TIDMBIDS
RNS Number : 0840O
Bidstack Group PLC
29 September 2023
Certain information contained within this Announcement is deemed
by the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 ("MAR"). Upon
publication of this Announcement, this information is considered to
be in the public domain.
29 September 2023
Bidstack Group Plc
("Bidstack" or "the Company")
Interim Results for six months ended 30 June 2023
Bidstack Group plc (AIM: BIDS.L), the native in-game advertising
group, announces its unaudited results for the six months ended 30
June 2023.
The Interim Report for the period ended 30 June 2023 will be
published on the Company's website - www.bidstack.com today.
Financial Update
-- Revenue of GBP1.967m (H1 2022: GBP2.046m), demonstrating a
strong recovery following re-engagement with agencies and
programmatic platforms after the termination of the Azerion
commercial partnership in December 2022. The underlying prior year
comparison (H1 2022: GBP0.4m) highlights the growth in campaign
sizes and quality of global brands;
-- Gross margin contracted to 25.9% (H1 2022: 39.9%), due to
product mix which is expected to improve in H2 2023;
-- Period end cash balance GBP2.084m (30 June 2022: GBP3.672m)
Post Period End Highlights
-- Bidstack Sports, the dedicated sports technology division
announced a partnership with StatusPRO's NFL PRO ERA and the
Washington Commanders professional football team to control their
virtual stadium for brand activations and fan engagement
messaging;
-- Commencement of Venatus partnership on 4 September 2023,
outsourcing Bidstack's in-game advertising network. Venatus has
sole ownership of direct sales of Bidstack's in-game inventory
across US, UK, Germany, Canada, Australia and South Korea
leveraging its extensive global sales presence;
-- A signed heads of terms, announced this morning in relation
to a proposed multi-year licensing agreement with Virtual Sport
Technology ("VST"), a sports marketing agency, subject to contract,
for a licence fee of GBP1.5m (two equal instalments of GBP0.75m
paid quarterly in advance), with Bidstack retaining a 70% share of
future revenues during the initial term of 3 years. Bidstack acts
purely as the technology provider, empowering sports teams to reach
fans within their virtual stadiums;
-- Following a comprehensive business review on the back of
commercial partnerships announced a restructuring programme has
been implemented to reduce monthly cash burn and prioritise
resources. The rationalisation in headcount, rephasing of hires,
working capital management and reduction in operating expenses
should deliver c.GBP3m p.a. of annualised savings;
-- Donald Stewart (Non-Executive Director) and Glen Calvert
(Non-Executive Director) stepped down from the Board at the end of
the Annual General Meeting on 21 July 2023;
-- Thomas Bullen (CFO) will step down from his role with
immediate effect. The Company will commence a search for a
successor.
Current trading and outlook
As we reach the end of Q3, the Board now anticipates that
revenue for FY23E will fall significantly short of previous market
expectations, however due to improving gross margin and cost
savings, EBITDA should be broadly in line. However, the Board
believes that the outsourcing of our sales efforts should allow the
Company to focus on its technology platform.
The business is transitioning to its next phase of growth
however the following factors have impacted market expectations for
the year:
-- The transition from in-house direct sales to Venatus in Q3
2023, the onboarding process is progressing well to ensure a
healthy Q4 2023 and strong start to FY24.
-- The proposed licensing agreement with VST, subject to
contract, includes a licence fee of GBP1.5m (two equal instalments
of GBP0.75m paid quarterly in advance).
-- Over the past several months, the Board and the Management
team have diligently examined numerous possible financing options
with the primary aim of securing the necessary capital to address
the Company's immediate and mid-term funding requirements. After an
extensive search for the best route to access capital by the Group,
the Independent Directors believe that the proposed transaction
announced with VST today, albeit a related party transaction and
subject to contract, represents the best value for shareholders at
this present time. However, the Board will continue to keep all
future funding options under review.
-- The technical development of the open marketplace has
unfortunately taken longer than anticipated. While we do not expect
open marketplace to be the primary source of company revenue going
forward due to the increased focus on technology licensing, we are
continuing to pursue this initiative to generate additional passive
income from our existing mobile publishers.
-- Operating cost reductions should lower FY23E operating costs
by c.GBP2m and generate annualised savings of c.GBP3m p.a.
At the same time the Company will continue to pursue its claim
against Azerion.
Dr. David Reeves, Chairman, said:
"The Board is pleased with the proposed acceleration of the
business towards a technology licensing business. The announcement
of the partnership with Venatus and proposed agreement with VST in
quick succession should enable the business to move rapidly to
further adapt its cost base. Looking ahead, Bidstack should now be
well positioned to generate recurring revenue and capture upside
potential. I would like to thank the Board and management team for
the hard work over the past six months."
James Draper, Chief Executive, said:
"The first six months of trading highlights the underlying
growth in in-game advertising and was a crucial period in
identifying opportunities to scale revenue which is evident in the
shift in focus to enterprise customers. This has led to some tough
decisions regarding the personnel within the Group as we reviewed
how we take our products to market.
The partnership with Venatus on our network gives Bidstack a
well-respected partner in gaming as we generate revenue through
brand activations for our contracted game publishers.
The proposed partnership with VST should empower our talented
team to focus on the technology and supporting our customers.
The clear actions and positive financial impact over the medium
to longer term of outsourcing media and technical sales
concentrates Bidstack's efforts on compounding revenue with similar
commercial prospects across other network and publisher
partners."
For further information please contact:
Bidstack Group Plc
James Draper, CEO via SPARK
SPARK Advisory Partners Limited
(Nomad)
Mark Brady/Neil Baldwin/James
Keeshan +44 (0) 203 368 3550
Stifel Nicholas Europe Limited
(Broker)
Fred Walsh/Tom Marsh +44 (0) 20 7710 7600
Chairman's Statement
H1 2023 Trading and Post Period Updates
During the first six months of the year, Bidstack demonstrated
underlying revenue growth and significant progress around
enterprise customers. This has enabled rapid implementation of cost
restructuring action and favourable product mix effect on gross
margins taking effect from H2 2023 onwards.
Revenue has been predominantly driven by an internal direct
sales strategy following the termination of the Azerion commercial
partnership in December 2022. The underlying revenue performance H1
2023: GBP1.967m (H12022 GBP0.4m ex-Azerion) represents c.400%
increase from growing campaign sizes and rebookings with blue chip
brands across all categories such as Kroger, Nerdwallet, JP Morgan
Chase, Apple Arcade, McDonalds, Magnum, Samsung and Skoda. This
demonstrates a strong recovery as Bidstack adapted by re-engaging
with agencies and programmatic platforms to maintain market share.
However, the strategy to outsource sales and identify a partner was
a high priority for the management team.
The roll out of the open marketplace, a key revenue initiative
faced technical delays and has unfortunately taken longer than
anticipated which has hampered revenue expectations for the year.
While we do not expect the open marketplace to be the primary
source of company revenue going forward due to increased focus on
technology licensing, we are continuing to pursue this initiative
to generate additional passive income for the existing mobile
publishers.
After the period end, Bidstack is accelerating its transition
into an accretive technology licensing model. This includes the
outsourcing of its ad-network sales to gaming specialist agency
Venatus and the proposed partnership with sports marketing agency
Virtual Sport Technology to sell Bidstack's platform to sports
leagues, teams and publishers.
Outsourcing Bidstack's in-game advertising network to
Venatus
The partnership with Venatus, a gaming specialist agency,
commenced on the 4th September 2023 with the combined objective to
aggressively accelerate market share gains and industry growth.
Venatus was founded in 2010 by Rob Gay (CEO) and Matt Cannon (COO)
and is based in London with offices in New York, Los Angeles,
Sydney and Seoul. In 2021, Livingbridge private equity invested
behind the global expansion of Venatus which is most recently
reflected in key hires in the US.
Venatus has sole ownership of direct sales of Bidstack's in-game
inventory across US, UK, Germany, Canada, Australia and South Korea
leveraging its extensive global sales presence. The access to
Bidstack's intrinsic in-game network adds another dimension to the
Venatus offer which centres on campaigns in-game, next to the game
and around the game.
Bidstack and Venatus have historically worked together and both
are pleased to leverage their relationship and synergies. This
partnership plays to Venatus' strength as a proven sales house
within the gaming segment of the advertising industry and
solidifies Bidstack's role as a technology provider.
Proposed multi-year licensing agreement with Virtual Sport
Technology Limited
Sports leagues and teams have long been identified as enterprise
customers of Bidstack's platform. Until now, Bidstack and its
competitors have been unable to monetise sports games within a
fully licensed stadium due restrictions from official sponsors. By
placing the control of the brand activations into the hands of the
leagues and teams, these licensed stadiums become monetisable for
Bidstack's partners. Bidstack acts purely as the technology
provider, empowering sports teams to reach fans within their
virtual stadiums with a level of targeting and flexibility that has
never been possible in the world of sport before.
The non-binding heads of terms terms for the proposed the
multi-year licensing agreement with VST, which remains subject to
contract, are as follows:
-- Bidstack would provide VST worldwide third party exclusivity
to provide access to Bidstack's proprietary video game content
management platform to rights-holders including sports leagues,
teams and publishers for an initial term of three years with a
further three year extension mutually available;
-- VST would pay Bidstack a licence fee of GBP1.5m (two equal
instalments of GBP0.75m paid quarterly in advance);
-- Bidstack would provide certain support services to VST in
consideration of a quarterly service fee of GBP45,000; and
-- Bidstack would capture upside of the growth potential through
retaining a revenue share of 70 per cent.
As part of these arrangements, certain Bidstack employees would
transfer their employment to VST with the consequent cost saving to
Bidstack.
Cost savings
Following a comprehensive business review, a restructuring
programme has been implemented to reduce the monthly cash burn and
prioritise resources. The Directors believe that the
rationalisation in headcount, rephasing of hires, working capital
management and reduction in operating expenses delivers c.GBP3m
p.a. of annualised savings. This is primarily driven by the
positive impact of outsourcing of commercialisation to external
parties whilst operating on a leaner cost base.
Board Changes and Review
As announced on the 18 July 2023, the Company has been
undertaking a review of the respective roles and responsibilities
of the Board.
Following the Company's Annual General Meeting on 21(st) July
2023, Donald Stewart (Non-Executive Director) and Glen Calvert
(Non-Executive Director) both stepped down from the Board to focus
on other business commitments.
Thomas Bullen (CFO) will step down from his role with immediate
effect. The Company will commence a search for a successor.
The Board will continue to evaluate its needs going forward and
seek to review the structure, size, composition, skills and
experience. A committee of the Board shall make recommendations in
regard to any adjustments considered necessary and the Company will
make further announcements as appropriate.
Future Prospects
As we reach the end of Q3, the Board now anticipates that
revenue for FY23E will fall significantly short of previous market
expectations, however due to improving gross margin and cost
savings, EBITDA should be broadly in line. However, the Board
believes that the outsourcing of our sales efforts should allow the
Company to focus on its technology platform.
The business is transitioning to its next phase of growth
however the following factors has impacted market expectations for
the year:
-- The transition from in-house direct sales to Venatus in Q3
2023, the onboarding process is progressing well to ensure a
healthy Q4 2023 and strong start to FY24.
-- Signing of the non-binding heads of terms for the proposed
multi-year licensing agreement with VST, for an initial GBP1.5m,
with Bidstack retaining a 70% share of future revenues during the
initial term of 3 years.
-- The technical development of the open marketplace has
unfortunately taken longer than anticipated. While we do not expect
open marketplace to be the primary source of company revenue going
forward due to the increased focus on technology licensing, we are
continuing to pursue this initiative to generate additional passive
income from our existing mobile publishers;
-- Operating costs to reduce FY23E operating costs by c.GBP2m
and generate annualised savings of c.GBP3m p.a.
The recent developments enable Bidstack to scale revenue on a
leaner cost base as it evolves into a technology provider
empowering its enterprise customers. Bidstack has improving
visibility and commercial partnerships in place driven by:
-- Potential recurring revenue from VST's proposed licensing
agreement that is expected to compound through retaining a revenue
share;
-- Outsourcing of ad-network sales to Venatus' 40 gaming
specialists in the following exclusive markets US, UK, Canada,
Germany, South Korea and Australia;
-- Outsourcing of ad-network to remaining markets to known and trusted gaming specialists;
-- Optimisation of open marketplace in Q4 2023 and beyond
following delayed rollout to generate passive revenue;
-- Benefit from rapid restructuring action that contracts the
cost base as it migrates from a media model to a
software-as-a-service model which significantly improves the
working capital profile.
It is expected that the proposed commercial terms of the
licensing agreement with VST and outsourcing of ad-network sales to
Venatus will provide cash flow and limit dilution to existing
shareholders. However, the Board will also continue to keep all
funding options under review.
Dr. David Reeves
Chairman
Unaudited Condensed Consolidated Statement of Total
Comprehensive Income
for the interim period ended 30 June 2023
Unaudited Audited
Unaudited 6 months year
6 months ended ended
ended 30 Jun 31 Dec
Note 30 Jun 2023 2022 2022
GBP GBP GBP
-------------- ----------- -------------
Revenue 1,967,779 2,045,986 5,267,155
(1,457,29
Cost of sales 8 ) (1,229,225) (1,484,512)
-------------- ----------- -------------
Gross profit 510, 481 816,761 3,782,643
Administrative expenses ( 5,972,383) (3,769,066) (11,352,785)
Share based payment charge 6 115,413 (738,435) (1,192,931)
( 5 , 346,489
Operating loss ) (3,690,740) (8,763,073)
Finance income 501 96 749
Finance costs (3,853) (1,442) (2,998)
-------------- ----------- -------------
( 5,349,841 (3, 692,086
Loss before taxation ) ) (8,765,322)
Taxation 325,000 938,1 84 1,079,136
-------------- ----------- -------------
( 5,024,841 (2,7 53,902
Loss for the period ) ) (7,686,186)
Other comprehensive income
Items that may be subsequently
reclassified to profit or loss
(1 0,675
Currency translation differences (145,242) ) 113,358
-------------- ----------- -------------
Total comprehensive loss for
the period attributable to owners (5, 170,083 (2, 764,577
of the parent ) ) (7,572,828)
============== =========== =============
Loss per share - basic and diluted
(pence) 5 (0 .39 ) ( 0.30 ) (0.62)
The above consolidated statement of profit and loss and other
comprehensive loss for the period relates to continuing operations
for the Group.
Unaudited Condensed Consolidated Statement of Financial
Position
as at 30 June 2023
Unaudited Unaudited Audited
30 Jun 30 Jun 31 Dec
Note 2023 2022 2022
ASSETS GBP GBP GBP
------------- ------------ -------------
Non-current assets
------------- ------------ -------------
Intangible assets 7 828,066 233,162 765,454
Right of use asset 2,240 5,600 3,920
Property, plant and equipment 44,313 45,8 41 56,623
------------- ------------ -------------
Total non-current assets 87 4,619 284,603 825,997
------------- ------------ -------------
Current assets
Trade and other receivables 8 10,064,279 4,284,584 9,319,868
Cash and cash equivalents 2,084,355 3,671,976 8,662,039
-------------
Total current assets 1 2,148,634 7,956,560 17,981,907
------------- ------------ -------------
Total assets 13, 023,253 8,241,163 18,807,904
============= ============ =============
EQUITY AND LIABILITIES
Equity
Share capital 9 10,796,670 8,950,048 10,796,670
Share premium 43,216,919 35,375,326 43,216,919
Share-based payment reserve 2,667,483 2,328,400 2,782,896
Merger relief reserve 6,508,673 6,508,673 6,508,673
Reverse acquisition reserve (23,320,632) (23,320,632) (23,320,632)
Warrant reserve - 71,480 -
Foreign exchange reserve (21,295) (86) 123,947
Retained losses (34,515,893) (24,630,248) (29,491,052)
-------------
Total equity 5,331,926 5,282,961 10,617,421
------------- ------------ -------------
Non-current liabilities
Lease liability - 2,416 614
------------- ------------ -------------
Total non-current liabilities - 2,416 614
------------- ------------ -------------
Current liabilities
Trade and other payables 7,688,911 2,952,597 8,186,323
Lease liability 2,416 3,189 3,546
------------- ------------
Total current liabilities 7,691,327 2,955,786 8,189,869
------------- ------------ -------------
Total liabilities 7,691,327 2,958,202 8,190,483
------------- ------------ -------------
Total equity and liabilities 13,023,253 8,241,163 18,807,904
============= ============ =============
The interim financial report was approved by the board of
Directors on 29 September 23 and signed on its behalf by:
David Reeves
Chairman of Bidstack Group Plc
Unaudited Condensed Consolidated Statement of Changes in
Equity
for the six months to 30 June 2023
Share-based Merger Reverse Foreign
Share Share payment relief acquisition exchange Retained Total
capital premium reserve reserve reserve reserve losses equity
GBP GBP GBP GBP GBP GBP GBP GBP
As at 1
January 2023 10,796,670 43,216,919 2,782,896 6,508,673 (23,320,632) 123,947 (29,491,052) 10,617,421
---------- ---------- ----------- ----------- -------------- --------- ------------ -----------
Loss for the
period - - - - - - (5,024,841) (5,024,841)
---------- ---------- ----------- ----------- -------------- --------- ------------ -----------
Other
comprehensive
loss:
---------- ---------- ----------- ----------- -------------- --------- ------------ -----------
Foreign
currency
exchange
difference - - - - - (145,242) - (145,242)
---------- ---------- ----------- ----------- -------------- --------- ------------ -----------
Total
comprehensive
loss
for the
period - - - - - (145,242) (5,024,841) (5,170,083)
---------- ---------- ----------- ----------- -------------- --------- ------------ -----------
Transactions
with owners
Share-based
payments - - (115,413) - - - - (115,413)
---------- ---------- ----------- ----------- -------------- --------- ------------
Total
transaction
with
owners - - (115,413) - - - - (115,413)
As at 30 June
2023 10,796,670 43,216,919 2,667,483 6,508,673 (23,320,632) (21,295) (34,515,892) 5,331,925
========== ========== =========== =========== ============== ========= ============ ===========
Unaudited Condensed Consolidated Statement of Changes in
Equity
for the six months to 30 June 2022
Share-based Merger Reverse Foreign
Share Share payment relief acquisition exchange Warrant Retained Total
capital premium reserve reserve reserve reserve reserve losses equity
GBP GBP GBP GBP GBP GBP GBP GBP GBP
As at 1
January 2022 8,950,048 35,375,326 1,589,965 6,508,673 (23,320,632) 10,589 71,480 (21,876,346) 7,309,103
--------- ---------- ----------- --------- ------------ -------- ------- ------------ -----------
Loss for the
period - - - - - - - (2,753,902) (2,753,902)
--------- ---------- ----------- --------- ------------ -------- ------- ------------ -----------
Other
comprehensive
loss:
--------- ---------- ----------- --------- ------------ -------- ------- ------------ -----------
Foreign
currency
exchange
difference - - - - - (10,675) - - (10,675)
--------- ---------- ----------- --------- ------------ -------- ------- ------------ -----------
Total
comprehensive
loss
for the
period - - - - - (10,675) - (2,753,902) (2,764,577)
--------- ---------- ----------- --------- ------------ -------- ------- ------------ -----------
Transactions
with owners
Share-based
payments - - 738,435 - - - - - 738,435
--------- ---------- ----------- --------- ------------ -------- ------- ------------ -----------
Total
transaction
with
owners - - 738,435 - - - - - 738,435
As at 30 June
2022 8,950,048 35,375,326 2,328,400 6,508,673 (23,320,632) (86) 71,480 (24,630,248) 5,282,961
========= ========== =========== ========= ============ ======== ======= ============ ===========
Audited Consolidated Statement of Changes in Equity
for the year ended 31 December 2022
Share-based Merger Reverse Foreign
Share Share payment relief acquisition exchange Warrant Retained Total
capital premium reserve reserve reserve reserve reserve losses equity
GBP GBP GBP GBP GBP GBP GBP GBP GBP
---------- ---------- ----------- --------- ------------ -------- -------- ------------ -----------
As at 01
January 2022 8,950,048 35,375,326 1,589,965 6,508,673 (23,320,632) 10,589 71,480 (21,876,346) 7,309,103
Loss for the
year - - - - - - - (7,686,186) (7,686,186)
Other
comprehensive
loss:
Foreign
currency
exchange
difference - - - - - 113,358 - - 113,358
Total
comprehensive
loss
for the year - - - - - 113,358 - (7,686,186) (7,572,828)
---------- ---------- ----------- --------- ------------ -------- -------- ------------ -----------
Transactions
with owners
Issue of
shares 1,839,122 8,643,873 - - - - - - 10,482,995
Issue of share
options
exercised 7,500 22,500 - - - - - - 30,000
Costs of
raising
equity - (824,780) - - - - - - (824,780)
Share-based
payments - - 1,192,931 - - - - - 1,192,931
Unexercised
lapsed
warrants - - - - - - (71,480) 71,480 -
Total
transaction
with
owners 1,846,622 7,841,593 1,192,931 - - - (71,480) 71,480 10,881,146
---------- ---------- ----------- --------- ------------ -------- -------- ------------ -----------
As at 31
December 2022 10,796,670 43,216,919 2,782,896 6,508,673 (23,320,632) 123,947 - (29,491,052) 10,617,421
---------- ---------- ----------- --------- ------------ -------- -------- ------------ -----------
Unaudited Condensed Consolidated Statement of Cash Flows
6 months 6 months Year end
to 30 Jun to 30 Jun to 31 Dec
2023 2022 2022
GBP GBP GBP
----------- ----------- -----------
Cash flows from operating activities
Loss before taxation (5,349,841) (2,753,902) (8,765,322)
Adjustments for:
Amortisation - Intangibles 79,544 15,598 71,528
Amortisation - Right of use asset 1,680 1,680 3,360
Depreciation 17,463 13,140 28,765
Equity settled share-based payments (115,413) 738,435 1,192,931
Interest received (501) (96) (749)
Interest paid 3,853 1,442 2,998
Bad debts expense - - 1,456,236
Exchange differences on translation
of foreign operations (145,242) (10,675) 113,358
----------- -----------
(5,508,457) (1,994,378) (5,896,895)
Changes in working capital
Increase in trade and other receivables (419,411) (1,532,550) (8,199,385)
(Decrease)/increase in trade and
other payables (497,411) 127,679 5,361,405
----------- ----------- -----------
Cash used in operations (6,425,279) (3,399,249) (8,734,875)
Taxation credits received - - 1,254,451
----------- ----------- -----------
Net cash used in operations (6,425,279) (3,399,249) (7,480,424)
Cash flow from investing activities
Investment in intangible assets (142,155) - (588,222)
Investment in property, plant and
equipment (5,153) (12,462) (38,869)
----------- ----------- -----------
Net cash flow used in investing
activities (147,308) (12,462) (627,091)
Cash flow from financing activities
Proceeds from issue of share capital - - 10,512,995
Cost of issue - - (824,780)
Principal movement on lease liabilities (1,744) (1,872) (3,318)
Interest received 501 96 749
Interest paid on lease liabilities (3,854) (1,443) (2,998)
----------- -----------
Net cash generated from financing
activities (5,097) (3,219) 9,682,648
(Decrease)/increase in cash and
cash equivalents in the period (6,577,684) (3,414,930) 1,575,133
Cash and cash equivalents at beginning
of period 8,662,039 7,086,906 7,086,906
Cash and cash equivalents at the
end of the period 2,084,355 3,671,976 8,662,039
=========== =========== ===========
for the interim period ended 30 June 2023
Notes to the unaudited interim report for six months ended 30
June 2023
1 General information
The Company is a public limited company which is admitted to
trading on the AIM Market of the London Stock Exchange and is
incorporated and domiciled in the UK. The address of the registered
office is Wework The Hewett 3(rd) Floor, 14 Hewett Street, London,
United Kingdom, EC2A 3NP. The registered number of the company is
04466195.
2 Basic of preparation
The condensed consolidated interim financial statements
consolidates those of the Company and its trading subsidiaries,
Bidstack Limited, Pubguard Ltd, Bidstack SIA, Bidstack Technologies
Ltd, Bidstack Sports Limited and Bidstack Inc. (together the
"Group") for the six months ended 30 June 2023. These condensed
consolidated interim financial statements do not comprise statutory
accounts within the meaning of section 434 of the Companies Act
2006.
These condensed consolidated interim financial statements have
been prepared in accordance with the AIM rules and the recognition
and measurement requirements of UK-adopted International Accounting
Standards ("UK-IAS") and adopting the accounting policies that will
be applied in the 31 December 2023 annual financial statements.
These condensed consolidated financial statements should be read
in conjunction with the financial statements for the year ended 31
December 2022, which is available on the Group's website at
www.bidstack.com.
3 Accounting policies
Going concern
The interim results have been prepared on a going concern basis
which assumes that the Group will be able to continue trading for
the foreseeable future. Although an operating loss has been
reported for the reporting period and an operating loss is expected
to be incurred in the 12 months subsequent to the date of this
report, the Directors believe, having considered all available
information, including the cash resources currently available to
the Group, that the Group will have sufficient funds to meet its
expected committed and contractual expenditure for the foreseeable
future. Thus, the Directors continue to adopt the going concern
basis of accounting in preparing the interim financial report for
the period ended 30 June 2023.
Summary of significant accounting policies
The accounting policies applied by the Group in these condensed
consolidated interim financial statements are the same as those
applied by the Group in the financial statements disclosed as at
and for the year ended 31 December 2022.
4 Critical accounting judgements and estimates
The preparation of the condensed consolidated interim financial
statements requires directors to make judgements, estimates and
assumptions that affect the application of accounting policies and
the reported amounts of assets and liabilities, income and expense.
Actual results may differ from these judgements and estimates.
In preparing these condensed consolidated interim financial
statements, the significant judgements made by management in
applying the Group's accounting policies and the key sources of
estimation uncertainty were the same as those that applied to the
audited consolidated financial statements for the year ended 31
December 2022.
5 Loss per share
Basic and diluted loss per share
The calculation of basic and diluted loss per share is based
upon the loss of attributable to equity holders divided by the
weighted average number of shares in issue during the period.
The loss incurred by the Group means that the effect of any
outstanding warrants and options would be considered anti-dilutive
and is ignored for the purposes of the loss per share
calculation.
6 months 6 months Year ended
to 30 Jun to 31 Dec
2023 30 Jun 2022 2022
Loss for the period from continuing
activities (GBP's) (5,024,841) (2,764,577) (7,686,186)
Weighted average number of ordinary
shares 1,300,855,984 931,531,573 1,235,295,798
Basic and diluted loss per share
(pence) (0.39) (0.30) (0.62)
============= ============ =============
All ordinary shares are equally eligible to receive dividends
and the repayment of capital and represent equal votes at meetings
of shareholders.
6 Share based payment expense.
6 months 6 months Year ended
to 30 Jun to 31 Dec
2023 30 Jun 2022 2022
GBP GBP GBP
Share based payment charge (115,413) 738,435 1,192,931
========== ============ ==========
The calculation of the share-based payment expense is based on
the grant date fair value to establish the fair value per
instrument. This fair value is multiplied by the number of options
that are expected to vest after considering performance conditions
and the likelihood of these performance conditions being met.
In the six months to June 2023, the revenue targets set as
performance conditions the for the LTIP awards made in December
2021 ("LTIP 2021") and LTIP awards made in December 2022 ("LTIP
2022") are now not expected to meet the minimum threshold for
vesting for the year ended 31 December 2023. The revenue targets
for FY2024 and FY2025 for both LTIP 2021 and LTIP 2022 are
currently expected to be met.
The result of result of this is a remeasurement to the options
expected to vest and reversal of the expense associated with these
options equates to GBP458,032, which has been offset against the
underlying charge for options continuing to vest as normal.
7 Intangible assets
Website Trademarks Software Brand Goodwill R&D Total
costs GBP GBP GBP GBP GBP GBP GBP
Cost
At 1 January
2023 48,618 1,460 88,205 29,402 168,000 588,222 923,907
Additions - - - - - 142,155 142,155
---------- ---------- -------- ------ -------- ------- ---------
At 30 June
2023 48,618 1,460 88,205 29,402 168,000 730,377 1,066,062
---------- ---------- -------- ------ -------- ------- ---------
Amortisation
At 1 January
2023 43,249 688 55,637 18,546 - 40,333 158,453
Charge 3,835 73 8,142 2,714 - 64,779 79,543
---------- ---------- -------- ------ -------- ------- ---------
At 30 June
2023 47,084 761 63,779 21,260 - 105,112 237,996
---------- ---------- -------- ------ -------- ------- ---------
Net book
---------- ---------- -------- ------ -------- ------- ---------
At 30 June
2023 1,533 699 24,426 8,142 168,000 625,265 828,066
---------- ---------- -------- ------ -------- ------- ---------
At 31 Dec 2022 1,533 699 24,426 8,142 168,000 547,889 765,454
---------- ---------- -------- ------ -------- ------- ---------
Research and development costs are internally generated
intangible assets associated with the development of the Group's
products.
8 Trade and other receivables
30 Jun 30 Jun 31 Dec
2023 2022 2022
GBP GBP GBP
---------- --------- ---------
Trade receivables 7,120,874 1,131,621 6,857,633
Contract assets 6,905 32,538 10,500
Prepayments 1,516,119 235,080 1,205,045
Other receivables 1,095,378 1,947,162 307,491
Corporation tax 325,000 938,183 939,199
---------- --------- ---------
Total trade and other receivables 10,064,276 4,284,584 9,319,868
========== ========= =========
The Group applies the IFRS 9 simplified approach to measuring
expected credit losses (ECL) which uses a lifetime expected loss
allowance for all trade receivables. The trade receivables do not
contain a significant financing component as the credit terms
offered by the Group to its customers are 45 days.
The Group measures ECL based on historical data by determining
the historical default rates to be applied to the Group's trade
receivables. The Group adjusted the historical default rates to
incorporate forward looking information looking at any linear or
non-linear relationships that could impact the Group's credit
losses.
The Group apply those default rates against the trade
receivables that have been analysed out into time buckets based on
their risk profile to determine the ECL to be applied. The Group
separately assesses the trade receivables for any bad debt
provisions.
During the period end 30 June 2023, the Group has made a nil bad
debt provision against the trade receivables.
9 Share capital and share premium
Allotted, called up and fully Ordinary
paid 0.5p shares Share capital Share premium
No. GBP GBP
At 1 January 2022 931,531,573 8,950,048 43,216,919
Issue of shares 369,324,411 1,846,622 -
As at 31 December 2022 1,300,855,984 10,796,670 43,216,919
------------- ------------- --------------
As at 30 June 2023 1,300,855,984 10,796,670 43,216,919
============= ============= ==============
All ordinary shares are equally eligible to receive dividends
and the repayment of capital and represent equal votes at meetings
of shareholders.
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END
IR SESEFAEDSEFU
(END) Dow Jones Newswires
September 29, 2023 02:00 ET (06:00 GMT)
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