TIDMBOOM
RNS Number : 9462H
Audioboom Group PLC
30 March 2020
This announcement contains inside information as stipulated
under the Market Abuse Regulations (EU) no. 596/2014 ("MAR").
Audioboom Group plc
("Audioboom", the "Company" or the "Group")
Final audited results for the year ended 31 December 2019
Audioboom (AIM: BOOM), the leading global podcast company,
announces its final audited results for the year ended 31 December
2019.
HIGHLIGHTS FOR THE YEARED 31 DECEMBER 2019
Financial highlights(1)
-- Revenue increased 91% to US$22.3 million (2018: US$11.7 million for 13 months)
-- Adjusted EBITDA(2) loss reduced 38% to US$2.9 million (2018: loss of US$4.7 million)(3)
-- Group cash as at 31 December 2019 of US$2.0 million (31 December 2018: US$1.6 million)
-- Successfully raised a total of GBP4.3 million(4) from a
placing and subscriptions to secure leading podcasting talent and
shows, and to develop co-production and AON opportunities
-- New content funding 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, providing up to US$4 million of minimum guarantees to
certain leading content partners of the Company
1) The financial period ended 31 December 2018 was a 13 month
period (01 December 2017 - 31 December 2018)
2) Earnings before interest, tax, depreciation, amortisation,
share based payments and material one-off items (including
corporate restructuring costs)
3) Audioboom has adopted the modified retrospective approach to
the implementation of IFRS 16: Leases. There is deemed to be no
impact on reserves brought forward. Lease rental costs included
within administrative expenditure in the Group's last reported
annual financial statements are excluded from the 2018 comparative
adjusted EBITDA to ensure consistency of presentation
4) Before expenses
KPIs
-- Key performance indicators ('KPIs') all delivered significant growth:
o Brand advertiser count of 280 as at 31 December 2019, up 75%
on 31 December 2018 (160)
o Global revenue per 1,000 downloads (eCPM) for December 2019
increased 16% to US$29.60 (December 2018: US$25.49)
o Total available premium advertising impressions for the 12
months to 31 December 2019 up 59% to 1,644 million (2018: 1,035
million for 13 months to 31 December 2018)
Post-year end highlights
-- Expansion of the Audioboom Originals Network with the launch
of For All Moms, Life's Little Mysteries, Here's The Sitch and
Noise Cancelling
-- Co-production partnership established with Future Publishing
Plc, to create and launch three original content podcasts in 2020
focused on technology, science and video games
-- Renewed partnership with a Tier 1 podcast partner, utilising
the provision by SPV of a financial guarantee on the Company's
contractual commitments - this partnership is expected to deliver
material revenue for the Company during 2020 and beyond
-- Entered into new distribution partnerships with Pandora (81
million active monthly users), Amazon Music (65 million active
monthly users) and expanded existing distribution partnership with
Saavn
-- Moved to the IAB V2 certified measurement standard to provide
greater transparency to our advertising sales partners
-- Entered into a two-year US$4 million secured loan facility
arrangement with SPV, providing sufficient headroom to fund the
Company through to forecast sustainable positive cash generation on
a monthly basis
-- Retained Raine Advisors Limited as financial adviser in
relation to examining strategic options for the Company, and
subsequently established a formal sale process pursuant to the
Takeover Code
-- Strong start to 2020, with bookings for the first quarter ahead of management expectations
Stuart Last, CEO of Audioboom, commented: " Audioboom has
achieved an outstanding set of results and I am delighted that, in
my first year as CEO, the Company has exceeded market expectations
for the first time in its history. In 2019, our premium content and
premium advertising strategy came sharply into focus, and resulted
in revenue almost doubling and our EBITDA loss being significantly
reduced.
" Quality and creativity have become the key pillars of our
business and have driven our growth at more than double the pace of
the wider podcast industry. We acquired some of the best new
independent shows for our premium sales network in 2019 and
expanded our Audioboom Originals Network with some fantastic new
programming from our in-house production teams in New York and
London.
" Momentum has continued into 2020, with bookings ahead of
management expectations for the first quarter. While we are working
hard to understand the impact of Covid-19 on the industry and our
business, we're confident that the support of our shareholders and
an improved cash position has put us in a strong position to
continue our expansion and further cement Audioboom as the leading
independent podcast company."
Michael Tobin, Chairman of Audioboom, added : " The Board
appointed Raine Advisors and have subsequently established a formal
sale process pursuant to the UK Takeover Code. A number of
interested parties are actively engaged in the process, and
currently potential buyer interest in Audioboom suggests the
process will stay the course, but we will continue to evaluate the
impact of Covid-19. We will keep shareholders informed of
developments in the coming weeks.
Notwithstanding the formal sales process, the Company remains
focussed on its core business strategy and the Q1 2020 results to
date indicate that these efforts continue to transform into
excellent financial performance."
Enquiries
Audioboom Group plc Tel: +44(0)20 7403 6688
Stuart Last, Chief Executive Officer
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 Group plc ("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),
'And That's Why We Drink' (US), 'No Such Thing As A Fish' (UK),
'Starburns Audio' (US), 'The Cycling Podcast' (UK) and 'The Totally
Football Show' (UK).
The Audioboom Originals Network is a slate of content produced
by Audioboom including 'The 45(th) ', ' 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, BookMyShow, Deezer, Google Podcasts,
iHeartRadio, RadioPublic, Saavn, Stitcher, Facebook and Twitter as
well as a partner's own websites and mobile apps.
For more information, visit audioboom.com.
CHAIRMAN'S STATEMENT
I am pleased to present this Chairman's Statement in respect of
my first full year in the position.
Following a challenging 2018, it is particularly satisfying to
reflect upon Audioboom's impressive performance in 2019, with
material growth in all KPIs, a near doubling of revenues,
substantially reduced EBITDA loss, and market expectations exceeded
for the first time in the Company's history. It is testament to the
efforts of the management team and all staff that growth in the
year outpaced that of the wider podcasting industry (which itself
continues to expand materially), leading to increased market share
and cementing its position as one of the world's largest
independent podcast companies.
In his CEO Review, Stuart Last provides detail around the
Company's strategy and focus, component parts of the business,
operational and financial performance, the strong start to 2020 and
the outlook for the remainder of the year in the light of global
events.
The Board was pleased to appoint Stuart as CEO following a brief
interim period last year. Stuart's key role in the growth of the US
business over recent years made him the obvious choice for the role
and the Board has been impressed with his performance, ably
supported by Brad Clarke as CFO.
We were pleased to secure GBP4.3 million in growth funding early
last year, and I was pleased, personally, to be able to support the
Company, along with Candy Ventures sarl (our largest shareholder)
and via SPV Investments Limited, through the provision of a US$4
million guarantee facility last year and a US$4 million loan
facility earlier this year. The funding and facilities have
enabled, and will continue to allow, the Company to acquire and
retain high revenue producing, established podcasts and talent, and
to develop the Group's higher margin Audioboom Originals Network,
all of which will further drive performance. The loan facility is
expected to provide sufficient headroom to fund Audioboom through
to sustainable positive cash flow generation on a monthly
basis.
As you will be aware, the Board appointed Raine Advisors Limited
as its financial adviser to examine strategic options for the
Company and subsequently the Board established a formal sale
process pursuant to the UK Takeover Code. A number of interested
parties are actively engaged in the process, but it is possible
that Covid-19 could impact the planned timeline. At this point,
potential buyer interest in the Company suggests the process will
stay the course, but we will continue to evaluate the impact of
Covid-19 over the coming weeks. Notwithstanding the formal sales
process, the Company remains focussed on its core business strategy
and the Q1 2020 results to date indicate that these efforts
continue to transform into excellent financial performance.
More generally on the impact of Covid-19, it is clearly far too
early to make any firm predictions as to its impact on the Group,
but Stuart provides some early reflections in his report. Given the
inevitable challenges ahead as the world continues to react to
events, I would like to take this opportunity to thank the entire
Audioboom team for their continuing professionalism and commitment
and also to thank our shareholders and partners for their loyalty
and vision in supporting Audioboom as it continues to grow.
Michael Tobin OBE
Chairman
CHIEF EXECUTIVE OFFICER'S REVIEW
Introduction
I am very pleased to provide my first CEO report since taking on
the role in September 2019. In my previous position as Audioboom's
Chief Operating Officer, I established our US operations, led our
global growth strategy, launched the Audioboom Originals Network,
and created our Sonic Influencer Marketing arm. I am proud to now
see the results of that work, with the Company exceeding market
expectations in 2019 for the first time in its history.
Audioboom is a global leader in podcasting - producing,
monetising and distributing premium audio content to millions of
listeners around the world. As our growth in 2019 considerably
outpaced that of the wider industry, we enhanced our position as
one of the biggest independent podcast companies in the world.
2019 was the year we put content at the heart of the business
and shifted to a focus on quality and creativity over sheer scale.
Audioboom became a fully-fledged media operation, positioned to
create maximum value from the fast-growing podcast industry.
During the year we restructured the Company, removed regional
teams and managers, and created a structure in which global sales,
production and business development units are aligned in strategic
focus under the leadership of our highest performing managers.
The outcome was an outstanding set of results that saw revenue
almost double and our EBITDA loss significantly reduced.
Momentum has continued into 2020, with our KPIs continuing to
show strong growth and bookings exceeding management expectations
for the first quarter. However, the Covid-19 virus may impact the
business in the coming months. We are still working to understand
how much disruption Covid-19 will bring to the podcast industry,
but my expectation is for softer sales than expected during the
second quarter as advertisers and brands grow more cautious in
their approach to the medium, albeit certain sectors may maintain
or increase their advertising at this time. It is reasonable to
expect that production and consumption of on-demand content,
including podcasts, will increase globally during the pandemic,
providing increased audience connection and sales inventory as we
go further into 2020.
The Chairman has addressed the latest position in respect of the
formal sales process in his statement.
Strategy
Audioboom is a media, content and talent company working at the
professional end of the podcast industry. We identify three clear
areas of growth - each focused on premium content and a premium
advertising sales model:
1. Content Acquisition. Audioboom develops commercial
partnerships with existing independent podcast talent and content
networks, where we provide a full slate of professional services,
including exclusive advertising representation in our core US and
UK markets. Opportunity for accelerated content acquisition comes
via the Company's strong working relationships with the major
Hollywood talent agencies, including UTA, WME and CAA. Content
acquisition of high-quality Tier One podcasts delivers fast revenue
growth for the Company, through the sale of high-value,
high-engagement host endorsement advertising.
2. Content Creation. Through co-production partnerships and
original content development from our in-house production teams,
the Audioboom Originals Network increases the volume of our premium
advertising inventory. Audience consumption and sales-trend data
from our wider business informs our show development strategy, with
insights into key growth genres and strong sales verticals. Content
creation requires up-front investment through content production
costs, facilities, and audience acquisition spend, but creates
strong revenue growth at a higher gross margin, as well as further
revenue potential through IP opportunities, including television
adaptation, touring and merchandise sales.
3. Content Access. The Sonic Influencer Marketing platform
enables brands to connect with audiences across the entire
professional-level podcasting landscape. The platform utilises
top-tier talent both within the Audioboom network and at all major
podcast networks globally, to deliver premium host endorsement
advertising campaigns to engaged audiences on behalf of their
clients. Sonic Influencer Marketing provides fast revenue growth to
the Group, albeit with a lower gross margin than Content
Acquisition and Content Creation.
We continue to operate our technology platform which supports
Tier Two podcasters and generates revenues through paid podcaster
subscriptions and lower-value automated advertising networks. These
are considered passive revenue streams by the Company and, as such,
we commit a lower level of resource to support their growth.
Overview of the market
2019 was a year of growth and a year of consolidation across the
podcast industry, with the US - Audioboom's major market -
continuing to lead the charge.
The Interactive Advertising Bureau's Podcast Revenue Study
projected the US market size to reach c. US$680 million in 2019 -
up 42% on the previous year. It is worth noting that Audioboom's
2018-2019 growth was more than double that of the wider industry,
as we increased market share significantly.
Key trends driving the growth of the market are highlighted in
the 2020 Edison Infinite Dial survey in which it was reported that
104 million Americans listen to podcasts each month - an increase
of 16% on the previous year.
2019 saw an increase in M&A activity within podcasting, as
the industry began to consolidate around key pillars of content
production, podcast technology and monetisation services. Notable
transactions include:
- Spotify's acquisitions of Gimlet Media, Parcast and Anchor
- Entercom's acquisitions of Cadence 13 and Pineapple Street Media
- Rogers Media's acquisition of Pacific Content
- E.W. Scripps' acquisitions of Triton Digital and Omny Media
In 2020 we have already seen further M&A activity, with
Spotify acquiring The Ringer network in February.
Operational review
I am pleased to report a strong year of monetisation and
operational progress across all areas of the business.
KPIs
Our three Key Performance Indicators are drivers of growth in
our most important income stream - premium advertising sales:
o Brand advertiser count of 280 as at 31 December 2019, up 75%
on 31 December 2018 (160)
o Global revenue per 1,000 downloads (eCPM) for December 2019
increased 16% to US$29.60 (December 2018: US$25.49)
o Total available premium advertising impressions for the 12
months to 31 December 2019 up 59% to 1,644 million (2018: 1,035
million for 13 months to 31 December 2018)
Content Acquisition - Partnerships
Audioboom saw significant growth in the size of its premium
sales network through the acquisition of new content, and the
renewal of major content partnerships. Our ability to create
competitive financial packages for Tier One podcast partners,
followed-up with consistent over-performance against the minimum
guarantee obligation from our premium advertising sales unit,
enhanced our standing as a leading provider of monetisation
services in the space.
Access to the SPV content funding facility (see further under
"Financial review" below) enabled certain leading independent
podcasters and talent agencies to enter into long-term commercial
contracts with Audioboom, by providing assurances that the Company
would meet its contractual financial obligations as to minimum
guarantees.
In the US, we entered into key new partnerships or renewed
contracts with The Morning Toast, True Crime Obsessed, Astonishing
Legends, Morbid, Waveform, and Chatty Broads.
In the UK, we renewed our partnerships with No Such Thing As A
Fish, The Totally Football Show, and F1: Beyond The Grid.
We now have more than 200 shows in our premium sales network,
allowing advertisers to connect with audiences at massive scale
through high-quality content and podcasting's leading creative
talent. The fill rate of available advertising inventory on our top
10 podcasts was greater than 83% across 2019.
Content Creation - Audioboom Originals Network
During 2019, we continued our commitment to original content
creation, expanding the Audioboom Originals Network to 19 shows.
Revenue from the network increased to US$0.7 million, growing
significantly from 2018 (US$0.3 million). The network was listened
to more than 25 million times and created more than 100 million
available advertising impressions during the year.
New shows launched in 2019 included What Makes A Killer, A Life
Lived, and Never Thought I'd Say This - a co-production with Main
Event Media. Mafia, Covert, and Inbox all returned for new seasons,
while The 45(th) , It's Happening, and Blank Check continued to
deliver weekly episodes.
We received critical acclaim for our original productions in
2019. Dead Man Talking received the Silver Award for Best True
Crime podcast at the UK Podcast Awards, while Blank Check was
nominated as one of Time Magazine's top three podcasts of the
year.
To support growth in the Audioboom Originals Network, the
Company expanded its production facilities in New York City,
opening two new studios and a green-room space. Our enhanced
facilities will support the creation of more than 40 shows.
We intend for our production arm to grow strongly in 2020, as we
invest further in talent, facilities and audience acquisition. The
higher gross margin of our original content should contribute
significantly to our bottom line, and the impact of our shows will
further shift the industry and podcast audience perception of the
Company to that of a creative media brand.
Content Access - Sonic Influencer Marketing
2019 was the first full year of operations for Sonic Influencer
Marketing, our platform that enables brands to buy advertising
inventory within any globally available podcast.
More than 30 brands utilised the service, with the platform
generating US$5.2 million in revenue (2018: US$0.8 million) - an
outstanding first full year of business. Key clients include
Article, Drink Works, Instacart and Hawthorne.
To support the development of Sonic Influencer Marketing we
increased headcount in the team to five and opened a dedicated
office space in Austin, Texas.
So far in 2020 six new brands have used the platform as we
continue to increase our client-base. We expect further strong
growth from Sonic Influencer Marketing across the year and for it
to contribute significantly to the Group's overall revenues.
SONR News Limited ("SONR")
As previously reported, the majority of SONR staff left the
Company in 2018 as Audioboom focussed its efforts on revenue
generating initiatives. During 2019 it became clear that the
opportunities previously being explored to exploit SONR's NLP and
AI technology would not generate a viable, sustainable business.
Therefore, the decision was taken to close the business and focus
all resources on Audioboom's monetisable core strategy.
Key commercial and strategic partnerships
Voxnest
In September 2019, Audioboom announced a partnership with
Voxnest, to provide technology and advertising services.
In the first phase of the partnership, Voxnest provided us with
a professional-level advertising toolset that enables dynamic
advertising injection on the entire roster of podcasts. For our
premium network of shows it gives the option for host endorsements
to be delivered at scale, targeted to location, or delivered
against a show's archive - creating a second sales window in order
to optimise revenue. For our wider group of podcast partners it
will connect to ad networks and programmatic exchanges to maximize
advertising fill.
Subsequently the partnership has enabled Audioboom to utilise
the Interactive Advertising Bureau's V2 Podcast Measurement
standard, via Voxnest's certified data platform. Audioboom's
premium advertising sales model now utilises IAB V2 certified
numbers to provide accurate and transparent pricing to the
advertising community.
Nielsen
In September 2019, we also announced a partnership with Nielsen
to utilise their Podcast Listener Buying Power Service. The toolset
provides insights into audience profiles and consumer buying habits
that help Audioboom improve the way we sell advertising. We are
able to create stronger connections between brands and audiences,
driving more value to both the advertisers and the talent we work
with.
Distribution partnerships
Post period end, the Group entered into new distribution
partnerships with Pandora (81 million active monthly users), Amazon
Music (65 million active monthly users) and expanded its existing
distribution partnership with Saavn.
Financial review
In 2019, the Company continued to both recognise record revenue
growth quarter on quarter and significantly outperformed the
overall podcast advertising market. This was achieved having laid
strong operational and financial foundations in 2018, allowing our
sales and creative staff to work with our content and advertising
partners to continue to drive the business, and wider industry,
forward.
Revenue growth accelerated in our core revenue segment; premium
host endorsement advertising for our podcast partners. This core
segment was assisted by excellent growth in Sonic Influencer
Marketing in its first full year of trading, and material growth in
a key area of focus for the business, the Audioboom Originals
Network.
Revenue increased by 91% to US$22.3 million for 2019 from
US$11.7 million (13 months to 31 December 2018). In 2019, 90% of
Group revenue was generated in the United States, which is the
largest and most developed market for podcasting, up from 83% in
2018 due to the continued growth in that territory as well as the
first full year of trading at Sonic Influencer Marketing.
Gross margin decreased to 22% in 2019 (13 months to 31 December
2018: 27%). 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 24% gross margin in 2019. Audioboom Originals Network
contributed 45% gross margin in 2019, and the higher associated
gross margin means this is a key area of focus going forward for
the Company. Sonic Influencer Marketing typically contributes
between 12% and 15% gross margin and therefore despite the growth
of this business, it does impact the overall Group gross margin.
The year-on-year decline in gross margin is mainly due to the
increasing gross revenue contribution of Sonic Influencer
Marketing, which accounted for 23% of total top line revenue in
2019 (13 months to 31 December 2018: 7%).
The Company continued to control overheads and we restructured
the business to align staff globally and to ensure that every
employee contributes to the growth of the business. We continue to
monitor the cost base closely and align it to the Company's
operational demands and this will continue into 2020 as we increase
focus on the Audioboom Originals Network.
The Company's overall trading for the period, as measured by
adjusted EBITDA (earnings before interest, tax, depreciation,
amortisation, share based payments and before exceptional items)
recorded an improvement to a loss of US$2.9 million from US$4.7
million (13 months to 31 December 2018).
The total comprehensive loss for the year recorded an
improvement to a comprehensive loss of US$7.1 million from US$8.5
million (13 months to 31 December 2018). The cash outflow from
operating activities fell to US$5.2 million for the 12 month period
(13 months to 31 December 2017: US$7.3 million), a 29%
reduction.
The improvements in the working capital cycle can now clearly be
seen in improvements in debtor collection days and average payable
days. The implementation of the bespoke podcast advertising booking
system in 2018, continued improved cash collection and sustained
revenue growth has led to a 10% reduction in debtor days from 94
days in 2018 to 86 days in 2019. Average payable days also reduced
from 98 days in 2018 to 72 days in 2019.
During the period, the Company raised a total of GBP4.3 million
(before expenses) from the issue of ordinary shares in order to
attract and retain leading third-party podcast talent and to
continue to invest in the growth of the Company. Net cash at the
period end was US$2.0 million (31 December 2018: US$1.6
million).
On 17 June 2019, the Company agreed a new content funding
facility with SPV pursuant to which SPV provides minimum revenue
guarantees to certain leading content partners of the Company.
Audioboom pays SPV 8% of the net advertising revenue (after paying
the content partner its share) received by Audioboom, in relation
to those podcasts. To date, two leading podcasts have been retained
via the SPV guarantee facility, in June 2019 and January 2020.
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.
The financial results shown above illustrate that the drive to
increase revenues whilst maintaining strong cost management is
working and should deliver significant shareholder value as the
Company continues its journey towards positive cash-flow.
Loan facility
On 7 February 2020, the Company announced that it had entered
into a US$4 million secured loan facility arrangement (the
"Facility") with SPV. 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, no funds have been drawn down.
Outlook
I am pleased with the strong start we have made in 2020, with
bookings for the first quarter ahead of management
expectations.
We have continued to sign great new podcasts into our premium
sales network, renew some of our biggest publisher partnerships,
and sign new clients to Sonic Influencer Marketing.
As mentioned above, our Chairman and largest shareholder have
recognised our outstanding performance and are supporting the
growth of the business with the Facility. This will allow us to
execute our growth strategy across 2020 and should provide
sufficient funding to take us through to forecast sustainable
positive cash generation on a monthly basis.
This year we will continue to position Audioboom as a
high-quality programme-maker within the US. We will invest
significantly in content production through our Audioboom Originals
Network, ensuring that we are developing creative concepts and
strong stories, and we are working with high profile talent that
can increase our audience engagement.
Already in 2020, we have launched four new AON shows - For All
Moms, Life's Little Mysteries, Noise Cancelling, and Here's The
Sitch. Revenue-wise the network is expected to deliver substantial
growth versus 2019. As more of our AON shows are fully developed by
our growing in-house team, we can implement greater controls on
production budgets, leading to improved gross margins.
Our AON development slate is oversubscribed for the year, and
I'm really excited about some of the new shows we will launch
including; Dark Air, Huddled Masses, and Truth Vs Hollywood.
All of this comes against an uncertain backdrop of Covid-19,
which may disrupt the advertising market and our immediate growth
plans. We will provide any update we can in this respect in our Q1
trading update in April. However, with our improved cash position
(as supported by the availability of the recently agreed loan
facility), focus on content production and market-leading
advertising sales operation, we are well placed to continue our
expansion as the leading independent podcast company.
Stuart Last
Chief Executive Officer
AUDIOBOOM GROUP PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 31 DECEMBER 2019
12 months 13 months
to 31 December to 31 December
2019 2018
Notes US$'000 US$'000
Continuing operations
Revenue 2 22,310 11,656
Cost of sales (17,414) (8,505)
----------------- -----------------
Gross profit 4,896 3,151
Administrative expenses (12,339) (11,381)
----------------- -----------------
--------------------------------------------- ------ ------------------ ------------------
Adjusted operating loss (2,860) (4,685)
- Amortisation and impairment of intangible
assets 5 (2,420) (578)
- Share based payments 9 (1,429) (385)
- Depreciation (60) (77)
- Corporate transaction costs - (1,708)
- Depreciation - leases / Rent - leases 7 (331) (404)
- Restructuring costs (343) (393)
---------------- ----------------
--------------------------------------------- ------ ------------------ ------------------
Operating loss (7,443) (8,230)
Finance costs (97) (130)
---------------- ----------------
Loss before tax (7,540) (8,360)
Income tax credit 221 272
---------------- ----------------
Loss for the financial period attributable
to equity holders of the parent (7,319) (8,088)
---------------- ----------------
Other comprehensive loss
Foreign currency translation difference 193 (450)
---------------- ----------------
Total comprehensive loss for the period (7,126) (8,538)
======== ========
Loss per share
from continuing operations
Basic and diluted 4 (55) cents (77) cents
============ ============
All results for both periods are derived from continuing
operations.
AUDIOBOOM GROUP PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2019
As at 31 December As at 31 December
2019 2018
Notes US$'000 US$'000 US$'000 US$'000
ASSETS
Non-current assets
Intangible assets 5 - 2,420
Property, plant and equipment 140 152
Right of use asset 7 1,300 -
--------------- ---------------
1,440 2,572
Current assets
Trade and other receivables 7,120 4,169
Cash and cash equivalents 1,992 1,581
--------------- ---------------
9,112 5,750
------------------- -------------------
TOTAL ASSETS 10,552 8,322
------------------- -------------------
Current liabilities
Trade and other payables (5,861) (4,087)
Deferred taxation - (203)
------------------- -------------------
NET CURRENT ASSETS 3,251 1,460
------------------- -------------------
Non-current liabilities
Lease liability 7 (1,029) -
------------------- -------------------
NET ASSETS 3,662 4,032
========= =========
EQUITY
Share capital 6 - -
Share premium 6 56,210 50,883
Issue cost reserve (2,048) (2,048)
Foreign exchange translation
reserve (337) (530)
Reverse acquisition reserve (3,380) (3,380)
Retained earnings (46,783) (40,893)
---------------- ----------------
TOTAL EQUITY 3,662 4,032
======== ========
The accompanying accounting policies and notes form an integral
part of these financial statements.
AUDIOBOOM GROUP PLC
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEARED 31 DECEMBER 2019
12 months 13 months
to 31 December to 31 December
2019 2018
US$'000 US$'000
Loss from continuing operations (7,319) (8,088)
---------------- ----------------
Loss for the period (7,319) (8,088)
Adjustments for:
Taxation credit (221) (272)
Amortisation and impairment of intangible
assets 2,420 578
Effect of retranslation of intangible
assets - 183
Depreciation of fixed assets 60 77
Effect of retranslation of fixed assets (11) 25
Share based payments 1,429 385
Increase in trade and other receivables (2,952) (856)
Increase in trade and other payables 1,413 1,413
Foreign exchange loss (17) (715)
---------------- ----------------
Cash flows from operating activities (5,198) (7,270)
Taxation received 106 214
---------------- ----------------
Net cash used in operating activities (5,092) (7,056)
---------------- ----------------
Investing activities
Purchase of property, plant and equipment (36) (82)
---------------- ----------------
Net cash used in investing activities (36) (82)
---------------- ----------------
Financing activities
Convertible loan interest and fees - (130)
Proceeds from convertible loan notes - 1,995
Proceeds from issue of ordinary share
capital (net of issue costs) 5,539 5,794
---------------- ----------------
Net cash generated from financing activities 5,539 7,659
======== ========
Net increase in cash and cash equivalents 411 521
---------------- ----------------
Cash and cash equivalents at beginning
of period 1,581 968
Effect of foreign exchange rate changes - 92
---------------- ----------------
Cash and cash equivalents at end of
period 1,992 1,581
======== ========
The Group had no borrowings in either financial period and
therefore no reconciliation of net debt has been provided.
AUDIOBOOM GROUP PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2019
Share Share Issue Reverse Foreign Retained Total
capital premium cost acquisition exchange earnings equity
reserve reserve translation
reserve
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
------------------- ------------------- ------------------- ------------------- ------------------- ------------------- -------------------
At 30 November
2017 - 43,224 (2,048) (3,380) (80) (33,190) 4,526
------------------- ------------------- ------------------- ------------------- ------------------- ------------------- -------------------
Loss for the
period - - - - - (8,088) (8,088)
Issue of shares - 7,659 - - - - 7,659
Equity-settled
share-based
payments - - - - - 385 385
Foreign exchange
loss on
translation
of overseas
subsidiaries - - - - (450) - (450)
------------------- ------------------- ------------------- ------------------- ------------------- ------------------- -------------------
At 31 December
2018 - 50,883 (2,048) (3,380) (530) (40,893) 4,032
------------------- ------------------- ------------------- ------------------- ------------------- ------------------- -------------------
Loss for the
period - - - - - (7,319) (7,319)
Issue of shares - 5,327 - - - - 5,327
Equity-settled
share-based
payments - - - - - 1,429 1,429
Foreign exchange
gain on
translation
of overseas
subsidiaries - - - - 193 - 193
------------------- ------------------- ------------------- ------------------- ------------------- ------------------- -------------------
At 31 December
2019 - 56,210 (2,048) (3,380) (337) (46,783) 3,662
------------------- ------------------- ------------------- ------------------- ------------------- ------------------- -------------------
Share premium
Share premium represents the consideration paid for shares in
excess of par value (nil), less directly attributable costs.
Issue cost reserve
The issue cost reserve arose from expenses incurred on share
issues.
Reverse acquisition reserve
The reverse acquisition reserve relates to the reverse
acquisition of Audioboom Limited by Audioboom Group plc on 20 May
2014.
Foreign exchange translation reserve
The foreign exchange translation reserve is used to record
exchange differences arising from the translation of the financial
statements of foreign operations.
AUDIOBOOM GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2019
1. GENERAL INFORMATION AND BASIS OF PREPARATION
Audioboom Group plc is incorporated in Jersey under the
Companies (Jersey) Law 1991. The Company's shares are traded on
AIM, the market of that name, operated by the London Stock
Exchange.
The Group prepares its consolidated financial statements in
accordance with International Accounting Standards ('IAS') and
International Financial Reporting Standards ('IFRS') as adopted by
the EU. The financial statements have been prepared on the
historical cost basis, except for the revaluation of financial
instruments. The consolidated financial statements have been
prepared in accordance with and in compliance with the Companies
(Jersey) Law 1991 and were approved by the Board on 23 March
2020.
These results are audited, however the financial information set
out in this announcement does not constitute the Group's statutory
accounts for the period ended 31 December 2019, but is derived from
the 2019 Annual Report. The auditors have reported on those
accounts; their report was unqualified.
The preparation of financial statements in accordance with IFRS
requires the use of estimates and assumptions that affect the
reported amounts of assets and liabilities, and disclosure of
contingent assets and liabilities at the date of the financial
statement and the reported amounts of revenue and expenses during
the reporting period. Although these estimates are based on
management's best knowledge of current events and actions, actual
results may ultimately differ from those estimates.
The accounting policies used in completing this financial
information have been consistently applied in all periods
shown.
Going concern
The financial statements have been prepared on the going concern
basis, which assumes that the Group will have sufficient funds to
continue in operational existence for the foreseeable future.
Following the recently announced US$4 million loan facility
arrangement with SPV Investments Limited (see note 10), the Board's
forecasts for the Group, including due consideration of the
continued operating losses, projected increase in revenues and
decreasing cash-burn of the Group (and taking account of reasonably
possible changes in trading performance and also changes outside of
expected trading performance), indicate that the Group will have
sufficient cash available to continue in operational existence for
the next 12 months from the date of approval of the financial
statements and beyond. No additional funding is considered to be
required and, based on the Board's forecasts, the Group considers
that it will not require additional funding for the foreseeable
future for the purposes of meeting its liabilities as and when they
fall due. The Board believes that the Group is well placed to
manage its business risks, and longer term strategic objectives,
successfully.
In forming this assessment the Directors have considered the
possible impact that the global outbreak of COVID-19 may have on
the Group. The Directors acknowledge that it is challenging to
predict the full impact this may have on the Group.
Notwithstanding, management has carried out sensitivity analyses of
the Group's cash flow models to quantify the impact of a range of
possible outcomes, including lower than anticipated revenues, and
the mitigations that the Group has available to it, including a
reduction in overhead costs, active working capital management and
the availability of finance from SPV Investments Limited.
Accordingly, the Directors are satisfied that the Group will
continue to be able to meet its ongoing liabilities as and when
they fall due in reasonably foreseeable circumstances.
Therefore the Directors consider the going concern basis of
preparation of these financial statements appropriate.
2. REVENUE 12 months 13 months
to 31 December to 31 December
2019 2018
US$'000 US$'000
Subscription 327 199
Advertising 21,983 11,457
-------------- --------------
22,310 11,656
======= =======
The Directors consider the Group to operate within one operating
segment, content related revenue, and consequently expenditure and
balance sheet analysis is not presented between subscription and
advertising services.
Geographical information
The Group's operations are principally located in the UK and the
USA. The main assets of the Group, cash and cash equivalents, are
held in Jersey.
The Group's revenue from external customers by geographical
location is detailed below:
12 months 13 months
to 31 December to 31 December
2019 2018
US$'000 US$'000
United Kingdom 2,137 1,901
Rest of the World 57 42
USA 20,116 9,713
-------------- --------------
22,310 11,656
======= =======
The Group invoiced 44% of its income to three customers who
represented more than 10% of the reported revenues.
The Group currently has three geographic revenue regions,
however, as the Group's controlling operations are primarily based
in the UK, there is no separation of income, expenditure and
sections of the balance sheet for the purposes of segmental
reporting.
3. STAFF COSTS 12 months 13 months
to 31 December to 31 December
2019 2018
Number Number
Average number of production, editorial
and sales staff 32 36
Average number of management and administrative
staff 8 11
-------------- ---------------
40 47
======= =======
US$'000 US$'000
Wages and salaries 4,597 4,490
Social security costs 348 556
Pension costs (defined contribution scheme) 221 81
Share based payments 976 175
-------------- ---------------
6,142 5,302
======= =======
4. LOSS PER SHARE
Basic earnings per share is calculated by dividing the loss
attributable to shareholders by the weighted average number of
ordinary shares in issue during the period.
IAS 33 requires presentation of diluted EPS when a company could
be called upon to issue shares that would decrease earnings per
share, or increase the loss per share. For a loss-making company
with outstanding share options, the net loss per share would be
decreased by the exercise of options. Therefore, as per IAS33:36,
the anti-dilutive potential ordinary shares are disregarded in the
calculation of diluted EPS.
The Company completed a 100:1 share consolidation on 21 June
2019 and the calculations set out below reflect this.
Reconciliation of the loss and weighted average number of shares
used in the calculation are set out below:
Weighted average Per
Loss number of share amount
shares
12 months ended
31 December 2019
US$'000 Thousand Cents
Basic and diluted EPS
Loss attributable to
shareholders: (7,319) 13,385 (55)
- Continuing and ========= ========= =========
discontinued
operations
13 months ended
31 December 2018
US$'000 Thousand Cents
Basic and diluted EPS
Loss attributable to
shareholders:
- Continuing and discontinued
operations (8,088) 10,474 (77)
========= ========= =========
5. INTANGIBLE ASSETS Software Intellectual Goodwill Total
development property arising
on consolidation
US$'000 US$'000 US$'000 US$'000
Cost
At 31 December 2018
and 31 December 2019 576 2,164 883 3,623
---------------- ---------------- ---------------- ----------------
Amortisation
At 31 December 2018 123 1,080 - 1,203
Impairment charge 453 1,084 883 2,420
---------------- ---------------- ---------------- ----------------
At 31 December 2019 576 2,164 883 3,623
---------------- ---------------- ---------------- ----------------
Net book value
At 31 December 2018 453 1,084 833 2,420
========= ========= ========= =========
At 31 December 2019 - - - -
========= ========= ========= =========
The Group has fully impaired the goodwill and intangible assets
during the period (2018: US$nil impairment).
The Group purchased SONR News Limited ('SONR'), a natural
langauge processing (NLP) and artificial intelligence (AI)
development company, in March 2017 for GBP1.42 million. The
intangible asset previously carried by the Group related in its
entirety to that acquisition and subsequent development costs
capitalised in relation to SONR and its associated intellectual
property.
The Group tests goodwill annually for impairment, or more
frequently if there are indications that it might be impaired.
Other intangibles are subject to tests for impairment where there
are considered to be indicators that such tests are required. As at
31 December 2019, all the Group's intangible assets were subject to
an impairment review performed by the Directors.
The recoverable value of goodwill arising on consolidation and
other intangible assets was measured with reference to expected
discounted future cash flows arising and commercial valuations
associated with opportunities and partnerships that SONR is in the
process of securing. In making this assessment, the Directors have
considered the probability of potential opportunities and
partnerships being formally agreed and the sensitivity of
recoverable values to changes in their associated valuations.
The Directors reassessed the SONR business plan and associated
projected cash flows and the assets held are now deemed to be
obsolete and so have no value in use nor any fair value (less cost
of sale). This has resulted in an overall impairment charge of
US$2.4 million.
6. STATED CAPITAL ACCOUNT
On 21 June 2019, the Company consolidated every 100 existing
ordinary shares of no par value into one new ordinary share of no
par value and the numbers below are adjusted to reflect this.
No. of Share Share
shares capital premium
US$'000 US$'000
At 30 November 2017 9,306,499 - 43,224
Shares issued in the period
Shares issued at 200p each 760,411 - 2,023
Shares issued at 300p each 1,666,000 - 5,636
---------------------- ------------------- ---------------------
At 31 December 2018 11,732,910 - 50,883
---------------------- ------------------- ---------------------
Shares issued in the year
Shares issued at 130p each 1,153,847 - 1,931
Shares issued at 250p each 1,120,000 - 3,396
-------------------- --------------------- -----------------------
At 31 December 2019 14,006,757 - 56,210
=========== =========== ===========
There is no authorised share capital and all shares rank pari
passu. All issued share capital is fully paid up. All ordinary
shares have nil par value.
7. RIGHT OF USE ASSET LEASES As at 31 As at 31
December December
2019 2018
US$'000 US$'000
Amounts recognised on the balance sheet
Right of use assets
Buildings 1,300 -
------------- -------------
Lease liabilities -
Current 340 -
Non-current 1,029 -
------------- -------------
1,369 -
======== ========
The Company has adopted the modified retrospective approach to
the implementation of IFRS 16: Leases. As a result, no adjustment
has been made to comparative financial information.
Amounts recognised on the consolidated statement of
comprehensive income
As at 31 As at 31
December December
2019 2018
US$'000 US$'000
Depreciation charge of right of use assets
Buildings (331) -
------------- -------------
Interest expense (97) -
------------- -------------
Total cash outflow for leases (428) -
======== ========
8. RELATED PARTY TRANSACTIONS
The following share subscription, issue of warrants and special
purpose vehicle notes are quoted before (and after) the 100:1 share
consolidation, which was completed on 21 June 2019.
Share subscriptions
Candy Ventures sarl subscribed for 46,153,850 (461,539) new
ordinary shares at 1.3p (GBP1.30) in February 2019 and a further
42,400,000 (424,000) new ordinary shares at 2.5p (GBP2.50) in May
2019. Candy Ventures sarl is the Company's largest shareholder and
an investment vehicle 90% owned by Nick Candy. Steven Smith, a
non-executive Director of the Company, is a 10% shareholder and
director of Candy Ventures sarl.
Michael Tobin, non-executive Chairman of the Company, subscribed
for 3,846,160 (38,462) ordinary shares at 1.3p (GBP1.30) in
February 2019 and a further 3,600,000 (36,000) ordinary shares at
2.5p (GBP2.50) in May 2019.
Roger Maddock, a non-executive Director of the Company,
subscribed for 3,846,160 (38,462) ordinary shares at 1.5p (GBP1.50)
in February 2019 and a further 2,000,000 (20,000) ordinary shares
at 2.5p (GBP2.50) in May 2019. The Preston Trust (being a trust for
the benefit of the family of Roger Maddock) subscribed for
4,000,000 (40,000) ordinary shares at 2.5p (GBP2.50) in May
2019.
Warrants
In order to allow the subscription shares in February 2019 to be
issued on a timely basis and within the Company's existing share
allotment authorities and without the need to convene an
extraordinary general meeting of the Company, Michael Tobin agreed
that the exercise of his 30,000,000 (300,000) warrants (split into
three tranches of 10,000,000 (100,000) warrants) over new ordinary
shares, awarded to him on 3 September 2018, be made conditional
upon the Company obtaining shareholder authorities to allot and
issue the new ordinary shares arising on exercise of the warrants
free of pre-emption rights. Such authority was granted at a general
meeting held on 21 May 2019. In return, and in recognition that
such warrants should be an incentive, the Company agreed to (a)
lower the exercise prices of the warrants from 2.4p (GBP2.40), 4.4p
(GBP4.40) and 6.4p (GBP6.40) to 1.3p (GBP1.30), 3.3p (GBP3.30) and
5.3p (GBP5.30) respectively and (b) lower the share price hurdle
for exercise of the second and third tranche of the warrants from
4.4p (GBP4.40) and 6.4p (GBP6.40) to 3.3p (GBP3.30) and 5.3p
(GBP5.30) respectively.
In addition, and in order to obtain a substantial participation
in the subscription, the Company agreed with Nick Candy to extend
the exercise period of 12,000,000 (120,000) warrants over new
ordinary shares held by him, granted pursuant to an agreement dated
2 April 2016, from 2 April 2019 to 31 March 2024. These warrants
have an exercise price of 2.5p (GBP2.50) per ordinary share.
Special Purpose Vehicle
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 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 2,500,000 (25,000) warrants to subscribe
for ordinary shares in the Company for every US$1 million of
guarantee provided, subject to a maximum of 10,000,000 (100,000)
warrants. The exercise price of these warrants will be 3.3p
(GBP3.30) per ordinary share each, with such warrants being
exercisable for five years from grant. The first guarantee provided
by the SPV in June 2019 led to an initial grant of an aggregate of
2,500,000 (25,000) warrants split equally between Michael Tobin and
Candy Ventures sarl.
9. SHARE-BASED PAYMENTS
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 and the numbers below are adjusted to reflect this.
The Company has share option schemes for employees of the Group.
Details of the share options granted during the period are as
follows:
2019 2018
Weighted Weighted
Average Average
Number of Exercise Number of exercise
Share options Price (GBP) Share options Price (GBP)
Outstanding at beginning
of period 563,644 1.937 621,745 2.000
Granted during the period 809,600 1.613 75,000 2.400
Forfeited/lapsed during
the period (160,601) 1.610 (133,101) 3.192
Exercised during the period - - - -
-------------------- ---------------------
Outstanding at end of
period 1,212,643 1.759 563,644 1.937
============= =============
Exercisable at end of
period 631,960 1.837 399,700 2.655
============= =============
The options outstanding at 31 December 2019 had a weighted
average exercise price of GBP1.76, and a weighted average remaining
contractual life of 5 years.
The Group recognised total expenses of US$977,000 related to
equity-settled share-based payment transactions for the 12-month
period ended 31 December 2019 (13 months to 31 December 2018:
US$4,000).
2019 2018
US$'000 US$'000
Share option charge 976 4
Warrant charge 453 381
-------------- --------------
1,429 385
======== ========
During the period, the Company revised the terms associated with
the warrants to subscribe for ordinary shares held by Michael
Tobin, the non-executive Chairman of the Company, which were issued
in 2018, details of which are disclosed in note 8.
In addition, in December 2019, 45,000 warrants to subscribe for
ordinary shares in the Company previously issued to one of its
largest US podcast partners were cancelled in line with the terms
of the agreement.
At the period end, the Company had in issue outstanding share
warrants for a total of 445,000 shares (2018: 705,715 shares) with
a weighted average exercise price of GBP3.08 (2018: GBP6.00).
245,000 (2018: 275,715) of the warrants were exercisable at the
period end, and the balance may become exercisable subject to
performance conditions.
10. POST BALANCE SHEET EVENTS
As referenced in note 8, in 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. In January 2020,
the second guarantee provided by the SPV led to a grant of an
aggregate of 43,750 warrants split equally between Michael Tobin
and Candy Ventures sarl.
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 will be secured against the assets of Audioboom Limited
and will contain 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, no funds have been drawn
down.
On 13 March 2020, the Company issued a further 13,325 ordinary
shares of no par value to satisfy the exercise of share options
under the Company's share option scheme.
The Directors have considered the potential impact of the
Covid-19 pandemic on the Group's trading prospects and future cash
flows. They have concluded both that the going concern basis of
preparation of these financial statements is appropriate (details
of this consideration can be found in note 1) and that no
adjustment is required to the statement of financial position as at
31 December 2019.
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
FR KKOBKFBKDQNB
(END) Dow Jones Newswires
March 30, 2020 02:00 ET (06:00 GMT)
Grafico Azioni Audioboom (LSE:BOOM)
Storico
Da Feb 2024 a Mar 2024
Grafico Azioni Audioboom (LSE:BOOM)
Storico
Da Mar 2023 a Mar 2024