Brave Bison Regulatory News (BBSN)

The information contained within this announcement is deemed by the Company to constitute inside information pursuant to Article 7 of EU Regulation 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 as amended. Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

13 September 2023

Brave Bison Group plc

("Brave Bison" or the "Company", together with its subsidiaries "the Group")

Interim Results

Performance in-line with Board expectations despite challenging environment

Brave Bison, the digital advertising and technology services company, today reports its unaudited interim results for the six months ended 30 June 2023.

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

"We are pleased to report a period of stable profitability despite a difficult macro-economic backdrop. The core Brave Bison business has performed in-line with our expectations, and the turnaround of SocialChain is showing encouraging progress with a number of recent customer wins including national brands such as Asda, The Army and Holland & Barrett"

Financial Highlights

Small apparent errors due to rounding

(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. Profit Before Tax is stated after adding back acquisition costs, restructuring costs, impairments, amortisation of acquired intangibles and share-based payments, and is after the deduction of costs associated with property leases.

· Adj. EBITDA of £1.9m (H1 2022: £1.6m) and Adj. Profit Before Tax of £1.5m (H1 2022: £1.3m), both in-line with expectations

· Double-digit growth in revenue and gross profit / net revenue to £16.9m (H1 2022: £14.7m) and £10.0m (H1 2022: £8.2m) respectively

· Statutory loss before tax of £0.2m (H1 2022: profit of £1.0m) after incurring £1.4m (H1 2022: £0.1m) in exceptional costs associated with the acquisition and integration of SocialChain and simultaneous £4.8m share placing in February 2023

· Net cash of £4.3m (H1 2022: £4.8m, H2 2022: £6.2m) excluding lease liabilities, a cash outflow of £1.9m (H1 2022: £0.1m inflow) during the period due to the acquisition of SocialChain which was funded in-part by balance sheet cash

· Gross cash of £4.5m (H1 2022: £5.4m, H2 2022: £6.5m). Brave Bison has now repaid all outstanding loans and deferred consideration, with the exception of £0.2m worth of Government-backed COVID relief loans with favourable interest rates and long-dated maturities. As at 30 June 2023, the Company's revolving credit facilities were undrawn

· Adjusted earnings per share for the period of 0.12p (H1 2022: 0.12p), in-line with Board expectations

Strategic Highlights

· SocialChain was acquired in February 2023 and integrated with Brave Bison Social & Influencer. The resulting SocialChain by Brave Bison is one of the UK's leading social media advertising and influencer marketing agencies. New business wins since completion include Warner Bros., Asda, Pinterest, Purina, The Army, Holland & Barrett and a national retailer under NDA

· Brave Bison completed a £4.8m fundraising in February 2023 to fund the acquisition of SocialChain and provide further capital for future acquisitions. The fundraising, initially targeting £3.0m, was increased due to strong demand from institutional and other investors and closed oversubscribed

· Integration of SocialChain is materially complete with IT, finance, HR, operations and marketing functions combined with Brave Bison at the period end. Full systems integration is expected to be materially complete by the end of 2023

· As a result of the integration and tighter resource control, headcount at SocialChain has reduced by 28% since completion of the acquisition. Annualised cost savings of circa £1m have now been realised

· Brave Bison Media Network customers representing approximately 65% of FY22 gross profit / net revenue have renewed key contracts for between 24 and 36 months, including flagship channels US Open, Ryder Cup, Link Up TV and PressPlay Media

· New business wins at Brave Bison Performance and Brave Bison Commerce include Markel Group, a global insurance company with revenues in excess of $10bn, Alliance Automotive Group, a European car parts distributor with revenues in excess of $3bn

· Brave Bison Commerce awarded Best B2B Project at the MACH Impact Awards for its world-first composable commerce architecture delivery for MKM Building Supplies

· Brave Bison total headcount as at 30 June 2023 of 238 (H1 2022: 156). Brave Bison staff now operate from in nine countries, with hubs in London, Manchester and New York, as well as Bulgaria and Egypt

Outlook

· FY23 performance anticipated to be in-line Board expectations, including net cash which is expected to exceed £6m at year end

· Trading in H2 is showing a meaningful improvement on H1, driven by the positive impact from the SocialChain acquisition & integration and healthy new business activity across Brave Bison

Change of Name of Nominated Adviser

Brave Bison also announces that its Nominated Adviser has changed its name to Cavendish Securities plc following completion of its own corporate merger.

For further information please contact:

Brave Bison Group plc

Oliver Green, Chairman via Cavendish

Theo Green, Chief Growth Officer

Philippa Norridge, Chief Financial Officer

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

Nominated Adviser & Broker

Ben Jeynes

Dan Hodkinson

About Brave Bison

Brave Bison (AIM: BBSN) is a digital advertising and technology services company, headquartered in London with a globally distributed workforce in over nine countries. The Company provides services to global brands and advertisers through four business units.

Brave Bison Performance is a paid and organic media practice. It plans and buys digital media on platforms like Google, Meta, TikTok, Amazon and YouTube, as well as providing search engine optimisation and digital PR services. Customers include New Balance, Curry's and Asus.

SocialChain by Brave Bison is a social media advertising practice. It creates content for social media platforms and works with influencers to create and distribute marketing content. This creative approach ensures that content is more native to the platform it is on, allowing its customers to drive higher engagement from audiences of all ages. Customers include KFC, TikTok and General Mills.

Brave Bison Commerce is a digital commerce practice. It creates, improves and maintains ecommerce websites and manages the customer experience in a digital environment. This practice builds ecommerce systems in a composable way - whereby different functions of a website are provided by different software from different vendors. Customers include MKM Building Supplies, Muller and Furniture Village.

Brave Bison Media Network is a portfolio of channels across YouTube, Facebook, Snapchat, TikTok and Instagram. These channels generate hundreds of millions of monthly views, and the advertising inventory from each channel is sold through online advertising exchanges. Popular channels include The Hook, PGA Tour, US Open and Link Up TV.

Chairman's Statement

The first half of 2023 has been dominated by the acquisition and subsequent integration of SocialChain, a social media advertising and influencer marketing agency, and our largest acquisition to date. Brave Bison acquired SocialChain in February 2023 from a distressed German corporate and the business has now been merged into our existing social and influencer operations to form SocialChain by Brave Bison.

SocialChain has an excellent market position and it is widely viewed as one of the leading social media advertising and influencer marketing agencies in the UK. This position stems from strong brand recognition amongst social and brand marketers across all industries. This recognition has three main drivers: firstly, SocialChain's genesis (the business was founded by Dragon's Den star Steven Bartlett), secondly, a very active marketing platform underpinned by Social Minds, an award-winning podcast, and, finally, an excellent roster of clients including global businesses such as The Army, KFC and General Mills.

The Board believes that SocialChain, which was loss-making at the time of acquisition, has the potential to become one of Brave Bison's strongest brands. The business has been comprehensively restructured, including property disposals, back office and systems integration with Brave Bison and a reduction in headcount of 28%, which is expected to result in an adjusted EBITDA SocialChain profit for the current financial year.

Turnarounds always present challenges, but we are encouraged with progress made to date. The integration of systems, operations and ways of working with Brave Bison has happened quickly, and resource is now being shared across the Company. Furthermore, SocialChain by Brave Bison has been on an impressive new business drive, winning in excess of £2m in annualised revenue, to be delivered over this and the next financial year, from brands including Holland & Barrett, The Army, Pinterest and Aer Lingus. SocialChain's work for The Army will be supported by additional work from our Brave Bison Performance business unit, demonstrating clients' demand for a connected social and performance marketing proposition and providing us with a strong case study to win additional customers in this space.

Despite management focus on SocialChain in the period, the core Brave Bison business has continued to perform in-line with our expectations overall. Brave Bison Commerce has signed new engagements with two large enterprise customers, Alliance Automotive Group, a car parts distributer, and a retailer under NDA. Fees are expected to exceed £1.3m in aggregate, on programmes of work that will extend into the next financial year. Some of this new revenue will be offset by customer losses as budgets tighten, but we are comfortable that the proposition remains strong and we will continue to win more market share. We are particularly encouraged to see that Brave Bison Commerce won Best B2B Project at the MACH Alliance Impact Awards, a prestigious award for technology companies using composable development architecture.

Similarly, Brave Bison Performance is trading in-line with our expectations. Despite challenging end markets, our consumer-focused customers such as New Balance and Curry's have continued to spend. Focus has shifted into conversion-led products that have repeatable and predictable outcomes for our customers, and performance marketing has proven to be the most resilient budget. In Q1 we launched a new Marketplaces proposition that allows our customers to simultaneously offer their products across a network of third-party websites (Amazon, eBay, TikTok, Target+, OnBuy, Google Shopping etc.). This has the potential to add incremental sales within a short period of time and take up to date has been encouraging. We were pleased to announce two significant new business wins during the period: Markel, a global insurance company, and Manual, a men's wellness company. Both customers have scope to expand both services and markets, and we look forward to collaborating into 2024.

The Brave Bison Media Network has experienced some volatility, particularly on Snapchat where revenues are lower year-on-year. Competition between publishers on the platform has increased substantially and consequently the views across some of our channels are lower, compounding the effects of an already subdued advertising market. However, our YouTube network performed well over the period. Our sports franchise, focussed on tennis and golf, has grown well, and customers representing approximately 65% of FY22 net revenue have now renewed their contracts of 24 to 36 months terms.

Financial Review

H1 2023 saw Brave Bison record another period of steady results whilst also completing a major acquisition and integration. The Company recorded revenues of £16.9m (H1 2022: £14.7m), gross profit / net revenue of £10.0m (H1 2022: £8.2m) and Adj. PBT of £1.5m (H1 2022: £1.3m), an increase of 16%.

Adjusted EBITDA Margin (Adj. EBITDA as a proportion of gross profit / net revenue) was 18.9% compared to 19.2% in H1 2022. This reduction is a consequence of the acquisition of SocialChain which was loss making at the point of acquisition, and should improve in future periods as a result of the cost savings and efficiencies already realised.

Net cash at the period end was £4.3m (H1 2022: £4.8m, H2 2022: £6.2m). Cash outflows during the period were primarily related to the initial cash outflows on the acquisition of SocialChain and the associated working capital requirements for the business over the following few months. We anticipate being significantly cash generative in H2 2023 now that the restructuring and integration costs have been incurred, with 2023 year-end cash expected to exceed £6m.

Acquisition costs of £0.8m (H1 2022: £0.0m) and restructuring costs of £0.6m (H1 2022: £0.1m) were recorded during the period. Acquisition costs relate to professional fees associated with the acquisition of SocialChain and the simultaneous fundraising. Due to investor demand, the size of the fundraising was increased from an initial £3.0m to £4.8m, resulting in higher fees than originally anticipated. Restructuring costs relate primarily to notice periods of duplicated employees, severance payments, legal costs, property costs and duplicated IT costs associated with the integration of SocialChain into Brave Bison.

As detailed in the 2022 annual report, there are ongoing costs recognised which are related to the amortisation of acquired intangible assets and the impairment of brand names. During the period the purchase price allocation exercise relating to the Best Response Media Ltd (BRM) acquisition was completed, and the amount allocated to the BRM brand name (£26k) was impaired following the successful integration of this into the Brave Bison Commerce.

Share based payments relate to the value of share awards that have been granted to employees of the Brave Bison. £0.2m (H1 2022: £0.2m) of this amount relates to the directors' LTIP, which can only be redeemed in accordance with the terms outlined in the Directors' Remuneration section of the 2022 Annual Report. The earliest possible redemption date is December 2024, and redemption is contingent on, inter alia, the Brave Bison share price exceeding 3.0 pence.

An analysis of the Adjusted Profit Before Tax is shown below:

On behalf of the Board

Oliver Green

Chairman

13 September 2023

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 2022 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 2023 were £4.5 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 achieve positive cash inflows in the second half of 2023 and 2024. 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 maintain rolling forecasts which are regularly updated.

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 2022.

Other pronouncements

Other accounting pronouncements which have become effective from 1 January 2023 and therefore have been adopted do not have a significant impact on the Group's financial results or position.

3 Segment reporting

The Group has identified three geographic areas (United Kingdom & Europe, Asia Pacific and Rest of the world) and the information is presented based on the customers' location.

Geographic reporting

The information is presented based on the customers' location.

The Group identifies two revenue streams, advertising and fee based services, which correspond to the Media Network and Digital Advertising and Technology Services pillars respectively. The analysis of revenue 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 and costs associated with setup up a Bulgarian subsidiary and transferring employees into this entity. Restructuring costs in 2023 relate to corporate reorganisation activities as a result of the acquisition of SocialChain.

5 Earnings per share

Both the basic and diluted earnings per share have been calculated using the profit after tax attributable to shareholders of Brave Bison Group plc as the numerator, i.e. no adjustments to profits were necessary in 2022 or 2023. The calculation of the basic earnings per share is based on the profit attributable to ordinary shareholders divided by the weighted average number of shares in issue during the year.

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 four office leases with the acquisition of SocialChain which expire in June 2024. 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 2023 were as follows:

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

At 30 June 2023 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 2023 (30 June 2022 and 31 December 2022: 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 had a Coronavirus Business Interruption Loan ("CBIL") which was acquired as part of the Greenlight acquisition which was due to be fully repaid in 2026. The repayment amount and timing of each instalment was 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. During the period, the Group repaid the CBIL in full. The Group continues to have a £3m revolving credit facility (RCF) with Barclays Bank plc. The RCF is a 3 year facility with an interest margin of 2.75% over Base Rate. The RCF was partially drawn (£1.5 million) at the time of the SocialChain acquisition but was repaid in full before the end of the period. The Group also has a U.S. Small Business Administration loan which was acquired as part of the SocialChain acquisition which is due to be fully repaid in 2050. The repayment amount and timing of each instalment was based on a fixed interest rate of 3.75% per annum payable on the outstanding principal amount of the loan and applicable until the final repayment date.

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 directors and shareholders, which include Oliver Green and Theodore Green. The Printed Group Limited is a related party by virtue of its directors and shareholders which include Oliver Green and Theodore Green. Oliver Green and Theodore Green are both directors of and shareholders in Brave Bison.

All of the above transactions were conducted at arms length, and in accordance with the Group's related party policy which requires approval by the Independent Directors.

There are no related party transactions with any family members of the Directors.

14 Acquisitions

On 3 February 2023, the Company acquired the entire issued share capital of Social Chain Limited. This was partially funded by way of an oversubscribed vendor placing to raise £4.75 million.

SocialChain is one of the UK's leading social media and influencer marketing agencies. It was founded in 2014 by Dragon's Den entrepreneur Steven Bartlett and works with global brands such as Amazon, TikTok, KFC and Apple Beats to create social media advertising campaigns and perform influencer marketing services. SocialChain has offices in Manchester, New York and London.

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

The consideration for the acquisition is as follows: