Mirriad Advertising Regulatory News (MIRI)

UNAUDITED INTERIM RESULTS

Mirriad Advertising plc

("Mirriad" or the "Group")

H1 Mirriad revenue improves as costs fall and drive towards adoption continues

Mirriad, the computer vision and AI platform company, today announces unaudited half-year results for the six months ended 30 June 2020.

Highlights:

Strategic Development

Financial

Our key performance indicators

Stephan Beringer, Chief Executive Officer of Mirriad, said:

"We have made significant progress in increasing revenue and driving adoption among our top-tier partners, despite the challenging macroeconomic conditions which have had a negative impact on demand for advertising and disrupted the production of new content. The improved revenue picture is supplemented with positive news from our work to reduce the company's operating loss. We have been able to respond to the Covid-19 headwinds effectively thanks to the efforts of our team, the strong relationships with partners, and a relentless focus on the execution of our strategy and the fundamental effectiveness of our technology.

"In China, June was the busiest month for brand campaigns carried since our operations began, building on positive numbers recorded in April and May, as confidence tentatively improves in the country post lockdown. Our positive experience with key partner Tencent in this market shows how Mirriad insertions can become integral pieces of the advertising and media mix, swiftly driving new levels of success and scale for advertisers and content partners alike.

"Looking ahead to the second half of the year, we are focusing on the areas that offer the best routes to adoption and scale. We expect to further expand our footprint with new and existing broadcast, VOD and streaming partners, and build on successful forays into new markets, such as music video content. This will be guided by the fact that audiences actively prefer our format, and that we are able to open up entirely new opportunities and revenue streams for advertisers and creators - a reality that is more important than ever in the current climate. Furthermore, while the macro-economic headwinds linked to Covid-19 are likely to remain in place, at least for the near term, we are pleased to see the business continuing to trade in line with our expectations and, should the current trends within the business continue during the second half of the year, we are cautiously optimistic of achieving our full year expectations." 

For further information please visit www.mirriad.com, or contact:

Chairman's Statement

The positive signs reported in these interim results clearly demonstrate Mirriad's unique ability to capitalise on the new opportunities offered by the rapidly-changing advertising landscape. As well as the increase in revenue, the company's cost base has been carefully controlled as part of the strategy implemented in 2019, resulting in a stronger cash position than previously anticipated. Our focused global footprint has enabled us to ride out the individual market challenges posed by recent events, and I am confident the Group is in a strong and well placed position for the future.

We are in the process of navigating a period of unprecedented global economic and social uncertainty as a result of the Covid-19 pandemic. Thanks to the tireless efforts of Mirriad's staff and management, in many cases reacting swiftly and creatively to changed working conditions, we have been able to deliver the expected increase in revenue, despite these unexpected macroeconomic headwinds. This agility will continue to be the norm as we continue to carefully monitor and respond to the ongoing impacts of the pandemic to ensure Mirriad remains in a robust position for the future.

The pandemic has also amplified existing industry trends, with clear increases in consumer streaming and ad skipping bringing Mirriad's core proposition into sharp focus with continued consumer aversion to interruption. On top of this, agencies are under more pressure than ever to defend their value propositions and deliver solutions that secure reach, impact and ROI. The resulting momentum that is building behind the adoption of Mirriad's solution shows our unique technology addresses the fundamental challenges faced by the industry.

Research has proven that viewers prefer Mirriad's non-intrusive format, and that it also drives brand awareness, favourability and consideration - all vital factors in a market that is under intense scrutiny in terms of value.

We remain in uncertain times however I am very confident that Mirriad has the technology, the team and the global footprint to continue building upon on the recent progress made in revenue growth, adoption and effectively managing the business through this disruption. While the effects from the continued macroeconomic uncertainty look like they will remain at least in the near term, we remain cautiously optimistic for the future.

John Pearson

Non-executive Chairman

10 September 2020

Chief Executive's Statement 

2020 has so far been defined by our resilience and our focus on driving adoption of Mirriad's award winning technology. With significant increases in revenue, reduced costs and true momentum behind us, it is the time to further accelerate our efforts to attract ever more interest from leading broadcasters, advertisers and content creators.

Our strategy now is to focus on three key objectives that will support Mirriad in addressing the full potential of the opportunity ahead:

1. expand - our global footprint, drive adoption and exploit new sources of content, providing greater inventory and scale.

2. extend - our business model to include a direct-to-advertiser/agency marketplace approach, accelerated with industry partnerships and alliances that allow us to leverage third party distribution and buying power.

3. establish - Mirriad as the leader in next generation brand and advertising experiences, powered by ground-breaking technology and innovation.

This targeted approach is building on the momentum created to date and we are currently in talks or negotiations with a large number of global entertainment platforms, new categories of content partner, brand advertisers and their agencies.

In China, our partnership with Tencent continues to go from strength to strength and the ability to integrate our API with their systems is a tangible demonstration of how Mirriad can become a 'line item' in the advertising sales process. In-video advertising powered by Mirriad has become an integrated part of Tencent's offer, connecting our technology with other solutions - a vital step in achieving true scalability.

Elsewhere, discussions that had been delayed by Covid-19 in the US, UK, Germany and France are now restarting as economic activity slowly begins to return. In the US, we have signed agreements with Condé Nast, one of the world's outstanding video and digital brands, and Tastemade, the global media company, whose food, home and travel content reaches 250 million monthly active viewers. As a result, we have run campaigns with brands such as P&G, demonstrating not only the scale but the trust our partners are building in our technology. We are looking forward to continuing our steady path to broad market adoption and more activity as the market begins to open up.

More recently, our cinematic hinterland has opened up a series of exciting creative avenues for Mirriad, as evidenced by our new agreements with ZigZag Productions and B-Unique Records. This includes our work on the striking music video for Kodaline's Say Something which underlines how Mirriad can deliver creative activations in a short time frame, to the benefit of the content producer and viewer alike. It also demonstrates how our technology can be used beyond normal broadcast content to bring creativity to life within the music video market, creating new revenue streams for artists, and new opportunities for Mirriad insertions.

We have also made progress in the important task of telling our story to investors. We have addressed the issue of a lack of research in the market by appointing Canaccord Genuity Limited as our retained nominated adviser and broker, as well as working with Edison Research to deliver vital insight for investors.

With the rapidly evolving marketplace, the breadth of exciting opportunities available to Mirriad continues to grow. The Group will use this time to accelerate its progress with key partners and potential partners even more swiftly to further cement its leadership position in the marketplace.

Stephan Beringer

Chief Executive

10 September 2020

David Dorans

Chief Financial Officer

10 September 2020

Company Information

Consolidated statement of profit or loss and statement of comprehensive income for the six months ended 30 June 2020

All activities are classified as continuing.

Consolidated balance sheet

At 30 June 2020

Consolidated statement of changes in equity

For the six months ended 30 June 2020

1 Basis of preparation

The condensed and consolidated interim financial statements of Mirriad Advertising plc for the period ended 30 June 2020 have been prepared in accordance with Accounting Standard IAS 34 Interim Financial Reporting ("IAS 34").

These condensed interim consolidated financial statements for the six months ended 30 June 2020 and for the six months ended 30 June 2019 do not constitute statutory accounts as defined in Section 434 of the Companies Act and are unaudited. The financial information for the six months ended 30 June 2020 presents financial information for the consolidated Group, including the financial results of the Company's wholly owned subsidiaries Mirriad Advertising Private Limited, Mirriad Inc, Mirriad (Singapore) Pte. Ltd, Mirriad Software Science and Technology (Shanghai) Co. Ltd, and Mirriad Limited (dormant). Comparative figures in the condensed interim financial statements for the year ending 31 December 2019 have been taken from the Group's audited financial statements on which the Group's auditors, Pricewaterhouse Coopers LLP, expressed an unqualified opinion.

The Board approved these interim financial statements on 10 September 2020.

1.1 Going concern

These condensed interim financial statements have been prepared on the going concern basis. After making enquiries and producing cash flow forecasts the directors have reasonable expectations, as at the date of approving these condensed interim financial statements, that the Group has adequate resources to fund the Group for 12 months from the end of financial period being reported. The Group's cash holding at 31 August 2020 was £13.3m and the Directors disclosed that the Group's cash burn continues to be not more than £1m per month and is anticipated to gradually improve with increased revenues. On the basis of the Group's internal forecasts the Directors believe that the Group has sufficient cash resources to fund its activities until the end of the third quarter 2021 at which point it may require additional cash resources depending on the rate of increase in revenue.

2 Accounting Policies

The accounting policies applied are consistent with those of the annual report and accounts for the year ended 31 December 2019, as described in those financial statements other than standards, amendments and interpretations which became effective after 1 January 2020 and were adopted by the Group. These have had no significant impact on the Group's loss for the period or equity.

The Group's activities and results are not exposed to any seasonality.

3 Group financial risk factors

The condensed interim financial statements do not contain all financial risk management information and disclosures required in annual financial statements; the information should be read in conjunction with the financial information, as at 31 December 2019, summarized in the 2019 annual report and accounts. There have been no significant changes in any risk management policies since 31 December 2019.

4 Segment information

Management mainly considers the business from a geographic perspective since the same services are effectively being sold in every Group entity. Therefore, regions considered for segmental reporting are where the Company and subsidiaries are based, namely the UK, the USA, India and China. The Singapore office was closed in early 2020. The revenue is classified by where the sales were booked not by the geographic location of the customer. For this reporting purpose the Singapore and China entities were considered together.

The only income outside of the primary business activity relates to income received from grants which is recognised in other operating income.

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the steering committee that makes strategic decisions. The steering committee is made up of the Board of Directors. There are no sales between segments. The revenue from external parties reported to the strategic steering committee is measured in a manner consistent with that in the income statement.

The Parent company is domiciled in the United Kingdom. The amount of revenue from external customers by location of the Group billing entity is shown in the tables below.

Revenue

Loss before tax

The EBITDA is the loss for the year before depreciation, amortisation, interest and tax. The loss before tax is broken down by segment as follows:

5 Loss per share

(a) Basic

Basic loss per share is calculated by dividing the loss for the period / year by the weighted average number of ordinary shares in issue during the period / year. Potential ordinary shares are not treated as dilutive as the Group is loss making and such shares would be anti-dilutive.

The loss per share for the period was 2p (six months to 30 June 2019: 7p; year ended 31 December 2019: 8p).

No dividends were paid during the period (six months to 30 June 2019: £nil; year ended 31 December 2019: £nil).

(b) Diluted

Potential ordinary shares are not treated as dilutive as the Group is loss making and such shares would be anti-dilutive

6 Share capital

Ordinary shares of £0.00001 each

 No shares were issued during the period.

7 Net cash flows used in operating activities

8 Related party transactions

The Group is owned by a number of investors the largest being IP2IPO Portfolio (GP) Limited (as general partner for IP2IPO Portfolio L.P) who owns approximately 16% of the share capital of the Company. Accordingly there is no ultimate controlling party.

During the period the Company had the following related party transactions which were carried out at arm's length. No guarantees were given or received for any of these transactions.

IP2IPO Limited - a company which shares a parent company with IP2IPO Portfolio (GP) Limited, a major shareholder in the Group, and which also appoints a Director of the Group charged Mirriad Advertising plc for the following transactions during the period: (1) £10,000 for the services of Dr. Mark Reilly as a Director during the period. Of this amount, £1,667 was invoiced and unpaid at the period end, and was subsequently paid on 15 July 2020. (2) £6,000 for the services of the Company Secretary during the period. £3,000 of this amount was invoiced and unpaid as at 30 June 2020, and subsequently paid on 15th July 2020; and (3) £206 for travel costs related to Dr. Mark Reilly, all of which were fully paid by 30 June 2020.

Parkwalk Advisors Limited - a company which shares a parent company with IP2IPO Portfolio (GP) Limited, a major shareholder in the Group, and which also appoints a Director of the Group charged Mirriad Advertising plc for the following transactions during the period: (1) £10,000 for the services of Alastair Kilgour as a Director during the period. £1,667 of this amount was accrued and unpaid as at 30 June 2020 but was subsequently paid on 15 July 2020.

9 Availability of Interim Report

Electronic copies of this interim financial report will be available on the Company's website at www.mirriadplc.com/investor-relations.

ENDS

About Mirriad

Mirriad's award-winning solution unleashes new revenue for content producers and distributors by creating new advertising inventory in content. Our patented, AI and computer vision technology dynamically inserts products and innovative signage formats after content is produced. Mirriad's market-first solution seamlessly integrates with existing subscription and advertising models, and dramatically improves the viewer experience by limiting commercial interruptions.

Mirriad currently operates in the US, Europe and China.