(Alliance News) - Be Heard Group PLC on Monday posted improved results for 2019, but warned on its outlook amid Covid-19 and financial constraints.
The stock was trading 27% higher at 0.28 pence each on Monday afternoon in London.
For 2019, the digital marketing services company reported a pretax loss of GBP7.9 million, narrowed from GBP10.3 million reported for 2018. Billings were up at GBP55.8 million up from GBP49.7 million, with net revenue at GBP29.8 million, up 1.0% from GBP29.5 million.
Administrative expenses were lower at GBP36.8 million from GBP39.2 million the year prior
Be Heard said that during the period, its digital and insight businesses continued to perform well, offsetting the "disappointing" results from its creative business.
The Freemavens analytics business contributed GBP4.3 million to revenue, up 44% from 2018 and the MMT Digital software business delivered GBP15.2 million in revenue up by 9%. However, media planning business contributed GBP4.5 million, representing an 8% decline while The Corner's revenue was 24% lower year-on-year at GBP5.7 million.
Looking ahead, the London-based company said although the Covid-19 outbreak will result in reduced earnings for 2020, it believes its quick response to the crisis will help it remain profitable and cash-generative.
"The evolving Covid-19 pandemic is having, and will continue to have a material and adverse impact on the demand and supply side of economies throughout the world. We expect a reduction to our earnings for the current financial year as clients adopt a cautious approach and look to defer or curtail engagements, but the full impact is impossible to assess at present and we have been guardedly encouraged by both the extension of existing contracts and new business activity in certain areas, said Non-Executive Chair David Morrison.
"The business remains constrained by its capital structure and, in particular, the earnout and loan note obligations. These balance sheet constraints limit the group's ability to invest in the partner companies that are delivering growth and bring into focus the strategic challenges facing the Board. Broadly, the choice is either to continue slowly to trade out of the current financial straitjacket or to consider other options that might deliver a more rapid and satisfactory outcome for all the stakeholders in the group," Morrison added.
As at the end of 2019, Be Heard had GBP8.7 million of earnout liabilities with total earnout payments restricted to GBP500,000 per year. The company had net cash of GBP1.7 million.
By Ife Taiwo; ifetaiwo@alliancenews.com
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