TIDMSBDS

RNS Number : 2251M

Silver Bullet Data Services Grp PLC

20 September 2021

20 September 2021

Silver Bullet Data Services Group plc

("Silverbullet" or the "Company", or, together with its subsidiaries, the "Group")

Interim Results

Silverbullet, a provider of digital transformation services and products, is pleased to announce interims results for the six months to 30 June 2021 .

Financial Highlights

 
                        Six months to   Six months to June 
                         June 2021       2020 
 
 Revenue                  GBP1.67m           GBP1.28m 
 Gross Profit             GBP1.24m           GBP1.01m 
 Headline Loss before     GBP2.97m           GBP1.99m 
  tax* 
 Reported Loss before     GBP3.93m           GBP2.41m 
  tax 
 Earnings Per Share       (GBP0.44)         (GBP0.41) 
 
 

* Headline results are calculated before exceptional items and share option charges

Business Highlights

 
  --   Successful admission to trading on AIM on 28 June 2021, 
        raising gross proceeds of GBP9.5 million. 
  --   Revenue of GBP1.67 million up 30 per cent on H1 2020, 
        this is ahead of management expectations. 
  --   13 new services client wins in the period including ITV 
        and Venture Crowd. 
  --   Consolidation of existing services clients as a result 
        of additional contract wins with Channel 4, Heineken and 
        Jägermeister. 
  --   Extensive technical development of '4D', Silverbullet's 
        contextual outcomes engine, led by the in-house development 
        and product teams. 
  --   4D campaigns have been successfully delivered for several 
        clients and global agencies. 
  --   Recruitment of Kristen Kelly as Chief Operating Officer. 
  --   Expansion of our 4D-focused US office, including the recruitment 
        of VP Partner Solutions, Director of Product Marketing, 
        Senior Director Strategic Sales and a Client Success Director. 
 

Chief Executive Officer's Report

Silverbullet (the "Company", or, together with its subsidiaries, the "Group") has delivered strong results for the first half start to 2021, as well as successfully completing its IPO on the AIM market of the London Stock Exchange ("AIM") on 28 June 2021. The listing raised gross proceeds of approximately GBP9.5 million and welcomed several established UK funds as shareholders.

Silverbullet is a data and digital transformation company that seeks to deliver future-proofed solutions for the privacy-first, post-cookie era for marketing and advertising purposes. The Group's core services and products comprise:

-- Data-driven transformational services : first-party data strategy and customer journey activation advisory services, technology implementation and integration engineering, alongside adtech and martech managed services. In short, our expert services help businesses deliver privacy-first, customer-centric marketing, powered by data.

-- '4D' - proprietary contextual data product: a contextual targeting solution designed to help clients face the challenges posed by the post-cookie era. 4D enables contextual a strong focus on online video. In short, 4D drives business outcomes for the modern marketer.

We have grown Group revenue by a solid 30 per cent. compared to H1 2020, underpinned by growth in our data-driven transformation services. We believe this a reflection of the ongoing permanent shift in consumer behaviours to digital and the need for our clients to accelerate their data driven marketing transformation. The Covid-19 pandemic and increasing regulatory scrutiny around personal data are proving strong agents of change in the ways brands are able to connect and transact with their customers, including through the demise of the third-party cookie, and we are perfectly positioned at Silverbullet to assist in their transformation journey through our data technology services and 4D product.

I am particularly proud of how the team have delivered fantastic growth in services revenues and the continued development of a world-class product whilst operating in a challenging working and home environment, and furthermore during a period in which the Company delivered a successful AIM IPO.

Data transformation services.

During the first half of the year, we have secured 13 new clients wins and, post period end, a further nine. We have also consolidated and extended contracts with a number of our key existing clients.

Winning new data and technology transformation contracts with ITV, RTE, SBS in the period, we are now working with six major broadcasters across the globe to assist them in transforming their advertising product from linear to programmatic. We are very proud to be at the centre of the era of the transformation for the Broadcast industry, which will affect the entire advertising ecosystem as TV accelerates into being digitally traded and data enabled in the coming year.

Revenue committed in our martech services unit has grown 72 per cent. versus the year ended December 2020, underpinned by the strengthening of our strategic partnership with the key software vendors including Salesforce, where Silverbullet works as a preferred services partner, and Treasure Data (a Softbank company), which works with Silverbullet as its European services partner.

4D - Proprietary contextual data product.

4D is Silverbullet's emerging proprietary contextual data product. After testing in H1 2021 4D is gaining traction in the market with multiple clients and agencies now using the platform for contextual targeting including video and display programmatic advertising, as well as for the purpose of generating unique insights on consumer activity online using our unique deterministic contextual data.

Specifically, 4D, is designed to enable advertisers to generate increased marketing ROI in the post-cookie, first-party data era, and is now being used by multiple Fortune 500 brands and agencies. The digital ad market, in which 4D is embedded, now accounts for approximately 58 per cent. of total worldwide ad spend, with a projected growth to 68 per cent. forecast by 2024 (according to eMarketer Worldwide Ad Spend report).

Investment in talent.

We have continued to invest in our people and culture, focusing on expanding our US team, with new hires in key customer success and sales positions to lead our client expansion in Q4 and beyond. We have also attracted a number of key product and engineering leaders to develop new features for 4D set for release early next year.

Our already experienced management team, which includes key professionals from the industry, has been recently enhanced by the arrival of Kristen Kelly as Chief Operating Officer. Kristen was formerly President of Precision, EMEA, at Publicis Media.

Outlook

We are delighted with the performance and continued development of the Group during H1 2021. The second half of this year, and 2022, are set to see programmatic media rise further, creating a positive environment for both our services and product business. We believe a permanent shift in consumer behaviours is accelerating business investment in marketing technology and data, enhancing Silverbullet's prospects with current and new clients. We are confident in our new business pipeline and our ability to extend our services offering to existing blue-chip client base.

The added credibility and increased profile generated as a result of the Company's AIM IPO, combined with our recent run of new business wins, has also attracted potential new strategic partnerships and M&A opportunities which we continue to explore on an ongoing basis.

We have material visibility on full-year revenues, which provides confidence and positive momentum for the second half of 2021, and we remain excited for the longer-term prospects for our 4D product.

I would like to thank all of our staff and management for their continued dedication and hard work, as well as both our new and longer-term stakeholders, and we look forward to providing further updates on our progress in due course.

Ian James

Chief Executive Officer and Director

Consolidated Statement of Comprehensive Income

 
                                        Note    Six months    Six months 
                                                  ended 30      ended 30 
                                                 June 2021     June 2020 
                                                       GBP           GBP 
 
 Revenue                                 3       1,668,894     1,282,591 
 Cost of sales                                   (424,093)     (270,384) 
 Gross profit                                    1,244,801     1,012,207 
 
 Other operating income                              4,006         6,078 
 Distribution costs                              (227,729)     (160,333) 
 Administrative expenses                       (4,412,008)   (3,201,147) 
 Exceptional items                       4       (508,821)      (53,235) 
                                              ------------  ------------ 
 Operating loss                                (3,899,751)   (2,396,430) 
 
 Finance expense                                  (33,777)      (15,963) 
                                              ------------  ------------ 
 Loss before taxation                          (3,933,528)   (2,412,393) 
 
 Taxation                                          145,085       349,912 
                                              ------------  ------------ 
 Loss after taxation attributable 
  to the equity shareholders of the 
  company                                      (3,788,443)   (2,062,481) 
 
 
 Other comprehensive income / (loss) 
  net of taxation 
 Currency translation differences                 (78,109)      (24,683) 
 
 Total comprehensive loss for the 
  period attributable to the equity 
  shareholders of the company                  (3,866,552)   (2,087,164) 
                                              ============  ============ 
 
 
 Earnings per share 
 Basic earnings                            6        (0.44)        (0.41) 
 Diluted earnings                          6        (0.44)        (0.41) 
 

Consolidated Statement of Financial Position

 
                                              At 30          At 31          At 30 
                                          June 2021       December      June 2020 
                                                              2020 
                                  Note          GBP            GBP            GBP 
 Non-current assets 
 Goodwill                          7      4,330,222      4,330,222      4,688,469 
 Intangible assets                 7      1,675,821      1,242,717        906,365 
 Property, plant and equipment               56,953         36,940         30,674 
                                        -----------  -------------  ------------- 
 Total non-current assets                 6,062,996      5,609,879      5,625,508 
 
 Current assets 
 Trade and other receivables              1,787,809      1,723,280      1,401,665 
 Cash and cash equivalents                8,649,818        654,792        580,704 
                                        -----------  -------------  ------------- 
 Total current assets                    10,437,627      2,378,072      1,982,369 
 
 Total Assets                            16,500,623      7,987,951      7,607,877 
                                        -----------  -------------  ------------- 
 
 Current liabilities 
 Trade and other payables                 3,287,249      3,272,101      2,652,039 
 Loans and other borrowings                       -              -        776,039 
                                        -----------  -------------  ------------- 
 Total current liabilities                3,287,249      3,272,101      3,428,078 
                                        -----------  -------------  ------------- 
 
 Non-current liabilities 
 Loans and borrowings                       194,216        188,570         18,912 
 Deferred tax liability            5        318,406        223,921        101,341 
                                        -----------  -------------  ------------- 
 Total non-current liabilities              512,622        412,491        120,253 
                                        -----------  -------------  ------------- 
 
 Total liabilities                        3,799,871      3,684,592      3,548,331 
                                        -----------  -------------  ------------- 
 
 Net assets                              12,700,752      4,303,359      4,059,546 
                                        ===========  =============  ============= 
 
 Equity 
 Share capital                     8        134,190          8,256          8,004 
 Share premium                     8      8,642,511     35,387,853     32,130,080 
 Share option reserve              9        812,332      1,192,653      1,183,727 
 Retained earnings                        3,134,556   (32,240,404)   (29,230,193) 
 Capital redemption reserve                      50              -              - 
 Foreign exchange reserve                  (22,887)       (44,999)       (32,072) 
 
 Total equity attributable to 
  the equity shareholders of 
  the company                            12,700,752      4,303,359      4,059,546 
                                        ===========  =============  ============= 
 

Consolidated Statement of Cash Flows

 
                                                 Six months    Six months 
                                                   ended 30      ended 30 
                                                  June 2021     June 2020 
                                                        GBP           GBP 
 Cash flows from operating activities 
 (Loss) after tax from continuing operations    (3,788,443)   (2,062,481) 
 Adjustments for: 
 Depreciation                                        21,056         6,062 
 Amortisation                                       201,982       105,319 
 Foreign exchange                                  (78,109)      (24,683) 
 Net finance expense                                 33,777        15,963 
 Taxation expense                                 (145,085)     (349,912) 
 Increase in trade and other receivables           (64,529)     (240,506) 
 (Decrease) / increase in trade and other 
  payables                                         (64,874)       459,709 
 Share option charge                                457,636       367,995 
 Increase in deferred tax liability                  94,485             - 
                                               ------------  ------------ 
 Cash generated from operations                 (3,332,104)   (1,722,534) 
 Taxation refunded                                  225,106        82,185 
                                               ------------  ------------ 
 Net cash used in operating activities          (3,106,998)   (1,640,349) 
                                               ============  ============ 
 
 Cash flows from investing activities 
 Purchase of property, plant and equipment         (41,069)       (8,567) 
 Purchase of intangible assets                    (635,086)     (403,780) 
                                               ------------  ------------ 
 Net cash used in investing activities            (676,155)     (412,347) 
                                               ============  ============ 
 
 Cash flows from financing activities 
 Proceeds from borrowings                             5,646             - 
 Repayment of borrowings                                  -      (42,161) 
 New equity issued (net of transaction 
  costs)                                         11,806,310     2,434,580 
 Interest paid                                     (33,777)      (15,963) 
 Net cash from financing activities              11,778,179     2,376,456 
                                               ============  ============ 
 
 Net increase in cash and cash equivalents        7,995,026       323,760 
 Cash and cash equivalents at beginning 
  of period                                         654,792       256,944 
                                               ------------  ------------ 
 Cash and cash equivalents at end of 
  period                                          8,649,818       580,704 
                                               ============  ============ 
 

Consolidated Statement of Changes in Equity attributable to the shareholders

 
                          Share          Share       Retained       Share      Capital    Foreign      Total 
                        Capital        premium       earnings      Option   redemption   exchange     equity 
                                                                  Reserve      reserve    reserve 
                            GBP            GBP            GBP         GBP          GBP        GBP           GBP 
 As at 1 January 2020     4,507     28,581,634   (27,122,080)     815,732            -   (53,021)     2,226,772 
 Total comprehensive 
  loss 
  for the period              -              -    (2,108,113)           -            -     20,949   (2,087,164) 
 Shares issued during 
  the 
  period                  3,497      3,548,446              -           -            -          -     3,551,943 
 Share option charge          -              -              -     367,995            -          -       367,995 
                       --------  -------------  -------------  ----------  -----------  ---------  ------------ 
 As at 30 June 2020       8,004     32,130,080   (29,230,193)   1,183,727            -   (32,072)     4,059,546 
 
 Total comprehensive 
  loss 
  for the period              -              -    (3,010,211)           -            -   (12,927)   (3,023,138) 
 Shares issued during 
  the 
  period                    252      3,257,773              -           -            -          -     3,258,025 
 Share option charge          -              -              -       8,926            -          -         8,926 
                       --------  -------------  -------------  ----------  -----------  ---------  ------------ 
 As at 31 December 
  2020                    8,256     35,387,853   (32,240,404)   1,192,653            -   (44,999)     4,303,359 
 
 Total comprehensive 
  loss 
  for the period              -              -    (3,888,664)           -            -     22,112   (3,866,552) 
 Share buyback and 
  cancellation             (50)              -              -           -           50          -             - 
 Bonus issue of 
  shares                 87,255       (87,255)              -           -            -          -             - 
 Capital reduction            -   (38,425,667)     38,425,667           -            -          -             - 
 Share option charge          -                             -     457,636            -          -       457,636 
 Share options 
  exercised                 275          1,700        470,983   (470,983)            -          -         1,975 
 Share options 
  forfeited                   -              -        366,974   (366,974)            -          -             - 
 Shares issued during 
  the 
  period (net of 
  transaction 
  costs)                 38,454     11,765,880              -           -            -          -    11,804,334 
 As at 30 June 2021     134,190      8,642,511      3,134,556     812,332           50   (22,887)    12,700,752 
                       ========  =============  =============  ==========  ===========  =========  ============ 
 

Notes to the Historical Financial Information

   1.       Description of business, basis of preparation and going concern 

GENERAL INFORMATION

Silver Bullet Data Services Group PLC ("SBDS") was incorporated on 13 May 2013. SBDS is a limited liability company incorporated in England and Wales and domiciled in the UK. The address of the registered office is Studio 11, Tiger House, Burton Street, London, WC1H 9BY.

The principal activity of the SBDS Group is marketing services through the application of big data technologies to reduce friction.

BASIS OF PREPARATION

The interim consolidated financial statements have been prepared in accordance with International Accounting Standard (IAS) 34, Interim Financial Reporting. These interim financial statements have been prepared in accordance with those International Accounting Standards in conformity with the requirements of the Companies Act 2006 and IFRIC interpretations issued and effective or issued and early adopted as at the time of preparing these statements (July 2021).

These consolidated interim financial statements have been prepared in accordance with the accounting policies set out below, which have been consistently applied to all the periods presented. These accounting policies comply with applicable International Accounting Standards in conformity with the requirements of the Companies Act 2006 and IFRIC interpretations issued and effective at the time of preparing these statements.

The preparation of these interim financial statements in accordance with International Accounting Standards in conformity with the requirements of the Companies Act 2006 requires the use of certain accounting estimates. It also requires management to exercise judgement in the process of applying the Group's accounting policies. The areas involving a high degree of judgement or complexity, or areas where the assumptions and estimates are significant to the consolidated interim financial statements are disclosed in Note 2.

The financial information contained in this report, which has not been audited, does not constitute statutory accounts as defined by Section 434 of the Companies Act 2006.

The presentational currency of the Group is GBP with functional currencies of the subsidiaries being GBP, EUR, AUD, and USD.

GOING CONCERN

The directors have prepared detailed budgets and forecasts covering the period to 31 December 2023 which are based on the strategic business plan. These take into account all reasonably foreseeable circumstances and include consideration of trading results, cash flows and the level of facilities the group requires on a month by month basis. Additional forecasting has been undertaken following the impact of COVID-19 that has considered the impact on the core business.

Based on their enquiries and the information available to them and taking into account the other risks and uncertainties set out herein, the directors have a reasonable expectation that the company and the group has adequate resources to continue operating for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing these financial statements.

   2.       Significant accounting policies 

SIGNIFICANT ACCOUNTING ESTIMATES AND ASSUMPTIONS

The preparation of the interim financial statements in accordance with IFRS requires the use of estimates and assumptions to be made in applying the accounting policies that affect the reported amounts of assets, liabilities, revenue and expenses and the disclosure of contingent assets and

liabilities. The estimates and related assumptions are based on previous experiences and other factors considered reasonable under the circumstances, the results of which form the basis for making the assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

Significant accounts that require estimates as the basis for determining the stated amounts include performance obligations surrounding revenue recognition and the valuation assumptions in calculating the impairment of goodwill.

REVENUE RECOGNITION

IFRS 15 - Revenue from Contracts with Customers has been applied for all periods presented within the historical financial information. The timing of all revenue recognised by the Group during the reporting period was transferred over time in accordance with IFRS 15 recognition criteria. None of the Group's activities result in the transfer of control of a product at a point in time for revenue recognition purposes.

No individual customer accounted for more than 10% of revenue.

During the period under review the Group recognised revenue from the following activities:

Data and strategic services

Revenue relating to service contracts is invoiced according to milestones defined within each contract, the terms of which vary on a case-by-case basis. In all cases the revenue is recognised in line with the provision of the services or, where the quantum and timing of the services cannot be reliably predicted, rateable over the period of the agreement.

Invoices against services contracts are raised on a monthly basis with adjustments for accrued or deferred income where the agreed invoicing timescale does not match the valuation of provision of services.

Activation channels and brand intelligence

Amounts received or receivable for campaigns, typically invoiced on a monthly basis, recognise revenue in proportion to the quantum of advertising units delivered according to the contracted service. Units and metrics deliverable under each contracted services will vary on a case-by-case basis.

BUSINESS COMBINATIONS

Silver Bullet Data Services Group Limited applies the acquisition method of accounting to account for business combinations in accordance with IFRS 3, 'Business Combinations'.

The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred and the equity interests issued by Silver Bullet Data Services Group Limited. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The excess of the consideration transferred over the fair value of Silver Bullet Data Services Group Limited's share of the identifiable net assets acquired is recorded as goodwill. All transaction related costs are expensed in the period they are incurred as exceptional operating expenses.

TAXES

Corporation tax, where payable, is provided on taxable profits at the current rate.

Deferred tax is provided on all temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry-forward of unused tax assets and unused tax losses can be utilised. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities, and when the deferred tax assets and liabilities relate to taxes levied by the same taxation authority on either the taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date.

FOREIGN CURRENCY TRANSLATION

Transactions in currencies other than the functional currency (foreign currencies) are initially recorded at the exchange rate prevailing on the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the reporting date. Non-monetary assets and liabilities denominated in foreign currencies are translated at the rate ruling at the date of the transaction, or, if the asset or liability is measured at fair value, the rate when that fair value was determined.

All translation differences are taken to profit or loss, except to the extent that they relate to gains or losses on non-monetary items recognised in other comprehensive income, when the related translation gain or loss is also recognised in other comprehensive income.

INTANGIBLE ASSETS AND GOODWILL

Goodwill

Goodwill is initially measured at fair value, being the excess of the aggregate of the consideration transferred over the fair value of the net assets acquired, and any previous interest held over the net identifiable assets acquired and liabilities assumed. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. The goodwill is tested annually for impairment irrespective of whether there is an indication of impairment.

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

Intangible assets (other than goodwill)

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date if the fair value can be measured reliably.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

   Brand names                                     -              Reducing balance basis over 5 years 
   Development costs                            -              Straight line basis over 5 years 
   Customer lists                                    -              Straight line basis over 4 years 

PROPERTY PLANT AND EQUIPMENT

Property, plant and equipment are stated at cost net of accumulated depreciation and accumulated impairment losses. Cost comprises purchase cost together with any incidental costs of acquisition.

Depreciation is provided to write down the cost less the estimated residual value of all tangible fixed assets by equal instalments over their estimated useful economic lives on a straight-line basis. The following rates are applied:

   Computer equipment                             -                       Straight line over 3 years 
   Fixtures, fittings and equipment             -                       Reducing balance over 4 years 

IMPAIRMENT OF NON-CURRENT ASSETS

At each reporting period end date, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in the statement of comprehensive income.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.

RESEARCH AND DEVELOPMENT EXPITURE

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

Development costs relate to a number of platforms developed internally by the group which are expected to generate future revenue streams.

FINANCIAL INSTRUMENTS

Silver Bullet Data Services Group PLC classifies financial instruments, or their component parts, on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the substance of the contractual arrangement. Financial instruments are recognised on the date when the Group becomes a party to the contractual provisions of the instrument. Financial instruments are recognised initially at fair value plus, in the case of a financial instrument not a fair value through profit and loss, transaction costs that are directly attributable to the acquisition or issue of the financial instrument. Financial instruments are derecognised on the settlement date when the Group is no longer a party to the contractual provisions of the instrument.

Non-derivative financial instruments comprise trade and other receivables, cash and cash equivalents, loans and borrowings, and trade and other payables.

Trade and other receivables and trade and other payables

Trade and other receivables are recognised initially at transaction price less attributable transaction costs. Trade and other payables are recognised initially at transaction price plus attributable transaction costs. Subsequent to initial recognition they are measured at amortised cost using the effective interest method, less any expected credit losses in the case of trade receivables. If the arrangement constitutes a financing transaction, for example if payment is deferred beyond normal business terms, then it is measured at the present value of future payments discounted at a market rate of interest for a similar debt instrument.

Contract assets

Contract assets are recognised when revenue is recognised but payment is conditional on a basis other than the passage of time. Contract assets are included in trade and other receivables.

Contract liabilities

Contract liabilities are recognised when payment from a customer is received in advance of performance obligations being satisfied. Contract liabilities are recognised in trade and other payables.

Interest-bearing borrowings

Interest-bearing borrowings are recognised initially at the present value of future payments discounted at a market rate of interest. Subsequent to initial recognition, interest-bearing borrowings are stated at amortised costs using the effective interest method, less any impairment losses.

Cash and cash equivalents

Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand form an integral part of the Group's cash management and are included as a component of cash and cash equivalents for the purpose only on the cash flow statement.

PROVISIONS

A provision is recognised in the statement of financial position when the Group has a present legal or constructive obligation as a result of a past event, that can be reliably measured and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects risks specific to the liability. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

EMPLOYEE BENEFITS

During the period the Group operated a defined contribution money purchase pension scheme under which it pays contributions based upon a percentage of the members' basic salary. The Group also paid other employee benefits including medical insurance.

All employee benefits are charged to the Statement of Comprehensive Income and differences between contributions payable in the year and contributions actually paid are shown as either accruals or prepayments.

LEASES

The Group leases a number of properties in various locations in Europe, Australia, USA, and the UK from which it operates.

All leases are accounted for by recognising a right-of-use asset and a lease liability except for:

- Leases of low value assets; and

- Leases with a duration of twelve months or less.

All leases signed by the Group during the reporting period were for a period of less than twelve months so no right-of-use assets have been recognised.

GRANT INCOME

Grant income is recognised where there is reasonable assurance that the grant will be received, and all attached conditions will be complied with. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. When the grant relates to an asset, it is recognised as income in equal amounts over the expected useful life of the related asset.

SHARE-BASED PAYMENTS

The Group operates a share option programme which allows employees of the subsidiary companies to be granted options to purchase shares in this company. The fair value of options granted is recognised as an employment expense with a corresponding increase in equity.

The particular terms of the share options state that they can only be exercised by employees in the event of an exit where the company is either sold to a third party, wound up or floated on a public stock exchange. The fair value of the options is measured at the grant date and spread over the vesting period. The fair value is measured based on an option pricing model taking into account the terms and conditions upon which the instruments were granted.

Vesting periods in each share option agreement vary from vesting immediately on grant date to vesting over a period of four years.

FINANCE INCOME AND EXPENSES

Finance expenses comprise interest payable and leases liabilities recognised in the statement of comprehensive income using the effective interest method, and unwinding of the discount on provisions.

Interest income and interest payable are recognised in the statement of comprehensive income as they accrue, using the effective interest method.

INTERIM MEASUREMENT

Costs that incur unevenly during the financial year are anticipated or deferred in the interim report only if it would also be appropriate to anticipate or defer such costs at the end of the financial year.

CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

The preparation of the historical financial information requires the Directors to make estimates and judgements that affect the reported amounts of assets, liabilities, costs and revenue in the historical financial information. Actual results could differ from these estimates. The judgements, estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant.

Key sources of estimation uncertainty that could cause an adjustment to be required to the carrying amount of assets or liabilities within the next accounting period are:

Critical accounting estimates:

Depreciation and amortisation

The assessment of the useful economic lives, residual values and the method of depreciating or amortising tangible and intangible (excluding goodwill) fixed assets requires judgement. Depreciation and amortisation are charged to profit or loss based on the useful economic life selected, which requires an estimation of the period and profile over which the group expects to consume the future economic benefits embodied in the assets. Useful economic lives and residual values are re-assessed, and amended as necessary, when changes in their circumstances are identified.

Critical accounting judgements:

Impairment of trade receivables

The Group's policy on recognising an impairment of the trade receivables balance is based on a review of individual receivable balances, their ageing and management's assessment of realisation. This review and assessment is conducted on a continuing basis and any material change in management's assessment of trade receivable impairment is reflected in the carrying value of the asset.

Impairment of intangible and tangible fixed assets

Impairment tests have been undertaken in respect of goodwill, intangible and tangible fixed assets using an assessment of the value in use of the respective cash generating units (CGUs). This assessment requires a number of assumptions and estimates to be made including the allocation of assets of CGUs, the expected future cash flows from each CGU and also the selection of a suitable discount rate in order to calculate the present value of those cash flows.

   3.       Operating segments 

IFRS 8 requires that operating segments be identified on the basis of internal reporting and decision-making. The Group has three key business segments outlined below. The business analyses these streams by revenue and gross margin. Overheads, assets and liabilities are not separately allocated across the business streams.

 
                                       Six months ended          Six months ended 
                                          30 June 2021              30 June 2020 
                                      Revenue         Gross     Revenue         Gross 
                                                     profit                    profit 
                                          GBP           GBP         GBP           GBP 
 Data, strategic, and activation 
  services                          1,656,110     1,385,646   1,282,591     1,012,207 
 Brand intelligence                    12,784     (140,845)           -             - 
 Total                              1,668,894     1,244,801   1,282,591     1,012,207 
                                   ----------  ------------  ----------  ------------ 
 
 EBITDA                                         (3,676,714)               (2,285,047) 
                                               ============              ============ 
 
   4.       Exceptional items 
 
                                  Six months   Six months 
                                       ended        ended 
                                     30 June      30 June 
                                        2021         2020 
                                         GBP          GBP 
 Professional fees relating          508,821            - 
  to the IPO 
 Business combination expenses             -       53,235 
                                     508,821       53,235 
                                 ===========  =========== 
 
   5.       Income tax 

A deferred tax asset in respect of the Group's cumulative losses to date has not been recognised due to the uncertainty of the timing of future loss relief. Deferred tax movements during the period relate solely to the increase in value of acquired intangible fixed assets.

Research and development tax relief claims under the SME scheme are submitted at each financial year end. Anticipated tax credits for the period under review totalling GBP180,000 are held within other debtors.

   6.       Earnings per share 

Earnings per share (EPS) is calculated on the basis of profit attributable to equity shareholders divided by the weighted average number of shares in issue for the year. The diluted EPS is calculated on the treasury stock method and the assumption that the weighted average EMI share options outstanding during the period are exercised.

 
                                             Six months   Six months 
                                              ended 30     ended 30 
                                              June 2021    June 2020 
                                                    GBP          GBP 
 
 Loss after taxation 
 Losses before share option charges           3,269,405    1,694,486 
 Share option charges                           519,038      367,995 
 Total losses after taxation attributable 
  to shareholders                             3,788,443    2,062,481 
                                            -----------  ----------- 
 
 Number of shares 
 Weighted average number of ordinary 
  shares                                      8,516,470    4,975,876 
 Dilutive effect of in-the-money 
  share options                               1,624,517      121,366 
 Diluted weighted average number 
  of shares                                  10,140,987    5,097,242 
                                            -----------  ----------- 
 
 Earnings per share 
 Basic earnings per share                        (0.44)       (0.41) 
 Diluted earnings per share                      (0.44)       (0.41) 
 

As options are antidilutive, the diluted EPS is the same as the basic EPS in this situation.

   7.       Goodwill and intangible assets 
 
                        Customer   Development   Brand Names    Goodwill       Total 
                           lists         Costs 
                             GBP           GBP           GBP         GBP         GBP 
 COST 
 At 1 January 2020       595,708           754        84,999   4,703,843   5,385,304 
 Additions                     -       419,154             -           -     419,154 
 Impairment                    -             -             -    (15,374)    (15,374) 
 At 30 June 2020         595,708       419,908        84,999   4,688,469   5,789,084 
                       ---------  ------------  ------------  ----------  ---------- 
 
 At 1 July 2020          595,708       419,908        84,999   4,688,469   5,789,084 
 Additions                     -       638,262             -           -     638,262 
 Impairment                    -             -      (84,999)   (358,247)   (443,246) 
 At 31 December 2020     595,708     1,058,170             -   4,330,222   5,984,100 
                       ---------  ------------  ------------  ----------  ---------- 
 
 At 1 January 2021       595,708     1,058,170             -   4,330,222   5,984,100 
 Additions                     -       635,086             -           -     635,086 
 At 30 June 2021         595,708     1,693,256             -   4,330,222   6,619,186 
                       ---------  ------------  ------------  ----------  ---------- 
 
 AMORTISATION 
 At 1 January 2020        64,936             -        23,995           -      88,931 
 Amortisation charge      74,463        22,356         8,500           -     105,319 
 At 30 June 2020         139,399        22,356        32,495           -     194,250 
                       ---------  ------------  ------------  ----------  ---------- 
 
 At 1 July 2020          139,399        22,356        32,495           -     194,250 
 Amortisation charge      74,464       174,942         8,500           -     257,906 
 Impairment                    -             -      (40,995)           -    (40,995) 
 At 31 December 2020     213,863       197,298             -           -     411,161 
                       ---------  ------------  ------------  ----------  ---------- 
 
 At 1 January 2021       213,863       197,298             -           -     411,161 
 Amortisation charge      74,464       127,518             -           -     201,982 
 At 30 June 2021         288,327       324,816             -           -     613,143 
                       ---------  ------------  ------------  ----------  ---------- 
 
 NET BOOK VALUE 
 At 30 June 2020         456,309       397,552        52,504   4,688,469   5,594,834 
                       =========  ============  ============  ==========  ========== 
 At 31 December 2020     381,845       860,872             -   4,330,222   5,572,939 
                       =========  ============  ============  ==========  ========== 
 At 30 June 2021         307,381     1,368,440             -   4,330,222   6,006,043 
                       =========  ============  ============  ==========  ========== 
 
   8.       Share capital and premium 

Movements in issued share capital and share premium accounts during these periods are summarised below:

 
                            30 June 2021                 31 December                30 June 2020 
                                                             2020 
 Ordinary share               No.           GBP           No.           GBP           No.           GBP 
  capital 
 Issued and fully 
  paid 
 Ordinary              13,418,982       134,190             -             -             -             - 
 Ordinary A                     -             -     1,546,797         1,547     1,546,797         1,547 
 Ordinary B                     -             -        35,448            35        35,448            35 
 Ordinary C                     -             -            10            50            10            50 
 Ordinary D                     -             -       464,689           465       464,689           465 
 Ordinary G                     -             -     5,379,104         5,379     3,667,593         5,127 
 Ordinary H                     -             -       780,093           780       780,093           780 
                       13,418,982       134,190     8,206,141         8,256     6,494,630         8,004 
                    =============  ============  ============  ============  ============  ============ 
 

On 1 April 2021 the Company filed a capital restructure which converted all issued A, B, D, G, and H shares in to one class of Ordinary Share capital with equal voting rights participation in dividends.

On 7 May 2021 a 9:1 bonus issue was approved by shareholders with a simultaneous consolidation of share capital from a nominal value of GBP0.001 to a nominal value of GBP0.01.

On 7 May 2021 a capital reduction was also completed reducing the share premium account by GBP38,425,667 with the balance being credited to the profit and loss reserve.

On 19 May 2021 all C shares were repurchased by the company at nominal value.

   9.       Share Option Reserve 
 
                         30 June   31 December    30 June 
                           2021        2020         2020 
                             GBP           GBP         GBP 
 Share Option reserve    812,332     1,192,653   1,183,727 
                         812,332     1,192,653   1,183,727 
                        ========  ============  ========== 
 

Silver Bullet Data Services Group PLC operates a programme for employees of its subsidiaries to acquire shares in the company under an EMI scheme.

The number and weighted average exercise price of share options during the year were as follows:

 
                              30 June 2021          31 December 2020         30 June 2020 
                          Weighted    Share       Weighted    Share      Weighted    Share 
                           average     options     average     options    average     options 
                           exercise                exercise               exercise 
                           price                   price                  price 
                                GBP         No.         GBP        No.         GBP        No. 
 Outstanding at start 
  of period                    3.05     250,153        3.35    220,499        3.05     80,359 
 Forfeited/expired 
  during period              (0.89)   (128,761)           -          -           -          - 
 Granted during period         1.34   1,618,496        0.79     29,654        3.53    140,140 
 Exercised during 
  period                     (0.37)    (29,904)           -          -           -          - 
 Outstanding at end 
  of period                    1.65   1,709,984        3.05    250,153        3.35    220,499 
                                     ----------              ---------              --------- 
 
   10.     Related party transactions 

Fluency Media Limited: is a related party to the group by virtue of having a common Director. Consultancy services were provided during the six months ended 30 June 2021 totalling GBP90,000 (six months to June 2020: GBP50,000). There were no amounts outstanding at the reporting date (2020: GBP12,000).

Purple Lime Accountancy Limited: is a related party to the group by virtue of having Directors closely related to Key Management Personnel of the Group. Accountancy and finance services were provided during the six months ended 30 June 2021 totalling GBP69,559 (six months ended June 2020: GBP50,063). Amounts outstanding at 30 June 2021 totalled GBP7,177 (June 2020: GBP7,862.

Umberto Torrielli : A director of the Group company as of 29 October 2020 relocated to the USA in order to establish a new presence in this territory. For this purpose, a loan was issued of GBP150,000 which is held within other debtors at the end of the reporting period (June 2020: GBPnil).

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September 20, 2021 02:00 ET (06:00 GMT)

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