Brave Bison Regulatory News (BBSN)

22 September 2022

Brave Bison Group plc

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

Interim Results

Brave Bison Group plc (AIM: BBSN), the social and digital media company, today announces its unaudited interim results for the six months ended 30 June 2022. 

Commenting on the results, Oliver Green, Chairman, said:

"These results are ahead of the trading update released in July 2022, and confirm a record-breaking first half period for Brave Bison with triple-digit growth in major KPIs. We remain confident and are currently on track to achieve or exceed our expectations for the full year."

Financial Highlights

(1) Adj. EBITDA is defined as earnings before interest, taxation, depreciation and amortisation, and after adding back acquisition costs, restructuring costs and share-based payments. Under IFRS16 most of the costs associated with the Company's property leases are classified as depreciation and interest, therefore Adj. EBITDA is stated before deducting these costs.

(2) Adj. Operating Profit is stated after adding back acquisition costs, restructuring costs and share-based payments, and is after the deduction of costs associated with property leases.

(3) Operating Margin is a function of Adj. Operating Profit on Gross Profit

(4) Basic Profit per Ordinary Share is the Profit attributable to equity holders of the parent, divided by the weighted average number of Ordinary Shares

· Triple-digit growth in major KPIs year-on-year and a record statutory Profit Before Tax of £1.0m (H1 2021: £0.2m)

· Operating Margin of 16.1% (H1 2021: 21.1%, FY 2021: 17.9%), a reduction of 500bps year-on-year, a result of significant growth in digital marketing services revenue in the period to £8.8m (H1 2021: £0.9m)

· Increase in Net Cash year-on-year to £4.8m (H1 2021: £2.1m, H2 2021: £4.7m) excl. lease liabilities. Cash generated in H1 2022 was largely offset by the payment of acquisition considerations

Strategic & Corporate Highlights

· Successful launch of the new Brave Bison trade brand (www.bravebison.com), an important step in continuing to drive customer cross-selling and acquisition integration

· 12 new customers won and onboarded since January 2022, including Rapyd, Paperchase, ILX Group, Feefo and Viking Direct

· Seven new Snap shows launched since the start of the year, taking the total to 13. New shows include StrEAT Food, a food & travel channel, and Alofoke, a Spanish-language music & entertainment channel

· Further growth on YouTube with the addition of Laver Cup and PGA of America, bolstering reach in tennis and golf verticals, respectively. Brave Bison is one of the largest tennis publishers on YouTube, managing two of four Grand Slam channels: US Open and Australian Open

· Appointment of Gordon Brough, ex-General Counsel at Aberdeen Asset Management plc, as Independent Non-Executive Director, bringing extensive public company and M&A experience to the Brave Bison Board

· Acquisition and integration of Best Response Media, a specialist Adobe ecommerce development company. Brave Bison Commerce now provides clients with the full spectrum of enterprise ecommerce technologies including Salesforce, SAP, Adobe and BigCommerce

For further information please contact:

Brave Bison Group plc

Oliver Green, Chairman via Cenkos

Theo Green, Chief Growth Officer

Philippa Norridge, Chief Financial Officer

Cenkos Securities plc Tel: +44 (0)20 7397 8900

Nominated Adviser & Broker

Nicholas Wells

Ben Jeynes

Chairman's Statement

The first half of 2022 was a transformative period for Brave Bison, during which we have completed the integration of three businesses, made a further new acquisition, launched a new trade brand, appointed new leadership and, most importantly, continued to win new customers as the Company's broadened offering continues to gain traction with existing and potential customers alike.

We have been working hard to deliver the six-point business plan presented to shareholders at the beginning of the year and we are pleased to report good progress has been made against all our objectives. By way of reminder:

The launch of the new trade brand (www.bravebison.com) has been well received by customers and staff. New customers are briefing us for multiple services and existing customers are being upsold new services. Staff churn has noticeably decreased since the start of the year as Brave Bison's long-term plans begin to resonate with our teams.

Our digital media network has expanded in recent months. We have increased the number of shows on our network and grown our strength in key niches. In tennis, we now manage two of four Grand Slam channels (US Open and Australian Open), as well as the Laver Cup. In golf, we manage PGA Tour, PGA of America, DP World Tour and the Ryder Cup. On Snapchat we have launched seven new shows since the start of the year, taking our total to 13. Revenues for a new show typically start small, but we have high hopes for a number of our new channels, particularly those in music & entertainment.

Brave Bison is headquartered in the UK, but our future is very much a global one. We currently have staff in 11 countries, and over a quarter are now working remotely. This operational strength allows us to hire faster and sometimes cheaper, speeding up customer onboarding times. Hybrid working has become a key feature for how our delivery teams work, and we expect this trend to continue.

We were pleased to acquire Best Response Media during the period. One of our key agency pillars is Brave Bison Commerce, our digital commerce practice, which provides ecommerce platform support and integrations for enterprise brands such as Primark, Furniture Village and Milk & More. Until the acquisition of Best Response Media, our efforts were focused on three major enterprise ecommerce platforms: SAP, Salesforce and BigCommerce. Through this acquisition, we are now able to offer services on Adobe Commerce Cloud, a ubiquitous platform that has grown from strength-to-strength in recent years. Furthermore, we acquired a highly experienced and flexible resource base in Mansoura, Egypt, as well as Tier 1 customers including NatWest.

Since taking executive roles in 2020, Theo and I have been committed to building Brave Bison's board in a thoughtful and measured way, very much in line with modern standards of governance. The appointment of Gordon Brough in July 2022 is a further indication of this ongoing commitment. Gordon has extensive public company experience, having been General Counsel at Aberdeen Asset Management for ten years, and we believe he will make a substantial contribution to the Board.

Financial Review

H1 2022 was a record period for Brave Bison. The Company recorded interim revenues of £14.7m (H1 2021: £7.3m) and Adj. Operating Profit of £1.3m (H1 2021: £0.4m), an increase of 102% and 221%, respectively. Gross Profit increased to £8.2m (H1 2021: £1.9m) and the Company reported a Profit Before Tax of £1.0m (H1 2021: £0.2m), the largest half-year profit in Brave Bison's history.

The Company's Operating Margin (Adj. Operating Profit as a proportion of Gross Profit) has declined to 16.1% (H1 2021: 21.1%). However, this is largely due to the rapid growth of revenues in Brave Bison's digital marketing services business to £8.8m (H1 2021: £0.9m), which operates at lower margins than the media network revenue.

Net cash increased to £4.8m (H1 2021: £2.9m) and remained broadly unchanged since the end of 2021 (H2 2021: £4.7m). The majority of the cash generated in the period was used to fund acquisition considerations, totaling £1.1m in respect of Best Response Media and Greenlight, as well as fund working capital changes. The only remaining deferred consideration payment is due to the selling shareholders of Best Response Media, totaling £0.2m payable in October 2022.

Outlook

The Board is comfortable that it will meet or exceed its expectations for the current financial year. Furthermore, and despite global macro headwinds, the Board expects further growth in the next financial year as brand advertisers continue to migrate towards our differentiated customer proposition.

On behalf of the Board

Oliver Green

Chairman

22 September 2022

BRAVE BISON GROUP PLC

CONDENSED CONSOLIDATED INCOME STATEMENT AND CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

BRAVE BISON GROUP PLC

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

BRAVE BISON GROUP PLC

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

BRAVE BISON GROUP PLC

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

BRAVE BISON GROUP PLC

NOTES TO THE UNAUDITED INTERIM FINANCIAL STATEMENTS

1 General information

The information for the year ended 31 December 2021 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 2022 were £5.4 million.

The Directors have prepared detailed cash flow projections ("the Projections") which are based on their current expectations of trading prospects. The board forecasts that the Group will continue to achieve positive cash inflows in the second half of 2022 and 2023. Accordingly, the Directors have concluded that it is appropriate to continue to adopt the going concern basis in preparing these financial statements. The Directors are confident that the Group's forecasts are achievable, and are committed to taking any actions available to them to ensure that any shortfall in forecast revenues is mitigated by cost savings.

The Directors also continue to monitor the impact of the COVID-19 pandemic, and maintain rolling forecasts which are regularly updated. Advertising revenues have recovered well after the initial impact of the pandemic, and while project budgets remain smaller, we are seeing signs of recovery in this area as well.

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 2021.

Other pronouncements

Other accounting pronouncements which have become effective from 1 January 2022 and therefore have been adopted do not have a significant impact on the Group's financial results or position.

3 Segment reporting

The Board has reviewed the Group and all revenues are functional activities of a digital media and marketing group, and these activities take place on an integrated basis. The senior executive team review the financial information on an integrated basis for the Group as a whole, with respective heads of business who are geographically located and in accordance with IFRS 8 Operating Segments, the Group will be providing a geographical split. The Group will also be providing a split between the Media Network revenue and Digital Marketing services revenue.

Geographic reporting

The information is presented based on the customers' location.

The group identifies two revenue streams, Media Network revenue and Digital Marketing services revenue. The analysis of revenue and gross profit by each stream is detailed below.

Timing of revenue recognition

The following table includes revenue from contracts disaggregated by the timing of recognition.

4 Restructuring

Restructuring costs in 2022 relate to corporate reorganisation activities as a result of the acquisition of Greenlight, as well as costs relating to the transfer of contractors into a new subsidiary in Bulgaria.

5 Profit per share

Both the basic and diluted profit / (loss) per share have been calculated using the profit / (loss) after tax

attributable to shareholders of Brave Bison Group plc as the numerator, i.e. no adjustments to profits / (losses) were necessary in 2021 or 2022. The calculation of the basic profit / (loss) per share is based on the profit /(loss) attributable to ordinary shareholders divided by the weighted average number of shares in issue during the year. Share options were dilutive in 2021 and 2022.

6 Intangible Assets

7 Property, plant and equipment

Included in the net carrying amount of property, plant and equipment are right-of-use assets as follows:

8 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.

9 Leases

Lease liabilities are presented in the statement of financial position as follows:

The Group acquired two office leases with the acquisition of Greenlight which expire in November 2023. With the exception of short-term leases and leases of low-value underlying assets, each lease is reflected on the balance sheet as a right-of-use asset and a corresponding lease liability.

The table below describes the nature of the Group's leasing activities by type of right-of-use asset recognised on the statement of financial position:

The lease liabilities are secured by the related underlying assets. Future minimum lease payments at 30 June 2022 were as follows:

The Group does not have any liabilities for short term leases.

The Group received a Covid-19 related rent concession during the period of £nil (2021: £72,030). It has applied the exemption granted by the Covid-19-Related Rent Concessions (Amendment to IFRS 16) and has therefore not assessed this as a lease modification but has included it within administration expenses.

At 30 June 2022 the Group had not committed to any leases which had not yet commenced excluding those recognised as a lease liability.

10 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.

11 Contingent liabilities

There were no contingent liabilities at 30 June 2022 (30 June 2021 and 31 December 2021: None).

12 Bank Loans

The Group has a Bounce Back Loan Agreement which is due to be fully repaid in 2026. The repayment amount and timing of each instalment is based on a fixed interest rate of 2.5% payable on the outstanding principal amount of the loan and applicable until the final repayment date. This loan is unsecured. The Group also has a Coronavirus Business Interruption Loan ("CBIL") which was acquired as part of the Greenlight acquisition which is due to be fully repaid in 2026. The repayment amount and timing of each instalment is based on a fixed interest rate of 4.35% per annum payable on the outstanding principal amount of the loan and applicable until the final repayment date. The CBIL and an unused bank overdraft facility of £500,000 available to the Company's subsidiary Greenlight Digital Limited are secured by a fixed and floating charge over its assets together with a cross guarantee with Brave Bison Group Plc, Brave Bison Limited and Greenlight Commerce Limited in favour of Barclays Bank, dated 1 September 2021.

13 Transactions with Directors and other related parties

Transactions with associates during the year were:

Tangent Marketing Services Limited is a related party by virtue of its shareholding in Brave Bison Group Plc. All of the above transactions were conducted at arms length.

14 Acquisitions

On 28 April 2022, the Company acquired the entire issued share capital of Best Response Media Limited. The consideration was financed by existing cash balances. Best Response Media is a specialist ecommerce and mobile development company focused exclusively on the Adobe Commerce platform.

The provisional fair value of the assets acquired and liabilities assumed were as follows:

The consideration for the acquisition is as follows: