Final Audited Results for year ended 31 Dec 2021

RNS Number : 0097L
Mirriad Advertising PLC
11 May 2022
 

11 May 2022

 

 

Mirriad Advertising plc

 

("Mirriad" or the "Company")

 

 

Final Audited Results for the year ended 31 December 2021

 

 

Mirriad, the leading in-content advertising company, announces its final audited results for the year ended 31 December 2021 ("2021").

 

Financial highlights

· Broadly maintained year-on-year revenue at £2.0m despite the continuing impact of COVID-19 (2020: £2.2m)

· US revenues, the world's largest advertising market, significantly increased by 182% to £884k following investment into sales resource

· Operating loss widened to £12.0m (2020 £9.1m) and cash consumption increased to £10.4m (2020: £8.1m) as the Company continued to execute its growth strategy

· Strong cash position maintained with net cash at 31 December 2021 of £24.5m (2020: £ 35.4m )

· Net assets at 31 December 2021 of £24.9m (2020: £35.3m) tracking cash holding

 

KPIs

To further illustrate operating progress of the business, the Company will now report key performance indicators ("KPIs") on an annual basis. The three "supply side" KPIs will allow to track the wider market adoption of the Mirriad platform and the three "demand side" KPIs will allow to track the development of the commercial relationships with agencies, advertisers and partnerships.

 

KPI

2020 (baseline)

2021

% Change

Supply side:

1.  Active supply partnerships*

2.  Supply partners represented

3.  Seconds of content available**

 

#16

#28

282,672 secs.

 

#25

#46

472,754 secs.

 

+56%

+64%

+67%

Demand side:

1.  Active agency relationships

2.  Number of advertisers who have run campaigns

3.  Strategic and commercials partnership agreements with advertisers and agencies

 

#14

#21

-

 

#19

#45

#3

 

+36%

+114%

N/A

 

* Defined as the number of supply partners who ran a campaign during the period

** Defined as the total number of seconds of advertising inventory available for sale during the period

 

 

Operational highlights

· Significant increase in overall supply partners. Mirriad now has access to content from 46 content partners globally

· Number of advertisers placing campaigns more than doubled to 45 during the year

· Contract signed in May 2021 with major food and beverages brand to incentivise spend with Mirriad

· Renewal of Tencent partnership effective April 2021

· Research studies confirmed that in-content advertising reaches more people than conventional spot advertising with an average increase in reach of +23% across seven campaigns tested

 

Post period highlights

· First campaign run in Japan for Fuji TV in February 2022, with a further four projects in consideration amidst interest from wider sector in-country

· First campaign run in Canada for Bell Media in February 2022

· Agreement signed with Springserve for programmatic enablement of in video content in the US market in March 2022

· Newly appointed Head of Programmatic Partnerships (US), Head of Studio Partnerships (US), and UK and France Sales Managers all driving improved pipelines

 

Current trading and outlook

 

· Trading in the current year to December 2022 is in line with market expectations, with good momentum continuing, particularly in the US

· We continue to invest in the Company and leverage our successes with blue chip advertisers, a roster of now over 100 partners (including supply and demand side partners), the experience of hundreds of campaigns and our market leading reputation

· We are expecting to announce imminently new Board members who will enhance our existing team and help drive the next phase of our business growth

· It is our objective to accelerate the integration of Mirriad's product in the linear and programmatic media ecosystem to establish a new standard in the industry

 

Stephan Beringer, CEO of Mirriad, said: "I am pleased with our progress in building the number and breadth of leading supply partners working with Mirriad. This sits alongside the fact we have significantly increased active relationships and campaigns run on the demand side with blue chip advertisers and the largest agency groups in the world. Our strategy remains very focused on driving adoption and integrating with the media buying ecosystem to make the inventory accessible to the entire market and to automate the transactions programmatically. As we build out against our key pillars, using our agreed KPIs as benchmarks, we will establish Mirriad as a standard and achieve scale.

 

"As ad markets and budgets started their post pandemic recovery in 2021, it became increasingly clear that brands and advertisers must prioritise diversification to ensure campaign success and relevancy with customers for meaningful business growth. With the simultaneous rise in connected TV and streaming services, we expect further opportunities for us from growth across these new platforms.

 

"Looking at 2022, Mirriad expects to capitalise on the significant opportunities in the North American market and our launch into the programmatic realm. We will also continue to nurture strong existing relationships in Europe and manage the move away from a minimum revenue guarantee model with Tencent in China. The clear gains in impact and reach we can deliver, all whilst consistently being found to be viewers' preferred format, are hugely significant in the context of increasing challenges for traditional ad formats."

 

ENDS

 

 

For further information please visit www.mirriad.com or contact:

 

Mirriad Advertising plc

Stephan Beringer, Chief Executive Officer

David Dorans, Chief Financial Officer

 

Tel: +44 (0)207 884 2530 

Nominated Adviser & Broker:

Panmure Gordon  

Alina Vaskina / James Sinclair-Ford (Corporate Advisory)

Erik Anderson (Corporate Broking)

 

Tel: +44 (0)20 7886 2500

 

Financial Communications:

Charlotte Street Partners  

Tom Gillingham

Andrew Wilson

 

 

 

Tel: +44 (0) 7741 659021

Tel: +44 (0) 7810 636995

 

 

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR").Upon the publication of this announcement, this inside information is now considered to be in the public domain.

 

Notes to Editors

 

About Mirriad

 

Mirriad's award-winning solution unleashes new revenue for content producers and distributors by creating new advertising inventory in content. Our patented, AI and computer vision technology dynamically inserts products and innovative signage formats after content is produced. Mirriad's market-first solution seamlessly integrates with existing subscription and advertising models, and dramatically improves the viewer experience by limiting commercial interruptions. 

 

Mirriad currently operates in the US, Europe and China.

 

 

Forward looking statements

Certain information contained in this announcement, including any information as to the Group's strategy, plans or future financial or operating performance, constitutes "forward-looking statements". These forward-looking statements may be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "projects", "expects", "intends", "aims", "plans", "predicts", "may", "will", "seeks" "could" "targets" "assumes" "positioned" or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this announcement and include statements regarding the intentions, beliefs or current expectations of the Directors concerning, among other things, the Group's results of operations, financial condition, prospects, growth, strategies and the industries in which the Group operates. The directors of the Company believe that the expectations reflected in these statements are reasonable, but may be affected by a number of variables which could cause actual results or trends to differ materially. Each forward-looking statement speaks only as of the date of the particular statement.

 

By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future or are beyond the Group's control. Forward-looking statements are not guarantees of future performance. Even if the Group's actual results of operations, financial condition and the development of the industries in which the Group operates are consistent with the forward-looking statements contained in this document, those results or developments may not be indicative of results or developments in subsequent periods.



 

Chairman's statement

 

2021 was an important year for Mirriad as we enter the critical adoption phase of our unique product and the wider industry understanding of the scale and potential of the in-content advertising market.

 

It is impossible to review 2021 in full without mentioning the lasting impact of Covid-19 on global advertising markets. While industry reports suggest that budgets started to return towards the end of the year, it has been a prolonged and challenging period for everyone in the advertising and content industries.

 

Thanks to the ongoing efforts of management and the whole Mirriad team, the Company navigated the pandemic and these difficult conditions which impacted our industry, combining flexibility and determination to make the most of new ways of working. This effort manifested itself in ongoing operational stability and the important ability to swiftly capitalise on returning advertising budgets.

 

The improved picture Mirriad reported in H2 2021 was primarily driven by growing deal size and deal volume in the US, vindicating our strategic focus on this important market. I am confident the Company has the capacity to ensure this momentum will continue while nurturing the strong partnerships we have built and continue to expand around the globe.

 

The in-content space Mirriad is building in the world's largest advertising geographies is designed with advertisers, brands and content in mind, but the approach also draws heavily on the Company's creative heritage to appeal to audiences. It offers a route to targeting consumers in a seamless and authentic way that simply does not exist elsewhere in the market.

 

We were delighted to welcome Philip Mattimoe as Chief Technology Officer in February 2021 and over the course of the year we have significantly ramped-up expertise in our technology and product function. Patented, sector-leading technology underpins everything the Company does and significant strides have been made in terms of assimilation into the wider advertising ecosystem. Increasing inventory supply; rising demand for Mirriad integrations; and progress towards programmatic delivery, making in-content inventory available at scale in industry-leading digital media buying platforms, will further drive adoption.

 

In line with our ambitions to position Mirriad for future scale, we were also pleased to announce the appointment of Chief Revenue Officer Miles Lewis in May 2021. Alongside a growing sales team in the US, his appointment reflects the Company's approach to strategic investment that has added important capacity in a key area for the business. We expect to continue to add strategic sales resource throughout 2022. 

 

We are also expecting to announce imminently new Board members who will enhance our existing team and help drive the next phase of our business growth.

 

As the Company continues its growth journey, the Board will be measuring the delivery of our strategic progress by establishing and reporting against several broader non-financial key performance indicators (KPIs) including measures covering active supply and demand partnerships and the volume of available inventory.

 

Mirriad is also committed to a clear and considered approach to Environmental, Social and Governance (ESG) matters, always ensuring a balance between corporate and ESG strategies. To this end, Non-executive director, Kelsey Lynn Skinner has been appointed as the board's ESG lead.

 

The Company is actively developing its policies in this area, but since last year its estimated carbon emissions, including travel based on pre-COVID-19 patterns, have been offset by purchasing carbon credits. 

 

Despite the need to adapt working practices in line with various national pandemic restrictions, the Company has retained a high employee satisfaction score of 92%.

 

All senior leaders undertook a three-part course covering diversity and inclusion awareness. A specific diversity and inclusion presentation was given to all other staff and all staff were required to complete a mandatory diversity and equality training course. Mirriad is also proud to have introduced a Company-wide volunteering policy to help staff give back to the communities in which we operate around the globe.

 

We are also tracking wider progress against the UN Sustainable Development Goals. There is still much more to do in this area and working closely with Kelsey to realise the 2022 ESG plans we have outlined. Progress will be reported in due course.

 

Looking ahead, there is every reason to be confident that in-content advertising offers a revolutionary solution to challenges faced by brands, content creators and broadcasters. Mirriad's approach counters the growing threat of subscription fatigue by delivering new revenue streams, while also offering a real solution to the rise of ad blocking and entrenched consumer aversion to interruptive advertising.

 

Every successful campaign run, or partner signed builds awareness of the scale of the in-content opportunity, and Mirriad is in a uniquely strong position to capitalise on growing awareness of, and appetite for, this high value and high potential market segment.

 

John Pearson

11 May 2022

 

 

Chief Executive Officer's Statement

 

Since my appointment in October 2018, I have underlined the need for Mirriad to evolve its approach to drive adoption and scale. To achieve this, we must continually develop the capabilities of our own business and raise awareness of the issues which marketers and the advertising industry as a whole need to address to remain relevant and effective.

 

In the current environment, marketers are facing three major challenges:

 

1.  consumers are shifting to more ad-free or ad-light video environments;

2.  current cookie-based targeting is unsustainable; and

3.  ad clutter and over-exposure are driving ad-fatigue or avoidance.

 

Shifting consumer behaviour (issue 1) means that it is more difficult to reach people and if companies don't reach their target audiences their ability to grow is constrained.

 

The ultimate withdrawal of cookies (issue 2) has increased the complexity of targeting because marketers can't rely on third party cookies to aggregate audiences and target them at scale on the basis of their behaviour. The reduced ability to target creates the need for a new approach to identify and address the right people.

 

Clutter and over-exposure (issue 3) lead to low consumer attention and make it difficult for advertising to cut through and stay relevant.

 

The net impact of all of these issues is that as investment increases, audience reach and advertising impact are going down.

 

By contrast, Mirriad's in-content advertising solution drives improved brand consideration, purchase intent and overall awareness. This conclusion was illustrated by the twelve advertising effectiveness research studies Mirriad carried out in 2021. The superior performance of the format ties back to the to the simple fact that our format is liked by viewers who have a six-fold preference for in-content advertising over conventional spots in commercial breaks and mid/pre-rolls. The Mirriad format is seen as natural, innovative and makes the brands involved more appealing to consumers.

 

Our approach is radically different to conventional advertising. Rather than adding more noise to the overcrowded space of ad breaks that, in a typical broadcast environment represent around 6% of people's viewing time, we utilise the 94% of viewing time represented by the content itself. Untouched by conventional advertising this viewing time represents untapped reach, attention and relevance. This approach means that we reach on average 23% more viewers than for the equivalent TV spot breaks in the same content (based on Nielsen research data).

 

The huge potential of this largely unrealised opportunity is something we are constantly promoting to new partners and this is why we are confident about the future potential for Mirriad and our $149bn estimated Total Addressable Market ("TAM"). 

 

Strategic approach

 

Our strategy is based on the twin pillars of driving adoption and integrating with the linear and programmatic media buying ecosystem. As we build out against these two pillars and work to automate more of our actitivity we will achieve scale.

 

Since 2020 we've been investing in the development of Mirriad in the US. The US is the largest media and advertising market in the world and forecast to be significantly larger than the next five biggest advertising markets. In 2021 we saw the first signs of success with rapidly rising H2 revenues and deal numbers in the US. This was delivered by incrementally increased sales power, a strong roster of new content partners and growing relationships with major advertisers and their agencies.

 

This progress in North America is parallel tracked by progress in the other markets where we have distinct strategies in place. There were positive developments in these markets too. Innovative new deals with CANAL+ Brand Solutions and Looping Group, the successful launch of a new data-driven format on Channel 4 in the UK, a first scaled campaign in Germany for a retail giant during the holiday season and the re-signing of the partnership with Tencent on new terms all evidence this fact.

 

The rapidly increasing available inventory across more content categories is starting to make a difference by stimulating the demand side. This is creating a virtuous circle and we will continue to invest in both the demand and supply sides of the market with a view to sustaining this positive momentum.

 

There is no escaping the fact that the COVID-19 pandemic cost us time. Throughout 2021, we highlighted that advertising budgets were taking longer than expected to recover from the COVID-19 pandemic. We also emphasised that the focus on both the demand and supply sides of the market had been on building back versus the new and innovative thus lengthening the buying cycle with respect to in-content. Recent industry reports indicate that we are moving into a recovery phase. As this happens, Mirriad is offering a positive solution to the long-standing decline in reach of advertisers' TV campaigns, with this reality particularly pronounced amongst younger viewers.

 

Business focus and performance

 

We are delivering against our strategic targets of adoption, integration and automation. In terms of adoption, we are now working with a record number of active content partners, in a wide range of sectors and geographies. On integration, we are initiating our programmatic path with an integration with Springserve, a leading ad serving platform for the over-the-top and connected TV space, and working on test campaigns with dynamically inserted in-content ads. We have also developed and adapted our systems to launch a new solution with Tencent, allowing buyers to purchase in-content advertising in the same way as any other format (by audience and impressions) and deliver campaigns across multiple content formats at unprecedented scale.

 

Beyond these core achievements, we have signed important new supply partner agreements and ended the year with 25 active supply partners (that is partners with whom we had run a campaign in 2021) a 25% increase on the number of contracted supply partners shown at the end of 2020. Every contract signed in the past year has brought different opportunities to our business. Whether this is high quality inventory, additional verticals, a progressive buying model delivered at scale with Tencent or another step on the journey towards programmatic delivery, we will continue to seek the highest quality partners to drive scale in our key markets. 

 

Last year I outlined the need to add more sales capacity in the US and I am pleased to report that we have delivered on this. To sustain momentum and drive adoption in this strategically important market we will continue to add resource into our US sales and business development teams to support the increases in deal volume and deal size seen in the latter half of 2021. 

 

Technological progress

 

Strategic partnerships also mean we have passed important new technological milestones. These include the Springserve integration in the US that will help accelerate Mirriad's strategy to make in-content inventory available at scale in industry-leading digital media buying platforms.

 

Every development in this space is designed to ensure Mirriad fits seamlessly into the ad-buying process, and we are further progressing in this space with CPM pricing advances. Our aim is that Mirriad will become a 'line item' in existing systems and a go-to for format decision makers in this space.

 

We have increased the number of accessible content hours analysed by almost 300% (to 5,232 from 1,318 in 2020) in the past year, underlining the additional content supply the Company now has at its fingertips.

 

Our protected technology and platform is central to our business. Driven by our expert team, we will continue to innovate to future-proof the business and ensure we protect our position as the leading in-content advertising company.

 

Outlook

 

The Company's trading in the current year to 31 December 2022 is in line with market expectations, with good momentum continuing, particularly in the US, the world's largest advertising market.

 

The market needs a new advertising solution. I believe Mirriad's platform more than meets the needs of our partners. This has been demonstrated by our results and the growing adoption of our solution. We aim to continue to invest in the Company and leverage our successes with blue chip advertisers, a roster of now over 100 partners (across the supply and demand sides of the market), the experience of hundreds of campaigns and our market leading reputation. It is our intention that the integration of Mirriad's product will bring a new standard to the industry.

 

I would like to thank our employees, the Board, our partners and the investors who continue to support us on this journey. Everyone at Mirriad is focused on delivering the agreed strategy to ultimately generate long-term shareholder value. We building a business for the long-term and also leading what has the potential to be a transformative new advertising segment.

 

Stephan Beringer

Chief Executive Officer

11 May 2022

 


Financial review

 

COVID-19 continued to impact the world's advertising markets in 2021 particularly in the first half.  Although we are reporting a slight fall in year on year revenues this masks significant improvements in the range and volume of work we undertook and the significant progress we made in developing our US market. Overall Mirriad saw an increase in underlying campaign activity, particularly in the second half of 2021. 

 

Zenith advertising forecast figures, published in December 2021, also suggest that growth returned to the advertising market in 2021 following a contraction in 2020 as a result of COVID-19. According to Zenith worldwide television advertising grew by around 5.5% in 2021. 

 

During the year we focused particularly on investment in our US operations as the scale of the opportunity in the US market is significantly greater than any other market. The US remains the world's largest advertising market with revenues estimated at just over $285bn making it over three times larger than the next biggest market, China, based on the same Zenith data. We also continued to invest in our technology and have begun to reorientate our technology team following the appointment of a new CTO, Philip Mattimoe, in February 2021.

 

2021 results

 

Revenue for the year was slightly lower than the prior year at £2.0 million (2020: £2.2 million) reflecting, particularly, the continuing impact of COVID-19 in the first half of 2021 and the change in contractual terms following the renewal of our Tencent Video contract. 

 

During the year revenues from the US expanded fast and have begun to replace the revenue historically guaranteed in our Tencent contract. US revenue increased by 182% year on year to £884k.  Following a slow start to the year the majority of this revenue was booked in the second half of the year. The key metrics of volume of content inventory, up 45% year on year, the number of advertisers, up 59% year on year and number of active supply partners, up 42% year on year, all improved in the US. We also broadened the range of supply partners during the year and we were pleased to add influencer content to the available inventory following deals signed with Influential and We Are Verified in the second half of 2021.

 

European revenues also increased during the year and we were particularly pleased to run our first campaign on Channel 4 for Rightmove in the UK and to re-establish our relationship with RTL in Germany with a major campaign for Aldi in the run up to Christmas. Overall European revenues increased by 69% to £144k, again with the majority of this booked in the second half of the financial year. As in the US all key metrics improved year on year with volume of content inventory up 37% year on year, the number of advertisers up 29% year on year and number of active supply partners up by 36% year on year.

 

In China we focused on renewal of our relationship with Tencent. Historically this was an exclusive deal with Mirriad restricted from working with other parties in the market in return for a substantial minimum guaranteed revenue. We renegotiated this deal to remove the exclusivity and to introduce a new product offering advertisers the ability to place campaigns against a specific audience target rather than buying on a show by show basis. This has substantially opened up the flow of content from Tencent and we were pleased to run a test campaign of this "CPM" model in the latter part of the year. Revenues in China have declined as we transition to this new business model with a modest guaranteed revenue in place for the 12 months April 2021 to March 2022. We anticipate the volume of campaigns increasing in 2022 and are actively talking to other potential partners in the Chinese market as well as working with Tencent on broadening out the commercial models available to their advertisers. 

 

As a result of a modest increase in the level of investment in staff associated with our cost of sales on a broadly flat revenue base, gross margin reduced slightly to £1.7 million (2020: £1.9 million). As noted in previous years the vast majority of our cost of sales relates to our staff based in Mumbai. The staff element of this work is largely fixed at current volumes which means that margin is impacted by the throughput of work and has the potential to improve significantly as these volumes increase. During the year cost of sales increased slightly to £294k (2020: £244k).

 

The Group's principal operating cost remains staff. We previously reported that we intended to increase investment in our staff base focused on our sales and technology teams. Underlying headcount has increased from 106 at the end of 2020 to 130 at the end of 2021. Over the course of 2021, administrative expenses increased to £14.0 million (2020: £11.2 million). The team in the US increased from 7 staff to 12 staff and we expanded our technology team from a headcount of 42 to 47. Overall we spent £2.8 million on sales and account management resource in 2021 (2020: £1.6 million), including the costs for an outsourced sales enablement service in the US which was appointed from Q1 2021.

 

Mirriad has continued to review and monitor the application of IAS 38 with respect to the capitalisation of development cost. We continue to take the view that due to the uncertainty of future revenue generation we will not capitalise any development cost in 2021 even though technology remains key to the Company's business and internally generated software and IP remain a key focus for future development of the business. Accordingly, the income statement includes £3.1 million (2020: £2.4 million) related to research and development ("R&D") activity.

 

The increase in operating costs and slight reduction in gross margin fed through to EBITDA with the EBITDA loss increasing to £11.6 million (2020: £8.6 million).

 

Likewise, the loss for the year before tax increased to £12.0 million (2020: £9.1 million).

 

Tax

 

During the year we reviewed our approach to claiming R&D tax credits and reviewed previously submitted claims for 2019 and 2020. Accordingly, there is a significant tax credit reported in the 2021 income statement which includes increases in the prior years' tax credits. At the time of drafting the increased claim for 2019 has been approved by HM Revenue & Customs which gives us a degree of confidence that the revised claim for 2020 and the initial claim for 2021 will also be approved. Taken together these three claims have resulted in a total credit to the income statement of £1 million. 

 

The Group has not recognised any tax assets in respect of trading losses arising in the current financial year or accumulated losses in previous financial years. The tax credit recognised in the current and previous financial years arises from the receipt of R&D tax credits.

 

Earnings per share

 

Loss per share was 4p per share (2020: loss of 4p per share) as a result of the increase in operating costs over the year and the increase in the Company's weighted average number of shares in issue during the financial year following the increase in share capital in December 2020.

 

Dividend

 

No dividend has been proposed for the year ended 31 December 2021 (2020: £nil).

 

Cash flow

 

Net cash used in operations was £10.4 million (2020: £8.1 million) as the increase in operating costs flowed through to cash. The Group incurred £159,250 (2020: £25,202) of capital expenditure on tangible assets in the year.

 

No shares were issued during the year other than as a result of the exercise of share options. Net proceeds from the issue of shares totalled £44,371 (2020: £24.8 million).

 

Balance sheet

 

Net assets decreased to £24.9 million (2020: £35.3 million) as a result of the losses for the year. Cash and cash equivalents at 31 December 2021 were £24.5 million (2020: £35.4 million).

 

Accounting policies

 

The Group's consolidated financial information has been prepared in accordance with International Financial Reporting Standards in conformity with the requirements of the Companies Act 2006. The Group's significant accounting policies, which have been applied consistently throughout the year, are set out in the annual report.

 

Going concern

 

The financial statements have been prepared on a going concern basis notwithstanding the Group having made a loss for the year of £10.97 million (2020: £9.06 million). The going concern basis assumes that the Group and Company will have sufficient funds available to continue to trade for the foreseeable future and not less than 12 months from the date of signing these financial statements. The Company's cash balance was £24.5 million at the year end and the Company remains debt free with no external borrowing.

 

After making enquiries and producing cash flow forecasts for the period up to 31 December 2024, the Directors have reasonable expectations, as at the date of approving the financial statements, that the Company and the Group will have adequate resources to fund the activities of the Company and the Group for the next 12 months from the date of the financial statements. The Group and Company's base case forecast suggest that the Group will require additional external funding within the next 16 months from the date of approval of these financial statements to be able to continue as a going concern. Albeit that the financial statements are prepared on a going concern basis, this gives rise to a material uncertainty that may cast significant doubt over the company's ability to continue as a going concern, because this is dependent on raising additional external funds from new equity, debt or customer contracts within 16 months of the date of this report. This funding has not yet been secured.

 

David Dorans

11 May 2022



 

Consolidated statement of profit or loss

For the year ended 31 December 2021

 



Year ended

Year ended



31 December

31 December



2021

2020

 

Note

£

£

Revenue

3

2,009,721

2,179,919

Cost of sales

 

(293,627)

(244,359)

Gross profit


1,716,094

1,935,560

Administrative expenses


(13,936,458)

(11,216,312)

Other operating income

 

200,982

188,306

Operating loss

4

(12,019,382)

(9,092,446)

Finance income


9,907

34,339

Finance costs

 

(10,768)

(30,702)

Finance income - net

 

(861)

3,637

Loss before income tax


(12,020,243)

(9,088,809)

Income tax credit

 

1,047,771

32,429

Loss for the year

 

(10,972,472)

(9,056,380)

Loss per Ordinary Share - basic

5

(4p)

(4p)

 

All activities are classified as continuing.

 

 

Consolidated statement of comprehensive income

For the year ended 31 December 2021

 


Year ended

Year ended


31 December

31 December


2021

2020

 

£

£

Loss for the financial year

(10,972,472)

(9,056,380)

Other comprehensive loss



Items that may be reclassified to profit or loss:



Exchange differences on translation of foreign operations

(216,756)

(646)

Total comprehensive loss for the year

(11,189,228)

(9,057,026)

 

Items in the statement above are disclosed net of tax.



 

Consolidated balance sheet

At 31 December 2021

 


Group



As at

As at



31 December

31 December



2021

2020


 

£

£

 

Assets




Non-current assets




Property, plant and equipment

767,396

636,543


Intangible assets

-

-


Investments

-

-


Trade and other receivables

162,962

186,021

 

 

930,358

822,564

 

Current assets




Trade and other receivables

1,892,152

1,475,785


Other current assets

1,116,320

72,993


Cash and cash equivalents

24,501,214

35,421,396

 

 

27,509,686

36,970,174

 

Total assets

28,440,044

37,792,738

 

Liabilities




Non-current liabilities




Lease liabilities

411,993

204,437

 

 

411,993

204,437

 

Current liabilities




Trade and other payables

2,866,773

1,913,845


Current tax liabilities

2,481

13,361


Lease liabilities

217,825

390,220

 

 

3,087,079

2,317,426

 

Total liabilities

3,499,072

2,521,863

 

Net assets

24,940,972

35,270,875

 

Equity and liabilities




Equity attributable to owners of the parent




Share capital

52,690

52,688


Share premium

65,754,666

65,710,297


Share-based payment reserve

3,665,525

2,850,571


Retranslation reserve

(360,054)

(143,298)


Accumulated losses

(44,171,855)

(33,199,383)

 

Total equity

24,940,972

35,270,875

 

 



 

Consolidated statement of changes in equity

For the year ended 31 December 2021

 


Year ended 31 December 2020




Share-based

Retranslation

Accumulated



Share capital

Share premium

payment reserve

reserve

losses

Total equity

 

£

£

£

£

£

£

Balance at 1 January 2020

52,029

40,932,183

2,500,944

(142,652)

(24,143,003)

19,199,501

Loss for the financial year

-

-

-

-

(9,056,380)

(9,056,380)

Other comprehensive loss for the year

-

-

-

(646)

-

(646)

Total comprehensive loss for the year

-

-

-

(646)

(9,056,380)

(9,057,026)

Proceeds from shares issued

659

26,228,815

-

-

-

26,229,474

Share issue costs

-

(1,450,701)

-

-

-

(1,450,701)

Share-based payments recognised as expense

-

-

349,627

-

-

349,627

Total transactions with shareholders recognised directly in equity

659

24,778,114

349,627

-

-

25,128,400

Balance at 31 December 2020

52,688

65,710,297

2,850,571

(143,298)

(33,199,383)

35,270,875

 


Year ended 31 December 2021




Share-based

Retranslation

Accumulated



Share capital

Share premium

payment reserve

reserve

losses

Total equity

 

£

£

£

£

£

£

Balance at 1 January 2021

52,688

65,710,297

2,850,571

(143,298)

(33,199,383)

35,270,875

Loss for the financial year

-

-

-

-

(10,972,472)

(10,972,472)

Other comprehensive loss for the year

-

-

-

(216,756)

-

(216,756)

Total comprehensive loss for the year

-

-

-

(216,756)

(10,972,472)

(11,189,228)

Proceeds from shares issued

2

44,369

-

-

-

44,371

Share-based payments recognised as expense

-

-

814,954

-

-

814,954

Total transactions with shareholders recognised directly in equity

2

44,369

814,954

-

-

859,325

Balance at 31 December 2021

52,690

65,754,666

3,665,525

(360,054)

(44,171,855)

24,940,972



 

Consolidated statement of cash flows

For the year ended 31 December 2021

 


Group



2021

2020


 

£

£

 

Cash flow used in operating activities

(10,450,796)

(8,146,368)


Tax credit received

72,993

99,886


Taxation paid

(46,928)

(17,697)


Interest received

9,907

34,339


Lease interest paid

(10,768)

(30,702)

 

Net cash used in operating activities

(10,425,592)

(8,060,542)

 

Cash flow from investing activities




Investment in subsidiaries

-

-


Purchase of tangible assets

(159,250)

(25,202)


Proceeds from disposal of tangible assets

-

100

 

Net cash used in investing activities

(159,250)

(25,102)

 

Cash flow from financing activities




Proceeds from issue of Ordinary Share capital
(net of costs of issue)

44,371

24,778,773


Payment of lease liabilities

(379,711)

(363,346)

 

Net cash (used in) / generated from financing activities

(335,340)

24,415,427

 

Net (decrease) / increase in cash and cash equivalents

(10,920,182)

16,329,783


Cash and cash equivalents at the beginning of the year

35,421,396

19,091,613

 

Cash and cash equivalents at the end of the year

24,501,214

35,421,396

 

Cash and cash equivalents consists of:




Cash at bank and in hand

24,501,214

35,421,396

 

Cash and cash equivalents

24,501,214

35,421,396

 

 



 

Notes to the consolidated financial statements

For the year ended 31 December 2021

 

1. Corporate Information

Mirriad Advertising plc is a public limited company incorporated and domiciled in the UK and registered in England with company registration number 09550311. The Company's registered office is 6th Floor, One London Wall, London, EC2Y 5EB.

 

2. Basis of preparation

The financial information set out above does not constitute the Group's statutory accounts for the years ended 31 December 2021 or 2020 but is derived from those accounts. Statutory accounts for 2020 have been delivered to the registrar of companies, and those for 2021 will be delivered in due course. The auditor has reported on those accounts; their reports were (i) unqualified, (ii) included a reference to material uncertainty related to going concern which the auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

 

On 31 December 2020, IFRS as adopted by the European Union at that date was brought into UK law and became UK-adopted international accounting standards, with future changes being subject to endorsement by the UK Endorsement Board. Mirriad Advertising Plc transitioned to UK-adopted international accounting standards in its consolidated financial statements on 1 January 2021. This change constitutes a change in accounting framework. However, there is no impact on recognition, measurement or disclosure in the period reported as a result of the change in framework.

The financial statements of Mirriad Advertising plc have been prepared in accordance with International Financial Reporting Standards ("IFRS") and IFRS Interpretations Committee ("IFRS IC") interpretations in conformity with the requirements of the Companies Act 2006 applicable to companies reporting under those standards. The financial statements have been prepared under the historical cost convention.

 

The accounting policies applied are consistent with those of the annual report and accounts for the year ended 31 December

2020.

 

(a) New standards, amendments and interpretations

The Group has applied the following standards and amendments for the first time for the annual reporting period commencing 1 January 2021:

• Interest Rate Benchmark Reform Phase 2 - Amendments to IFRS 9, IAS 39, IFRS 7 and IFRS 16;

• Covid-19 related rent concessions beyond 30 June 2021 - Amendments to IFRS 16.

The amendments listed above did not have any impact on the amounts recognised in prior periods and are not expected to significantly affect the current or future periods.

 

(b) New standards, amendments and interpretations not yet adopted

A number of new standards and amendments to standards and interpretations are effective for annual periods beginning after 1 January 2022, and have not been applied in preparing these financial statements. These standards are not expected to have a material impact on the entity in the current or future reporting periods or on foreseeable future transactions

 

3. Segment information

Management mainly considers the business from a geographic perspective since the same services are effectively being sold in every Group entity. Therefore regions considered for segmental reporting are where the Company and subsidiaries are based, namely the UK, the USA, India and China. The revenue is classified by where the sales were booked not by the geographic location of the customer. For this reporting purpose the Singapore and China entities are considered together.

The only income outside of the primary business activity relates to income received from grants which is recognised in other operating income.

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, which is responsible for allocating resources and assessing performance of the operating segments, has been identified as the steering committee that makes strategic decisions. The steering committee is made up of the Board of Directors. There are no sales between segments. The revenue from external parties reported to the strategic steering committee is measured in a manner consistent with that in the income statement.

The parent company is domiciled in the United Kingdom. The amount of revenue from external customers by location of the Group billing entity is shown in the tables below.


2021

2020

Revenue

£

£

Turnover by geography



China

981,164

1,765,196

USA

884,248

313,967

UK

144,309

100,756

Total

2,009,721

2,179,919

 


2021

2020

 

£

£

Turnover by category



Rendering of services

2,009,721

2,179,919

Total

2,009,721

2,179,919

 


2021

2020

Revenues from external customers by country, based on the destination of the customer

£

£

China

981,164

1,780,905

USA

863,960

313,967

UK

41,475

21,700

France

35,399

31,559

Turkey

26,194

22,010

Canada

20,288

-

Spain

19,684

-

Germany

12,800

-

Other

8,757

9,778

Total

2,009,721

2,179,919

 

4. Operating loss

The Group operating loss is stated after charging/(crediting):



2021

2020

 

 Note

£

£

Employee benefits

7

9,398,756

7,559,195

Depreciation of property, plant and equipment

12

440,390

466,097

Foreign exchange movements


(247,956)

28,040

Other general and administrative costs


4,638,895

3,407,339

Other operating income

 

(200,982)

(188,306)

Total cost of sales, administrative expenses and other operating income

 

14,029,103

11,272,365

 

Other operating income includes income received from government grants and research and development expenditure credits. The Group has complied with all the conditions attached to these grant awards.

Included within Employee benefits costs are share based payments for the year ended 31 December 2021 of £0.8m (2020: £0.4m).

 

5. Loss per share

Basic loss per share is calculated by dividing the loss for the year by the weighted average number of Ordinary Shares in issue during the year. Potential Ordinary Shares are not treated as dilutive as the Group is loss making and such shares would be anti-dilutive.

Group

2021

2020

Loss attributable to owners of the parent (£)

(10,972,472)

(9,056,380)

Weighted average number of Ordinary Shares in issue (number)

279,091,959

215,687,030

 

The loss per share for the year was 4p (2020: 4p).

No dividends were paid during the year (2020: £nil).

(b) Diluted

Potential Ordinary Shares are not treated as dilutive as the Group is loss making and such shares would be anti-dilutive.

 

6. Related party transactions

The Group is owned by a number of investors, the largest being M&G Investment Management, which owns approximately 13% of the share capital of the Company (2020: 13%). Accordingly there is no ultimate controlling party.

During the year the Company had the following significant related party transactions. No guarantees were given or received for any of these transactions:

Transactions with Directors

There were no transactions with Directors during the year.

In the prior year the following Directors purchased Ordinary Shares in the Company at a cost of £0.40 per share:

Director

Number

of shares

John Pearson

25,000

Stephan Beringer

25,000

David Dorans

2,500

Alastair Kilgour

25,000

Bob Head

50,000

 

Transactions with other related parties

IP2IPO Limited - a company which shares a parent company with IP2IPO Portfolio (GP) Limited, a major shareholder in the Group, and which also appoints a Director of the Group charged Mirriad Advertising plc for the following transactions during the year: (1) £3,333 for the services of Dr Mark Reilly as a Director during the year for the period from 1 January 2021 until 24 February 2021 (2020: £20,000). All of this amount was invoiced and paid as at 31 December 2021; (2) £16,667 for the services of Kelsey Lynn Skinner as a Director during the year for the period from 24 February 2021 to 31 December 2021 (2020: £nil). £3,333 of this amount was invoiced and unpaid as at 31 December 2021. The outstanding amount was paid in equal instalments on 4 January 2022 and 31 January 2022; and (3) £12,000 for the services of the Company Secretary during the year (2020: £12,000). £3,000 of this amount was invoiced and unpaid as at 31 December 2021. This outstanding amount was paid on 31 January 2022.

Parkwalk Advisors Limited - a company which shares a parent company with IP2IPO Portfolio (GP) Limited, a major shareholder in the Group, charged Mirriad Advertising plc for the following transactions during the year: (1) £20,000 for the services of Alastair Kilgour as a Director during the year (2020: £20,000). £1,667 of this amount was accrued and unpaid as at 31 December 2021, but was invoiced in early January 2022 and subsequently paid on 31 January 2022.

All the related party transactions disclosed above were settled by 31 December 2021 except where stated.

During the year ended 31 December 2021, the Company entered into transactions with its subsidiary companies for working capital purposes, which net off on consolidation - these have not been shown above.

The Directors have authority and responsibility for planning, directing and controlling the activities of the Group and they therefore comprise key management personnel as defined by IAS 24 "Related party disclosures". Remuneration of Directors and senior management is disclosed in the Remuneration Report.

 

 

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