TIDMBOOM
RNS Number : 4371G
Audioboom Group PLC
19 July 2023
19 July 2023
This announcement contains inside information as stipulated
under the UK Market Abuse Regulations ("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 2023.
Financial and operational KPIs
-- H1 revenue of US$31.8 million (H1 2022: US$40.9 million),
predominantly reflecting the loss of the Morbid podcast which left
the network in May 2022
-- Q2 revenue of US$16.4 million, up 6.5% on Q1 2023 (US$15.4 million)
-- Total H1 adjusted opex(1) of US$5.5 million, down 11% on H1
2022 (US$6.2 million), demonstrating strong cost control
-- Adjusted EBITDA(2) profit of US$0.3 million (H1 2022: US$2.0 million)
-- Group cash at 30 June 2023 of US$5.3 million (31 March 2023:
US$5.1 million), with a further US$1.9 million available via an
undrawn overdraft. A further US$2.7 million has been collected in
July
-- Average Q2 global monthly downloads of 125.9 million, up 1%
on prior quarter (Q1 2023: 125.2 million). Global monthly downloads
in May 2023 reached a record 135.2 million
-- Average Q2 brand advertiser count of 8,042, up 24% (Q1 2023:
6,498). The brand advertiser count reached a record 8,786 in June
2023
-- Average Q2 global revenue per 1,000 downloads (eCPM) of US$43.55, up 6% (Q1 2023: US$41.00)
-- Record total advertising impressions made available to buyers
in H1 2023 of 5.1 billion, up 25% on prior year (H1 2022: 4.1
billion), including 3.4 billion via the Showcase marketplace (H1
2022: 2.1 billion)
-- So as to better reflect the underlying performance of the
business, the Company reports an exceptional one-off cost in
relation to an individual contract which has been deemed to be
onerous (US$8.9 million). This includes the H1 contract net loss
(US$1.8 million) and the future estimated net loss (US$7.1 million)
which has been provided for in full as at 30 June 2023
-- The Board had previously indicated its intention to introduce
a progressive dividend policy with a maiden dividend in respect of
the current financial year being declared and paid in 2024. Taking
into consideration the expected performance of the current
financial year, it is the Board's intention to review the
progressive dividend policy for the 2024 financial year and
onwards
-- Business operations continue to improve significantly, with
the Company in a strong position to fully exploit future
improvements in advertising market conditions, and the Company
expects to return to meaningful growth in H2 2023 on a year-on-year
and sequential basis
Commercial highlights
-- Continued growth of Showcase, our global advertising
marketplace - Q2 2023 revenue from advertising technology up 18% on
Q1 2023 and H1 2023 up 35% on H1 2022. Showcase now contributes
more than 21% to Group revenue (H1 2022: 15%)
-- New demand-side/monetisation partners added to Showcase,
including Bauer Nordics, Icon, Entravision, AudioHook and
AudiOn
-- New exclusive partnerships launched during H1 2023 in
Audioboom's creator network, with major podcasts including The Tim
Dillon Show, No Sleep, Networth and Chill, The Broski Report, Real
Ones with Jon Bernthal, Trading Secrets and Once Upon A Crime
-- Renewal of key content partnerships during H1 2023, including
Tiny Meat Gang, Brooke & Connor, F1: Beyond the Grid and F1
Nation, Two Hot Takes and Astonishing Legends
-- Audioboom continues to cement its position as the leading
pure-play podcast publisher, ranking fifth in the key US market in
both the Edison Research and Triton Digital reports, as well as
third in Australia, second in New Zealand and fourth in Canada on
the Triton Digital Podcast ranker
(1) Operating costs before interest, tax, depreciation,
amortisation, share based payments and non-cash foreign exchange
movements
(2) Earnings before interest, tax, depreciation, amortisation,
share based payments, non-cash foreign exchange movements and
material one-off items
Stuart Last, CEO of Audioboom, commented:
"Significant growth of our content network and the continued
development and evolution of our revenue product offering is key to
our progress in 2023. Our strategy and model continue to work well,
with the fast expansion of our network and the refocusing of our
advertising strategy setting us up to emerge from the economic
downturn in a position of strength.
Podcasts on our network are now downloaded more than 135 million
times per month - in December 2022 this number was just 103
million. Our inventory levels are now at 930 million monthly
impressions, compared to 530 million one year ago. The value that
we are building through the growth of our network and our revenue
product offering is significant and we believe it will be
crystalised as the adverting market recovers, having a materially
positive long-term impact on the business.
I'm looking forward to updating you on the progress of our
recently launched brand-focused revenue unit in the second half of
the year - its success will be a sign of maturation for our
advertising business as we expand our customer base beyond
traditional podcast advertisers to leading global brands.
While we have been disappointed with the softer advertising
market since the second half of 2022 which has caused us to reduce
expectations, our model has delivered CAGR of 65% over the previous
five years and led us to outperform the wider podcast market
consistently during that time. We continue to refine and adapt our
model so that we are primed for further success, which will be seen
in the second half of 2023 as we move back into a positive growth
phase."
Enquiries
Audioboom Group plc
Stuart Last, Chief Executive Officer Tel: +44(0)20 3714 4285
Brad Clarke, Chief Financial Officer
finnCap Ltd (Nominated Adviser and Broker)
Jonny Franklin-Adams/Abigail Kelly/Milesh Hindocha (Corporate Finance) Tel: +44(0)20 7220 0500
Charlotte Sutcliffe/Harriet Ward (ECM)
About Audioboom
Audioboom is a global leader in podcasting - our shows are
downloaded more than 135 million times each month by 38 million
unique listeners around the world. Audioboom is ranked as the fifth
largest podcast publisher in the US by Edison Research.
Audioboom's ad-tech and monetisation platform underpins a
scalable content business that provides commercial, distribution,
marketing and production services for a premium network of top tier
podcasts. Key partners include the official Formula 1 podcasts 'F1:
Beyond the Grid' and 'F1 Nation', 'Casefile True Crime' (US), 'True
Crime Obsessed' (US), The Tim Dillon Show' (US), 'No Such Thing As
A Fish' (UK) and 'The Cycling Podcast' (UK).
Audioboom operates internationally, with global partnerships
across North America, Europe, Asia and Australia. The platform
distributes content via Apple Podcasts, YouTube, Spotify, Pandora,
Amazon Music, Google Podcasts, iHeartRadio, Facebook and Twitter as
well as a partner's own websites and mobile apps.
For more information, visit audioboom.com.
Chief Executive's Report
Strategy and Business Model
Audioboom powers podcasting - connecting creators, brands and
audience to create value across the industry. Since 2018 we have
generated more than US$180 million in revenue for our podcast
creators and helped thousands of brands deliver more than US$230
million of advertising campaigns.
Creators are the heartbeat of the platform. Our technology
enables more than 8,000 podcasters to manage their content
publishing process, grow their audience, distribute to all major
listening apps, and see insights into the consumption of their
content with our data and analytics dashboard.
Brands can access unique advertising options including the
Premium Network, our high-value product in which the host of the
podcast delivers campaign messages for the brand and endorses the
product directly to their engaged audience. Showcase - our highly
automated marketplace - enables brands to pinpoint their target
audience at scale and with great efficiency through our ad-tech
stack, while Sonic - our platform for brands - helps advertisers
develop and execute campaigns across the podcast landscape.
Audioboom delivers strong global scale, with monthly downloads
achieving a new high of 135 million in May 2023. More than 38
million unique users consume content from Audioboom each month, and
in 2023 we will create more than 10 billion available advertising
impressions.
Audioboom is the fifth largest podcast publisher in the US - the
world's largest podcast market - on Edison Research's publisher
ranker. We also rank third in Australia, second in New Zealand and
fourth in Canada. Audioboom's growth continues to outpace our
competitors - since 2017 we have outperformed the market by an
average of 68% per year.
After a period of strong industry growth in 2021, advertising
markets in our key territories weakened significantly in mid-2022
due to global macro-economic headwinds. These challenging
conditions have continued into 2023. Podcasting's core customer
group of 'direct response' or 'performance marketing' brands - who
have been key to building the industry over the past 10 years -
have been particularly impacted by the downturn. These brands are
generally smaller, direct-to-consumer companies - they track
performance of each podcast ad they buy, directly measuring their
return on investment by how many listeners each ad can convert to
customers. We have seen a 25% decrease in budgets from this group
of advertisers that are primarily utilising our premium advertising
product.
To combat this, Audioboom restructured its revenue operations in
Q2 2023 and launched an in-house team focused on growing
partnerships with 'brand awareness' advertisers. These brands are
larger companies, who are more stable in challenging economic
times, and have an advertising strategy focused towards improving
consumer awareness and sentiment around their product, rather than
an immediate and directly measurable return-on-investment. The
impact of the development of this new customer base will start to
be seen in the second half of the year.
Showcase has continued to be a success story for Audioboom.
During H1 2022, Showcase contributed 21% of Group revenue (up from
15% in 2022 and 11% in 2021). In May 2023 Showcase delivered record
monthly revenue of US$1.4 million. Across 2023 we are on track to
make more than 7 billion impressions available to advertisers
through Showcase (up from 4 billion in 2022).
Our continued audience, download and inventory growth is driven
by further expansion of our creator network, with a focus on
establishing new partnerships with top tier podcast producers. Key
partnership launches during H1 2023 include The Tim Dillon Show, No
Sleep, Networth and Chill, The Broski Report, Real Ones with Jon
Bernthal, Trading Secrets and Once Upon A Crime. We further
bolstered our creator network through long-term renewals of
existing partnerships including F1: Beyond The Grid and F1: Nation,
Tiny Meat Gang, Astonishing Legends, Two Hot Takes and RELAX!
Financial Review
Group revenue in the first half of 2023 of US$31.8 million (H1
2022: US$40.9 million) reduced year-on-year but it is important
that we compare H1 2023 to H1 2022 without revenue included from
the Morbid podcast which left the network in May 2022. H1 2022
revenue, excluding the Morbid podcast, was US$33.4 million and the
Company has performed relatively well to be within 5% of H1 2022 in
a softer advertising market. The Company has also recorded growth
quarter-on-quarter in 2023 with Q2 2023 revenue of US$16.4 million
increasing by 6.5% over Q1 2023 (US$15.4 million).
Adjusted EBITDA profit (earnings before interest, tax,
depreciation, amortisation, share based payments, non-foreign
exchange movements and material one off items) was US$0.3 million
(H1 2022: US$2.0 million) with the challenging advertising market
impacting revenue and consequently adjusted EBITDA.
As detailed further in Note 9, a provision of US$7.1 million has
been created in relation to an individual partner contract. Despite
downloads for the contract continuing to increase, the ad rates
that have been commanded, and the future ad rates that are likely
to be commanded, are lower than those modelled when the contract
was signed due to advertising markets being more challenging for
longer than anticipated. In light of revenue growth being lower
than projected at the previous reporting date it is now assumed
that it is unavoidable that the contract will generate a net loss
through to its conclusion in July 2025. The contract, which was
negotiated in Q1 2022 during buoyant podcast advertising market
conditions, recorded a net loss of US$1.8 million in H1 2023 and
this has also been treated as an exceptional cost in the period.
This is so that the gross margin can be reported for the rest of
the business in 2023, providing a more accurate reflection of
performance in the period.
Excluding the specific contract that has been provided for, the
Group gross margin has increased to 20% (year to 31 December 2022:
19%). Audioboom has a mix of revenue streams, contributing
different gross margins. Showcase contributed 21% of gross revenue,
up from 12% in H1 2022, with a healthy contracted gross margin of
41%. Premium revenue, where the host of the podcast delivers
campaign messages for the brand and endorses the product directly
to their engaged audience, contributed 59% of gross revenue, down
from 71% in H1 2022 due to the progression of Showcase, and yielded
a contracted gross margin of 21% in H1 2023. Sonic Influencer
Marketing contributed 20% of gross revenue, up from 17% in H1 2022,
with a 13% gross margin, as in 2022.
Despite macro inflationary pressures, there has been strong
management of opex costs incurred during the first half of 2023.
Adjusted opex has reduced from US$6.2 million in H1 2022 to US$5.5
million in H1 2023. This reduction has been achieved predominantly
through reductions in staff and commission costs incurred. Total
salary and commission in H1 2023 of US$3.1 million was US$1.1
million, or 26%, lower in the period versus the prior year.
Audioboom remains an extremely lean organisation - headcount has
been reduced to 39 (30 June 2022: 47) and we have successfully
reorganised our revenue operation in Q2 2023. Part of the headcount
reductions occurred within Audioboom Studios as we shifted our
approach to production-as-a-service in line with our mission to
power podcasting for creators. As well as reducing headcount in
this area, we also removed the higher-risk development of new shows
and the marketing budgets associated with promoting new original
content.
Technology costs have increased by US$0.3m, or 24%, to US$1.5
million in H1 2023 due to increased bandwidth utilised in the
period and the record number of advertising impressions made
available to buyers in H1 2023, which were up 25% on H1 2022.
Through successful renegotiation of third-party technology costs,
and securing more favourable rates for bandwidth and serving
advertising impressions, we were able to reduce the expected cost
incurred by US$0.1m in H1 2023.
Cash collections continue to perform well thanks to our
efficient internal processes and good relationships with our
customers. We report a debtor day figure of 72, in line with both
31 December 2022 and 30 June 2022 (68 days). Total cash collected
in H1 2023 of US$32.9 million was 104% of revenue reported.
Operating cash outflow, before working capital movements, totalled
US$1.3 million (H1 2022: US$1.3 million cash inflow) largely due to
the impact of the contract net loss as detailed in note 9 (US$1.8
million. Cash held at 30 June 2023 of US$5.3 million increased by
US$0.2 million from 31 March 2023 and decreased by US$2.8 million
from 31 December 2022 (US$8.1 million). A further US$2.7 million
has been collected in July. The US$1.9 million overdraft with HSBC
was renewed and remained undrawn at 30 June 2023, giving the
Company access to capital of US$7.2 million at the period end.
Outlook
As expected, key financial and operational comparisons between
H1 2023 and the corresponding period last year are distorted by a)
the inclusion of the Morbid podcast in H1 2022 reporting (Morbid is
a global top 10 podcast which contributed to that period's revenue
and download success, but which left the Audioboom platform in May
2022), and b) a very buoyant advertising market in the first half
of last year which provided strong demand and pricing from our
premium customer base but which deteriorated quickly from June 2022
onwards. As such, while H1 2023 performance is down in comparison
with H1 2022, we expect to return to year-on-year growth for H2
2023 where market conditions are more closely aligned with the
previous year.
Historically H2 is seasonally strong for Audioboom with
significant advertising demand linked to the NFL season, European
football schedules, and the Thanksgiving-to-Christmas holiday
period. This is expected again in 2023 and, along with the initial
impact of our newly launched 'brand awareness' sales unit, will
lead to continued quarterly sequential growth as well as the
previously noted year-on-year growth.
While disappointed that market conditions have limited our
financial performance so far this year, our operational progress
has been pleasing. We have achieved record download and record
unique user figures and, through a focus on accelerated inventory
extraction, we now create more than seven advertising impressions
from each download (vs five in 2022). The launch of our new
in-house 'brand awareness' unit has begun well - so with more
listeners, more downloads, more advertising inventory and more
customers than ever before, we are fully primed to maximise the
opportunity an improved ad market will bring.
The past 12 months have been challenging, but the strength of
our platform and content engine have minimised the impact of market
conditions on the business. We have made strategic changes -
particularly in our revenue operation - that are strengthening our
business and setting us up us for success alongside an ad market
recovery. The Audioboom team continues to fight hard to deliver
maximum value for our creators, customers and shareholders.
Stuart Last
Chief Executive Officer
Audioboom Group PLC
Consolidated Statement of Comprehensive Income
Unaudited Unaudited Audited
six months six months 12
to 30 June to 30 months
Majority Onerous 2023 June 2022 to 31 Dec
of business contract 2022
Notes US$'000 US$'000 US$'000 US$'000 US$'000
Continuing operations
Revenue 2 29,381 2,427 31,808 40,910 74,879
Cost of sales (23,614) (4,250) (27,864) (32,650) (60,667)
Cost of sales - contract
provision 9 - (7,090) (7,090) - -
-------------- ----------- ------------ ------------ -----------
Gross (loss) / profit 5,767 (8,913) (3,146) 8,260 14,212
Other income - forgiven
loan liability - - - - 374
Administrative expenses - - (7,420) (7,631) (14,909)
Adjusted EBITDA - - 315 2,047 3,591
- Share based payments 8 - - (1,403) (2,290) (4,358)
- Depreciation - - (19) (24) (47)
- Depreciation - leases - - (131) (125) (250)
- Operating foreign exchange
(loss) / gain - - (331) 1,021 1,141
- Contract provision and
H1 contract
net loss* 9 - - (8,913) - -
- Contract settlement - - - - (400)
- Restructuring costs - - (84) - -
Operating (loss) / profit - - (10,566) 629 (323)
Finance costs - - (43) (63) (106)
-------------- ----------- ------------ ------------ -----------
(Loss) / profit before
tax - - (10,609) 566 (429)
Taxation on continuing operations - - (2) - (328)
-------------- ----------- ------------ ------------ -----------
(Loss) / profit for the
financial period - - (10,611) 566 (757)
Other comprehensive income
Foreign currency reserves
translation difference - - 841 (1,541) (2,233)
-------------- ----------- ------------ ------------ -----------
Total comprehensive loss
for the period - - (9,770) (975) (2,990)
============== =========== ============ ============ ===========
(Loss) / profit per share
Basic and diluted EPS 4 (64.8) - (4.7)
cents cents
Diluted EPS 4 - 3 cents -
Basic EPS 4 - 4 cents -
* Onerous contract H1 net loss and future contract provision
treated as an exceptional cost so as to accurately report the rest
of the business
Audioboom Group PLC
Consolidated Statement of Financial Position
Unaudited Unaudited Audited
as at 30 as at 30 as at
June 2023 June 2022 31 Dec
2022
Notes US$'000 US$'000 US$'000
ASSETS
Non-current assets
Property, plant and equipment 38 65 59
Right of use asset 205 452 329
Deferred tax asset 3,770 4,650 3,609
4,013 5,167 3,997
----------- ----------- ---------
Current assets
Trade and other receivables 5 15,579 18,960 16,013
Cash and cash equivalents 5,297 5,774 8,067
Deferred tax asset 841 625 805
21,717 25,359 24,885
----------- ----------- ---------
TOTAL ASSETS 25,730 30,526 28,882
----------- ----------- ---------
Current liabilities
Trade and other payables 6 (9,075) (12,598) (10,614)
Partner contract provision 9 (3,386) - -
Contract settlement provision - - (400)
Lease liability 6 (220) (274) (278)
NET CURRENT ASSETS 9,036 12,487 13,593
----------- ----------- ---------
Non-current liabilities
Lease liability 6 - (220) (80)
Partner contract provision 9 (3,703) - -
----------- ----------- ---------
NET ASSETS 9,346 17,434 17,510
=========== =========== =========
Equity
Share capital - - -
Share premium 4 63,105 62,880 62,902
Issue cost reserve (2,048) (2,048) (2,048)
Foreign exchange translation
reserve (1,661) (1,811) (2,502)
Reverse acquisition reserve (3,380) (3,380) (3,380)
Retained earnings (46,670) (38,207) (37,462)
TOTAL EQUITY 9,346 17,434 17,510
=========== =========== =========
Audioboom Group PLC
Consolidated Cash Flow Statement
Unaudited Unaudited Audited
six months six months 12 months
to 30 June to 30 June to 31 Dec
2023 2022 2022
US$'000 US$'000 US$'000
(Loss) / profit from operations (10,611) 566 (757)
------------ ------------ -----------
Adjustments for:
Tax charge 2 - 328
Interest payable 43 63 106
Depreciation of fixed assets 19 24 47
Share based payments 1,403 2,290 4,358
Increase in partner contract 7,090 - -
provision
Operating foreign exchange
gain / (loss) 725 (1,609) (1,557)
------------ ------------ -----------
Cash generated from operating
activities before working
capital movements (1,329) 1,334 2,525
Decrease / (increase) in
trade and other receivables 433 (813) 2,134
(Decrease) / increase in
trade and other payables
(excluding leases) (1,938) 611 (1,154)
Decrease in lease liability (138) (177) (269)
Net cash generated from
/ (used in) operating activities (2,972) 955 3,236
------------ ------------ -----------
Investing activities
Purchase of property, plant
and equipment - - (29)
------------ ------------ -----------
Net cash used in investing activities - - (29)
------------ ------------ -----------
Financing activities
HSBC overdraft fees - (19) -
Proceeds from issue of ordinary
share capital 202 1,869 1,891
------------ ------------ -----------
Net cash generated from
financing activities 202 1,850 1,891
------------ ------------ -----------
Net (decrease) / increase in
cash and cash equivalents (2,770) 2,805 5,098
------------ ------------ -----------
Cash and cash equivalents at beginning
of period 8,067 2,969 2,969
Cash and cash equivalents
at end of period 5,297 5,774 8,067
============ ============ ===========
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 2021 61,011 (5,698) (41,063) 14,250
-------------- ---------------- ---------- -------------
Profit for the period - - 566 566
Issue of shares 1,869 - - 1,869
Equity-settled share-based
payments - - 2,290 2,290
Foreign exchange loss
on translation
of overseas subsidiaries - (1,541) - (1,541)
At 30 June 2022 62,880 (7,239) (38,207) 17,434
-------------- ---------------- ---------- -------------
Loss for the period - - (1,323) (1,323)
Issue of shares 22 - - 22
Equity-settled share-based
payments - - 2,068 2,068
Foreign exchange loss
on translation
of overseas subsidiaries - (691) - (691)
At 31 December 2022 62,902 (7,930) (37,462) 17,510
-------------- ---------------- ---------- -------------
Loss for the period - - (10,611) (10,611)
Issue of shares 203 - - 203
Equity-settled share-based
payments - - 1,403 1,403
Foreign exchange profit
on translation
of overseas subsidiaries - 841 - 841
At 30 June 2023 63,105 (7,089) (46,670) 9,346
-------------- ---------------- ---------- -------------
*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 2022 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 18 July
2023. 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 2023, which
are not expected to be significantly different to those set out in
note 1 to the Company's audited financial statements for the year
ending 31 December 2022.
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 UK.
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 year ending 31 December 2022.
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 at least
12 months from the date of approval of these interim financial
statements. The Group ended the period with access to US$5.3
million of cash, and a US$1.9 million overdraft which was undrawn
as at 30 June 2023. The Board's forecasts for the Group, including
due consideration of the business forecasting continuing positive
EBITDA in 2023, projected increase in revenues and cash utilisation
of the Group and taking account of reasonable possible changes in
trading performance including changes outside of expected trading
performance and the impact of missed partner minimum guarantees,
indicate that the Group will have sufficient cash available to
continue in operational existence for the next 12 months from the
date of approval of these interim financial statements and beyond.
Based on the Board's forecasts, the Group considers that it will
not require additional funding for the foreseeable future for the
purposes of meeting its liabilities as and when they fall due. The
Board believes that the Group is well placed to manage its business
risks, and longer-term strategic objectives, successfully.
Management has carried out sensitivity analyses of the Group's
cash flow models to assess the impact of a range of possible
outcomes, including lower than anticipated revenues, and the
mitigations that the Group has available to it, including a
reduction in overhead costs, active working capital management and
the availability of the HSBC overdraft. Accordingly, the Directors
are satisfied that the Group will continue to be able to meet its
ongoing liabilities as and when they fall due in reasonably
foreseeable circumstances.
Therefore, the Directors consider the going concern basis of
preparation of these interim financial statements appropriate.
2. Revenue
The Group's operations are principally located in the UK and the
USA. The Group's revenue from external customers by geographical
location is detailed below:
Unaudited Unaudited Audited
six months six months 12 months
to 30 June to 30 June to 31 Dec
2023 2022 2022
US$'000 US$'000 US$'000
United Kingdom and Rest of
the World 963 1,750 3,327
USA 30,845 39,160 71,552
------------ ------------ -----------
Total 31,808 40,910 74,879
============ ============ ===========
3. Loss / profit per share
Basic earnings per share (EPS) is calculated by dividing the
profit or 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, for the
periods ending 30 June 2023 and 31 December 2022, as per IAS 33:36,
the anti-dilutive potential ordinary shares are disregarded on the
calculation of diluted EPS.
Reconciliation of the loss and weighted average number of
ordinary shares used in the calculation are set out below:
30 June 2023
Loss Weighted average Per share
number of shares amount
US$'000 Thousand Cents
Basic and diluted EPS
Loss attributable to equity
shareholders (10,611) 16,357 (64.9)
30 June 2022
Profit Weighted average Per share
number of shares amount
US$'000 Thousand Cents
Basic EPS
Profit attributable to equity
shareholders 567 15,928 4
Diluted EPS
Profit attributable to equity
shareholders 567 17,433 3
31 December 2022
Loss Weighted average Per share
number of shares amount
US$'000 Thousand Cents
Basic and diluted EPS
Loss attributable to equity
shareholders (757) 16,192 (4.7)
4. Share capital
Issued and fully paid - ordinary shares of no par value
At 30 June 2023 16,376,936
At 30 June 2022 16,286,752
At 31 December 2022 16,297,419
During the period 79,517 new ordinary shares were issued to
satisfy the exercise of existing share options under the Company's
Share Option Scheme 2014 by current or former employees.
The total number of instruments over equity (including both
share options and warrants) outstanding at the period end was
1,862,451, and of these, 1,122,016 had vested at the period
end.
5. Trade and other receivables
Unaudited Unaudited Audited
six months six months 12 months
to 30 June to 30 June to 31 Dec
2023 2022 2022
US$'000 US$'000 US$'000
Amounts receivable for the
sale of goods and services 12,547 15,334 13,966
Allowance for doubtful debts (209) (171) (325)
------------ ------------ -----------
Net receivables 12,338 15,163 13,641
Deferred cost of sales relating
to minimum guarantee payments 382 - 93
Other receivables 241 234 237
Prepayments and accrued income 2,533 3,563 1,923
Taxes recoverable 85 - 119
------------ ------------ -----------
Total 15,579 18,960 16,013
============ ============ ===========
The average credit period taken on sales of goods and services
is 72 days (30 June 2022: 68; 31 December 2022: 68). Accrued income
carried forward that will fully reverse is US$0.4 million (30 June
2022: US$1.6 million; 31 December 2022: US$0.6 million). As at 30
June 2023, US$0.4 million (2022: US$0.1 million) is included within
trade and other receivables and relates to deferred cost of sales
relating to podcast partner contractual minimum guarantee payments.
These are payments which were made to podcast partners where
revenue shares earned were lower than the contractual minimum
guaranteed amount. The Company expects to recoup these payments
over the life of the contract.
6. Trade and other payables
Unaudited Unaudited Audited
six months six months 12 months
to 30 June to 30 June to 31 Dec
2023 2022 2022
US$'000 US$'000 US$'000
Current liabilities
Trade payables 7,577 8,900 5,932
Other taxes and social security 31 - 37
Accruals 1,392 2,546 4,522
Other payables 75 1,152 123
------------ ------------ -----------
Trade and other payables
due within one year 9,075 12,598 10,614
============ ============ ===========
Trade payables and accruals principally comprise amounts
outstanding for trade purchases and ongoing costs. The average
credit period taken for trade purchases is 51 days (30 June 2022:
47; 31 December 2022: 54 days). The Company currently accrues all
costs based on contract terms. Payables relating to leases total
US$0.2 million which is due in under one year.
7. Related party transactions
During the period, there were no related party transactions.
8. Share based payments
During the period, 447,000 share options were issued to
qualifying current employees with an exercise price of GBP3.61 per
share.
9. Contract provision and costs
A provision has been recognised as at 30 June 2023 in relation
to an individual partner contract. As advertising markets have
performed below the expectations previously modelled for this
specific agreement, it is now assumed that it is unavoidable that
the contract will generate a loss through to its conclusion in July
2025. The contract, which was negotiated in Q1 2022 during buoyant
podcast advertising market conditions, recorded a net loss of
US$1.8 million in H1 2023 and in light of revenue growth being
lower than projected at the previous reporting date it is
considered likely that it will continue to be loss making through
to its conclusion.
A provision has therefore been created for the estimated total
contract loss with the trigger point being future revenue and
growth assumptions for the show being lowered due to the
advertising markets being more challenging for longer than
anticipated during Q2 2023. Consequently, despite the downloads for
the contract continuing to increase, the ad rates that have been,
and are likely to be, commanded for the contract are likely to be
lower than those previously assumed.
In estimating the potential net loss of the contract between
July 2023 and July 2025, high, medium and low growth projections
have been used to estimate the total net loss of the contract. The
provision has been created as, even under the high growth scenario,
it is estimated that the contract will incur a net loss due to
insufficient time and opportunity to derive sufficient revenue
growth for the contract to generate a profit before its expiration
in July 2025. A weighted average of the different growth scenarios
has been used as the performance of future advertising markets and
the specific show can only be estimated at the balance sheet
date.
It has been deemed appropriate to disaggregate the revenue, net
loss and provided for projected net loss of this contract within
the consolidated statement of comprehensive income in order to
detail revenue and gross margin which reflects the performance of
the underlying business. No overheads or other costs have been
included in the provision assessment.
The following are the amounts recognised in the statement of
comprehensive income:
Unaudited Unaudited Audited
six months six months 12 months
to 30 June to 30 June to 31 Dec
2023 2022 2022
US$'000 US$'000 US$'000
H1 net loss
Contract net loss incurred between 1,823 - -
January and
June 2023
Contract provision
Contract provision for expected 7,090 - -
net loss between July 2023 and
July 2025
------------ ------------ -----------
Total 8,913 - -
============ ============ ===========
The following are the total value of the provision which has
been calculated on a weighted average basis based on a range of
scenarios then discounted to detail the net present value of the
provision:
Unaudited Unaudited Audited
six months six months 12 months
to 30 June to 30 June to 31 Dec
2023 2022 2022
US$'000 US$'000 US$'000
Current contract provision 3,386 - -
Non-current contract provision 3,703 - -
------------ ------------ -----------
Total 7,090 - -
============ ============ ===========
ENDS
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END
IR BVLLFXDLZBBB
(END) Dow Jones Newswires
July 19, 2023 02:00 ET (06:00 GMT)
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