TIDMBOOM
RNS Number : 5691L
Audioboom Group PLC
20 July 2017
Audioboom Group plc
("AudioBoom", the "Group" or the "Company")
Half Yearly Report
AudioBoom (AIM: BOOM), the leading spoken word audio on-demand
platform, announces its unaudited half yearly results for the six
months ended 31 May 2017.
H1 2017 Highlights and Financials
-- Revenue increased by 460% to GBP1,843,000 (H1 2016:
GBP329,000), ahead of the previous trading update in respect of H1
announced on 7 June 2017
-- Completed the acquisition of SONR News Limited ("SONR"), a
natural language processing and artificial intelligence development
company for approximately GBP1.43 million in February 2017
-- Integrated programmatic advertising back-end systems with
media and advertising agencies, ad networks and demand side
platforms ("DSPs"), such as:
o Starcom; Blue 449; Zenith; Adswizz; BlogTalkRadio; TargetSpot;
AdWave; Comcast; TradeDesk; AppNexus and MediaMath
-- Programmatic advertising accounted for c.5% of total revenue during the period
o This is expected to rise significantly going forward given the
completed technical integrations
-- 'In-read', or 'host-read', advertising accounted for majority
of balance of revenue and continues to deliver impressive
growth
-- AudioBoom successfully launched its own schedule of higher
gross margin, original content under the brand name Audioboom
Originals Network ('AON')
o The Company now has an extensive and valuable slate of
original content in production and planning for the remainder of
2017 and planning for 2018 is well underway
o Notable AON podcasts include; Hip Hop Saved My Life, The 45th
and the newly launched It's Happening with Snooki & Joey which
debuted at number 2 in the iTunes podcast charts
-- Re-signed one of the world's largest podcasts: Undisclosed,
created by the lawyers for Adnan Syed, from Serial. Significantly,
Undisclosed is to be re-branded as a AON production
-- Raised approximately GBP5.3 million (before expenses) to
support technology investment, content acquisition and working
capital for the Group during a period of significant growth
-- Net cash, as at 31 May 2017, of GBP3.25 million
-- Continued growth post period end and trading in line with
market expectations for the year - currently over GBP4m in bookings
and billings for 2017 as a whole (inclusive of H1 revenues already
booked)
Key Performance Indicators ("KPIs")
-- Total H1 2017 unique file requests of 325 million (H2 2016: 247 million*)
-- Monthly unique users in May 2017 of 81 million, compared to 34 million for May 2016
-- Total H1 2017 available ad impressions of 789 million (H2 2016: 188 million*)
-- Content partner channels increased to 11,843 (H1 2016: 8,115)
-- Audioboom's 'Brand Advertiser' count has now grown to 106,
significantly ahead of our last trading update in June 2017
*H1 2016 comparable data not available as new KPI metric for H2
2016
Post period highlights
-- Monthly subscription service costing US$9.99 launched for
smaller podcast creators and/or those whose content does not carry
advertising
-- Independently commissioned research published by Edison
highlights the growing size and profitability of the global
podcasting market
o A survey of more than 8,000 listeners by AudioBoom revealed
that the average listener aged between 25 and 44 is listening to
podcasts for an average of two hours a day
Rob Proctor, CEO of AudioBoom, said: "I am delighted to report
that H1 has been a period of rapidly improving financial results
and KPIs and that the Group has continued its accelerated growth
post period end. We are now delivering on our potential and are
well positioned to lead our emerging industry on the international
stage with a strong balance sheet to fund the business through to
profitability."
"Audioboom has focused on its original content production during
this period, which is vitally important as we look to create our
own IP and increase our overall gross margins. Additionally, we
have placed emphasis on our ability to deliver programmatic
advertising campaigns which, given PWC's latest industry report
showing a sharp rise in programmatic audio revenues, means that we
are once again ahead of the curve and well positioned for future
growth."
"I believe that our overall strategy of content acquisition,
content creation and media sales is being further validated by the
rapid rise in voice activated, hands free, screen free, internet
search requests via digital home assistants, such as Amazon Echo
and Microsoft's Cortana. ComScore estimates that 50% of all
internet search requests are going to be voice activated by 2020
and logically, if the search request doesn't have a screen or a
keyboard, then the results and associated content must be delivered
back to the user in audio. Given AudioBoom's ever expanding list of
content partners and content library, combined with our natural
language processing insights, we are ideally placed to be a leading
player in this next evolution of the internet".
Audioboom Group plc
------------------------------------------- ----------------------------
Rob Proctor, Chief Executive Officer Tel: +44(0)20 7403
6688
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Allenby Capital Limited (Nominated adviser Tel: +44(0)20 3328
and broker) 5656
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David Hart / James Thomas / Asha Chotai
------------------------------------------- ----------------------------
Walbrook PR Limited (PR & IR Advisers) Tel: +44(0)20 7933
8780
------------------------------------------- ----------------------------
Paul Cornelius / Sam Allen or audioboom@walbrookpr.com
------------------------------------------- ----------------------------
About AudioBoom
AudioBoom is a global podcasting platform that consolidates the
business of on-demand audio, making content accessible,
wide-reaching and profitable for podcasters, advertisers and
brands. AudioBoom addresses the issue of disparate podcast services
by putting all of the pieces of the puzzle together under one
umbrella, creating a user-friendly, economical experience.
AudioBoom helps content creators share their content via iTunes,
iHeartRadio, Google Play, Saavn, Spotify, Stitcher, Facebook and
Twitter, as well as their own websites and mobile apps.
AudioBoom hosts almost 12,000 channels, with key ones including
the Associated Press, Trinity Mirror Group, BBC, celebrities such
as Russell Brand, and more.
Top podcasts include Athletico Mince, News Roast, No Such Thing
As A Fish, and Untold: The Murder of Daniel Morgan. AudioBoom
receives over 60 million unique file requests per month and is the
only end-to-end podcasting platform that also operates
internationally, with operations across the US, Europe, Asia,
Australia and Latin America.
For more information for podcasters, advertisers and listeners,
visit audioboom.com.
Chief Executive's Report
During the period under review, AudioBoom has been busy
broadening and acquiring its audience, making original audio
content and selling advertising.
This has resulted in the Company delivering on expectations both
in terms of KPIs and revenue growth quarter on quarter. 'In-read',
or 'host-read', advertising sales remain strong and an important
indicator for future profitable growth as the Company earns
significantly more revenue per in-read advert than from
programmatic advertising.
While the Company's focus has been on revenue generation, the
senior management team is aware of the need to have the technology
and resources to both lead and react to industry dynamics,
especially around advertising formats and delivery mechanisms. The
Company has therefore invested in research and development to make
sure the Company is well positioned going forward, illustrated by
the acquisition of SONR.
Financial Results
The Company's strong performance for the first quarter of the
year continued in the second quarter resulting in revenue for the
six months ended 31 May 2017 of GBP1,843,000, ahead of the previous
trading update and representing an increase of 460% over the
comparable period in 2016 (H1 2016: GBP329,000).
The Company produced an adjusted EBITDA* loss of GBP2.6m (H1
2016: GBP2.2m), and net cash used in operating activities also
increased to GBP2.6m (H1 2016: GBP2.2m), reflecting the additional
investment in technology and content acquisition which was enabled
by the successful fundraising in March 2017. Cash management
remains a key focus within the business. AudioBoom finished the
period with cash reserves of GBP3.25m. The monthly cash-burn is
expected to decrease through the remainder of 2017 as the growth in
revenue continues.
*earnings before interest, tax, depreciation and amortisation,
adjusted for the costs of acquisition of SONR and non-cash
accounting treatment of share based payments
Operational Review
Programmatic advertising integrations
Programmatic advertising generally refers to a number of
technologies that automate the planning, selling, buying and
optimisation of advertising inventory using audience data, thus
making ad spend more targeted and effective. Programmatic buying
and selling refers to any ad buy processed via a computerised
interaction, as opposed to manual or partially automated
processes.
The programmatic landscape is moving fast, and a key question
for marketers today is how exactly their brands keep abreast of new
platforms for programmatic advertising placement, evolving
technology to purchase and place adverts, and the changing roles of
agencies. Large quantities of data on brand attributes, audience,
ratings and other metrics could potentially be incorporated into
sophisticated formulas for ad placement on both the buy and sell
side.
During the period, to help facilitate this automated advertising
process, AudioBoom acquired SONR, which has not only provided key
natural language processing algorithms, but has also enhanced our
overall advertising development capabilities. This acquisition has
allowed AudioBoom to accelerate its programmatic advertising
integrations with media and advertising agencies, ad networks and
DSPs, such as; Starcom, Blue 449, Zenith, Adswizz, BlogTalkRadio,
TargetSpot, AdWave, Comcast, TradeDesk, AppNexus and MediaMath.
DSPs collaborate with AudioBoom's back end systems and take
real-world signals like voice and audio that have been digitised
and then mathematically manipulate them so that ad campaigns can be
measured, monetised, targeted and optimised.
The proportion of ad revenue generated in this way currently
accounts for approximately 5% of total revenue, although this is
expected to increase with the integration of the DSPs.
The AudioBoom Originals Network - the Netflix model for
audio
AudioBoom successfully launched its own schedule of original
content under the brand name Audioboom Originals Network ("AON").
Notable AON podcasts include; Hip Hop Saved My Life, a comedy
podcast about hip hop presented by award winning comedian Romesh
Ranganathan, and The 45(th) , a weekly dissection of policy and
spectacle under the Trump Administration with guests and
perspectives from across the political spectrum.
AudioBoom has also re-signed one of the world's largest
podcasts: Undisclosed, a programme that investigates wrongful
convictions within the U.S. criminal justice system, which will
significantly be re-branded as an AON production.
The Company now has an extensive and valuable slate of original
content in production for the remainder of 2017 and expects to
announce positive newsflow from these programmes throughout the
remainder of the financial year with a specific mention of this
season's It's Happening with Snooki and Joey, which we anticipate
will be a 'blockbuster' podcast.
AudioBoom continued its audience and content acquisition
strategy during the period, which included adding the Drinks Champs
podcast to its inventory. This podcast is currently achieving more
than 500,000 listens per episode and the new true crime podcast,
Unconcluded, a podcast about true crime investigations, which
already reaches 100,000 listens per episode.
Independently commissioned research into listening trends in the
UK and USA
As previously announced in June 2017, podcasts are fast becoming
the spoken-word choice for younger people, enabling big brands and
advertisers to target a thriving audience.
A survey of more than 8,000 listeners by AudioBoom revealed in
June 2017 that the average listener aged between 25 and 44 is
listening to podcasts for an average of two hours a day.
Independent research by Edison also revealed that podcasts were
drawing audiences away from traditional radio with 68% admitting
they were listening to radio less as a result of listening to
podcasts, and 81% listening to podcasts via their smartphone.
These figures provide the Company with 'real world' insight into
how listeners are increasingly turning away from radio and towards
podcasting to get their audio content. This is a group who have
grown up tied to their smartphones and podcasting caters to the
on-demand and on-the-move generation of listeners. Importantly for
advertisers, an overwhelming 93% of responders said that when they
downloaded a podcast, they listened to it all the way through.
Monthly subscription service for podcast creators
During the period, AudioBoom launched its own premium podcast
subscription service, which allows content creators to publish
without pre, mid and post roll advertising built into the audio
file. While in the very early stages of the rollout process, the
subscription service is already achieving over a 50% conversion
rate from the free trial to those end users who become fully paid
up subscribers. The remaining six months of 2017 will see the
completion of the subscription service implementation and the
Company looks forward to reporting on its progress in its full year
results announcement.
The subscription service costs US$9.99 per month and will apply
to all existing podcast creators on the AudioBoom platform
achieving fewer than 10,000 listens per month. The US$9.99
subscription service was also introduced for existing podcast
creators on the AudioBoom platform achieving in excess of 10,000
listens per month but which do not want advertising linked to their
podcasts.
New podcast creators joining the platform are now given the
option to go 'ad-supported' if they already have more than the
10,000 listeners on their RSS feeds or they can choose the US$9.99
per month package if they are new to podcasting and are looking to
grow an audience. Once the podcaster is achieving more than 10,000
listens per month, they will automatically be sent an invitation to
move on to AudioBoom's 'ad-supported' plan and start generating
revenues for themselves.
Outlook
Overall, I am delighted to report a period of rapidly improving
KPIs and financial results and can confirm accelerated growth post
the period end. We are now well positioned within our industry to
grow on the international stage with a strong balance sheet to fund
the Group through to profitability. I look forward to updating the
market with further announcements in due course.
Rob Proctor
Chief Executive Officer
Audioboom Group plc
Consolidated statement of comprehensive income
Unaudited Unaudited Audited
6 months 6 months 12 months
to 31 May to 31 to 30
2017 May 2016 Nov 2016
Notes GBP'000 GBP'000 GBP'000
Continuing operations
Revenue 1,843 329 1,312
Cost of sales (1,346) (328) (1,046)
----------- ---------- -----------
Gross profit 497 1 266
Administrative expenses (3,431) (2,557) (5,140)
Adjusted operating
loss (2,634) (2,187) (4,598)
- Costs of acquisition (118) - -
- Amortisation of (134) - -
intangible assets
- Share based payments (48) (339) (276)
------------------------- ------ ----------- ---------- -----------
Operating loss (2,934) (2,556) (4,874)
Interest 1 4 5
----------- ---------- -----------
Loss before tax (2,933) (2,552) (4,869)
Taxation on continuing
operations 22 - 79
----------- ---------- -----------
Loss for the financial
period (2,911) (2,552) (4,772)
Other comprehensive
income
Foreign currency
translation difference (165) (59) 45
----------- ---------- -----------
Total comprehensive
income for the period (3,076) (2,611) (4,727)
=========== ========== ===========
Loss per share (pence)
From continuing
operations
Basic and diluted 2 (0.39) (0.48) (0.88)
Audioboom Group plc
Consolidated statement of financial position
Unaudited Unaudited Audited
as at as at as at
31 May 31 May 30 Nov
2017 2016 2016
Notes GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Intangible assets 5 2,123 - -
Property, plant and
equipment 126 52 54
2,249 52 54
---------- ---------- ---------
Current assets
Trade and other receivables 6 1,682 831 1,532
Cash and cash equivalents 3,245 931 687
4,927 1,762 2,219
---------- ---------- ---------
Total assets 7,176 1,814 2,273
---------- ---------- ---------
Current liabilities
Trade and other payables 7 (1,866) (662) (943)
Deferred taxation (317) - -
(2,183) (662) (943)
---------- ---------- ---------
Net current assets 2,744 1,100 1,276
---------- ---------- ---------
Net assets 4,993 1,152 1,330
========== ========== =========
Equity
Share capital - - -
Share premium 3 29,278 20,208 22,595
Issue cost reserve (1,309) (1,309) (1,309)
Foreign exchange
translation reserve (170) (108) (4)
Reverse acquisition
reserve (2,159) (2,159) (2,159)
Retained earnings (20,647) (15,480) (17,793)
Total equity 4,993 1,152 1,330
========== ========== =========
Audioboom Group plc
Consolidated cash flow statement
Unaudited Unaudited Audited
six months six months 12 months
to 31 to 31 to 30
May 2017 May 2016 Nov 2016
GBP'000 GBP'000 GBP'000
Loss from continuing
operations (2,911) (2,552) (4,772)
------------ ---------------------- -----------
Loss for the period (2,911) (2,552) (4,772)
Adjustments for:
Taxation (22) - (97)
Interest (1) (4) (5)
(Gain)/Loss on sale
of fixed assets (1) - 4
Depreciation of fixed
assets 9 13 28
Amortisation of intangible 134 - -
assets
Share based payments 48 369 276
Increase in trade and
other receivables (191) (142) (818)
Increase in trade and other
payables 309 181 690
Foreign exchange gain (1) (61) -
------------ ---------------------- -----------
Cash flows from operating
activities (2,627) (2,195) (4,694)
Taxation - - 96
Net interest - 4 5
Net cash used in operating
activities (2,627) (2,191) (4,593)
------------ ---------------------- -----------
Investing activities
Purchase of property,
plant and equipment (71) (6) (27)
Net cash used in investing
activities (71) (6) (27)
------------ ---------------------- -----------
Financing activities
Loans given - - (239)
Proceeds from issue 800 - -
of convertible loan
instrument
Proceeds from issue
of ordinary share capital 4,458 2 2,389
------------ ---------------------- -----------
Net cash generated
from financing activities 5,258 2 2,150
------------ ---------------------- -----------
Net increase/(decrease)
in cash and cash equivalents 2,560 (2,195) (2,470)
------------ ---------------------- -----------
Cash and cash equivalents
at beginning of period 687 3,125 3,125
Effect of foreign exchange
rate changes (2) 1 32
------------ ---------------------- -----------
Cash and cash equivalents
at end of period 3,245 931 687
============ ====================== ===========
Audioboom Group plc
Consolidated statement of changes in equity
Share Other Retained Total
premium reserves earnings equity
GBP'000 GBP'000 GBP'000 GBP'000
--------- ---------- ---------- --------
At 30
November
2015 20,206 (3,517) (13,297) 3,392
--------- ---------- ---------- --------
Loss for
the period - - (2,552) (2,552)
Issue
of shares 2 - - 2
Equity-settled
share-based
payments - - 369 369
Other
comprehensive
income - 59 - 59
At 31
May 2016 20,208 (3,576) (15,480) 1,152
--------- ---------- ---------- --------
Loss for
the period - - (2,220) (2,220)
Issue
of shares 2,215 - - 2,215
Equity-settled
share-based
payments 172 - (93) 79
Other
comprehensive
income - 104 - 104
At 30
November
2016 22,595 (3,472) (17,793) 1,330
--------- ---------- ---------- --------
Loss for
the period - - (2,911) (2,911)
Issue
of shares 6,683 - - 6,683
Equity-settled
share-based
payments - - 48 48
Other
comprehensive
income - (166) - (166)
Other
movements 9 9
At 31
May 2017 29,278 (3,638) (20,647) 4,993
--------- ---------- ---------- --------
Audioboom Group plc
Notes to the financial statements
1. General information and basis of preparation
Audioboom Group plc is incorporated in Jersey under the
Companies (Jersey) Law 1991. The Company's shares are traded on the
Alternative Investment Market of the London Stock Exchange
("AIM").
These consolidated interim financial statements, which are
unaudited, have been approved by the Board of Directors on 19 July
2017. They have been drawn up using accounting policies and
presentation expected to be adopted in the Group's full financial
statements for the year ending 30 November 2017, which are not
expected to be significantly different to those set out in note 1
to the Company's audited financial statements for the period ended
30 November 2016.
The consolidated interim financial statements have been prepared
under the historical cost convention and in accordance with
International Financial Reporting Standards ("IFRS") and with IAS
34 "Interim financial reporting", as adopted by the EU.
The preparation of financial statements in accordance with IFRS
requires the use of estimates and assumptions that affect the
reported amounts of assets and liabilities, and disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during
the reporting period. Although these estimates are based on
management's best knowledge of current events and actions, actual
results may ultimately differ from those estimates.
Going concern
These interim financial statements have been prepared on the
going concern basis, which assumes that the Company will have
sufficient funds to continue in operational existence for the
foreseeable future. The Company's forecasts for the combined group,
including due consideration of the continued operating losses of
the group, and projections, taking account of reasonably possible
changes in trading performance and available sources of funding,
indicate that the Group has sufficient cash available to continue
in operational existence for at least the next 12 months. The Board
has considered various alternative operating strategies should
these be necessary and are satisfied that revised operating
strategies could be adopted if and when necessary. As a
consequence, the Board believes that the Group is well placed to
manage its business risks, and longer term strategic objectives,
successfully. Therefore the Directors consider the going concern
basis appropriate.
2. Loss per share
Basic earnings per share is calculated by dividing the loss
attributable to shareholders by the weighted average number of
ordinary shares in issue during the period.
IAS33 requires presentation of diluted EPS when a company could
be called upon to issue shares that would decrease earnings per
share, or increase the loss per share. For a loss-making company
with outstanding share options, net loss per share would be
decreased by the exercise of share options. Therefore, as per
IAS33:36, the antidilutive potential ordinary shares are
disregarded on the calculation of diluted EPS.
Reconciliation of the loss and weighted average number of shares
used in the calculation are set out below:
31-May-17
Loss Weighted average Per share
number of amount
shares
Basic and Diluted GBP'000 Thousand Pence
EPS
Loss attributable
to shareholders:
- Continuing and
discontinued operations (2,911) 744,445 (0.39)
31-May-16
Loss Weighted average Per share
number of amount
shares
Basic and Diluted GBP'000 Thousand Pence
EPS
Loss attributable
to shareholders:
- Continuing and
discontinued operations (2,552) 533,971 (0.48)
30-Nov-16
Loss Weighted average Per share
number of amount
shares
Basic and Diluted GBP'000 Thousand Pence
EPS
Loss attributable
to shareholders:
- Continuing and
discontinued operations (4,772) 563,351 (0.88)
3. Share Capital
Issued and fully paid - ordinary shares of no par value
At 30 November 2016 638,021,678
At 31 May 2017 930,649,854
During the period a total of 15,076,262 new ordinary shares were
issued at 1.5p per share as a result of the exercise of
warrants.
On 23 March, 7 April and 12 April 2017, 51,360,000, 108,640,000
and 20,000,000 new ordinary shares (respectively) were issued at
2.5p per share pursuant to a placing and subscription.
On 7 April 2017, 40,613,698 new ordinary shares were issued at
2p per share as a result of the conversion of a convertible loan
instrument.
On 6 February, 2 March and 13 April 2017, 53,165,598, 1,828,913
and 1,943,705 new ordinary shares (respectively) were issued as
consideration for the acquisition of SONR News Limited ("SONR") at
2.5 p per share.
The total number of instruments over equity (including both
share options and warrants) outstanding at the period end was
107,821,233.
4. Acquisition during the period
On 1 February 2017, the Group acquired 93.4% of the ordinary
shares in SONR. The consideration paid on completion was
GBP1,329,140 in shares and prior to completion the Group had
provided GBP367,795 via loans to SONR, which were subsequently
written off. The Group subsequently acquired the remaining share
capital for GBP94,315 and now holds 100% of SONR. This investment
has been included in the Group's balance sheet at its fair value at
the date of acquisition. SONR specialises in the development of
natural language programming and artificial intelligence
software.
The assets and liabilities of SONR were as follows:
GBP'000s
Tangible fixed assets 10
Stock -
Debtors -
Cash at bank 13
Creditors (131)
_____
Book value of assets acquired (108)
Intangible assets identified 2,016
_____
Fair value of assets acquired 1,908
_____
The acquisition costs of GBP118,000 have been written off as
overheads in the financial period ended 31 May 2017.
5. Intangible assets
Cost Intellectual Goodwill Total
property (GBP'000s) (GBP'000s)
(GBP'000s)
Arising on acquisition 2,016 241 2,257
Carried forward at
31 May 2017 2,016 241 2,257
Amortisation charged
in the period 134 - 134
Carried forward at
31 May 2017 134 - 134
Net book value 31
May 2017 1,882 241 2,123
============== ============ ============
6. Trade and other receivables
The trade and other receivables at the end of the period
comprised GBP1,194,000 relating to trade debtors and accrued sales
income, GBP178,000 relating to office rental deposits and
GBP310,000 relating to prepaid expenses including content and
marketing actions.
7. Trade and other payables
The trade and other payables at the end of the period comprised
GBP1,384,000 relating to trade payables and accrued content partner
costs. The Company currently accrues all costs based on contract
terms. Due to a minimum payable value, some partners have not
attained the threshold level to receive a payment. Other payables
of GBP482,000 relate to accrued costs for hosting, salary costs and
professional services.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR FKLLFDDFEBBZ
(END) Dow Jones Newswires
July 20, 2017 02:00 ET (06:00 GMT)
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