TIDMSEEN
RNS Number : 9484O
SEEEN PLC
06 February 2023
Prior to publication, the information contained within this
announcement was deemed by the Company to constitute inside
information for the purposes of Regulation 11 of the Market Abuse
(Amendment) (EU Exit) Regulations 2019/310. With the publication of
this announcement, this information is now considered to be in the
public domain.
SEEEN plc
("SEEEN", the "Group" or the "Company")
Trading and Operational Update, Significant Customer Win and
Board Change
SEEEN plc (AIM: SEEEN), the company whose proprietary
AI-generated Key Video Moments technology helps all video asset
owners increase direct revenue and profits from their videos,
announces: a trading and operational update for the year ended 31
December 2022 ("2022"); its 2023 outlook following its recent
fundraising; a change to the Board; and a significant customer win
expected to be worth approximately $1m in annual revenues, which
reinforces how SEEEN's Key Video Moments technology positions it
well to benefit from a shift in emphasis for all MCNs driven by
YouTube.
During 2022, the Board made management changes to shift the
Group's focus from product development to commercialisation. As a
result, SEEEN gained sales traction for its proprietary Key Video
Moments technology by targeting certain strategic customers and
gaining a foothold in key vertical markets; especially sports,
financial publishing and services. With its fundraising closed, the
Group has started 2023 by reinforcing these vertical customer wins
with sales hires in these target markets.
For 2022, the Group generated revenues expected to be
approximately $3.3 million and an expected adjusted EBITDA(*) loss
of $0.8-0.9 million, reflecting the increased commercialisation
focus of the Group.
Finally, as outlined below, YouTube is re-designating MCNs as
Creator Service Partners ("CSPs"), which the Group will use to
describe this business going forward. In-line with this shift, the
Group has focused on retaining and winning YouTube channel partners
for its MultiChannelNetwork business ("MCN") where its technology
products add value. Today's announcement of a new strategic
customer, initially for SEEEN's CSP services, which is expected to
be worth approximately $1m in revenues per year, further validates
this focus. There is potential to grow this relationship
significantly in both size and scope, reinforcing the Group's
strategic growth plan. A key component of this growth plan includes
using Key Video Moments to drive value for CSPs, in line with
YouTube's strategy for added value from CSPs.
Unaudited 2022 Financial Highlights
Profitability
-- Adjusted Group EBITDA(*) loss expected to be between $0.8m and $0.9m (2021: loss of $1.5m)
-- Improved gross margin of 15.2% (2021: 10.6%), reflecting
increasing mix of technology sales and higher margin CSP channel
partners
Revenues
-- Changing mix of revenue, reflecting technology commercialisation
-- Revenues from customers using CreatorSuite, the Group's
primary technology product, of approximately $1.0 million (2021:
$0.1 million)
o Recurring technology revenues of approximately $0.1 million
(2021: $0.1 million, of which approximately half was professional
services fees)
-- Total Group revenues for the year ended 31 December 2022
expected to be $3.3m (2021: $8.5m). Reduction reflects: (i)
elimination of unprofitable revenue from CSP channel partners with
no technology upselling potential with annual views of 10.0bn
(2021: 12.0bn); (ii) loss of all CSP advertising revenue in Russia
since the start of the Ukrainian conflict; (iii) an unseasonably
weak Q4 exacerbated by adverse exchange rates; together with (iv)
shifting revenue mix to include technology-led sales
Balance Sheet
-- Pro forma cash position of $3.4 million, reflecting amounts
receivable from the fundraising completed on 30 December 2022
2022 Operating and Strategic Highlights
-- Successful fundraising of GBP2.6 million (gross) to
accelerate sales through an enhanced sales and marketing team and
selected technology upgrades
-- Accelerating commercialisation reinforcing the Group's core technology KPIs
o 14 vertical market customers in financial publishing, sports,
retail and services markets
o 3 strategic customers in the publishing industry, including
Daily Mail; subsequent event - new further customer announced
today
o 4 e-commerce customers
o Strategic partnership with Kinetiq
o Publication of new customer-led product features for
CreatorSuite
-- CSP increasingly profitable
o Increasing focus on targeting publishers with large video back
catalogues to optimise historic and new video content through "Key
Video Moments"
o Shedding of lower margin, higher volume legacy creator
partners who had minimal cross-sell opportunities
o Subsequent event - customer win
Customer Win
The Group is pleased to announce today that it has secured a
further strategic customer, initially for its technology-driven CSP
services. This new customer's core business is as a provider of
channels to streaming and cable networks, focused on long and short
form programmes delivering adventure and danger-related
content.
This customer is expected to become one of the Group's biggest
CSP channel partners, with the contract expected to deliver
approximately $1m per year in revenues to SEEEN, generated from
YouTube advertising. SEEEN will enhance this channel's significant
presence by using its Key Video Moments technology to create Short
Form highlights and re-mixed videos to drive increased views and
revenue for the channel partner.
The Board believes that this relationship could significantly
grow in terms of both size and scope, reinforcing the Group's
strategic growth plan.
As discussed in the strategy and outlook section below, this win
builds on SEEEN's growing relationships in the publishing industry.
Moreover, it reinforces the Group's Go to Market Strategy in line
with the Group's KPIs as outlined in its 2021 Annual Report.
Board Change
SEEEN announces that Charles Burdick has tendered his
resignation from the Board of the Company in order to focus on his
other interests. He will remain a director of the Company until 3
April 2023, in line with his notice period.
Having completed its fundraise, the Company is seeking to
appoint an additional non-executive director to the Board to help
advance its growth plan. The Group also plans to strengthen its
executive team with the appointment of a CFO ahead of the Group's
audited results for the year ended 31 December 2022. The Group will
make further announcements as appropriate.
2023 Strategy and Outlook
In 2022, the Group added 16 customers across its different KPIs,
including the first cross-sale of technology services to a CSP
customer. Building on this, on 30 December 2022, the Group
completed a GBP2.6m (gross) fundraising, principally to:
-- invest in accelerating sales traction, through targeted sales and marketing hires; and
-- add functionality for CreatorSuite, especially more flexible
end cards and advertising integration, to enable shorter sales
cycles and faster implementation by both vertical and strategic
customers
Since the start of 2023, the Group has added two sales hires in
the US (for e-commerce and strategic partnerships) and the UK (for
the sports vertical). Both of these individuals will leverage both
the Group's 2022 case studies and sales wins to accelerate sales of
CreatorSuite. These efforts are being supplemented by attendance at
trade shows, such as the Smart Retail Tech Expo in London on 28
February - 1 March 2023.
In addition, the Group has invested in developing additional
functionality for CreatorSuite aimed at accelerating sales cycles
and customer adoption, including the creation of more flexible
in-video Calls To Action (or end cards) to drive increased viewer
conversion into paying customers and advertising modules for videos
processed in CreatorSuite to attract larger scale publishers.
Finally, the contract win announced today further validates the
strategy of targeting larger publishers initially with our YouTube
offering with a strategy to cross-sell our CreatorSuite services
for enhanced Search Engine Optimisation (SEO) and video
monetisation. This builds on SEEEN's growing reputation in the
publishing community, including working with YouTube to become the
leading partner of choice for publishing channels on YouTube.
Furthermore, YouTube is re-designating MCNs as CSPs, as they are
focused on the value-add that such organisations bring to creators.
With its Key Video Moments technology, SEEEN is well positioned to
benefit from this shift in emphasis from YouTube and will refer to
this segment of its business as CSP going forward.
Adrian Hargrave, CEO of the Company, stated: "2022 was a
transformative year for the business, where we truly began to see
sales wins and synergies between our YouTube CSP business and our
AI-led Key Video Moments technology. I am grateful to our investors
for their ongoing support, including the recent fundraising to
accelerate sales in 2023 and beyond for both our AI technology and
CSP products and services. I am confident that during 2023, we will
execute against the plans set out as part of our recent
fundraising."
Notes
* EBITDA adjusted for share-based payments and one-time
costs
SEEEN, seeen.com Tel: +44 (0)7775
701 838
Adrian Hargrave, CEO
Dowgate Capital (Joint Broker) Tel: +44 (0)20 3903
7721
Stephen Norcross
Allenby Capital Limited Tel: +44 (0)20 3328
(Nominated Adviser and Joint Broker ) 5656
Alex Brearley / George Payne (Corporate
Finance)
Tony Quirke / Amrit Nahal (Sales and Corporate
Broking)
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