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mporium Group PLC - Half-year Report

RNS Number : 3363N
mporium Group PLC
08 August 2017
 

8 August 2017

 

mporium Group plc

 

("mporium" or the "Group")

 

Half Year Results

 

 

mporium Group plc (AIM:MPM), the technology company that delivers high performance advertising campaigns, today announces its results for the six months ended 30 June 2017.

 

Financial Highlights

  •     

Revenue increased 21% to £1.1 million (H1 2016: £0.9 million), driven by an increase in Technology & Other Recurring Revenue

  •    

Operating loss reduced 18% to £2.4 million (H1 2016: £2.9 million) despite a substantial increase in headcount, predominantly associated with Technology & Data Science and Sales & Account Management

  •     

£3.0 million raised in March 2017 to support continued investment in the IMPACT technology product

 

Operational Highlights

  •      

Revised product strategy driving improved product performance

  •      

Commercial agreement (IMPACT) with Essence, a market-leading global digital agency majority owned by WPP

  •      

Commercial agreement and industry award (IMPACT) with the7stars, the UK's largest independent media agency

  •      

Expansion of IMPACT into several Continental European markets ahead of schedule

  •      

Advanced discussions with additional leading agencies are ongoing

 

Board Changes

  •  

Barry Moat appointed Executive Chairman with Nigel Walder's departure

  •  

Nelius De Groot, the Group's COO, appointed CEO

  •  

Richard Gordon, FD, to leave at the end of September

 

Nelius De Groot, CEO of mporium, commented:

"We have made strong progress in the first half: signing new commercial agreements and taking significant steps towards further contracts, while improving our IMPACT product and adding key resource that will support future growth. I am delighted that we have managed to increase our revenues while simultaneously reducing our costs and thereby narrowing our loss.

"We look to the future with confidence; the global market for IMPACT is vast and we have proved that the technology delivers significant performance improvements. We are confident that the progress and momentum generated to date, will continue throughout 2017."

 

Enquiries

mporium

020 3841 8402

Barry Moat

 

Nelius De Groot

 

 

 

N+1 Singer (Nominated Adviser & Broker)

020 7496 3000

Michael Taylor

Mark Taylor

 

 

 

Bell Pottinger

020 3772 2573

Elly Williamson

 

Dan de Belder

 

 

About mporium

 

mporium is a technology company that delivers high performance advertising campaigns, maximising the advertiser's return on investment.

 

mporium's proprietary technology, IMPACT, enables advertisers and the media agencies that serve them to achieve better outcomes from digital advertising campaigns. The patent pending technology allows advertisers to target consumers when real world events stimulate consumer interest, delivering high performing digital advertising campaigns from brand advertising to direct response.

 

Mobile advertising has proved challenging to both advertisers and media agencies. In a world where the majority of traffic comes from smartphones, a solution is urgently needed to address the challenge of capturing consumer intent in the moment. mporium is uniquely positioned to address this issue by leveraging a range of data inputs - including TV, news, sports and social media - to deliver sophisticated real-time bidding, timing and creative switching for digital advertising campaigns.

 

The technology has already been adopted by several market leading media agencies: Jellyfish, Essence and the7stars. Although the Company is based in the UK, the technology has been used to drive campaigns across the UK and Continental European markets, and management intend to expand across the global digital markets.

 

Based in the UK, mporium Group plc is quoted on AIM, the growth market of the London Stock Exchange plc.

 

www.mporium.com

 

 

Registration number: 8696120 (England and Wales)

 

 

 

 

 

mporium Group PLC

Financial Statements for the 6 months ended

30th June 2017

 

 

 

Company information for the 6 months ended 30 June 2017….........………………………………………………………....2

Directors' report for the 6 months ended 30 June 2017…..........................................................................3

Consolidated interim statement of total comprehensive income for the period ended 30 June 2017.......5

Consolidated interim statement of financial position as at 30 June 2017…………….....................................6

Consolidated interim statement of changes in equity for the period ended 30 June 2017........................7

Consolidated interim statement of cash flows for the period ended 30 June 2017...................................8

Notes to the consolidated interim financial statements .........................................................................9

 

 

Company information for the 6 months ended 30 June 2017

 

Directors:

N Walder - Non-Executive Chairman

 

B Moat - Chief Executive Officer

 

R J Gordon - Finance Director and Company Secretary

 

S Bjornstad - Non-Executive Director

A Casey - Non-Executive Director

 

 

Registered office:

106 New Bond Street

London

W1D 1DS

 

 

Registered number:

08696120

 

 

Statutory Auditors:

Grant Thornton UK LLP

Grant Thornton House

Melton Street

Euston Square

London

NW1 2EP

 

 

Nominated Advisor

and Broker

Nplus1 Singer Capital Markets Limited

One Bartholomew Lane

London

EC2N 2AX

 

 

Public Relations

Bell Pottinger

Holborn Gate

330 High Holborn

London

WC1V 7QD

 

Registrars

Capita Asset Services

34 Beckenham Road

Beckenham

Kent

BR3 4TU

 

 

Banker

Metro Bank

One Southampton Row

London

WC1B 5HA

 

 

Directors' report for the 6 months ended 30 June 2017

 

mporium Group PLC (AIM: MPM) ("mporium" or the "Company"), the technology company that delivers high performance advertising campaigns, today announces its results for the six months ended 30 June 2017.

Results Overview

Overall revenue during the period under review was £1,052,750 (2016: £870,473) and the loss from ordinary activities before taxation was £2,418,414 (2016: loss of £2,939,919). The loss per share was £0.01 (2016: loss of £0.01). The Group had cash reserves at the end of the half year of £1,641,643.

Business Review

The Company's revised product strategy has been responsible for driving improved performance in the period under review. Rollout of the Group's flagship IMPACT product accelerated significantly during H1 2017, building on the initial deployments in Q4 2016. The Group's Fast Web Media (FWM) business performed well, benefitting from a more targeted focus with improving revenues, clients and margins.

 

IMPACT has been engineered to operate as a performance overlay to the two principal digital advertising platforms: Google (Search) and Facebook (Social), delivering performance improvement for digital advertising campaigns. During the period under review, IMPACT has been significantly enhanced, delivering additional performance capabilities: these include new signal sources, advanced bid modification and creative switching functionality. These enhancements have provided increased commercial traction and further strengthened the product's market position.

 

The rollout of IMPACT to agencies and advertisers, which began in Q4 2016 with an agreement with Jellyfish, has accelerated throughout H1 2017, with agencies including Essence and the7stars adopting its use, the latter to great effect in winning Best Paid Search Campaign in The Drum Digital Trading Awards.

 

This commercial progress with leading agencies has provided further validation of mporium's route to market: working alongside industry leading media agencies allows us to achieve a leveraged sales model. This close relationship with agencies has also been critical in the product development cycle, ensuring that IMPACT enhancements are targeted at addressing the core needs of a rapidly growing market. These agency relationships were directly responsible for extending the use of IMPACT into several Continental European markets, a development that was not expected to take place until 2018.

 

The Group made substantial investment in staff during the period, particularly across Technology & Data Science and Sales & Account Management. These investments were targeted to correctly position the business for growth.

 

The Company has made significant progress against the Key Performance Indicators (KPIs) that were outlined in the 2016 Annual Report. The increase in advertising Spend Under Management (SUM) has been particularly significant. Refinement and measurement of these KPIs will continue to be monitored closely by the business over the coming quarters.

 

To support this continued investment, the Company raised £3.0 million (after expenses) through the placing and subscription of ordinary shares in March through an accelerated book build.

 

Board Changes

As announced today, after nearly two intensive years as Chairman throughout the company's crucial foundation phase, Nigel Walder is leaving the Board. Chief Executive Officer Barry Moat is taking the role of Executive Chairman, while Nelius De Groot is joining the Board as Chief Executive Officer after two years as Chief Operating Officer. All of these changes take place with immediate effect.

Richard Gordon, who provided essential continuity as Finance Director while mporium was established within the listing of a predecessor company, will be leaving at the end of September, to focus on other business interests. Succession planning is already underway.

Outlook

The market for IMPACT is vast, with global Digital Ad spend equating to $194bn in 2016. This figure is estimated by eMarketer to grow to $335bn by 2020, with most of this growth being driven by mobile advertising. mporium is well positioned to benefit from this growth and is poised for its IMPACT technology to be used across global markets. As was the case with the expansion into Continental Europe, the initial phases of this expansion will not require the addition of local staff. Ultimately, full monetisation of the expansion into global markets will naturally require the introduction of a limited number of local Sales and Account Management resources.

Advanced discussions with additional leading agencies regarding commercial arrangements are ongoing and the overall pipeline for mporium IMPACT is promising.

The Directors believe the progress and momentum generated to date will continue throughout 2017.

 

 

Consolidated Interim Statement of Total Comprehensive Income

for the 6 months ended 30 June 2017

 

Note

6 months to

30 June 2017
unaudited

6 months to 30 June 2016
unaudited

Year ended

31 December 2016

audited

 

 

£

£

£

Continuing operations

 

 

 

 

Revenue

4

1,052,750

870,473

1,824,108

Cost of sales

 

(78,796)

(154,778)

(318,731)

Gross profit

 

973,954

715,695

1,505,377

Administrative expenses

 

(3,391,243)

(3,648,134)

(6,310,785)

Operating loss

 

(2,417,289)

(2,932,439)

(4,805,408)

Financial income

 

621

2,508

4,612

Financial expense

 

(1,746)

(9,988)

(4,558)

Loss on ordinary activities before taxation

 

(2,418,414)

(2,939,919)

(4,805,354)

Taxation

 

-

-

626,848

Total loss

 

(2,418,414)

(2,939,919)

(4,178,506)

Other comprehensive loss for the period

 

 

 

 

Revaluation of investment which will subsequently be reclassified to profit and loss

6

(323,381)

269,023

283,601

Total comprehensive losses attributable to equity holders of the parent company

 

(2,741,795)

(2,670,896)

(3,894,905)

Basic and diluted loss per share for losses attributable to the owners of the parent during the period

7

(0.01)

(0.01)

(0.01)

 

 

 

The notes on pages 9 to 11 form part of these financial statements

Consolidated Interim Statement of Financial Position

as at 30 June 2017

 

Note

As at

30 June 2017

unaudited

As at

30 June 2016
unaudited

As at

31 December 2016
audited

 

 

£  

£  

£  

Non-current assets

 

 

 

 

Property, plant and equipment

 

351,111

326,006

345,936

Intangible assets

 

3,366,547

2,277,615

2,881,850

Investments

6

400,624

688,480

724,005

Total Non-current assets

 

4,118,284

3,292,101

3,951,791

 

 

 

 

 

Current assets

 

 

 

 

Trade and other receivables

 

1,596,540

1,574,547

1,696,752

Cash and cash equivalents

 

1,641,643

662,052

1,282,429

Total Current assets

 

3,238,183

2,236,599

2,979,181

 

 

 

 

 

Total assets

 

7,356,467

5,528,700

6,930,972

 

 

 

 

 

Current liabilities

 

 

 

 

Trade and other payables

 

(1,212,769)

(1,779,228)

(1,233,654)

Total Current liabilities

 

(1,212,769)

(1,779,228)

(1,233,654)

 

 

 

 

 

Total liabilities

 

(1,212,769)

(1,779,228)

(1,233,654)

 

 

 

 

 

Net assets

 

6,143,698

3,749,472

5,697,318

 

 

 

 

 

Shareholders' Equity

 

 

 

 

Share capital

 

2,672,692

2,351,049

2,571,027

Share premium

 

20,386,239

14,614,568

17,493,454

Share option reserve

 

1,926,120

2,136,763

1,854,505

Merger reserve

 

7,641,598

7,641,598

7,641,598

Retained earnings

 

(26,482,951)

(22,994,506)

(23,863,266)

Equity shareholders' funds

 

6,143,698

3,749,472

5,697,318

 

 

 

The notes on pages 9 to 11 form part of these financial statements

Consolidated Interim Statement of Changes in Equity

for the 6 months ended 30 June 2017

 

Retained

Share

Share

Share

Merger

Total

 

earnings

capital

premium

option

reserve

 

 

 

 

reserve

reserve

 

 

 

£

£

£

£

£

£

 

 

 

 

 

 

 

31 December 2015 - audited

(20,323,611)

2,350,663

14,614,568

1,889,558

7,641,598

6,172,776

Total loss for the year

(4,178,506)

-

-

-

-

(4,178,506)

Share-based payments

-

-

-

320,197

-

320,197

Transfer related to lapsed share

options

355,250

-

-

(355,250)

-

-

Share issue cost

-

-

(86,824)

-

-

(86,824)

Share issue during the year

-

220,364

2,965,710

-

-

3,186,074

Other comprehensive income -

revaluation of investment

283,601

-

-

-

-

283,601

31 December 2016 - audited

(23,863,266)

2,571,027

17,493,454

1,854,505

7,641,598

5,697,318

Comprehensive loss for the period

(2,418,414)

-

-

-

-

(2,418,414)

Share-based payments

-

-

-

193,725

-

193,725

Transfer related to lapsed share

options

 

122,110

 

-

 

-

 

(122,110)

 

-

 

-

Share issue during the year

-

101,665

2,948,285

-

-

3,049,950

Share issue cost

-

-

(55,500)

-

-

(55,500)

Other comprehensive income -

revaluation of investment

 

(323,381)

 

-

 

-

 

-

 

-

 

(323,381)

30th June 2017 - unaudited

(26,482,951)

2,672,692

20,386,239

1,926,120

7,641,598

6,143,698

               

 

 

 

The notes on pages 9 to 11 form part of these financial statements

Consolidated Interim Statement of Cash Flows

for the 6 months ended 30 June 2017

 

6 months to 30 June 2017
unaudited

6 months to 30 June 2016
unaudited

Year ended 31 December 2016

audited

 

£

£

£

Cash flows used in operating activities

 

 

 

Loss before taxation

(2,418,414)

(2,939,919)

(4,805,354)

Adjustments for:

 

 

 

Depreciation of property, plant and equipment

89,800

67,183

144,403

Amortisation of intangible assets

449,179

125,000

312,749

Impairment of intangible assets

-

575,250

575,250

Loss on sale of intangible assets

-

10,500

-

Share based payment expense

193,724

247,206

320,197

Write-off of intercompany receivable

-

-

-

Financial income 

(621)

(2,508)

(4,612)

Financial expense

1,746

9,988

4,558

Dividend

-

-

-

Cash flows from operating activities before changes in working capital

(1,684,585)

(1,907,300)

(3,452,809)

 

 

 

 

Decrease/(increase) in trade and other receivables

125,754

(2,058,444)

(11,751)

Increase /(decrease) in trade and other payables

(70,536)

2,257,238

(730,916)

Cash used in operations

(1,629,368)

(1,708,506)

(742,667)

Income taxes received

24,109

-

900,528

Net cash used in operating activities

(1,605,259)

(1,708,506)

(3,294,948))

 

 

 

 

Cash flows used in investing activities

 

 

 

Interest received

621

2,508

4,612

Investment

-

-

(20,947)

Purchase of intangible assets

(933,877)

(298,872)

(1,080,356)

Purchase of property, plant and equipment

(94,976)

(58,794)

(155,942)

Net cash used in investing activities

(1,028,232)

(355,158)

(1,252,633)

Cash flows from financing activities

 

 

 

Interest paid

(1,745)

(9,988)

(4,558)

Issue of share capital

3,049,950

386

3,186,074

Issue cost of share

(55,500)

-

(86,824)

Net cash generated from financing activities

2,992,705

(9,602)

3,094,602

 

 

 

 

Net increase/(decrease) in cash and cash equivalents

359,214

(2,073,266)

(1,452,889)

Cash and cash equivalents at start of period

1,282,429

2,735,318

2,735,318

Cash and cash equivalents at end of period

1,641,643

662,052

1,282,429

 

 

The notes on pages 9 to 11 form part of these financial statements

Notes to the consolidated interim financial statements

 

1   Basis of preparation

The interim condensed consolidated financial statements are the unaudited Consolidated Financial Statements of mporium Group plc, for the six months ended 30 June 2017. This non-statutory interim statement has been prepared on a basis consistent with that used in the preparation of the annual accounts, which are prepared under International Financial Reporting Standards as adopted by the EU ("IFRS"). They do not include all of the information required in annual financial statements in accordance with IFRS.

The interim financial statements were approved by the Board on 24 August 2017. The financial information set out in this interim report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The financial statements have been prepared under the historical cost convention and the consolidated financial statements incorporate the financial statements of the Company and its subsidiary companies.

The comparative figures for the year ended 31 December 2016 were derived from the statutory accounts for that year which have been delivered to the Registrar of Companies. Those accounts received an unqualified audit report which did not contain statements under sections 498(2) or (3) (accounting record or returns inadequate, accounts not agreeing with records and returns or failure to obtain necessary information and explanations) of the Companies Act 2006.

2   Significant accounting policies

The principal accounting policies and presentation followed in the preparation of this interim report have been consistently applied to all periods in these financial statements and are the same as those applied in the Group's annual accounts for the year ended 31 December 2016. The accounts for the Group can be obtained from the company's website.

3   Critical accounting judgements and key estimation of uncertainty

The preparation of financial statements in conforming with adopted IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimates and assumptions are based on historical experience and other factors considered reasonable at the time, but actual results may differ from those estimates. Revisions to these estimates are made in the period in which they are recognised. The critical accounting judgements made in preparing this interim report are the same as those in preparing the annual accounts for the Group for the year ended 31 December 2016 which can be obtained from the company's website.

4   Business segments

         The mporium Group plc's operations are centred on providing software and supporting services. Management therefore considers there to be one reporting segment covering the entire Group.

A supplementary analysis of revenue is as follows:    

 

 

6 months to 30 June 2017
unaudited

6 months to 30 June 2016 unaudited

Year ended 31 December 2016

audited

 

£

£

£

 

 

 

 

Technology & Other Recurring Revenue

925,027

508,982

1,223,599

Upsold Project Fees to Existing Clients

127,723

361,491

600,509

 

1,052,750

870,473

1,824,108

               

 

 

Notes to the consolidated interim financial statements
continued
 

5   Staff numbers

The average number of persons employed by the mporium Group during the period including executive directors is analysed below:

 

6 months to 30 June 2017
unaudited

6 months to 30 June 2016
unaudited

Year ended 31 December 2016

audited

Directors

5

                  6

5

Administration

5

                  4

4

Technology & Data Science

15

10

11

Analytics, Search & Marketing

12

11

12

Product & Project Management

6

3

4

Sales & Account Management

14

8

11

 

57

42

47

 

6   Investments

On 8 June 2015, the Company entered into a share swap agreement with Cxense ASA, the Norwegian specialists in data management and personalized online experiences, to license Cxense's technology.

 

The equity securities are denominated in NOK and are publicly traded in Norway. Fair values of this investment have been estimated by reference to quoted bid prices in active markets at the reporting date and are categorised within Level 1 of the fair value hierarchy. On the 27 July 2016, the business acquired 1,936 additional shares as part of a fundraise. A loss of £323,381 to reflect the movement in market value was recognised in other comprehensive income.

 

        

6 months to 30 June 2017
unaudited

6 months to 30 June 2016
unaudited

Year ended 31 December 2016

audited

 

£

£

£

Number of shares

53,113

51,177

53,113

Share price Norwegian Krona

82

150

145

FX NOK/£

10.87

11.15

10.64

Fair value

400,624

688,480

724,005

Revaluation recognised in consolidated

statement of income

 

(323,381)

 

269,023

 

283,601

 

7   Loss per share

 

6 months to 30 June 2017
unaudited

6 months to 30 June 2016
unaudited

Year ended 31 December 2016

audited

 

£

£

£

 

 

 

 

Loss for the period

(2,418,414)

(2,939,919)

(4,178,506)

Deemed average ordinary shares

 

 

 

in issue during the period

534,538,406

470,206,403

489,348,567

Loss per share

(0.01)

(0.01)

(0.01)

Deemed average ordinary shares are used due to the application of merger accounting.

 

8   Interim Report

The Group's interim report will be available from the Company's registered office and on the Company's website www.mporium.com.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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