Brave Bison Regulatory News (BBSN)

Brave Bison Group plc

("Brave Bison" or "the Group" or "the Company")

Interim results for the six months ended 30 June 2018

Brave Bison Group plc (AIM: BBSN), the social video company, today announces its unaudited interim results for the six months ended 30 June 2018. 

Financial Highlights 

· Net Revenue of £9.3 million for the period, at an increased gross profit margin of 32% (1H 2017: £10.5 million* at 28%). Growth driven by higher margin platform advertising

· Achieved Adjusted EBITDA of £79,000 for the period (1H 2017 Adjusted EBITDA of £64,000)

· Cash balance at 30 June 2018 of £4.2 million

*revenues restated as a result of the adoption of IFRS 15 "Revenues from Contracts with Customers", see Note 2

Operational Highlights

· The fourth biggest media publisher in the world over the last quarter for views, according to Tubular Labs, based on average position on its global leader board. Brave Bison channels averaged 4.5 billion views a month during this period (April-June 2018)

· Expanded APAC business into South Korea and Indonesia, as well as a new partnership with video marketplace, UNRULY

· New strategic partnerships with global information technology and peripherals producer and Golf's European Tour

· Kate Burns appointed as Non-Executive Director to strengthen the Board's digital media experience

· Announcement of Perk and Mutha, two new editorialised multi-platform channels to be launched in August 2018. Mutha's first project will be working with the United Nations Environment Programme

 Claire Hungate, Chief Executive Officer, commented:

"When I took over the role as CEO of Brave Bison almost 10 months ago I said I could see 'green shoots' of opportunity after a period of upheaval. The business required focus and nurturing in a fast changing, highly competitive and fragmented market. These half year results show growth and consolidation as we begin to see the benefits of our new direction powered by strategy, origination and distribution. We've streamlined the business in preparation for strategic investment to deliver future growth, and we will continue to see delivery on this investment as we head into 2019."

 For further information please contact:

This announcement is available on the Group's website, www.bravebison.io.

This announcement contains inside information as defined in EU Regulation No. 596/2014 and is in accordance with the Brave Bison obligations under Article 17 of that Regulation. 

Financial and Business Review

During the first half of the year, the Group started to implement the new strategy outlined in our 2017 Annual Report, focused on the three pillars around which all our services revolve; Strategy, Origination and Distribution.

Revenue in the period decreased by 11% to £9.3 million (2017: £10.5 million). The decline is due to the Company terminating a low margin advertising revenue product in the first quarter of 2017. Despite this, advertising remains by far the most significant revenue stream, accounting for 78% of revenue (2017: 68%). Growth has been from Facebook platform advertising as a result of a significant increase in views driven by our highly engaging and shareable content. This strategy of building large audiences and viewing is based around our portfolio of 18 owned and operated social media communities across Facebook, Instagram and YouTube. Brave Bison's properties, including Slash Football, Viral Vault, Rebel FC, Canvas, Viral TRND and Superviral TV, reach over 1 billion people a week. According to the global leaderboard of "Most Views by Media and Entertainment Properties" produced by Tubular Labs, the leading global video measurement and analytics platform, Brave Bison was, on average, the fourth biggest global media publisher (April to June 2018). Facebook continues to experiment with video content resulting in algorithm changes and Brave Bison will adapt to experiment alongside them. We are continually reviewing monetisation opportunities and invest accordingly. Platform advertising around our Slash Football and Rebel FC channels also benefitted from higher Cost Per Mille (CPM) due to the Football World Cup in June and July 2018.

Fee based services revenues decreased in the first half to £2.0 million (H1 2017: £3.4 million). This is partly due the ending of a long-term partnership with the Australian Football League for live streaming. This four-year contract, originally signed in 2012, came to its natural end in Q4 2016 and, aside from a short-term extension, it was not renewed for a further season. Revenues were also impacted by the loss of a significant contract with a major Hollywood movie studio that ended in Q4 2016. Branded content revenues were also down year-on-year primarily due to a very strong first half 2017 in APAC. These revenue declines have been partly offset by growth in strategic partnerships fees driven by Shell, The PGA tour and a multi-national information technology and peripherals producer across the APAC and EMEA regions. We are internally reviewing our branded content sales operation in order to improve performance.

Administrative expenses have decreased by £1.1 million in the first half of 2018 primarily as a result of a £1.3 million reduction in amortisation charge. This has been partly offset by staff cost increases as a result of investment in areas of strategic focus. These include strategic partnerships to drive: fee-based income; country investment in the APAC region to take advantage of the fast growing digital market in South Korea and Indonesia; and our two new multi-platform owned and operated channels, Mutha and Perk. As a result, headcount at 30 June 2018 has increased to 63 (30 June 2017: 57).

The Group had £4.2 million of cash and cash equivalents at 30 June 2018 (30 June 2017: £5.3 million) and no overdraft or other borrowings. Cash outflows from operations continued to improve in the first half with outflows reduced to £0.7 million (H1 2017: £1.2 million outflow).

Outlook

The Group has had an encouraging start to 2018 as it moves closer to profitability. Our organic end to end service offering is a real USP in the digital first and video first consumer market. This, coupled with our deep understanding and experience in the social video space in a world of fragmented service offerings and multiple invoices, means we are well placed to take advantage of a wide range of market opportunities. Our nimble and flexible approach means we are always ready to adapt as the market shifts.

Investment in strategic initiatives will result in further cash outflows in the second half of 2018, funded out of existing cash reserves.

On behalf of the Board

Claire Hungate

Chief Executive Officer

31 July 2018

CONSOLIDATED INCOME STATEMENT AND CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

CONSOLIDATED STATEMENT OF CASH FLOWS

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

NOTES TO THE FINANCIAL STATEMENTS

1 General information

The information for the year ended 31 December 2017 does not constitute statutory accounts as defined in section 435 of the Companies Act 2006. A copy of the statutory accounts has been delivered to the Registrar of Companies. The auditors reported on those accounts: their report was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006. The interim financial statements have not been audited or reviewed by the Group's auditor.

2 Accounting policies

Basis of preparation

The annual financial statements of Brave Bison Group plc are prepared in accordance with IFRS as adopted by the European Union. The condensed set of financial statements included in this half yearly report has been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting", as adopted by the European Union. The interim statement has been prepared on a going concern basis, which assumes that the Group will be able to meet its liabilities for the foreseeable future. The Group is dependent for its working capital requirements on cash generated from operations, cash holdings and from equity markets. The cash holdings of the Group at 30 June 2018 were £4.2 million.

Significant accounting policies

The accounting policies applied by the Group in this condensed set of consolidated financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 31 December 2017 excepted as noted below.

Adoption of new and revised standards

The Group has adopted the new accounting pronouncements which have become effective this year, and are as follows:

IFRS 15 "Revenue from Contracts with Customers"

IFRS 15 "Revenue from Contracts with Customers" and the related "Clarifications to IFRS 15 Revenue from Contracts with Customers" (hereinafter referred to as "IFRS 15") replaces IAS 18 "Revenue", IAS 11 "Construction Contracts" and several revenue-related Interpretations. The new standard has been applied retrospectively and with restatement to aid comparability.

The adoption of IFRS 15 has resulted in the change in determination of certain revenues streams from a net to a gross basis as the Group is now deemed to be acting as the principal in the transaction. The determination of whether the Group is acting as a principal or an agent in a transaction involves judgment and is based on an evaluation of the terms of an arrangement. This adjustment is a gross up of revenue and costs of sales and does not impact operating profit or taxation.

The table below sets out the impact on revenue and cost of sales on prior periods.

IFRS 9 "Financial Instruments"

IFRS 9 replaces IAS 39 "Financial Instruments: Recognition and Measurement". This new standard has not significantly impacted the Group's accounting as it does not have any complex financial instruments.

Other pronouncements

Other accounting pronouncements which have become effective from 1 January 2018 and therefore have been adopted do not have a significant impact on the Group's financial results or position.

3 Segment reporting

Management identify only one operating segment in the business, being monetising online video content. This single operating segment is monitored and strategic decisions are made on the basis of this segment alone.

As a result, only the geographic reporting of revenue analysis has been included in this note.

The breakdown of net assets and capital expenditure for geographic reporting has not been shown as it can only be provided as an arbitrary breakdown.

Segment reporting - continued

Geographic reporting

The information is presented based on the customers' location.

The analysis of revenue by each stream is detailed below.

4 Finance costs

In September 2017 the Group issued 2.1 million new ordinary shares of 0.1 pence each following the conversion of £0.4 million of convertible debt.

5 Loss per share

Both the basic and diluted loss per share have been calculated using the loss after tax attributable to shareholders of Brave Bison Group plc as the numerator, i.e. no adjustments to losses were necessary in 2018 or 2017. The calculation of the basic loss per share is based on the loss attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period. All share options and warrants have been excluded when calculating the diluted earnings per share (EPS) as they were anti-dilutive.

6 Share capital

Rights attributable to ordinary shares

The holders of ordinary shares are entitled to receive notice of and attend and vote at any general meeting of the Company.

7 Financial Instruments

Brave Bison categorises all financial assets and liabilities as level 1 for fair value purposes which means they are valued using quoted prices (unadjusted) in active markets for identical assets or liabilities.

8 Contingent liabilities

There were no contingent liabilities at 30 June 2018 (30 June 2017 and 31 December 2017: None).

9 Transactions with Directors and other related parties

There have been no material changes in the related party transactions described in the last annual report aside from those disclosed elsewhere in this interim statement.

10 Subsequent events

On 6 July 2018, Kate Burns was appointed Non-Executive Director.