(Sharecast News) - Native in-game advertising company Bidstack Group reported revenue of £0.03m in its interim results on Monday, rising from the nil revenue it reported for the same period last year.
The AIM-traded firm said its loss per share improved to 0.83p for the six month period ended 30 June, narrowing from a loss of 3.04p per share at the same time a year ago.
During the period, it completed a placing of 40 million shares at 12.5p each, raising £5m, with a further £0.7m raised following the exercise of warrants at 20p per share.
Its period-end cash balance stood at £6m, rising from £0.3m year-on-year.
On the operational front, Bidstack noted its first demand side platform with Avocet Systems in March, which the board termed a "significant" technical milestone, enabling the purchase of advertising inventory on a programmatic basis.
A second demand side platform was onboarded in March, expanding the breadth of Bidstack's demand side platform.
The board said the company continued the development and testing of new software development kits, and noted the generation of its first true programmatic revenue, following test spends with advertising clients at the end of the period.
It said an independent study provided proof its product worked in a demonstrable way, and added that it was awarded a Brand Safety Seal by the Digital Trading Standards Group.
Looking at its headcount, Bidstack said it expanded its team from 17 staff on 31 December to 34 as at 30 June.
It also established an advisory board , and added two new non-executive Directors - Mike Hayes, formerly of SEGA, Codemasters and Nintendo, and Derek Wise of Oracle Data Cloud, and formerly of Grapeshot and Jagex.
Since the period ended, Bidstack entered into a strategic partnership agreement with Dentsu Aegis Network, and acquired Minimised Media, trading as 'Pubguard', on 1 August.
Contracts with Xandr Invest, formerly AppNexus, and The Trade Desk, were entered into, with the board describing them as operators of two of the world's largest demand side platforms.
An agreement was also made with Epic Games, to make Bidstack's software development kit available for games using the Unreal games engine, and renewed its Football Manager contract for a further three years.
"On 4 April, we published our audited accounts for 2018, [and] as set out in my statement, in the first half of 2019 we have been building the foundations for our future growth," said Bidstack Group chairman Donald Stewart.
"As I said, Bidstack's strategic focus throughout the period has been on the continued development of our software platform alongside our product offering.
"During the period we made the strategic decision not to prioritise the acquisition of new games and additional advertising inventory for two reasons."
Stewart said that firstly, that strategy gave its technical development and product teams the space they needed to carry out "significant" development work.
Secondly, he said it meant that the firm was not disappointing major video games developers and publishers by having to hold off filling their advertising inventory while necessary development work took place.
That approach had an impact on first half revenues, Stewart explained, but would yield longer-term benefits.
"We made extraordinary progress in the first half which has continued since the end of the period.
"It is also fair to say that the business has matured significantly."
While the company's first-half strategy was at the expense of short-term revenues, Stewart said the board remained convinced that getting the fundamentals right was the key to future success.
"We plan to continue hiring at pace," he said, adding that "in particular, there will continue to be sizeable expansion in the technical development team.
"However, both the sales and supply teams are also expected to grow quickly with additions in the US and Europe, as well as in the UK reflecting where we expect to find advertisers and games publishers.
"These teams will be key to developing significant future revenues bringing both brands and advertising agencies as well as new games with substantial advertising inventory."
Additional growth would also bring additional administration, and the group would need to fill consequent managerial positions, Stewart explained.
"As I anticipated almost six months ago, the board continues to expect the Group to be cash flow negative in the second half of 2019 but believes that market expectations for 2019 revenues remain achievable, revenues are expected to grow significantly in 2020 propelling the group towards material profitability in 2021."