TIDMLSAI
RNS Number : 0748U
Location Sciences Group PLC
27 July 2020
Location Sciences Group PLC
("Location Sciences" or the "Company")
Trading Update
Location Sciences (AIM: LSAI), the leading location data
verification company, provides the following trading update for the
six months to 30 June 2020 ("H1 2020" or the "period").
Trading Performance
Unaudited revenues (including X-Mode securitisation) for the six
months ended 30 June 2020 are expected to be approximately GBP0.65
million, an increase of approximately 43% on the corresponding
period last year (H1 2019: GBP454,872) with core revenues
(excluding X-Mode securitisation) of approximately GBP0.46 million,
which is slightly ahead of H1 2019 despite the impact of
COVID-19.
To mitigate the impact of COVID-19, the Company's directors
implemented a cost reduction programme and are pleased to report
this has seen cash administrative expenses being reduced to
approximately GBP0.95 million for the period (H1 2019: GBP1.11
million), a reduction of 15%. This in turn has led to an improved
adjusted cash EBITDA loss of approximately GBP0.68 million in the
period, a decrease of approximately 17% compared to 2019 (H1 2019:
EBITDA loss GBP0.82 million).
Cash Resources
In March 2020, the Company raised approximately GBP0.975 million
(before expenses) through an equity placing comprising the issue
and allotment of 111,430,000 new ordinary shares and an additional
approximately GBP0.07 million was raised through the issue and
allotment of 74,057,996 new ordinary shares pursuant to the issue
of warrants.
The combination of the GBP1.05 million of capital raised
together with the cost control measures implemented resulted in the
Company having cash reserves of approximately GBP1.7 million at 30
June 2020 (31 December 2019: GBP1.3 million), which the directors
believe will be sufficient for the Company's requirements until Q2
2021.
Impact of COVID-19
Verify revenues were adversely impacted by significantly reduced
advertising spend in Q2 2020. In particular, it has been a
challenging time for location-based advertising within sectors that
rely on people's movement, such as retail and QSR. As these sectors
come back to life, the Board expects a focus on local advertising
which should be a positive driver for the Company's media
verification revenues in H2 2020 and especially in Q4 when the
Board expects the majority of the Company's Verify revenues to be
secured. However, overall, the Board believes that advertising
spend will be lower in 2020 compared to 2019.
The Company has worked hard to replace these revenues, investing
significant time and energy into enlarging its data insights
customer base, including making its location data available to UK
Government departments and pitching for global data projects linked
to the COVID-19 data analysis. Although no major contract wins have
been secured to date, the Company is still exploring several open
opportunities and will provide updates in due course.
The cash impact of the lower Verify revenues was mitigated
quickly through making operational overhead cutbacks, which
included reducing the Board's and senior management's
remuneration.
Verify Progress
As announced in its COVID-19 update on 23 March 2020, the
Company launched an updated version of its Verify Proximity
platform at the end of April 2020. This will give its customers a
clearer picture of how to obtain better value from their location
spend and how to drive better performance. This will be needed in
the months ahead, as companies look for a competitive edge.
In addition, Location Sciences launched its Verify Audience
product in the US. Verify Audience allows brands, agencies and
suppliers to check the validity of location based derived audience
segments, a review of historical movements in contrast to proximity
which validates the real time locations as digital advertising
campaigns are delivered. To date eight paid for tests have been
undertaken with the initial feedback from agencies and suppliers
being very encouraging and the Company expects to be able to
announce further news in the coming months.
X-Mode Partnership
The Company's partnership with X-Mode is progressing well and
has allowed it to expand its insights customer base and, in
particular, pitch for insight deals outside the UK as well as
upsell insights to its Verify customers. This gives the Company a
greater market opportunity going forward.
As a consequence of its partnership with X-Mode and specifically
the initial transfer of some its data contracts, the Company has
been required to recognise an additional approximately GBP0.2
million of income in H1 2020, representing the securitisation of
these contracts over the period from 1 January 2020 to 31 December
2021.
iOS 14 - Changing the Location Landscape
The upcoming changes caused by iOS 14, Apple's latest iOS update
due in September 2020, will see users being given the choice of
sharing their IDFA (the unique identifier for advertisers) as well
as an approximate location as an alternative to their precise
location. This new operating system update will add greater
consumer choice and transparency features that will have a
significant impact on location advertisers - particularly when it
comes to behavioural audiences and precise location targeting at
scale.
The Board expects that these changes will be welcomed by
consumers which will, as a result, increase the volume of location
data being shared - albeit the increase in volume is likely to be
driven with the sharing of approximate location (rather than not
sharing at all).
Mark Slade, the Company's Chief Executive. commented on the
impact of iOS 14 in a recent blog, which can be found via this
link
https://www.locationsciences.ai/blog/ios-14-and-its-impact-on-the-location-based-advertising-market/
Mark Slade, Chief Executive Officer of Location Sciences,
commented: "While the first half of 2020 was not what anyone had
been expecting or indeed hoping for, there are some positive macro
trends emerging in our industry. Only last month, Group M (the
world's largest advertising agency) told its customers that
location verification is critical to brand safety, a milestone
which has been a long time coming and something we celebrated
internally.
In the second half of 2020, we expect advertising revenues to
return, albeit perhaps not to 2019 levels, however, with a renewed
focus on local marketing, something which Location Sciences is
ideally positioned to benefit from. I am confident we will emerge
from this global crisis as a stronger company and better able to
deliver shareholder value."
A further update on trading and prospects will be provided at
the time of the release of the Company's unaudited interim results
due to be released in mid-September 2020.
For further information please contact:
Location Sciences Group PLC via Milk & Honey PR
Mark Slade, Chief Executive
Officer
David Rae, CFO and Commercial
Director
Shore Capital (Nominated Tel: +44 (0)20 7408 4090
Adviser and Broker)
Tom Griffiths/David Coaten
Peterhouse Capital (Joint Tel: +44 (0) 20 7220
Broker) 9791
Charles Goodfellow
Eran Zucker
Milk & Honey PR Tel: +44 (0)20 3637 7310
Kirsty Leighton
Jessica Ballinger
About Location Sciences Group PLC:
Location Sciences is the pre-eminent global location
verification provider to the $160 billion digital advertising
industry. Working in partnership with brands, media agencies and
suppliers to reduce ad-wastage and improve the effectiveness of
location-based advertising campaigns.
The digital advertising market-place remains unregulated and
un-monitored, with an estimated $19 billion wasted on ad-fraud in
2018. Location Sciences has developed Verify, the world's first
independent location verification product. Utilising sophisticated
machine learning and pattern recognition technologies, Verify
detects location ad-fraud and shines a light on location data
inaccuracy with the aim of bringing back integrity, transparency
and trust to the market place.
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
TSTUSSVRRAUBUAR
(END) Dow Jones Newswires
July 27, 2020 02:00 ET (06:00 GMT)
Grafico Azioni Location Sciences (LSE:LSAI)
Storico
Da Mar 2024 a Apr 2024
Grafico Azioni Location Sciences (LSE:LSAI)
Storico
Da Apr 2023 a Apr 2024
