Interim results

RNS Number : 5252M

Mirriad Advertising PLC

22 September 2021

 

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the company's obligations under Article 17 of MAR.

UNAUDITED INTERIM RESULTS

Mirriad Advertising plc

("Mirriad" or the "Group")

New deals, significant inventory and record US commercial activity drive adoption

Mirriad, the leading in-content advertising company, today announces unaudited half-year results for the six months ended 30 June 2021.

Highlights:

Strategic developments

· Key scalable demand-side deal signed with one of the world's largest food and beverage groups in May 2021

· Contract renewal with Tencent Video. Unlocking new commercial arrangements in June 2021 (effective April 2021)

· New audience-based programmatic model developed with Tencent Video with the first campaign expected to run from the end September

· Contracted content partners increased 38% over H1 2020

· Levels of commercial activity at highest ever level in the US and significant increase in average deal size

· Appointment of new Chief Revenue Officer, Miles Lewis, in May 2021

· New major US media agency deal announced in July 2021 post period end

· Agreement with the world's largest social influencer marketing platform Influential, based in the US. Opening up the rapidly growing vertical of 'influencers' in the US post period end

Financial highlights

· Revenue increased by 27% to £1,137k (30 June 2020 £897k)

· Pivot of revenue towards the US from China is accelerating, the US now constitute 23% of H1 revenues and 72% of contracted Q3 revenues

· Cash and cash equivalents of £29.8m (30 June 2020 £14.4m), following the 2020 fundraise, net of trading losses.

· Gross cash balance at end August 2021 is £28.7m, implying a runway of 34 months at the end of August 2021 on current spend and revenue levels

· Cash consumption increased to £5.5m (30 June 2020 £4.5m) as the company invests in key areas of commercial and technology

· Operating loss of £5.9m (30 June 2020 a loss of £4.9m)

· Loss per share 2p (30 June 2020 2p)

Our key performance indicators

	Revenue		Cash consumption		Customers under contract
	£000k	Period on period change %	£000k	Period on period change %	No.	Period on period change %
6 months to June 2021	1,137	+27%	5,511	+23%	22	+38%
6 months to June 2020	897	+109%	4,487	-24%	16	+78%
6 months to June 2019	429	+258%	5,917	-5%	9	No change

Stephan Beringer, CEO of Mirriad , said:

"As we scale Mirriad into a cookie-less, fully programmatic ad-world with high volumes of in-content advertising opportunities for high spending brands; our mission is to secure the most progressive partners and advertisers first. Therefore, bolstering our market position by future proofing the business, including adoption, IP protection and technology development - is our priority as we enter our growth phase. It's here we're on target and today are building a significant market position and valuable IP for the business and it's shareholders.

"Since April 2020, Advertisers have generally retrenched towards more traditional formats as they were mitigating the uncertainties of the prolonged Covid-19 pandemic period. While these market conditions have been delaying our revenue trajectory, it is clear to see that the fundamental challenges faced by the industry - including ad fatigue, falling effectiveness and reach - are starting to bite brands even harder. In the face of these threats and recovering budgets, Mirriad is perfectly placed to counter these issues with a compelling solution that drives measurable purchasing decisions with a format that consumers actually prefer.

"Against the challenging macroeconomic backdrop we have continued to execute  our strategy to scale, and as a result, revenues in the key US market are increasing significantly,  fueled by incremental sales power, a strong roster of new content partners, and an increasing number of relationships with major advertisers and their agencies. Meanwhile, in China, we have taken big strides towards our programmatic future via a new audience-based buying model with Tencent. This is a first for the Company and it's the blueprint for how we see our proposition globally evolving  into the future of the $649 billion media advertising world. Having a leading global tech innovator like Tencent chose to collaborate and prove out our technology and solution is a positive statement. In this new CPM model, advertisers can buy in-content advertising like any other digital inventory by demographics, geographics and context across a vast pool of Tencent's video content and we are now working to build even more market demand and further develop our technology to drive the company towards true scale.

"Mirriad is in the adoption phase of building a marketplace with advertisers, brands and content first in mind. Our investment in global sales infrastructure is now generating a visibly strong pipeline of clients and agency partnerships.

"The advertising market is returning from the pandemic slowdown but we are seeing the first budgets return to traditional ad routes before utlising more innovative media.  We have seen several big campaigns delayed until Q1 2022 giving us volatility in revenue forecasting.  Tencent have also delayed the launch of the new audience buying solution until the Autumn. The year end result is linked to the Tencent launch and the closing of a small number of large deals the timing of which is difficult to predict. This level of volatility has led us to be increasingly cautious in our current revenue forecasts.  In late July the Company provided revised guidance for revenues this year and an expectation on annualised run rate around the end of the year. The Board now expects its revenues to be below this guidance and will provide a further update around the time of the year end.

Going forward the Board remains confident that revenues for 2022 will be materially larger than 2021 as a result of the strong development of the Company's business fundamentals, the opportunities in the pipeline and overall market position. The Company retains a strong balance sheet and healthy cash runway. This gives us the strength to develop our platform and business and build on the market leading position that Mirriad has in the in-content advertising market."

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

Mirriad Advertising plc Stephan Beringer, Chief Executive Officer David Dorans, Chief Financial Officer	Tel: [phone]
Nominated Adviser & Broker: Canaccord Genuity Limited Simon Bridges Richard Andrews Thomas Diehl	Tel: [phone]
Financial Communications: Charlotte Street Partners   Tom Gillingham Andrew Wilson	Tel: [phone] Tel: [phone]

Chairman's Statement

These interim results show that we are making positive strides in establishing Mirriad at the forefront of in-content advertising

Mirriad's unwavering strategic focus on the US is driving scalable new revenue streams, and shows a clear route towards future growth. In China, the shape of the new Tencent agreement represents a key step into the programmatic era of the company's business model, while in the US the quality and diversity of new partners reflects the company's own market leadership.

Building on the new partners announced, the company's leadership is now working hard to increase available inventory to cater to the multi-faceted demand that is being built for Mirriad's patented solution.

Advertising spending is now coming back having favoured more 'traditional' media as brands shored up market positions and regain volume. With sector budgets and spend still being in a prolonged period of recovery, our conversion cycles have been longer than we previously anticipated. As we seek to strike agreements with increasing numbers of top-tier partners, this is particularly apparent, but we are also confident that the long-term reward will reflect the effort being undertaken at this moment.

It is also appropriate to recognise the tireless efforts of the wider Mirriad team, who have continued to further develop the platform's capabilities in terms of automation, integration and data intelligence despite periods of enforced remote working. Evolving technologic capabilities have allowed us to make significant strides in live content, for example, with testing taking place over the summer.

While the pandemic has thrown up very real hurdles, it has also focused minds on the fundamental challenges faced by current-generation advertising. The ongoing consumer move towards subscription-driven streaming and sustained aversion to interruptive advertising underlines the continuing importance of Mirriad's core proposition for brands and content creators seeking to reach the audiences that matter to them.

Our position as a market leader, uniquely able to address many of the fundamental challenges faced by an under-pressure advertsing industry, should not be underestimated.

We are grateful for the support of our investors and I am confident in the overall strategic approach, the  company's proposition and the team working hard to deliver against our objectives.

John Pearson

Non-executive Chairman

22 September 2021

Chief Executive's Statement  

Our strategic emphasis on key markets and especially the US, and a renewed focus on technological development is starting to show positive outcomes, despite unprecedented macro conditions arising from the Covid-19 pandemic. Mirriad's in-content advertising approach is primed for the next generation and, as the in-content advertising market leader, we are working to capitalise on a wealth of emerging opportunities.

The two elements at the heart of our strategy are to boost our available inventory, whilst diversifying and expanding our demand pipeline. Progress in these two key areas is accelerated by the continuing development of our patented technology, with exciting developments in live, server-side advertising integration and a cost per-thousand (CPM)-pricing model.

On the supply side, the breadth of deals signed show how Mirriad can leverage multiple routes to market, as we build towards true scale. Whether it's a new, more flexible non-exclusive agreement with Tencent in China, new partnerships in the US with the likes of Crown Media (Hallmark), Up Entertainment, the deal with a UK-based tier-one television production companyor entering the important influencer sector via a partnership with US industry leader Influential, we are finding additional routes to effectively integrate our technology with content sources.

Our recent agreements incentivise agencies to work with Mirriad and to introduce our capabilities to their customers. We believe having agencies as strategic and commercial partners on these terms provides another important pathway to scale.

We have also seen first positive progress in new verticals, including music videos, through the Mirriad Music Alliance with a campaign for Tecate in a Giovanny Ayala music video and for Lays and Lexus in the Concacaf anthem video, both targeted at the Hispanic market.

Last year I spoke about expanding our global revenue footprint, this has been achieved through new deals in the US and China, meaning Mirriad is now contracted with 22 broadcast/digital content partners in total. Revenue in the US is up 333% year on year, and we believe there is more to come in this key market with 7 new sales currently in negotiation with leading advertisers and responses pending to a further 74 proposals or RFPs.

The breadth of the innovative work we are delivering also underlines how Mirriad has extended and established itself, despite the longer-than-expected industry impact from Covid-19. We continue to adapt well to changed working conditions, and are closely monitoring developments in the markets we operate in and serve.

Despite the challenges associated with the pandemic resulting in significant delays of decision making and a reduced appetite for innovation, the fundamentals remain unchanged: our solution is game-changing and much needed as advertisers grapple with the triple challenge of engaging consumers, effective targeting and cutting through the noise that has become so prevalent in the sector.

Collated Kantar, Toluna and Tencent research studies shows our in-content format is actively preferred by consumers, and has proven ability to drive purchasing decisions. Most recently it has been found that Mirriad exposure drives +42% increase to advertising awareness, +20% increase in affinity and +35% increase in spend.

It is clear there is further work to do, but I am confident that with everything achieved to-date means Mirriad is in pole position to  capitalise on returning advertising spend in key markets.

We have carefully controlled our operating costs, whilst adding notable new talent to the team in the form of a new chief technology officer and a chief revenue officer, among others. Both roles are central to our long-term growth strategy and will ensure we continue to innovate.

I look forward to providing further progress updates to the market as we deliver against our clear strategy and demonstrate progress in building additional demand, whilst continuing to refine the protected technology that will define the in-content advertising space. 

Stephan Beringer

Chief Executive

22 September 2021

Finance review  

Current period results

Revenues increased meaningfully year on year, with revenue for H1 growing by 27% to £1,137k (30 June 2020 £897k).  This was despite the impact of Covid-19 which has continued to impact the advertising market around the world, including in China.  The Group increased revenues significantly in the US, which we have flagged as our key growth market, where revenues increased to £ 266k (30 June 2020: £62k) despite a very slow start to the year.  We anticipate that the US share of overall revenue will continue to increase and will eventually become the Company's largest market.

The Company also announced the signing of a new two-year deal with Tencent Video in China following the expiry of the existing deal on 31 March 2021.  The Company believes that this new contract will ultimately benefit revenues overall as it moves the commercial relationship to a revenue share in line with the Company's other contracts.  Critically the new contract introduces new audience based sales whereby brands will purchase campaigns based on reaching a specified total audience with Tencent free to place the advertising across a broad range of its content rather than selling advertising on a show by show basis.  The Company believes that while it benefitted from the fixed minimum fee arrangement with Tencent under the prior contract, the show based sales model previously adopted ultimately reduced the speed of market adoption of its services in China. The second year of the prior contract guaranteed revenues of approximately £2m to the company so there will be a transitional period where revenues in China will reduce in the short term while the new commercial arrangements become established.  A further benefit of the new contract is that it removes the exclusivity restriction granted to Tencent in China. This now affords the Company the opportunity to offer services to new partners in the Chinese market which the Company believes will result in improved revenue in the medium term.

In Europe we saw a softening in activity as Covid-19 continued to impact the production of content and advertisers were less likely to try new and innovative products.  This impact has continued for longer than the company originally anticipated resulting in a slight reduction in European revenues in the period.  Revenues in Europe were £51k (30 June 2020: £71k).

In May the company appointed a new Chief Revenue Officer, Miles Lewis, as part of its planned investment into developing its commercial team.  Miles will provide oversight of all the Group's revenue generating activities.

Gross margin for the period increased by 22% to £978k (30 June 2020: £803k).  As previously stated cost of sales is principally expenditure on staff and the Company has staffed for peaks of activity.  We anticipate gross margin will continue to increase as the volume of activity increases.

The Group's operating loss increased 22% to £5,943k (30 June 2020: £4,891k) as a result of an increase in Administrative expenses which also increased by 22% to £7,006k (30 June 2020: £5,766k).  The Group increased investment in its commercial and technology staff as flagged in its fundraising in December 2020.  This cost will continue to increase as a result of full year effects for the remainder of 2021 and into 2022.  Headcount at 30 June 2021 was 109 (30 June 2020 100). 

At the half year we have again reviewed our compliance with IAS 38 and we continue to believe that the inherent uncertainty of future revenue generation means that it is not appropriate to capitalise any of our development cost in the first six months of the year.

The Group continues to prioritise expenditure on research and development to ensure that it retains its technological lead and addresses partner needs.  For the period ending June 2020 total expenditure on research and development increased in absolute terms to £1,531k (30 June 2020: £1,220k).

The loss for the period before tax also increased by 22% to £5,942k (30 June 2020: £4,876k) in line with the increase in operating loss noted above.

Tax

The Group has not recognised any tax assets in respect of trading losses arising in the current financial period or accumulated losses in previous financial years. The tax credit recognised in the current and previous period arises from the receipt of R&D tax credits in the UK. The amount receivable for the period ended 30 June 2021 is £31k (30 June 2019 £34k).

Earnings per share

The company recorded a loss of 2 pence per share (30 June 2020: loss of 2 pence per share) based on a combination of the increased loss before tax noted above balanced by an increase in the Company's issued share capital following the fundraise in December 2020. This calculation is based on the weighted average number of shares in issue during the period.

Dividend

No dividend has been proposed for the period ended 30 June 2021 (30 June 2020: £nil).

Cash flow

Net cash used in operations (defined as the sum of net cash used in operating activities and the net cash used in investing activities) during the period increased in line with the increase in operating loss by 23% to £5,511k (30 June 2020: £4,487k). During the period no development costs were capitalised (30 June 2020: £nil). The Group also incurred £55k (30 June 2020: £9k) of capital expenditure on tangible assets. 

During the period 188,917 Ordinary Shares were issued (30 June 2020: none).

Balance sheet

The Group has a debt-free balance sheet. Net assets increased by 107% to £29,754k (30 June 2020: £14,341k) following the fundraise in December 2020 net of the cash used to fund the Group's ongoing operations. Cash and cash equivalents at 30 June 2021 were £29,764k (30 June 2020: £14,428k).

Accounting policies

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. There was no impact and no changes in accounting policies resulting from the transition. These condensed consolidated interim financial statements for the half-year reporting period ended 30 June 2021 have been prepared in accordance with the UK-adopted International Accounting Standard (IAS) 34, 'Interim Financial Reporting'.

David Dorans

Chief Financial Officer

22 September 2021

 

Company Information

Directors John Pearson Chairman Stephan Beringer Chief Executive Officer David Dorans Chief Financial Officer Alastair Kilgour Non-Executive Director Kelsey Lynn Skinner Non-Executive Director Bob Head Non-Executive Director	Independent Auditors PricewaterhouseCoopers LLP 3 Forbury Place 23 Forbury Road Reading RG1 3JH Solicitors Osborne Clarke LLP 6th Floor One London Wall London EC2Y 5EB
Company registration number 09550311	Company Secretary Will Crompton
Registered Office 6th Floor One London Wall London EC2Y 5EB	Nominated Adviser & Broker Canaccord Genuity Limited 88 Wood Street London EC2V 7QR
Company website www.mirriad.com	Financial PR Charlotte Street Partners Limited 16 Alva Street Edinburgh EH2 4QG
	Registrars Computershare Investor Services plc The Pavilions Bridgwater Road Bristol BS99 6ZZ

 

Condensed consolidated statement of profit or loss and condensed statement of comprehensive income for the six months ended 30 June 2021

			Six months ended 30 June 2020 (unaudited) £
	Note	Six months ended 30 June 2021 (unaudited) £		Year ended 31 December 2020 (audited) £
Revenue	5	1,137,288	896,714	2,179,919
Cost of Sales		(159,614)	(93,783)	(244,359)
Gross Profit		977,674	802,931	1,935,560
Administrative expenses		(7,006,277)	(5,766,379)	(11,216,312)
Other operating Income		85,217	72,831	188,306
Operating Loss		(5,943,386)	(4,890,617)	(9,092,446)
Finance Income		4,288	27,880	34,339
Finance costs		(3,275)	(12,886)	(30,702)
Finance income  net		1,013	14,994	3,637
Loss before income tax		(5,942,373)	(4,875,623)	(9,088,809)
Income tax credit		30,949	34,355	32,429
Loss for the period / year		(5,911,424)	(4,841,268)	(9,056,380)
Loss per ordinary share - basic                  6		(2p)	(2p)	(4p)

All activities are classified as continuing.

		Six months ended 30 June 2021 (unaudited) £	Six months ended 30 June 2020 (unaudited) £	Year ended 31 December 2020 (audited) £
Loss for the financial period / year		(5,911,424)	(4,841,268)	(9,056,380)
Other comprehensive income / (loss) Items that may be reclassified to profit or loss:
Exchange differences on translation of foreign operations		25,992	(200,450)	(646)
Total comprehensive loss for the period / year		(5,885,432)	(5,041,718)	(9,057,026)

Condensed consolidated balance sheet

At 30 June 2021

	Note		As at 30 June 2021 (unaudited) £		As at 30 June 2020 (unaudited) £		As at 31 December 2020 (audited) £
Assets Non-current assets:
Property, plant and equipment			470,361		863,727		636,543
Trade and other receivables			185,885		213,964		186,021
			656,246		1,077,691		822,564
Current assets
Trade and other receivables			1,738,492		1,511,856		1,475,785
Other current assets			110,293		111,110		72,993
Cash and cash equivalents			29,764,102		14,427,938		35,421,396
			31,612,887		16,050,904		36,970,174
Total assets			32,269,133		17,128,595		37,792,738
Liabilities
Non-current liabilities
Lease liabilities			29,636		360,235		204,437
			29,636		360,235		204,437
Current liabilities
Trade and other payables			2,124,607		1,994,651		1,913,845
Current tax liabilities			-		23,063		13,361
Lease liabilities			361,132		409,660		390,220
			2,485,739		2,427,374		2,317,426
Total liabilities			2,515,375		2,787,609		2,521,863
Net Assets			29,753,758		14,340,986		35,270,875
Equity and Liabilities Equity attributable to owners of the parent
Share capital	7		52,690		52,029		52,688
Share premium			65,754,666		40,932,183		65,710,297
Share based payment reserve			3,174,515		2,684,147		2,850,571
Retranslation reserve			(117,306)		(343,102)		(143,298)
Accumulated losses			(39,110,807)		(28,984,271)		(33,199,383)
Total equity			29,753,758		14,340,986		35,270,875

Condensed consolidated statement of changes in equity

For the six months ended 30 June 2021

			Six months ended 30 June 2020
		Note		Share Capital £	Share Premium £	Share based payment reserve £	Retranslation reserve £		Accumulated Losses £	Total Equity £
Balance as at 1 January 2020				52,029	40,932,183	2,500,944	(142,652)		(24,143,003)	19,199,501
Loss for the period				-	-	-	-		(4,841,268)	(4,841,268)
Other comprehensive loss for the period				-	-	-	(200,450)		-	(200,450)
Total comprehensive loss for the period				-	-	-	(200,450)		(4,841,268)	(5,041,718)
Share based payments recognised as expense				-	-	183,203	-		-	183,203
Total transactions with shareholders recognised directly in equity				-	-	183,203	-		-	183,203
Balance as at 30 June 2020				52,029	40,932,183	2,684,147		(343,102)	(28,984,271)	14,340,986

			Year ended 31 December 2020 (audited)
				Share Capital £	Share Premium £	Share based payment reserve £	Retranslation reserve £		Accumulated 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 as at 31 December 2020				52,688	65,710,297	2,850,571		(143,298)	(33,199,383)	35,270,875

			Six months ended 30 June 2021
		Note		Share Capital £	Share Premium £	Share based payment reserve £	Retranslation reserve £		Accumulated Losses £	Total Equity £
Balance as at 1 January 2021				52,688	65,710,297	2,850,571	(143,298)		(33,199,383)	35,270,875
Loss for the period				-	-	-	-		(5,911,424)	(5,911,424)
Other comprehensive income for the period				-	-	-	25,992		-	25,992
Total comprehensive loss for the period				-	-	-	25,992		(5,911,424)	(5,885,432)
Proceeds from shares issued				2	44,369	-		-	-	44,371
Share based payments recognised as expense				-	-	323,944		-	-	323,944
Total transactions with shareholders recognised directly in equity				2	44,369	323,944		-	-	368,315
Balance as at 30 June 2021				52,690	65,754,666	3,174,515		(117,306)	(39,110,807)	29,753,758

Condensed consolidated statement of cash flows for the six months ended 30 June 2021 Note Six months ended 30 June 2021 (unaudited) £ Six months ended 30 June 2020 (unaudited) £ Year ended 31 December 2020 (audited) £ Net cash from operating activities 8 (5,430,798) (4,493,714) (8,146,368) Tax credit received - - 99,886 Taxation paid (26,261) - (17,697) Interest received 4,288 27,880 34,339 Interest paid (3,275) (12,886) (30,702) Net cash used in operating activities (5,456,046) (4,478,720) (8,060,542) Cash flow from investing activities Purchase of tangible assets (55,133) (8,788) (25,202) Proceeds from disposal of tangible assets - 100 100 Net cash used in investing activities (55,133) (8,688) (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 (190,486) (176,267) (363,346) Net cash used in financing activities (146,115) (176,267) 24,415,427 Net (decrease) / increase in cash and cash equivalents  (5,657,294) (4,663,675) 16,329,783 Cash and cash equivalents at the beginning of the period / year 35,421,396 19,091,613 19,091,613 Cash and cash equivalents at the end of the period / year 29,764,102 14,427,938 35,421,396

Cash and cash equivalents consists of
Cash at bank and in hand		29,764,102	14,427,938					35,421,396
Cash and cash equivalents		29,764,102	14,427,938					35,421,396

 

1  Basis of preparation

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. There was no impact or changes in accounting policies from the transition. These condensed consolidated interim financial statements for the half-year reporting period ended 30 June 2021 have been prepared in accordance with the UK-adopted International Accounting Standard (IAS) 34, 'Interim Financial Reporting'.

The interim report does not include all of the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 31 December 2020, which has been prepared in accordance with both "international accounting standards in conformity with the requirements of the Companies Act 2006" and "international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union", and any public announcements made by Mirriad Advertising Plc during the interim reporting period .

These condensed interim consolidated financial statements for the six months ended 30 June 2021 and for the six months ended 30 June 2020 do not constitute statutory accounts as defined in Section 434 of the Companies Act and are unaudited. The financial information for the six months ended 30 June 2021 presents financial information for the consolidated Group, including the financial results of the Company's wholly owned subsidiaries Mirriad Advertising Private Limited, Mirriad Inc, Mirriad Software Science and Technology (Shanghai) Co. Ltd, and Mirriad Limited (dormant). Comparative figures in the condensed interim financial statements for the year ending 31 December 2020 have been taken from the Group's audited financial statements on which the Group's auditors, Pricewaterhouse Coopers LLP, expressed an unqualified opinion.

The Board approved these interim financial statements on 22 September 2021.

1.1  Going concern

These condensed interim financial statements have been prepared on the going concern basis. After making enquiries and producing cash flow forecasts the directors have reasonable expectations, as at the date of approving these condensed interim financial statements, that the Group has adequate resources to fund the Group for 12 months from the end of financial period being reported. This is supported by the Company's successful fundraise in December 2020, where an additional £26.2m (gross) proceeds were raised, the substantial cash balance of £29.8m at the period end, the fact that the Company is debt free with no external borrowing and the Company's net cash outflow of £5.5m for the period to 30 June 2021.

2  Accounting Policies

The accounting policies applied are consistent with those of the annual report and accounts for the year ended 31 December 2020, as described in those financial statements other than standards, amendments and interpretations which became effective after 1 January 2021 and were adopted by the Group. These have had no significant impact on the Group's loss for the period or equity.

The Group's activities and results are not exposed to any seasonality.

There are no items affecting assets, liabilities, equity, net income or cash flows that are unusual because of their nature, size or incidence which are required to be disclosed under IAS 34 para 16A(c).

There are no events after the interim reporting period which are required to be reported under IAS 34 para 16A(h).

There are no financial instruments being measured at fair value which require disclosure under IAS 34 para 16A(j)

3    Group financial risk factors

The condensed interim financial statements do not contain all financial risk management information and disclosures required in annual financial statements; the information should be read in conjunction with the financial information, as at 31 December 2020, summarized in the 2020 annual report and accounts. There have been no significant changes in any risk management policies since 31 December 2020.

4  Critical accounting estimates and judgements

The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results might differ from these estimates. IAS34(16A)(d) In preparing these condensed interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended 31 December 2020.

There are no changes in estimates of amounts reported in prior financial years.

5  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 Singapore office was closed in early 2020. 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 were 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, who 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.

Revenue

	Six months ended 30 June 2021 (unaudited) £	Six months ended 30 June 2020 (unaudited) £	Year ended 31 December 2020 (audited) £
Turnover by geography
China and Singapore	819,727	763,515	1,765,196
USA	266,440	61,732	313,967
UK	51,121	71,467	100,756
India	-	-	-
Total	1,137,288	896,714	2,179,919

Loss before tax

The EBITDA is the loss for the year before depreciation, amortisation, interest and tax. The loss before tax is broken down by segment as follows:

	Six months ended 30 June 2021 (unaudited) £	Six months ended 30 June 2020 (unaudited) £	Year ended 31 December 2020 (audited) £
UK	(4,886,554)	(4, 011,192 )	(6,683,801)
USA	(946,497)	( 700,544 )	( 1,412,955 )
India	(301,783)	(3 73,973 )	(649,208)
China and Singapore	412,293	428,018	119,615
Total EBITDA	(5,722,541)	( 4,657,691 )	(8,626,349)
Depreciation	(220,845)	(2 32,926 )	( 466,097 )
Finance income net	1,013	14,994	3,637
Loss before tax	(5,942,373)	( 4,875,623 )	(9,088,809)

6  Loss per share

( a) Basic

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

Group	Six months ended 30 June 2021	Six months ended 30 June 2020	Year ended 31 December 2020
Loss attributable to owners of the parent (£)	(5,911,424)	(4,841,268)	(9,056,380)
Weighted average number of ordinary shares in issue Number	279,001,638	213,108,250	215,687,030

The loss per share for the period was 2p (six months to 30 June 2020: 2p; year ended 31 December 2020: 4p).

No dividends were paid during the period (six months to 30 June 2020: £nil; year ended 31 December 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

7   Share capital

Ordinary shares of £0.00001 each

Allotted and fully paid		Number
At 1 January 2021		278,991,891
Issued during the period		188,917
At 30 June 2021		279,180,808

On 21 June 2021 63,917 Ordinary Shares were issued for £0.35 per share following an exercise of options under the Company's EMI Share Option Scheme.

On 22 June 2021 125,000 Ordinary Shares were issued for £0.176 per share following an exercise of options granted to a member of the Company's US advisory Board.

8  Net cash flows used in operating activities

		Six months ended 30 June 2021 (unaudited) £	Six months ended 30 June 2020 (unaudited) £	Year ended 31 December 2020 (audited) £
Loss for the financial period / year		(5,911,424)	(4,841,268)	(9,056,380)
Adjustments for:
Tax on loss on ordinary activities		(30,949)	(34,355)	(32,429)
Interest income		(4,288)	(27,880)	(34,339)
Lease interest costs		3,275	12,886	30,702
Operating loss:		(5,943,386)	(4,890,617)	(9,092,446)
Amortisation of right-of-use assets		158,986	157,406	315,852
Depreciation of tangible assets		61,859	75,520	150,245
Loss / (profit) on disposal of tangible assets		-	(90)	(90)
Bad debts written off / (reversed)		(524)	18,734	11,609
Share based payment charge		323,944	183,203	349,627
Adjustment to tax credit in respect of previous periods		-	-	(5,426)
Research and development expenditure credits		(6,351)	-	(35,490)
Foreign exchange variance		25,992	(200,450)	(646)
- (Increase)/ decrease in debtors		(262,047)	(511,274)	(436,276)
- Increase  in creditors		210,729	673,854	596,673
Cash flow used in operating activities		(5,430,798)	(4,493,714)	(8,146,368)

9  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.  Accordingly there is no ultimate controlling party.

During the period the Company had the following related party transactions which were carried out at arm's length. No guarantees were given or received for any of these transactions.

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 period: (1) £3,333 for the services of Dr. Mark Reilly as a Director from 1st January 2021 until 24 February 2021. (2) £6,667 for the services of Kelsey Lynn Skinner as a Director from 24 February 2021 until 30 June 2021.  Of this amount £1,667 was invoiced and unpaid as at 30 June 2021. (3) £6,000 for the services of the Company Secretary during the period. £3,000 of this amount was invoiced and unpaid as at 30 June 2021.

Parkwalk Advisors 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 period: (1) £10,000 for the services of Alastair Kilgour as a Director during the period.  £1,667 of this amount was accrued and unpaid as at 30 June 2021.

All the related party transactions disclosed above were settled by 30 June 2021 except where stated.

10  Availability of Interim Report

Electronic copies of this interim financial report will be available on the Company's website at www.mirriadplc.com/investor-relations .

ENDS

About Mirriad

Mirriad's market-first solution seamlessly integrates with existing subscription and advertising models, improving the viewer experience by limiting commercial interruptions whilst delivering dramatically increased reach and impact for advertisers.

Mirriad currently operates in the US, Europe and China. 

 

END

 

 

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