TIDMBOOM
RNS Number : 5453T
Audioboom Group PLC
21 July 2020
This announcement contains inside information as stipulated
under the Market Abuse Regulations (EU) no. 596/2014 ("MAR")
Audioboom Group plc
("Audioboom", the "Group" or the "Company")
Half-Year Report
Audioboom (AIM: BOOM), the leading global podcast company,
announces its unaudited half-year results for the six months ended
30 June 2020.
Financial Highlights
-- Revenue increased 20% to US$11.8 million (H1 2019: US$9.8
million), outperforming US podcast industry* and highlighting
strong resilience to Covid-19
-- Adjusted EBITDA** loss improved to US$1.2 million (H1 2019 loss: US$1.4 million)
-- Group loss for the period significantly improved to US$2.0
million (H1 2019 loss: US$2.8 million)
-- US$4.3 million of cash reserves as at 30 June 2020,
representing Group cash of US$0.8 million and US$3.5 million of the
SPV loan facility remaining undrawn
-- Entered into a two-year US$4 million secured loan facility
arrangement with SPV Investments Limited, a special purpose vehicle
owned by both Michael Tobin, the Company's Chairman, and Candy
Ventures sarl, the Company's largest shareholder. The loan has
enabled the Company to access funding without equity dilution of
the Company's shareholders
Operational Highlights and KPIs
-- Key performance indicators ('KPIs'):
o Revenue per 1,000 listens (eCPM) was US$25.32 in June 2020,
marginally decreasing by 4% from US$26.38 in June 2019 due to lower
advertiser demand during the Covid-19 pandemic - it had grown to
US$38.40 in Q1 2020, and is expected to improve again in H2
2020
o Brand advertiser count of 234 as at 30 June 2020, up 10% on 30
June 2019 (212)
o Total H1 2020 available premium advertising impressions of 854
million, up 24% on H1 2019 (691 million)
-- Expansion of the Audioboom Originals Network with the launch
of For All Moms, Life's Little Mysteries, Here's The Sitch, Noise
Cancelling and Truth Vs Hollywood
-- Co-production partnership established with Future Publishing,
to create and launch three original content podcasts in 2020
focused on technology, science and video games
-- Renewed partnerships with major publisher partners including
Casefile, Morbid and No Such Thing As A Fish
-- Entered into new distribution partnerships to position the
Company to emerge from the Covid-19 pandemic in a position of
strength. These new partnerships include Pandora (81 million active
monthly users) and Amazon Music (65 million active monthly users)
and the expansion of an existing distribution partnership with
Saavn
-- Moved to the IAB V2 certified measurement standard to provide
greater transparency to our advertising sales partners
-- Joined the Triton Digital(R) Podcast Report, ranked as sixth
out of the top 15 US podcast networks in June 2020, based on
average weekly downloads and average weekly users
-- Entered into a new sales partnership with Australian Radio
Network to monetise inventory in Australia. Additionally, Audioboom
ranked as the biggest international podcast publisher in Australia
on Triton Digital's Podcast Reports
-- Retained Raine Advisors Limited ("Raine") as financial
adviser in relation to examining strategic options for the Company,
and subsequently established a formal sale process pursuant to the
Takeover Code. This process is ongoing and the Board, management
and Raine remain engaged with a number of interested parties
* Interactive Advertising Bureau July 2020 Podcast Advertising
Revenue Report states that US podcast advertising revenue is
expected to grow by 14.7% in FY 2020 relative to FY 2019
** Earnings before interest, tax, depreciation, amortisation,
share based payments and material one-off items
Stuart Last, CEO of Audioboom, commented:
"I am delighted to report that Audioboom's growth story
continues in 2020, despite the immense challenges the sector has
seen from the Covid-19 pandemic. Revenue growth for the period of
20% highlights a business model that continues to prove itself.
Once again Audioboom is outpacing the industry, with revenue for
the period growing 36% faster than is expected for US podcast
industry over the 2020 full year per the Interactive Advertising
Bureau's ('IAB') 2020 Podcast Revenue Report.
Alongside the revenue growth, cost control measures implemented
in the face of the pandemic delivered a reduced EBITDA loss and a
reduced overall loss for the period. Our reduced cash burn and the
US$4 million loan facility provided in February 2020 by our
Chairman and largest shareholder is expected to provide sufficient
headroom to fund the Company through to sustainable positive cash
flow generation on a monthly basis.
The most severe impact of Covid-19 was felt in May and June,
however, July and August bookings are displaying signs of
rebounding with advertiser demand increasing from previous lows. I
am confident that Audioboom's expansion will continue in the second
half of 2020 and I look forward to updating shareholders regarding
future developments."
Enquiries
Audioboom Group plc
Stuart Last, Chief Executive Officer Tel: +44(0)20 7403 6688
Brad Clarke, Chief Financial Officer
Allenby Capital Limited (Nominated Adviser Tel: +44(0)20 3328 5656
and Broker)
David Hart /Alex Brearley/Asha Chotai
Walbrook PR Limited (PR & IR Advisers) Tel: +44(0)20 7933 8780
Nick Rome/Tom Cooper or audioboom@walbrookpr.com
About Audioboom
Audioboom is a global leader in podcasting - producing,
distributing and monetising premium audio content to millions of
listeners around the world. Audioboom operates internationally,
with operations and global partnerships across North America,
Europe, Asia and Australia.
Audioboom provides technology and advertising services for a
premium network of 250 top tier podcasts, with key partners
including 'Casefile True Crime' (US), 'The Morning Toast' (US), 'No
Such Thing As A Fish' (UK), 'The Cycling Podcast' (UK) and 'The
Totally Football Show' (UK).
The Audioboom Originals Network is a slate of content produced
by Audioboom including 'The 45th', 'Covert', 'It's Happening with
Snooki & Joey', 'Mafia', 'Dead Man Talking' and 'Blank
Check'.
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.
Chief Executive's Report
Operational Review
Audioboom's core revenue strategy is focused on the monetisation
of premium podcasts through advertising. Expanding the business is
linked to three key strategic pillars:
1. content acquisition (partnerships with independent podcasts and networks)
2. content creation (development of owned and operated podcasts
through the Audioboom Originals Network)
3. content access (monetising shows at external podcast networks
through our in-house agency, Sonic Influencer Marketing)
Covid-19
The Covid-19 ('Covid') pandemic impacted many aspects of the
Company's operations during the first half of 2020, with the first
changes being seen in content consumption trends across Audioboom's
network. An initial 10-12% drop in downloads during the last two
weeks of March can be attributed to changes in audience schedules
as general travel for work purposes and commuting decreased almost
entirely overnight. Listening levels recovered during April,
returning to pre-Covid levels by the end of that month. Audioboom
has since grown downloads and available advertising inventory
across May and June, which can be attributed to the signing of new
publishers to the network during this period. The creation of
strong supply can be seen in our premium advertising impressions
KPI, with the total for H1 2020 reaching 854 million - a 24%
increase on the same period in 2019.
Advertiser demand was quickly and deeply impacted by Covid. A
number of brands and agencies swiftly enacted their 30-day
cancellation policies in mid-March, leading to the removal of
certain pre-booked campaigns from mid-April through to the end of
June. At the same time, many advertisers paused placing new
business and the combined result is lower than expected revenue
across Q2 2020.
A more detailed analysis of advertiser demand shows that top
tier podcasts, which average more than 100 thousand downloads per
episode, have been more resilient to market declines than smaller
shows. The majority of brands operating in podcasting are direct
response advertisers, who are able to track campaign performance at
individual podcast level through promotional codes and vanity URLs
and in the main they have remained committed to shows with larger
audience reach that have proven sales conversions. Tier 2 shows,
which average less than 100 thousand downloads per episode, have
been impacted to a greater extent. Advertisers have also been
significantly more risk averse, which has reduced their testing of
spend on new shows, making it an extremely difficult environment in
which to launch new, unproven podcasts. The Audioboom Originals
Network ('AON') has been impacted most severely during this time
from a revenue standpoint. The majority of AON shows have Tier 2
level audiences and new launches have seen softer than expected
advertiser support.
The impact of low advertiser demand can be seen in our eCPM KPI,
which is a measure of how we optimise our available advertising
inventory. In June 2019, our eCPM was US$26.38. For Q1 2020 we
reported an eCPM of US$38.40. However, in June 2020 this number was
US$25.32, a reduction on our strong Q1 performance and a 4% year on
year decrease.
The IAB's Podcast Revenue Report - published in July 2020 - also
highlighted the impact of Covid on the industry. Pre-Covid the IAB
was projecting industry revenue growth of 30% from 2019, however,
that growth forecast has been reduced to 14.7% due to the pandemic.
With H1 20 revenue growth of 20%, Audioboom has outperformed the
IAB's expectation for the US podcast industry over the 2020 full
year in terms of revenue growth by 36%.
Advertiser demand is increasing again as we move into Q3; new
bookings are picking up pace, while Covid-related advertising
cancellations are decreasing. Combined with strong inventory
levels, this demand is expected to lead to further expansion of the
business across the second half of the year.
Market Overview
Overall, the podcast market in the United States, which
continues to be Audioboom's main revenue generating region, remains
in a growth period and has shown stronger resilience to the
Covid-19 pandemic than many other sectors. The IAB's most recent
Podcast Revenue Study - released in July 2020 - projects 2020 US
market revenue growth at 14.7%, downgraded from 29.6%
pre-Covid.
Podcasting continues to be an active market for M&A activity
with several notable transactions being announced in 2020
including:
- Spotify's acquisition of The Ringer network
- Sirius XM's proposed acquisition of Stitcher
- LiveXLive's acquisition of PodcastOne
- Sirius XM's acquisition of Simplecast
Strategic Partnerships
During the period under review, the Company established new
strategic partnerships that support its sales, marketing and
technology operations. As a result of these partnerships, Audioboom
will be positioned to emerge from the Covid-19 pandemic in a
position of strength.
Our partnership with Podsights will provide advertisers with
attribution metrics, allowing them to measure the success of
campaigns they run on Audioboom podcasts, and book advertising with
increased confidence. In Australia, we signed a sales partnership
with Australian Radio Network (ARN), who will sell advertising and
sponsorships against consumption of our podcasts in Australia, our
3(rd) largest region.
Two distribution partnerships - with Pandora and Amazon Music -
will put our shows in front of 145 million potential new
listeners.
In the UK, Audioboom is now an official partner of The Podcast
Show. This will be a major podcast focused event launching in
Spring 2021 which will increase our exposure to UK-based
podcasters, advertisers and listeners.
A partnership with Triton Digital, and the extension of our work
with Voxnest, will provide Audioboom with audience data and
insights that will power our sales operation, deepen our
relationship with advertisers and agencies, and give our podcast
partners a clearer understanding of how their audience listens.
Triton Digital Partnership and Metrics
Audioboom's strategic partnership with Triton Digital provides a
detailed consumption measurement platform that is certified by the
Interactive Advertising Bureau in the United States. As well as
providing transparent and verified metrics to our advertising and
brand partners, the measurement service enables a more detailed
level of insight into listening trends across our podcasts. Key
insights that highlight Audioboom's position as a global leader in
podcasting include;
- Audioboom podcasts are downloaded more than 74 million times each month globally
- 21 million unique listeners consume an Audioboom podcast each month
- Audioboom shows are downloaded 40 million times in the US and
12 million times in the UK per month
Triton Digital's measurement service also provides data for
their monthly Podcast Reports - a set of regional rankers for
podcasts and networks. Audioboom placed as the 6(th) largest
podcast publisher in the United States and the largest
international podcast publisher in Australia in June's reporting
period, while many Audioboom podcasts appeared in the Top 200 show
ranker.
Independent Podcast Partnerships
Audioboom acquired exclusive sales rights with several major
podcast publishers during the period, and renewed partnerships with
many of its leading independent podcasters. New signings include
Tiny Meat Gang (ranked as the 60(th) biggest podcast in the US in
Triton Digital's Podcast Report), ID10T with Chris Hardwick (a
successful, long-running show formerly known as Nerdist), and
Coffee Convos with Kail Lowry & Lindsie Chrisley.
Notable major partnership renewals included; Morbid (the 30(th)
biggest show in the United States in Triton Digital's Podcast
Report), No Such Thing As A Fish, and Casefile (the second largest
show in Australia and the 42(nd) ranked show in the US as per the
Triton Report). All renewals for top tier podcast partners are for
24 months.
Audioboom Originals Network
The Company continues to focus on the growth of its in-house
production unit, which develops content for the Audioboom Originals
Network at a higher gross margin than our independent podcast
partnership business. Additionally, the unit develops branded
content treatments, provides production services to a number of
other podcasts and produces the acclaimed F1: Beyond The Grid
Podcast.
New shows launched into the Audioboom Originals Network in the
first half of 2020 include Life's Little Mysteries, Here's The
Sitch, Noise Cancelling, For All Moms and Truth Vs Hollywood. What
Makes A Killer, Never Thought I'd Say This and An Hour Or So With
Sue Perkins returned for new seasons, while established weekly
shows like The 45(th) , It's Happening and Blank Check continued
successfully.
Our production unit adapted quickly and nimbly to the logistical
challenges that Covid presented. Production studios in our New York
City offices were closed in mid-March, and on-location recording
has not been possible during this time. It is commendable that the
unit has delivered high quality production across new and returning
shows whilst working remotely and without access to production
facilities.
However, the medium-term growth of AON has been impacted by the
pandemic. Several planned show launches for 2020 were postponed
until later in the year or early 2021, reducing planned inventory
levels and therefore revenue potential. Expansion plans for 2020
included the launch of production facilities in Los Angeles as well
as investment in a number of senior production roles - these plans
will now be delayed until Q1 2021 at the earliest, creating a
knock-on effect of delays to new show launches over the next 18
months.
We are very excited for upcoming show launches planned for H2
2020 including Huddled Masses (from the production team behind the
Audioboom Original Dead Man Talking), Dance Moms and Crime Weekly
(a co-production with Main Event Media).
Sonic Influencer Marketing
Audioboom's in-house agency specialising in podcast advertising
continued its positive momentum as it entered its second full year
of operations. Sonic is part of the Audioboom Group but operates as
a distinct and separate brand. Sonic once again materially
contributed to the Group's revenue in H1 20. Sonic is focused on
the third pillar of Audioboom's strategic growth strategy -
accessing content at external podcast networks and monetising this
through advertising.
During the first half of 2020, nineteen brands utilised the
Sonic Influencer Marketing platform and accessed inventory across
184 podcasts outside of the Audioboom network.
Financial Review
Group revenue in the first half of 2020 increased by 20% year on
year to US$11.8 million (H1 2019: US$9.8 million). Adjusted EBITDA
loss (earnings before interest, tax, depreciation, amortisation,
share based payments and material one-off items) improved by 15% to
US$1.2 million (H1 2019 loss: US$1.4 million). Total loss for the
period significantly improved to US$2.0 million (H1 2019 loss:
US$2.8 million). Despite the challenges posed by Covid, the Company
delivered year-on-year revenue growth ahead of the wider podcast
market.
Gross margin remained fairly consistent with 2019 at 21% (year
to 31 December 2019: 22%). Audioboom has 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 21% gross margin in H1 2020. The Audioboom
Originals Network contributed a 47% gross margin in H1 2020, and
the higher associated gross margin means this is a key area of
focus going forward for the Company. Sonic Influencer Marketing
contributed a 14% gross margin.
Cost control continues to be of upmost importance, ensuring that
the resources of our lean and efficient Company are aligned to our
operational demands and allow our excellent 38 members of staff to
continue to deliver growth. Cash collection has continued to
improve once again, despite increasing revenue volume, thanks to
our efficient internal processes and good relationships with our
customers, yielding a new record low debtor days of 58 at 30 June
2020 (30 June 2019: 78). Creditor payments continue to be in line
with our contractual payment obligations, with trade payables and
accrued costs of US$4.2 million.
On 7 February 2020, the Company announced that it had entered
into a US$4 million secured loan facility arrangement (the
"Facility") with SPV Investments Limited ("SPV"), a special purpose
vehicle owned by Michael Tobin, the Company's Chairman, and Candy
Ventures sarl, the Company's largest shareholder. Historically, the
growth of Audioboom has been financed by the issue of equity with
consequential dilution to the Company's shareholders, and the Board
believes that the expectation of potential equity issues has had a
negative impact on the Company's share price. The Facility should
provide sufficient funding through to forecast sustainable positive
cash generation on a monthly basis. To date, US$0.5 million of the
loan has been drawn down and we will continue to prioritise
limiting further draw-downs to when absolutely necessary as we
continue to approach break even.
The separate US$4 million content funding facility with SPV,
announced on 17 June 2019, has continued to decrease pressure on
capital required to secure high revenue producing podcasts. This
provides minimum revenue guarantees to certain leading content
partners of the Company with Audioboom paying 8% of the net
advertising revenue (after paying the content partner its share)
received by Audioboom, in relation to those podcasts to SPV. The
second guarantee of US$1.75 million was provided in January 2020
and as at 30 June 2020, the amount currently remaining available
under the guarantee facility was approximately US$2.6 million.
Operating cash outflow before working capital movements is
marginally ahead of H1 2019 at US$1.7 million (H1 2019: US$1.8
million). Net cash used in operating activities was US$1.7 million
(H1 2019: US$3.8 million) as the Company continued to fulfil a
number of material recoupable advance payments to retain existing
and attract new podcast partners. This has been offset by continued
over-performance on debtor collections, leading to a US$1.7 million
decrease in trade debtors since 31 December 2019. Further improved
working capital management can be identified when comparing the
cash burn rate. Excluding recoupable content partner advances paid
(H1 2020: US$0.8 million, H1 2019: US$1 million), 2019 fundraising
(US$5.5 million) and 2020 SPV loan drawn down (US$0.5 million), H1
2019 saw a net cash burn of US$2.7 million, which decreased to
US$1.4 million in H2 2019 and again further to US$0.9 million in H1
2020.
Formal Sale Process Update
In 2020, Audioboom retained Raine as financial adviser in
relation to examining strategic options for the Company, and
subsequently established a formal sale process pursuant to the
Takeover Code. The process is ongoing and the Board, management and
Raine remain engaged with a number of interested parties.
Outlook
The strong growth recognised in H2 2019 has continued into 2020
with impressive performance, despite the impact of Covid-19 on the
whole advertising industry. Continued cost control and working
capital management, new partnerships, and the continued growth of
our creative content operation will enable us to continue our
progress as the pandemic subsides.
I would like to take this opportunity to thank the management
team and staff for their continued hard work and commitment during
a challenging period and look forward to the second half of the
year with renewed optimism.
Stuart Last
Chief Executive Officer
Audioboom Group PLC
Consolidated Statement of Comprehensive Income
Unaudited Unaudited Audited
6 months 6 months 12
to 30 June to 30 June months
2020 2019 to 31 Dec
2019
Notes US$'000 US$'000 US$'000
Continuing operations
Revenue 2 11,829 9,844 22,310
Cost of sales (9,343) (7,553) (17,414)
------------ ------------ -----------
Gross profit 2,486 2,291 4,896
Administrative expenses (4,347) (5,043) (12,339)
Adjusted operating loss (1,207) (1,418) (2,860)
- Amortisation of intangible
assets - (205) (2,420)
- Share based payments (335) (882) (1,429)
- Depreciation (30) (30) (60)
- Depreciation - leases (160) (166) (331)
- Corporate transaction (129) - -
costs
- Restructuring costs - (51) (343)
Operating loss (1,861) (2,752) (7,443)
Finance costs 3 (141) (18) (97)
------------ ------------ -----------
Loss before tax (2,002) (2,770) (7,540)
Income tax credit - 1 221
------------ ------------ -----------
Loss for the financial
period (2,002) (2,769) (7,319)
Other comprehensive income
Foreign currency translation
difference (320) (134) (193)
------------ ------------ -----------
Total comprehensive loss
for the period (2,322) (2,903) (7,126)
============ ============ ===========
Loss per share
from continuing operations
Basic and diluted 4 (14) cents (23) cents (55) cents
Audioboom Group PLC
Consolidated Statement of Financial Position
Unaudited Unaudited Audited
as at 30 as at 30 as at
June 2020 June 2019 31 Dec
2019
Notes US$'000 US$'000 US$'000
ASSETS
Non-current assets
Intangible assets - 2,237 -
Property, plant and equipment 112 110 140
Right of use asset 1,129 1,631 1,300
1,241 3,978 1,440
----------- ----------- ---------
Current assets
Trade and other receivables 6 5,348 6,171 7,120
Cash and cash equivalents 818 3,351 1,992
6,166 9,522 9,112
----------- ----------- ---------
TOTAL ASSETS 7,407 13,500 10,552
----------- ----------- ---------
Current liabilities
Trade and other payables 7 (4,240) (5,752) (5,861)
Deferred taxation - (197) -
(4,240) (5,949) (5,861)
----------- ----------- ---------
Net current assets 1,926 3,573 3,251
----------- ----------- ---------
Non-current liabilities
Loan liability 3 (500) - -
Lease liability 3 (892) - (1,029)
----------- ----------- ---------
NET ASSETS 1,775 7,551 3,662
=========== =========== =========
Equity
Share capital - - -
Share premium 5 56,310 56,423 56,210
Issue cost reserve (2,048) (2,048) (2,048)
Foreign exchange translation
reserve (657) (664) (337)
Reverse acquisition reserve (3,380) (3,380) (3,380)
Retained earnings (48,450) (42,780) (46,782)
TOTAL EQUITY 1,775 7,551 3,662
=========== =========== =========
Audioboom Group PLC
Consolidated Cash Flow Statement
Unaudited Unaudited Audited
six months six months 12 months
to 30 June to 30 June to 31 Dec
2020 2019 2019
US$'000 US$'000 US$'000
Loss from continuing operations (2,002) (2,769) (7,319)
------------ ------------ -----------
Loss for the period (2,002) (2,769) (7,319)
Adjustments for:
Taxation - (1) (221)
Interest payable 141 18 97
Depreciation of fixed assets 30 30 60
Effect of retranslation of
fixed assets - 13 (11)
Amortisation of intangible
assets - 205 2,420
Effect of retranslation of - (22) -
intangible assets
Share based payments 335 882 1,429
Taxation received 27 - 106
Foreign exchange loss (223) (153) (17)
------------ ------------ -----------
Cash flows from operating
activities before working
capital movements (1,692) (1,797) (3,456)
Decrease/(Increase) in trade
and other receivables 1,773 (2,003) (2,952)
(Decrease)/Increase in trade
and other payables (excluding
leases) (1,766) 34 1,316
Net cash used in operating
activities (1,685) (3,766) (5,092)
------------ ------------ -----------
Investing activities
Purchase of property, plant
and equipment (2) - (36)
------------ ------------ -----------
Net cash used in investing activities (2) - (36)
------------ ------------ -----------
Financing activities
Proceeds from loan 500 - -
Loan interest and fees (87) - -
Proceeds from issue of ordinary
share capital 100 5,540 5,539
------------ ------------ -----------
Net cash generated from financing
activities 513 5,540 5,539
------------ ------------ -----------
Net (decrease)/increase in cash
and cash equivalents (1,174) 1,774 411
------------ ------------ -----------
Cash and cash equivalents at beginning
of period 1,992 1,581 1,581
Effect of foreign exchange - (4) -
rate changes
------------ ------------ -----------
Cash and cash equivalents
at end of period 818 3,351 1,992
============ ============ ===========
Audioboom Group PLC
Consolidated Statement of Changes in Equity
Share premium Other reserves* Retained Total equity
earnings
US$'000 US$'000 US$'000 US$'000
-------------- ---------------- ---------- -------------
At 31 December 2018 50,883 (5,958) (40,893) 4,032
-------------- ---------------- ---------- -------------
Loss for the period - - (2,769) (2,769)
Issue of shares 5,327 - - 5,327
Equity-settled share-based
payments - - 882 882
Other comprehensive loss - (134) - (134)
At 30 June 2019 56,210 (6,092) (42,780) 7,338
-------------- ---------------- ---------- -------------
Loss for the period - - (4,550) (4,550)
Equity-settled share-based
payments - - 547 547
Other comprehensive income - 327 - 327
At 31 December 2019 56,210 (5,765) (46,783) 3,662
-------------- ---------------- ---------- -------------
Loss for the period - - (2,002) (2,002)
Issue of shares 100 - - 100
Equity-settled share-based
payments - - 335 335
Other comprehensive loss - (320) - (320)
At 30 June 2020 56,310 (6,085) (48,450) 1,775
-------------- ---------------- ---------- -------------
*Other reserves relate to the following reserves: Issue Cost
Reserve, Foreign Exchange Translation Reserve and the Reverse
Acquisition Reserve. Full details are disclosed in the 2019 Annual
Report.
Audioboom Group plc
Notes to the financial statements
1. General information and basis of preparation
Audioboom Group plc is incorporated in Jersey under the
Companies (Jersey) Law 1991. The Company's ordinary shares of no
par value are traded on AIM, a market operated by the London Stock
Exchange.
These consolidated interim financial statements, which are
unaudited, have been approved by the Board of Directors on 20 July
2020. They have been drawn up using the accounting policies and the
basis of presentation expected to be adopted in the Group's full
financial statements for the year ending 31 December 2020, which
are not expected to be significantly different to those set out in
note 1 to the Company's audited financial statements for the 12
month period ending 31 December 2019.
The consolidated interim financial statements have been prepared
under the historical cost convention and in accordance with
International Financial Reporting Standards ("IFRS") and with IAS
34 "Interim financial reporting", as adopted by the EU.
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 as at the date of the financial
statements and the reported amounts of revenues and expenses during
the reporting period. Those estimates and assumptions are
consistent with those as reported in the Company's audited
financial statements for the 12 month period ending 31 December
2019.
Going concern
These interim 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 the
foreseeable future. Following the US$4 million loan facility
arrangement with SPV Investments Limited announced in February
2020, the Board's forecasts for the Group, including due
consideration of the continued operating losses, projected increase
in revenues and decreasing cash-burn of the Group (and taking
account of reasonably possible changes in trading performance and
also 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. No additional
funding is considered to be required and, 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.
In forming this assessment, the Directors have considered the
ongoing impact that the global outbreak of Covid-19 may have on the
Group. The Directors acknowledge that it is challenging to predict
the full impact this, and a potential second wave of Covid-19, may
have on the Group. Notwithstanding, management has carried out
sensitivity analyses of the Group's cash flow models to quantify
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 SPV
Investments Limited. 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
appropriate.
2. Revenue
The Group's operations are principally located in the UK and the
USA. The Group's revenue from external customers by geographical
location is detailed below:
Unaudited Unaudited Audited
six months six months 12 months
to 30 June to 30 June to 31 Dec
2020 2019 2019
US$'000 US$'000 US$'000
United Kingdom 729 1,095 2,137
Rest of World 18 13 57
USA 11,082 8,736 20,116
------------ ------------ -----------
Total 11,829 9,844 22,310
============ ============ ===========
3. Finance costs
The Company has incurred interest on the US$0.5 million loan
drawn in the first half of 2020 from SPV Investments Limited. The
Facility attracts an interest rate of 8 per cent. per annum on
drawn down funds, together with a US$80,000 arrangement fee which
was paid on the first draw down, equivalent to 2 per cent. of the
full US$4 million available under the facility. The accrued
interest is payable at the date of repayment of the principal
amount outstanding with the latest date for repayment being 24
months from the commencement date of the Facility, being 7 February
2022. The loan may be repaid earlier at the Company's election.
Unaudited Unaudited Audited
six months six months 12 months
to 30 June to 30 June to 31 Dec
2020 2019 2019
US$'000 US$'000 US$'000
SPV loan interest and arrangement 87 - -
fee
Depreciation - lease interest 54 18 97
------------ ------------ -----------
Total 141 18 97
============ ============ ===========
4. Loss per share
Basic earnings per share is calculated by dividing the loss
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, net loss per share would be
decreased by the exercise of share options. Therefore, as per IAS
33:36, the antidilutive potential ordinary shares are disregarded
on the calculation of diluted EPS.
On 21 June 2019, the Company consolidated every 100 existing
ordinary shares of no par value into one new ordinary
share of no par value.
Reconciliation of the loss and weighted average number of
ordinary shares used in the calculation are set out below:
30-June-20
Loss Weighted average Per share
number of shares amount
Basic and Diluted EPS US$'000 Thousand Cents
Loss attributable to shareholders:
- Continuing and discontinued
operations (2,002) 14,017 (14)
30-June-19
Loss Weighted average Per share
number of shares amount
Basic and Diluted EPS US$'000 Thousand Cents
Loss attributable to shareholders:
- Continuing and discontinued
operations (2,769) 12,238 (23)
31-Dec-19
Loss Weighted average Per share
number of shares amount
Basic and Diluted EPS US$'000 Thousand Cents
Loss attributable to shareholders:
- Continuing and discontinued
operations (7,319) 13,385 (55)
5. Share capital
Issued and fully paid - ordinary shares of no par value
At 31 December 2019 (adjusted
for share consolidation) 14,006,757
At 30 June 2020 14,056,504
During the period 49,747 new ordinary shares were issued to
satisfy the exercise of existing share options under the Company's
Share Option Scheme 2014 by ex-employees whose options were due to
lapse.
The total number of instruments over equity (including both
share options and warrants) outstanding at the period end was
1,740,276.
6. Trade and other receivables
The trade and other receivables at the end of the period
comprised US$4.1 million relating to trade debtors and accrued
sales income, and US$1.2 million relating to deposits, prepaid
expenses and advance talent payments.
7. Trade and other payables
The trade and other payables at the end of the period comprised
US$3.9 million relating to trade payables and accrued content
partner costs. The Company currently accrues all costs based on
contract terms. Due to a minimum payable value, some partners have
not attained the threshold level to receive a payment. Payables
relating to leases total US$1.2 million, US$0.3 million due in
under one year and US$0.9 million due in more than one year.
8. Related party transactions
On 17 June 2019, the Company agreed a new content funding
facility with SPV Investments Ltd, a special purpose vehicle
('SPV') which has been established and is owned equally by Michael
Tobin, the Company's Chairman, and Candy Ventures sarl, the
Company's largest shareholder. The SPV will provide minimum revenue
guarantees to certain leading new and existing content partners of
the Company. Audioboom will pay 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 will 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 these warrants will be GBP3.30 per ordinary share each,
with such warrants being exercisable for five years from grant. The
second guarantee provided by the SPV in January 2020 of US$1.75
million led to a grant of an aggregate of 43,750 warrants split
equally between Michael Tobin and Candy Ventures sarl. Following
the second use of the content funding facility, as at 30 June 2020
the amount currently remaining available under the guarantee
facility was approximately US$2.6 million.
In February 2020, the Company announced a US$4 million secured
loan facility arrangement (the "Facility") with SPV. The Facility
will be drawn down in accordance with an agreed cash flow forecast
schedule and has a minimum draw down amount of US$200,000. The
Facility will attract 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 accrued
interest is payable at the date of repayment of the principal
amount outstanding. The latest date for repayment is 24 months from
the commencement of the Facility, however it may be repaid earlier
at the Company's election. Any amounts repaid will not be available
for subsequent drawdown. The SPV may require early repayment of
some or all of the amounts outstanding if the Company undertakes a
future equity fundraising (provided that a minimum of US$3 million
of any such fundraise must remain available for other uses by the
Company) or if there is a change of control of the Company. The
Facility is secured against the assets of Audioboom Limited and
contains events of default which are customary in nature for this
type of loan facility. The interest rate payable will increase to
12 per cent. per annum in the case of default on repayment by the
Company. To date, US$0.5 million has been drawn down under the
facility.
ENDS
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR QBLFLBDLEBBF
(END) Dow Jones Newswires
July 21, 2020 02:00 ET (06:00 GMT)
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