals | - | (150) |
Foreign exchange | - | (6) |
------------- | ------------- | |
Balance at 31 December | 627 | 888 |
======== | ======== | |
Current | 269 | 252 |
Non-current | 358 | 636 |
|
|
The following are the amounts recognised in the consolidated income statement:
2021 | 2020 | |
US$'000 | US$'000 | |
|
| |
Depreciation expense of right of use assets | 252 | 319 |
Interest expense on lease liabilities | 87 | 86 |
------------- | ------------- | |
Total amount recognised | 339 | 405 |
======== | ======== |
The Company had total cash outflows for leases of US$435,000 in 2021 (2020: $497,000).
The following are the total value of the commitments on an undiscounted basis:
2021 | 2020 | |
US$'000 | US$'000 | |
|
| |
Under one year | 356 | 347 |
One to five years | 474 | 829 |
------------- | ------------- | |
Total value of commitments | 830 | 1,176 |
======== | ======== |
|
|
| |
15. | OPERATING LEASE ARRANGEMENTS | 2021 | 2020 |
$'000 | $'000 | ||
The Group as lessee |
|
| |
Lease payments under operating leases recognised as an expense |
|
| |
in the year | 78 | 70 | |
------------- | ------------- | ||
At the balance sheet date, the Group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows: | |||
|
|
| |
Under one year | 73 | 49 | |
------------- | ------------- | ||
73 | 49 | ||
======== | ======== | ||
The operating lease is not recognised as an asset or liability in the Statement of Financial Position under IFRS 16 due to its total length being less than one year.
16. RELATED PARTY TRANSACTIONS
Key management personnel remuneration
See the Remuneration Committee Report for details relating to key management personnel remuneration during the year. Key management during the year being Stuart Last, CEO and Brad Clarke, CFO.
Content funding facility
On 17 June 2019, the Company agreed a content funding facility with SPV Investments Ltd ('SPV), a special purpose vehicle. SPV was established and is owned equally by Michael Tobin, the Company's Chairman, and Candy Ventures sarl, the Company's largest shareholder. The SPV was established to provide minimum revenue guarantees of up to US$4 million to certain leading new and existing content partners of the Company. Audioboom pays the SPV 8% of the net advertising revenue (after paying the content partner its share) received by Audioboom, in relation to those podcasts. The underlying providers of the guarantees were to be granted 25,000 warrants to subscribe for ordinary shares in the Company for every US$1 million of guarantee provided, subject to a maximum of 100,000 warrants. The exercise price of all warrants associated with the SPV content funding facility is £3.30 per ordinary share each, with such warrants being exercisable for five years from grant. A total of 100,000 warrants have now been issued pursuant to the facility, which is the maximum number of warrants being capable of issue in this regard. As at 31 December 2021 the amount remaining available under the facility was approximately US$3.9 million.
US$4 million loan facility
In February 2020, the Company announced a US$4 million secured loan facility arrangement (the "Facility") with SPV. The Facility attracted interest at a rate of 8 per cent. per annum on drawn down funds, together with a US$80,000 arrangement fee payable on the first draw down, equivalent to 2 per cent. of the full US$4 million available under the Facility. The Facility was secured against the assets of Audioboom Limited. US$0.7 million was drawn down under the Facility and this was repaid in full in November 2020 (including interest and loan arrangement fees amounting to US$113,000). As at 31 December 2021 and 31 December 2020, US$3.3 million of the non-revolving Facility remained undrawn and the Facility subsequently expired in February 2022.
17. SHARE-BASED PAYMENTS
The Company has share option schemes for employees of the Group. Options are exercisable at the price agreed at the time of the issue of the share option. The vesting period and/or any performance conditions vary between employees. If the options remain unexercised after a period of 10 years from date of grant the options expire. Options are typically forfeited if the employee leaves the Group before the options vest. Details of the share options granted during the period are as follows:
2021 | 2020 | ||||
| Weighted |
| Weighted | ||
| Average |
| Average | ||
Number of | Exercise | Number of | Exercise | ||
Share options | Price (£) | Share options | Price (£) | ||
|
|
|
| ||
Outstanding at beginning of period | 1,038,737 | 1.822 | 1,212,643 | 1.759 | |
Granted during the period | 202,000 | 6.379 | 271,500 | 1.840 | |
Forfeited/lapsed during the period | - | - | (177,669) | 1.533 | |
Exercised during the period | (93,524) | 1.504 | (267,737) | 1.464 | |
-------------------- |
| --------------------- |
| ||
Outstanding at end of period | 1,147,213 | 2.650 | 1,038,737 | 1.822 | |
============= |
| ============= |
| ||
Exercisable at end of period | 840,213 | 2.118 | 547,379 | 1.845 | |
============= |
| ============= |
| ||
The options outstanding at 31 December 2021 had a weighted average exercise price of £2.65, and an average remaining contractual life of 8 years. The inputs into the Black-Scholes model are as follows:
| 2021 |
| 2020 |
| |
Weighted average share price | 7.867 |
| 1.863 |
| |
Weighted average exercise price | 7.867 |
| 1.863 |
| |
Expected volatility | 85% |
| 85% |
| |
Expected life | 10 years |
| 10 years |
| |
Risk-free rate | 0.5% |
| 0.5% |
| |
Expected dividend yield | 0% |
| 0% |
| |
============= |
| ============= |
|
Expected volatility was determined by assessing the share price volatility from the prior year. The Group recognised total expenses of US$1,174,000 related to equity-settled share-based payment transactions for the year ended 31 December 2021 (31 December 2020: US$600,000).
2021 | 2020 | ||
US$'000 | US$'000 | ||
|
| ||
Share option charge | 990 | 600 | |
Warrant charge | 184 | 115 | |
-------------- | -------------- | ||
1,174 | 715 | ||
======== | ======== |
At the period end, the Company had in issue outstanding share warrants for a total of 520,000 shares (2020: 520,000 shares) with a weighted average exercise price of £3.12 (2020: £3.12). All 520,000 (2020: 320,000) of the warrants were exercisable at the period end.
18. CONTENT PARTNER MINIMUM GUARANTEES
In order to attract and retain leading podcast partners, the Group offers certain partners minimum revenue guarantees ("MG") over the life of the agreement between the parties. The MG offers guaranteed revenue over the life of the agreement in the form of monthly payments and/or an upfront advance payment, which is then recouped over the life of the agreement, thus reducing future expected payments proportionally. The MGs provided secure the right of access to future content and therefore the expenditure in relation to these guarantees is recognised over the term of the contract. The content providers' obligations are discharged to the Group over the term of the contract in line with when the Group consumes the benefit of these obligations. In accordance with IFRS 9, no liability is recognised at the date of the contract as the MG relates to future performance obligations of the content provider.
2021 | 2020 | ||
US$'000 | US$'000 | ||
|
| ||
MG expenditure committed in 12 months or less | 8,279 | 6,585 | |
MG expenditure committed in more than 12 months | 3,454 | 1,226 | |
----------------- | ----------------- | ||
Total MG amount committed to expenditure | 11,733 | 7,811 | |
======== | ======== |
Included within the above minimum guarantees are:
2021 | 2020 | ||
US$'000 | US$'000 | ||
|
| ||
MG amount that is backed by the SPV content funding facility | 73 | 2,881 | |
MG amount available in SPV content funding facility | 3,927 | 1,119 | |
----------------- | ----------------- | ||
Total SPV content funding facility (see note 16) | 4,000 | 4,000 | |
======== | ======== |
19. FINANCIAL INSTRUMENTS
Capital risk management
The Group manages its capital to ensure that entities in the Group will be able to meet their financial obligations as they arise while maximising the return to stakeholders. The capital structure of the Group consists of cash and cash equivalents 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. As at the period end, the Group did not have any external borrowings and was not subject to externally imposed capital requirements. In February 2020, the Company secured a US$4 million debt facility with two related parties (see note 16) which has since expired. Post period end on 14 April 2022 the Company secured a £1.5 million overdraft with HSBC.
Categories of financial instruments
2021 | 2020 | ||
US$'000 | US$'000 | ||
Loans & receivables |
|
| |
Trade and other receivables | 15,605 | 6,599 | |
Cash and cash equivalents | 2,969 | 3,257 | |
|
|
| |
Financial liabilities at amortised cost |
|
| |
Trade and other payables | 7,837 | 4,168 | |
======== | ======== |
The carrying amounts of financial assets and financial liabilities recorded at amortised cost approximates to their fair values.
Financial and market risk management objectives
It is, and has been throughout the period under review, the Group's policy not to use or trade in derivative financial instruments. The Group's financial instruments comprise its cash and cash equivalents and various items such as trade debtors and trade creditors that arise directly from its operations. The main purpose of the financial assets and liabilities is to provide finance for the Group's operations in the period.
Currency risk management
The Group has limited exposure to foreign currency risk as a result of matching local currency costs to local currency receipts; thus the main risks arising from the Group's financial instruments are interest rate risk and liquidity risk. The Board reviews and agrees policies for managing these risks and they are summarised below. These policies have remained unchanged throughout the period under review.
Interest rate risk management
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.
Credit risk management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group has adopted a policy of only dealing with creditworthy counterparties, as a means of mitigating the risk of financial loss from defaults. The Group only transacts with entities after assessing credit quality using independent rating agencies and, if not available, the Group uses other publicly available financial information and its own trading records to rate its major customers. The Group's exposure is continuously monitored and the aggregate value of transactions concluded is spread amongst approved counterparties. Credit exposure is controlled by counterparty limits.
19. FINANCIAL INSTRUMENTS (continued)
Ongoing credit evaluation is performed on the financial condition of accounts receivable. The credit risk on liquid funds is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies. The carrying amount of financial assets recorded in the financial statements, which is net of impairment losses, represents the Group's maximum exposure to credit risk. Please refer to note 11 for more detail on the trade receivables collection period.
The ageing of trade receivables (US$'000s) as at 31 December 2021 was:
Current | Over 30 days | Over 60 days | 90 days + | Total |
US$5,265 | US$4,349 | US$3,397 | US$2,472 | US$15,483 |
34% | 28% | 22% | 16% |
|
Liquidity risk management
The Group's policy throughout the period has been to ensure continuity of funds. The Group manages liquidity risk by maintaining adequate reserves and banking facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. Please refer to note 12 for more detail on the trade payables payment period.
Fair value of financial instruments
The fair value of other non-derivative financial assets and financial liabilities are determined in accordance with generally accepted pricing models based on discounted cash flow analysis using prices from observable current market transactions.
20. POST BALANCE SHEET EVENTS
To the date of this repoert, 101,686 new Ordinary Shares were issued to satisfy the exercise of existing share options under the Company's Share Option Scheme 2014 by an employee. In addition, between 2 and 4 March 2022, Michael Tobin exercised warrants over 350,000 ordinary shares of no par value in the Company. Therefore, the total number of Ordinary Shares and voting rights in the Company is 16,219,703 at the date of this report.
Post period end on 14 April 2022 the Company secured a £1.5 million overdraft with HSBC and HSBC have a fixed and floating charge in place in relation to this overdraft.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
Latest directors dealings
- 1 day ago IntegraFin Holding
- 1 day ago Spirent Communications
- 1 day ago CRH (CDI)
- 1 day ago Bezant Resources
- 1 day ago EJF Investments Ltd NPV