TIDMIME
RNS Number : 9115N
Immediate Acquisition PLC
07 June 2022
The information contained within this announcement is deemed by
the Company to constitute inside information stipulated under the
Market Abuse Regulation (EU) No. 596/2014. Upon the publication of
this announcement via the Regulatory Information Service, this
inside information is now considered to be in the public
domain.
Tuesday, 7 June 2022
Immediate Acquisition Plc
("IME" or "the Group" or "the Company")
2021 Preliminary Results
Immediate Acquisition Plc (AIM: IME) today announces its
preliminary results for the year ended 31 December 2021.
2021
FINANCIAL HIGHLIGHTS GBP
Revenue 2,940,692
Gross profit 1,941,667
EBITDA (359,454)
Profit / (Loss) after taxation (438,597)
Debt (loans plus lease liabilities) 53,959
Net funds (cash less debt) 568,829
----------
Post period end highlights
-- Disposal of wholly owned subsidiary, Immedia Broadcast
Limited, for a total consideration of GBP2.0 million comprising of
GBP1.718 million paid on completion of the disposal on 9 May 2022
with the balance of GBP282,000 payable in 12 equal monthly
instalments, beginning one month after completion.
-- Executive Directors, Ross Penney and John Trevorrow, stepped
down from the Board on 9 May 2022.
-- Change of Company name to Immediate Acquisition Plc.
-- Disposal of the Sprift Loan for cash consideration of GBP1.05m.
-- Including investment in Audioboom, at the date of this report
the Company has unaudited net assets in excess of GBP3.8m, of which
all are cash or liquid investments.
-- The Directors continue to investigate a number of potential
acquisitions in the technology and fintech sector; none of which
they have yet committed to pursue at this time.
Tim Hipperson, Non-executive Chairman, commented:
"With the disposal of Immedia Broadcast Limited now complete we
are absolutely focused on our capital growth strategy including the
monetisation of the Company's remaining assets, of which we have
already disposed of the Sprift Loan, and the pursuit of an
acquisition of a company in the technology or fintech sectors which
would constitute a reverse takeover under the AIM Rules for
Companies.
"The Board has already identified a number of exciting
opportunities in our target sectors and is confident that any
acquisition will deliver meaningful shareholder value. We will
report on further progress as soon as we are in a position to do
so."
For further information please contact:
Immediate Acquisition Plc Tel: +44 (0) 203 515 0233
Tim Hipperson, Non-executive Chairman
Simon Leathers, Non-executive Director
SPARK Advisory Partners Limited (Nomad) Tel: +44 (0) 203 368 3550
Mark Brady
Neil Baldwin
SP Angel Corporate Finance LLP (Broker) Tel: +44 (0) 207 470 0470
Abigail Wayne
Buchanan Communications Tel: +44 (0) 207 466 5000
Chris Lane
Chairman's Statement
In my statement in the 2020 preliminary results I expressed the
expectation that 2021 would offer significant opportunities as well
as challenges. As predicted, that has turned out to be the
case.
In an eventful period we raised more funds at the start of the
year with a view to bolstering our working capital and
transactional capabilities. The original transaction that was under
consideration in the early part of the year, with Sprift
Technologies Ltd, did not complete although we remained invested
via a loan note as announced on 26 March and 15 July 2021 until the
recently announced disposal and focus on monetising our remaining
assets. We do however continue to investigate suitable
opportunities to enhance shareholder value through a strategic
acquisition or reverse takeover and have already identified a
number of exciting opportunities in our target sectors: technology
and fintech .
Our trading business, Immedia Broadcast Ltd, continued to suffer
depressed demand in H1 because of the continuing Covid pandemic
before enjoying a well-deserved period of success in the second
half of the year. I commend the entire team for their talent,
commitment and perseverance in materially turning round the 2021
outturn. I offer every one of them my heartfelt thanks.
Financial highlights
Revenue increased 27% from the previous year to GBP2,940,692
(2020: GBP2,310,872), producing an improved loss before tax of
GBP438,597 (2020: loss of GBP733,181) - because of increased sales
and margin improvements as well as a full year of the cost
reduction and financial efficiency measures implemented in
2020.
Immedia Broadcast Ltd (IBL)
Owing to the cost of operation, it remained the view of the
Board that IBL would trade more efficiently without the financial
and regulatory burden of the AIM listing and the Group therefore
sought expressions of interest from third parties. None of these
was at a level commensurate with the trading prospects of IBL so,
having received shareholder approval, on 9 May 2022 the Group sold
IBL to AVC Immedia Limited, a company led by CEO Ross Penney.
Trading and profitability were on an upward curve throughout
2021, and we are pleased that in H2 2021 we achieved not only
profitability at the EBITDA level in every month but also two of
the most successful months the company has ever posted. Whilst the
upturn in trade was significant and trading in Q1 2022 was
promising, the operations remain too small to readily absorb the
costs of being a PLC and generate a return for investors.
Accordingly, the Independent Directors believe that, despite the
UK's apparent recovery from the pandemic, there remains significant
uncertainties in the economy and the growth of the Group would
continue to be limited in the foreseeable future. This conviction
led to the disposal of IBL which completed on 9 May 2022.
Capital
In January 2021 the Group raised further gross proceeds of
GBP3.0 million via the placing of 10,400,000 new Ordinary Shares at
GBP0.25 per share and a subscription for 1,600,000 new Ordinary
Shares at GBP0.25 per share.
AudioBoom
I am delighted that the Company's investment in AudioBoom Group
plc (AIM:BOOM) has proved to be of long term strategic benefit. I
commend AudioBoom's management on the huge progress made and look
forward to further developments.
Warrant Extension
On 8 January 2021, pursuant to a placing and subscription to
raise GBP3 million, the Company announced the issue of 12,000,000
new warrants, exercisable at a price of 35 pence for a period of 12
months from admission, subsequently announced as 8 February 2021.
In order to maintain the Company's access to capital and enable the
Company to assess and complete potential corporate actions in a
timely manner the Board has agreed to extend the final exercise
date of the warrants to 30 June 2022 or, if the Company publishes
an Admission Document prior to 30 June 2022 relating to a reverse
takeover, the Business Day falling two Business Days prior to the
date of the General Meeting relating to the reverse takeover. As
part of the fundraising, Mark Horrocks subscribed for 1,600,000
subscription shares (and so received 1,600,000 new warrants). As
Mark Horrocks is a Director and substantial shareholder, any
extension of the new warrants was a related party transaction
pursuant to AIM Rule 13. The directors, other than Mark Horrocks,
having consulted with the Company's nominated adviser believed that
the terms of the new warrant extension are fair and reasonable
insofar as shareholders are concerned.
Sprift Loan
On 15 July 2021 the Company entered into a cost recovery
agreement with Sprift Technologies Limited ("Sprift"). Driven
largely by consecutive monthly growth in Estate Agent subscriptions
and the provision of property data APIs, Sprift Technologies
generated revenue growth of circa 100% in the eight months ended 30
September 2021 compared to the equivalent period last year. In the
interest of facilitating further growth of the Borrower, on 20
December 2021 the Company entered a revised facility agreement
("Facility Agreement") with Sprift and Mark Horrocks that increased
the facility size from GBP1.05m to GBP2.55m, defined equity
conversion terms in the event of defined liquidity events and set
out board participation rights. No further funding was provided by
the Company under this agreement. Mark Horrocks is a party to the
Facility Agreement and as such this is a related party transaction
pursuant to AIM Rule 13. The directors independent of the Facility
Agreement, having consulted with the Company's nominated adviser,
believed that the terms of the Facility Agreement were fair and
reasonable insofar as shareholders are concerned.
On 6 June 2022 the Company disposed of the GBP1.05m Sprift Loan
to Mark Horrocks for GBP1.05m in cash consideration. This was a
related party transaction pursuant to AIM Rule 13 and the directors
independent of disposal, having consulted with the Company's
nominated adviser, believed that the terms of the disposal are fair
and reasonable insofar as shareholders are concerned.
Outlook
Immediate Acquisition plc
Post completion of the IBL disposal and the sale of the Sprift
Loan, the Company name has been changed to Immediate Acquisition
Plc and intends to adopt a capital growth strategy through the
monetisation of its remaining investments, in an orderly manner,
and the pursuit of an acquisition of a company in the technology or
fintech sectors. This is in line with the Company's ambition to
deliver meaningful shareholder value.
Tim Hipperson
Chairman
Consolidated Statement of Profit or Loss
For the Year Ended 31 December 2021 2020
GBP GBP
CONTINUING OPERATIONS
Revenue 2,940,692 2,310,872
Cost of sales (999,025) (924,824)
------------ ------------
Gross profit 1,941,667 1,386,048
Administrative expenses (2,458,683) (2,126,783)
Other income 12,397 68,127
------------ ------------
Operating profit/(loss) (504,618) (672,608)
Finance income 72,505 116
Finance costs (6,483) (60,689)
------------ ------------
Loss before taxation (438,597) (733,181)
Tax on loss - -
------------ ------------
Loss for the financial year (438,597) (733,181)
------------ ------------
2021 2020
Earnings/(loss) per share
Basic (pence per share) (2.77) (5.22)
Diluted (pence per share) (2.77) (5.22)
------- -------
Consolidated Statement of Profit or Loss and Other Comprehensive
Income
For the Year Ended 31 December 2021 2020
GBP GBP
Loss for the year (438,597) (733,181)
Other comprehensive income
Item that will not be reclassified
to profit or loss:
Fair value gain on equity investments
not held for trading designated
as fair value through OCI 768,766 42,600
---------- ----------
Total comprehensive income/(loss)
for the year 330,168 (690,581)
---------- ----------
Consolidated Statement of Financial Position
As at 31 December 2021 2020
GBP GBP
ASSETS
NON-CURRENT ASSETS
Goodwill 191,018 191,018
Owned
Intangible assets 28,577 38,401
Property, plant and equipment 106,678 101,500
Right-of-use
Property, plant and equipment 9,230 74,408
Investments 1,175,349 157,500
------------ ------------
1,510,852 562,827
CURRENT ASSETS
Inventories 161,556 124,094
Trade and other receivables 2,254,937 575,449
Cash and cash equivalents 622,788 464,232
------------ ------------
3,039,281 1,163,775
------------ ------------
TOTAL ASSETS 4,550,133 1,726,602
LIABILITIES
NON-CURRENT LIABILITIES
Financial liabilities (39,716) (45,663)
Provisions (70,000) (42,500)
------------ ------------
(109,716) (88,163)
CURRENT LIABILITIES
Trade and other payables (1,594,058) (1,803,183)
Contract liabilities (101,587) (145,195)
Financial liabilities (14,242) (92,471)
------------ ------------
(1,709,887) (2,040,849)
------------ ------------
TOTAL LIABILITIES (1,819,604) (2,129,012)
------------ ------------
Net assets/(liabilities) 2,730,529 (402,410)
------------ ------------
EQUITY
Called up share capital 3,758,184 2,558,184
Share premium 5,189,313 3,586,541
Merger reserve 2,245,333 2,245,333
Share-based payment reserve 40,218 40,218
Investment valuation reserve 836,265 67,500
Retained losses (9,338,784) (8,900,186)
------------ ------------
TOTAL EQUITY 2,730,529 (402,410)
------------ ------------
Consolidated Statement of Changes in Equity
Called Share Retained Merger Share-based Investment Total
up Share premium losses reserve payment valuation equity
capital reserve reserve
GBP GBP GBP GBP GBP GBP GBP
---------- ---------- ------------ ---------- ------------ ----------- ----------
Balance
at
31 December
2020 2,558,184 3,586,541 (8,900,186) 2,245,333 40,218 67,500 (402,410)
Loss for
the year - - (438,597) - - - (438,597)
Other comprehensive
income - - - - - 768,765 768,765
---------- ---------- ------------ ---------- ------------ ----------- ----------
Total comprehensive
income for
the year - - (438,597) - - 768,765 330,168
Transactions
with shareholders
Share options - - - - - - -
exercised
Share-based - - - - - - -
payments
Shares placed/subscribed 1,200,000 1,602,772 - - - - 2,802,772
---------- ---------- ------------ ---------- ------------ ----------- ----------
Total transactions
with shareholders 1,200,000 1,602,772 - - - - 2,802,772
---------- ---------- ------------ ---------- ------------ ----------- ----------
Balance
at 31 December
2021 3,758,184 5,189,313 (9,338,783) 2,245,333 40,218 836,265 2,730,529
---------- ---------- ------------ ---------- ------------ ----------- ----------
Consolidated Statement of Cash Flows
For the Year Ended 31 December 2021 2020
GBP GBP
Cash flows from operating activities
Cash used in operations (1,251,072) (366,488)
Net cash flow from operating
activities (1,251,072) (366,488)
Cash flows from investing activities
Purchase of tangible fixed assets (67,619) (52,145)
Purchases of marketable securities (249,083) -
Investment loan (1,050,000) -
Interest received 72,504 -
Cash from sale of assets 42 116
----------- ---------
Net cash flow from investing
activities (1,294,156) (52,029)
Cash flows from financing activities
New loans in year - 50,000
Loan principal repaid (5,517) (300,000)
Share issue 3,000,000 1,100,000
Costs of share issue (197,228) (50,800)
Exercise of share options - 2,500
Repayment of lease liabilities (86,986) (111,208)
Interest paid (6,483) (45,317)
----------- ---------
Net cash flow from financing
activities 2,703,784 645,175
----------- ---------
Increase/(decrease) in cash and
cash equivalents 158,556 226,658
Cash and cash equivalents at
beginning of year 464,232 237,574
----------- ---------
Cash and cash equivalents at
end of year 622,788 464,232
----------- ---------
Immedia Group Plc
NOTES TO THE FINANCIAL INFORMATION
The financial information set out in this preliminary
announcement does not constitute statutory accounts as defined in
section 435 of the Companies Act 2006.
The financial information for the year ended 31 December 2021 is
derived from the statutory accounts for that year. The auditors
reported on those accounts; their report was unqualified and did
not contain a statement under either Section 498 (2) or Section 498
(3) of the Companies Act 2006 and included a reference by way of
emphasis to the disposal of Immedia Broadcast Limited subsequent to
the year end date.
The statutory accounts for the year ended 31 December 2020 have
been delivered to the Registrar of Companies. The auditors reported
on those accounts; their report was unqualified and did not contain
a statement under either Section 498 (2) or Section 498 (3) of the
Companies Act 2006 and did not include references to any matters to
which the auditor drew attention by way of emphasis.
The statutory accounts for the year ended 31 December 2021 have
not yet been delivered to the Registrar of Companies. The 2021
accounts will be delivered to the Registrar of Companies following
the Company's Annual General Meeting. The Annual Report and Notice
of Annual General Meeting will be posted to the shareholders by 30
June 2022 and will be made available on the Company's website (
www.imeplc.com ) at that time.
This preliminary announcement was approved by the Board on 6
June 2022.
1. ACCOUNTING POLICIES
Basis of preparation
Both the parent company financial statements and the
consolidated financial statements have been prepared and approved
by the Directors in accordance with UK-adopted international
accounting standards. The total comprehensive income was GBP330,168
(2020 loss: GBP690,581), reflecting an increase in the carrying
value of GBP768,766 in our strategic investment in the AIM-quoted
spoken word audio platform Audioboom Group PLC (AIM:BOOM). The
Company's loss for the year was GBP649,784 (2020 loss:
GBP341,928).
The financial statements were approved by the Board of Directors
on the date as shown on the Consolidated and Company Statement of
Financial Position.
Statement of compliance
The AIM Rules require that the consolidated financial statements
of the Group be prepared in accordance with International Financial
Reporting Standards.
Judgements made by the Directors in the application of these
accounting policies that have a significant effect on the financial
statements and estimates with a significant risk of material
adjustment in the next year are discussed in note 2.
Measurement convention
The consolidated financial statements have been prepared on the
historical cost basis except where explicitly stated otherwise.
Basis of consolidation
(i) Subsidiaries
Subsidiaries are entities controlled by the Group. Control
exists when the Group has power over the investee significantly to
direct the activities; exposure, or rights, to variable returns
from its involvement with the investee and the ability to use its
power over the investee to affect the amount of the investor's
returns. The financial statements of subsidiaries are included in
the consolidated financial statements from the date that control
commences until the date that control ceases. The Group also
included an Employee Benefit Trust which is considered to be a
quasi-subsidiary under the control of the Group.
(ii) Acquisitions
Acquisitions are accounted for using the acquisition method. The
cost of an acquisition is measured at fair value at the date of
exchange of the consideration. Identifiable assets and liabilities
of the acquired business are recognised at their fair value at the
date of acquisition. To the extent that the cost of an acquisition
exceeds the fair value of the net assets acquired the difference is
recorded as goodwill. Where the fair value of the net assets
acquired exceeds the cost of an acquisition the difference is
recorded in profit and loss.
(iii) Transactions eliminated on consolidation
Intra-group balances and any unrealised income and expenses
arising from intra-group transactions are eliminated in preparing
the consolidated financial statements.
(iv) Merger
On 20 November 2003 a new holding company was brought into the
Group. This was carried out by a share for share exchange and the
existing shareholders of Immedia Broadcast Limited received 1,000
10p ordinary shares in Immedia Group Plc for every share held.
There was no cash consideration. As part of its transition to IFRS
on 1 January 2006 the Group did not restate the Group
reconstruction which had been accounted for as a merger as
permitted by UK GAAP.
Going concern
The Group meets its day to day working capital requirements
through the combined use of its cash balances, the monetization of
investments, receivable and payable balances.
Following the disposal of Immedia Broadcast Limited for cash
consideration of GBP1.7m and the disposal of the Sprift Loan for
cash consideration of GBP1.05m and the investment in Audioboom, at
the date of this report the Company has net assets in excess of
GBP3.8m, of which all are cash or liquid investments. Accordingly
the Directors believe that this represents more than adequate
resources to continue to pay its liabilities as they fall due in
the year ahead, including some headroom to deal with possible
shortfalls against expectations judged reasonable. The Directors
have also considered whether that headroom would be adequate to
deal with any reasonable abortive costs associated with potential
acquisitions should they not proceed and consider it adequate.
Accordingly, whether or not the transactions to change the make
up of the Group are completed, the Directors believe there is
reasonable assurance that the Group has adequate resources to
continue in operation for the foreseeable future, being at least 12
months from the date of signing of the financial statements, and
continue to adopt the going concern assumption.
Changes in accounting policies
There are no new standards or amendments to standards which are
material to the accounts and mandatory for the first time for the
financial year ended 31 December 2021.
Accounting policies
The accounting policies set out below have been applied
consistently to all periods presented in these consolidated
financial statements, and have been applied consistently by all
Group entities.
a) Revenue
Revenue represents the amounts receivable by the Group for the
provision of its goods and services, excluding value added tax.
Production services comprise the broadcasting of live and as
live radio programmes to customers' premises using appropriate
technologies, together with the production of advertising content
for use in those programmes. Revenue from these services is billed
on time-based subscriptions and recognised as the performance
obligation is fulfilled. Additionally, the creation of digital web
and app designs, digital solutions for audio visual content, 3D,
virtual reality and augmented reality content provided by the AVC
Immedia division are all included in production services. Revenue
from these services is billed and recognised on completion as that
is when the performance obligation is met.
Operations revenue from equipment sales which includes delivery
and configuration is recognised over time; revenue from content
delivery and equipment maintenance and hire services is billed on
time-based subscriptions and is recognised monthly on completion
when the performance obligation is met.
To the extent that invoices are raised to a different pattern
from the revenue recognition described above, appropriate
adjustments are made through contract assets and contract
liabilities to account for revenue when underlying service has been
performed or goods have transferred to the customer.
b) Other income
The Company has other income for the sub-lease of its Aberdeen
offices.
c) Finance income and cost
Finance income comprises interest income on bank deposits and
interest income from customers on deferred payment terms, both of
which are recognised as accrued using the effective interest
method.
Finance cost comprises interest expense on borrowings including
leases which is recognised in profit or loss using the effective
interest method.
d) Taxation
The tax expense comprises current and deferred tax. Tax is
recognised in the statement of profit or loss, except to the extent
that it relates to items recognised in other comprehensive income.
In this case, the tax is also recognised directly in other
comprehensive income.
Current tax is the expected tax payable on the taxable income
for the year, using tax rates enacted or substantively enacted at
the reporting date, and any adjustment to tax payable in respect of
previous years.
Deferred tax is recognised using the statement of financial
position method, providing for temporary differences between the
carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for taxation purposes. Deferred tax
is not recognised for the following temporary differences: the
initial recognition of goodwill, the initial recognition of assets
or liabilities in a transaction that is not a business combination
and that affects neither accounting nor taxable profit, and
differences relating to investments in subsidiaries to the extent
that they will probably not reverse in the foreseeable future.
Deferred tax is measured at the tax rates that are expected to be
applied to the temporary differences when they reverse, based on
the laws that have been enacted or substantively enacted by the
reporting date.
A deferred tax asset is recognised to the extent that it is
probable that future taxable profits will be available against
which temporary differences can be utilised. Deferred tax assets
are reviewed at each reporting date and are reduced to the extent
that it is no longer probable that the related tax benefit will be
realised.
e) Research and development expenditure
Recognition and measurement
Expenditure on research (or the research phase of an internal
project) is recognised as an expense in the period in which it is
incurred.
Costs that are directly attributable to the development phase of
new customised technologies are recognised as intangible assets
provided they meet the following recognition requirements:
-- completion of the intangible asset is technically feasible so
that it will be available for use or sale;
-- the Group intends to complete the intangible asset and use or sell it;
-- the Group has the ability to use or sell the intangible asset;
-- the intangible asset will generate probable future economic
benefits. Among other things, this requires that there is a market
for the output from the intangible asset or for the intangible
asset itself, or, if it is to be used internally, the asset will be
used in generating such benefits;
-- there are adequate technical, financial and other resources
to complete the development and to use or sell the intangible
asset; and
-- the expenditure attributable to the intangible asset during
its development can be measured reliably. Development costs not
meeting the criteria for capitalisation are recognised as expenses
as incurred.
f) Foreign currencies
Transactions in foreign currencies are translated at the foreign
exchange rate ruling at the date of the transaction. Monetary
assets and liabilities denominated in foreign currencies at the
statement of financial position date are translated at the foreign
exchange rate ruling at that date. Foreign exchange differences
arising on translation are recognised in profit or loss.
Non-monetary assets and liabilities that are measured in terms of
historical cost in a foreign currency are translated using the
exchange rate at the date of the transaction.
g) Employee benefit
(i) Defined contribution plans
Obligations for the contributions to defined contribution
pension plans are recognised as an expense in profit or loss when
they are due.
(ii) Share-based payments options
The Group operated an equity settled compensation scheme which
grants options to qualifying employees. The grant date fair value
of options granted to employees is recognised as an employee
expense, with a corresponding increase in equity, over the period
in which the employees become unconditionally entitled to the
options. The amount recognised as an expense is adjusted to reflect
the expected number of share options that vest unless this
adjustment is due to the share price not achieving the set
thresholds for vesting.
(iii) Share-based payments warrants
The Group also operated an equity settled compensations scheme
which grants warrants. The warrants have a life of 5 years from
grant date and expire if not exercised. The grant date fair value
of warrants granted to employees is recognised as an employee
expense, with a corresponding increase in equity, over the period
in which the employees become unconditionally entitled to the
warrants. The amount recognised as an expense is adjusted to
reflect the expected number of share warrants that vest unless this
adjustment is due to the share price not achieving the set
thresholds for vesting.
(iv) Employee benefit trust
The Group operates an employee trust ("EBT") for the benefit of
its employees through Immedia Broadcasting Trustees Limited which
acts as Trustee. Transactions for the EBT are treated as being
those of the Group and are therefore reflected in the consolidated
financial statements. The trust's purchases and sales of shares in
the Company are debited and credited directly to equity.
h) Goodwill
Goodwill arises on the acquisition of subsidiaries and is stated
at cost less any accumulated impairment losses. Goodwill, which
under IFRSs is not amortised, is tested annually for
impairment.
For acquisitions on or after 1 January 2006, goodwill represents
the excess of the cost of the acquisitions over the Group's
interest in the net fair value of the identifiable assets,
liabilities and contingent liabilities of the acquiree.
i) Amortisation of intangible assets
Amortisation is recognised as an administrative expense in
profit or loss on a straight-line basis over the estimated useful
lives of intangible assets, other than goodwill, from the date that
they are available for use. The estimated useful lives for
intangible assets are as follows:
Brand - ten years
Proprietary software - five years
Customer contracts - three to four years
Content delivery - three years
j) Investment in subsidiaries
Investments in subsidiaries held in the parent company accounts
are stated at cost less impairment. Investments in subsidiaries are
reviewed for impairment on an annual basis or when events or other
changes in circumstances indicate that the investment carrying
value may be impaired.
k) Impairment
(i) Non-financial assets
Assets that have indefinite lives (goodwill) are tested for
impairment annually. Assets that are subject to amortisation or
depreciation are reviewed for impairment whenever events or changes
in circumstances indicate that the carrying value may not be
recoverable.
The test for impairment under IAS 36 compares the carrying value
of an asset against its economic value (recoverable amount to the
business), where economic value is defined as the higher of the
asset's fair value less costs to sell or its value in use. (These
measures are based on the net present value of future cash flows).
If the carrying value exceeds the economic value, impairment
exists.
An impairment loss is recognised if the carrying amount of an
asset or the cash-generating unit in which the asset is used
exceeds its recoverable amount. A cash-generating unit is the
smallest identifiable asset group that generates cash flows that
largely are independent from other assets and groups.
Impairment losses are recognised in consolidated statement of
profit or loss. Impairment losses recognised in respect of
cash-generating units are allocated first to reduce the carrying
amount of any goodwill allocated to the units and then to reduce
the carrying amount of the other assets in the unit on a pro rata
basis.
(ii) Financial assets
All financial assets are subject to review for impairment at
least at each reporting date to identify whether there is any
objective evidence that a financial asset or a group of financial
assets is impaired.
An impairment loss in respect of goodwill is not subsequently
reversed. In respect of other assets, impairment losses recognised
in prior periods are assessed at each reporting date for any
indications that the loss has decreased or no longer exists. An
impairment loss is reversed if there has been a change in the
estimates used to determine the recoverable amount. An impairment
loss is reversed only to the extent that the asset's carrying
amount does not exceed the carrying amount that would have been
determined, net of depreciation or amortisation, if no impairment
loss had been recognised.
l) Property, plant and equipment
(i) Recognition and measurement
Items of property, plant and equipment are measured at cost less
accumulated depreciation and accumulated impairment losses.
Cost includes expenditures that are directly attributable to the
acquisition of the asset. Purchased software that is integral to
the functionality of the related equipment is capitalised as part
of that equipment.
(ii) Subsequent costs
The cost of replacing part of an item of property, plant and
equipment is recognised in the carrying amount of the item if it is
probable that the future economic benefits embodied within the part
will flow to the Company and its cost can be measured reliably. The
carrying amount of any part that is replaced is derecognised. The
cost of the day-to-day servicing of property, plant and equipment
is recognised in income and expenditure as incurred.
(iii) Depreciation
Depreciation is recognised as an expense in profit or loss on a
straight-line basis over the estimated useful lives of each part of
an item of property, plant and equipment. Leased assets are
depreciated over the shorter of the lease term and their useful
lives.
The estimated useful lives for the current and comparative
periods are as follows:
Plant and equipment - three to seven years
Fixture and fittings
Office and IT equipment - three to ten years
Leasehold improvements - unexpired period of original term of
leases, ranging from 1.5 to eight years
Network equipment - three to five years or contract term if shorter
Leasehold property - length of property lease
Depreciation methods, useful lives and residual values are
reviewed at each statement of financial position date.
m) Financial instruments
Financial assets and financial liabilities are recognised in the
statement of financial position when the Group becomes a party to
the contractual provisions of the instrument.
Investments other than investments in subsidiaries are
classified as either held-for-trading or not at initial
recognition. At the year-end date all investments are classified as
not held for trading. An irrevocable election has been made to
recognise changes in fair value in other comprehensive income.
Trade receivables are held in order to collect the contractual
cash flows and are initially measured at the transaction price as
defined in IFRS 15, as the contracts of the Group do not contain
significant financing components. Impairment losses are recognised
based on lifetime expected credit losses in profit or loss.
Other receivables are held in order to collect the contractual
cash flows and accordingly are measured at initial recognition at
fair value, which ordinarily equates to cost and are subsequently
measured at cost less impairment due to their short-term nature. A
provision for impairment is established based on 12-month expected
credit loses unless there has been a significant increase in credit
risk when lifetime expected credit losses are recognised. The
amount of any provision is recognised in profit or loss. Cash and
cash equivalents comprise cash balances held by the Group and
overnight call deposits.
Financial liability and equity instruments issues by the Group
are classified in accordance with the substance of the contractual
arrangements entered into and the definitions of a financial
liability and an equity instrument. An equity instrument is any
contract that evidences a residual interest in the assets of the
Group after deducting all of its liabilities. Equity instruments
issues by the Company are recorded at the proceeds received, net of
direct issue costs.
n) Inventories
Inventories include audio, screen and content delivery equipment
and are measured at the lower of cost and net realisable value. In
determining the cost of raw materials, consumables and goods
purchased for resale, the weighted average purchase price is used.
For work in progress and finished goods, cost is taken as
production cost which includes an appropriate proportion of
attributable overheads.
o) Contract assets
When equipment supplied within an audio services contract is
paid for over the contract term, the Group continues to recognise
equipment sales revenues consistently with the revenue recognition
policy in 2. a) Revenue .
p) Trade and other payables
Trade and other payables are recognised at fair value on initial
recognition and subsequently at amortised costs.
q) Borrowings
Borrowings are recognised initially at fair value, net of
transaction costs incurred. Borrowings are subsequently stated at
amortised cost.
Borrowings are classified as current liabilities unless the
Group has an unconditional right to defer settlement of the
liability for at least twelve months after the reporting date.
r) Leases
A right of use asset and a lease liability have been recognised
for all leases except leases of low value assets, which are
considered to be those with a fair value below GBP4,500, and those
with a duration of 12 months or less. Right of use assets have been
measured at cost, which is made up of the initial measurement of
the lease liability, any initial direct costs incurred by the
Group, an estimate of any costs to dismantle and remove the asset
at the end of the lease, and any lease payments made in advance of
the lease commencement date.
The Group depreciates right of use assets on a straight-line
basis from the lease commencement date to the earlier of the useful
life of the right of use asset or the end of the lease term. Where
impairment indicators exist, right of use assets will be assessed
for impairment.
The lease liabilities are measured at the present value of the
lease payments due to the lessor over the lease term, discounted
using the interest rate implicit in the lease if that rate is
readily available or the Group's incremental borrowing rate.
After initial measurement, any payments made will reduce the
liability and the interest accrued will increase it. Any
reassessment or modification will lead to a remeasurement of the
liability. In such case, the corresponding adjustment will be
reflected in the right of use asset, or profit and loss if the
right of use asset is already reduced to zero.
s) Provisions
Provisions are recognised when the Group has a present legal or
constructive obligation as a result of past events; it is probable
that an outflow of resources will be required to settle the
obligation; and the amount has been reliably estimated. Amounts
provided in respect of leasehold premises dilapidations are the
only constituent of the provisions balance.
t) Equity and reserves
Share capital represents the nominal value of shares that have
been issued.
Share premium includes any premium received on issue of share
capital. Any transaction costs associated with the issuing of
shares are deducted from share premium, net of any related income
tax benefits.
The Company also has warrants in issue following an equity fund
raising process. The warrants had a life of 1 year from grant date,
since extended to 30 June 2022, and will expire if not exercised.
The grant date fair value of warrants granted to investors is
recognised as an expense against Share Premium, with a
corresponding increase in equity, The amount recognised as an
expense is adjusted to reflect the expected number of share
warrants that vest unless this adjustment is due to the share price
not achieving the exercise price threshold.
Merger reserve represents the consolidation difference that
arises under merger accounting. This consists of the difference
between the cost of investment and the nominal value of the share
capital acquired.
Other reserves include share-based payment charges.
The investment revaluation reserve includes accumulated gains
and losses on financial assets.
Retained losses include retained profits and losses relating to
current and prior years and purchases and sales of own shares by
the Employee Benefit Trust.
All transactions with owners of the parent are recorded
separately within equity.
u) Earnings per share
Basic or diluted
The Group presents basic and diluted earnings per share ("EPS")
data for its ordinary shares. Basic EPS is calculated by dividing
the profit or loss attributable to ordinary shareholders of the
Company by the weighted average number of ordinary shares
outstanding during the period. Diluted EPS is determined by
adjusting the profit or loss attributable to ordinary shareholders
and the weighted average number of ordinary shared outstanding for
the effects of all dilutive potential ordinary shares, which
comprise share options granted to employees.
v) Segment reporting
In identifying its operating segments, management has
historically followed the Group's service lines, which represent
the main products and services by the Group. There were two
operating segments: production and operations.
The Chief Operating Decision Maker, which is deemed to be the
executive Board, reviews management information which is the same
as is reported and prepared under IFRS.
The revenue streams in the production segment comprise the
content created for customers, including audio based (live and
recorded radio, music, advertising and branding) and visual based
(video, music advertising and branding, digital web and app
designs, and digital solutions for audio visual, 3D, virtual
reality and augmented reality content), together with all
applicable licensing charges.
The revenue streams in the operations segment comprise the
supply, installation and sale or hire of equipment to deliver
content to customers, the delivery of the content (including via
broadband or satellite technologies), and the maintenance of the
equipment.
2. USE OF ESTIMATES AND JUDGEMENTS
The preparation of financial statements requires management to
make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of
assets, liabilities, income and expenses. Actual results may differ
from these judgements and estimates. Estimates and underlying
assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in which the
estimate is revised and in any future periods affected.
3. REVENUE
a) Segmental reporting
The Chief Operating Decision Maker, which is deemed to be the
executive Board consider that the Group has just one operating
segment, being the provision of audio visual communication products
and services.
Analysis of sales and cost of sales between the two main service
lines, production and operations is provided for information in the
table below. The production revenue streams comprise the content
created for customers, including audio based (live and recorded
radio, music, advertising and branding) and visual based (video,
music advertising and branding, digital web and app designs, and
digital solutions for audio visual, 3D, virtual reality and
augmented reality content), together with all applicable licensing
charges. The operations revenue streams comprise the supply,
installation and sale or hire of equipment to deliver content to
customers, the delivery of the content (including via broadband or
satellite technologies), and the maintenance of the equipment.
2021 2020
Production Operations Total Production Operations Total
GBP GBP GBP GBP GBP GBP
----------- ----------- ------------ ----------- ----------- ------------
Revenue 2,879,891 60,801 2,940,692 2,180,313 130,559 2,310,872
Cost of
sales (968,353) (30,672) (999,025) (873,807) (51,017) (924,824)
----------- ----------- ------------ ----------- ----------- ------------
Gross profit 1,911,538 30,129 1,941,667 1,306,506 79,542 1,386,048
----------- ----------- ------------ ----------- ----------- ------------
Administrative
expenses (2,458,683) (2,126,783)
Other income 12,397 68,127
----------- ----------- ------------ ----------- ----------- ------------
Loss from
operations (504,618) (672,608)
Finance
income 72,505 116
Finance
cost (6,484) (60,689)
----------- ----------- ------------ ----------- ----------- ------------
Loss before
tax (438,597) (733,181)
----------- ----------- ------------ ----------- ----------- ------------
Geographical analysis:
2021 2020
GBP GBP
---------- ----------
UK 2,554,416 2,032,591
Europe excluding the UK 103,360 133,703
RoW 282,916 144,578
---------- ----------
Total 2,940,692 2,310,872
---------- ----------
*included in above are sales to Canada GBP177,969 (2020:
GBP79,530) and USA GBP62,622 (2020: GBP61,373). There were no
material sales to other countries.
Significant customers
There were three customers where revenue was greater than 10% of
the total (2020: three). Revenue from each of these customers is
derived from both production and operations segments.
Significant customer analysis:
202 1 2020
Revenue % of total Revenue % of total
GBP revenue GBP revenue
-------- ----------- -------- -----------
Customer
1 500,863 17.0 499,848 21.6
Customer
2 438,457 14.9 439,494 19.0
Customer
3 309,754 10.5 243,401 10.5
-------- ----------- -------- -----------
Analysis of revenue between goods and services:
2021 2020
GBP GBP
---------- ----------
Services 2,333,654 2,096,479
Goods 607,038 214,393
Total revenues 2,940,692 2,310,872
Analysis of revenue recognition
2021 2020
GBP GBP
---------- ----------
Recognised at a point in time 1,609,267 951,680
Recognised over time 1,331,425 1,359,192
---------- ----------
Total revenues 2,940,692 2,310,872
---------- ----------
b) Contract liabilities
2021 2020
GBP GBP
-------- --------
Current - Media services 101,587 145,195
-------- --------
During the year, the Company recognised revenue of GBP142,687
that was included in the contract liability at the beginning of the
period.
Revenue recognised in relation to contract liabilities
Where media services are billed in advance, income is deferred
until it can be recognised in accordance with the revenue
recognition policy as detailed in note 2 .
Analysis of future obligations:
2021 2020
GBP GBP
---------- --------
Performance obligations to be satisfied
in the next year 1,033,274 753,542
---------- --------
Performance obligations to be satisfied
in the subsequent year 202,788 3,420
---------- --------
4. EMPLOYEES AND DIRECTORS
Staff costs
Group Company
2021 2020 2021 2020
GBP GBP GBP GBP
---------- ---------- ----- --------
Wages and salaries 1,166,184 1,066,787 - 163,278
Social security
costs 124,538 127,496 - 30,660
Other pension
costs 34,734 32,760 - 9,295
---------- ---------- ----- --------
Total 1,325,456 1,227,043 - 203,233
---------- ---------- ----- --------
The Group also made payments of fees to Non-Executive Directors
of GBP81,510 (2020: GBP33,899).
The average number of employees during the year was as
follows:
Group Company
2021 2020 2021 2020
Administration
and sales 12 13 - 2
Production and
distribution 15 15 - -
----- ----- ----- -----
Total 27 28 - 2
----- ----- ----- -----
Directors' remuneration
2021 2020
GBP GBP
-------- --------
Directors' remuneration 211,677 200,385
Directors' pension contributions to
money purchase schemes 8,200 7,515
Payments to Directors for loss of
office - 101,240
-------- --------
The number of directors to whom retirement benefits were
accruing was as follows:
202 1 2020
Money purchase schemes 2 3
Information regarding the highest paid director is as
follows:
2021 2020
GBP GBP
-------- --------
Emoluments etc 119,245 110,661
Pension contributions to money purchase
schemes 4,600 4,280
-------- --------
Remuneration for each individual director, which is required to
be disclosed under the AIM rules, is shown in the Directors' Report
in the Report and Accounts.
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END
FR UNRARUNUNRUR
(END) Dow Jones Newswires
June 07, 2022 02:00 ET (06:00 GMT)
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