TIDMBBSN
RNS Number : 0999U
Brave Bison Group PLC
27 March 2019
27 March 2019
Brave Bison Group plc
("Brave Bison" or "the Group" or "the Company")
Full year results for the twelve months ended 31 December
2018
Brave Bison Group plc (AIM: BBSN), the social video company
today announces its audited full year results for the twelve months
ended 31 December 2018.
2018 Highlights
Financial Highlights
-- 19% increase in revenue to GBP21.2 million (2017: GBP17.8
million(1) ), driven by growth in Facebook platform advertising,
in line with 2018 strategy
-- Gross profit has increased in absolute terms, by 33% to
GBP6.5 million (2017: GBP4.9 million) as a result of the
increase in revenue and margin mix
-- Maiden adjusted EBITDA(2) of GBP0.8 million (2017: GBP0.9
million loss)
-- Operating cash inflow for the first time - cash inflow
from operating activities of GBP0.9 million (2017: cash
outflow of GBP1.5 million) and the Group had GBP5.4 million
of cash at the year end
Operational Highlights
-- Secured multiple new brands and retained and expanded existing
customer relationships across APAC and UK
-- Ranked as the '7th Biggest Media and Entertainment Publisher
in the World 2018' by Tubular Labs Video Aces Award for
digital publishers
-- Ended 2018 as biggest Facebook publisher globally based
on views and has the single biggest page on Facebook in
Viral Trnd
-- Won the Digiday Award for best branded content campaign
for SEGA's Football Manager on Slash Football
-- Launched two new cross-platform channels, Mutha and Perk,
across a range of social channels
-- Partnership with United Nations Environment Programme secured
for Mutha
-- Grew APAC teams following appointment of new General Manager
APAC - new hires in Indonesia and South Korea
-- Featured in the London Stock Exchange's 1,000 Companies
to Inspire Britain report
Post Period
-- Top Facebook page in the world, Viral Trnd, re-branding
to V Trnd, to create a viable home for branded content
and dotcom launching in April
-- Miaow channel re-launched on Facebook
-- Engaged Ingenuity, a lead generation and marketing company
to drive new business in 2019 and beyond
-- BBC Instagram campaign won for 'Body Positive' season
-- Appointment of new Commercial Director, Brian Murnin -
ex Vice and Warner Music
-- APAC content wins include multiple Lego productions, Jaguar
Landrover projects and new work for SK-II in Japan
1. Revenues restated as a result of the adoption of IFRS 15
("Revenues from Contracts with Customers"), see Note 2.3.
2. Adjusted EBITDA excludes restructuring costs and share-based payments
Claire Hungate, Chief Executive Officer, commented:
"2018 has been a transformative year for Brave Bison in terms of
our financial results, our market positioning, and the value we
have created for shareholders. I am delighted with what we achieved
in the year, particularly becoming adjusted EBITDA positive and
Tubular Labs listing us as the biggest publisher on Facebook based
on views. Looking ahead, while there are challenges of running a
digital media business, there are also a lot of opportunities to
capitalise on, in a world increasingly dominated by social media
and video content."
For further information please contact:
Brave Bison Group plc
Jack Bates, Communications Manager
Email: jackbates@bravebison.io
Allenby Capital Limited - AIM Nominated Adviser and Broker
Jeremy Porter / Asha Chotai
Tel: 020 3328 5656
Newgate Communications
Elisabeth Cowell / Robin Tozer/ Fiona Norman
bravebison@newgatecomms.com
Tel: 020 3757 6880
About Brave Bison:
Brave Bison is a social video company, proudly working with some
of the biggest brands and most followed YouTube and Facebook talent
in the world. Clients include P&G, Shell, PUMA and Hyundai.
Brave Bison makes it simple for content owners, creators,
brands, publishers and platforms to unlock the value of online
video, whether on a licensed, ad-funded, direct to consumer or paid
placement basis.
The business is based in two regions - Europe, with headquarters
in London; and APAC, with offices in Singapore.
Chairman's Report
For the first time in the Company's history, Brave Bison became
adjusted EBITDA positive in 2018. It is always dangerous to claim
that a corner has been turned, but I think we are entitled to
express a degree of cautious optimism about the future.
Significant revenue growth via our Facebook channels, a solid
performance from our APAC team and tight cost control all
contributed to a turnaround from an adjusted EBITDA loss of GBP0.9
million in 2017 to positive adjusted EBITDA of GBP0.8 million for
the year we now report on.
Whilst we remain optimistic about the years ahead, last year's
statement ended with a warning that the business we are in, whilst
providing growth and plenty of opportunity, was quite
unpredictable. This remains the case but the management and staff
deserve credit for managing this uncertainty in 2018 and we look
forward to even greater stability and a more promising future.
Our strategy of owning channels continued in 2018 with the
launch of Mutha and Perk. These are both underway and we have
started to see some interest from brands and organisations alike.
Mutha is focused on the environment and sustainability and has
already secured the involvement of the United Nations. Perk is
focused on career paths and jobs for young people.
We have been focused on YouTube partnerships, which mostly
involve channel management for leading brands. Our partnership with
golf's PGA Tour has recently been renewed following significant
growth in YouTube subscribers and views. Client wins in 2018
include golf's European Tour and Hewlett Packard. Significant UK
branded content deals include Marriot Courtyard and Puma, both on
our Slash Football YouTube channel. Our licensing business has
grown as a result of deals with Sky Q, Tencent and Snapchat.
The APAC region, which is centred in Singapore, produced another
year of solid results ending the year with some good branded
content contract wins with Lego and All Nippon Airlines as well as
a contract renewal with SK-II, a luxury beauty brand owned by
Procter & Gamble. The region has significant further growth
potential.
We have been focused on growing other new revenue streams within
our company. We are in the top 10 of Global Digital Media
Publishers according to Tubular Labs and revenue from Facebook is
the most significant contributor to the top line. Viral Trnd, is
the biggest Facebook channel in the world in terms of views.
Although, this is a great strength it is also a challenge in its
unpredictability. A major aspect of our strategy, as illustrated
above, is to focus on growing other revenue streams from businesses
we have greater influence over.
In the year ahead, we will continue to grow and reshape the
business with the confidence of having both more cash in the bank
at the end of the year than we started with, and remaining debt
free. I would like to thank our shareholders for their continued
support.
Sir Robin Miller
Chairman, Brave Bison Group plc
CEO's Report
2018 has been a game-changing year for Brave Bison, both in
terms of our financial results, our trade market positioning and
the value we have created for shareholders.
It has been a year of highlights and firsts; the first year
Brave Bison has declared a positive adjusted EBITDA or been
operating cashflow generative; the first year Brave Bison has been
able to call itself the biggest publisher on Facebook or to say we
have the single biggest page on Facebook in Viral Trnd, and the
first year we have won a Digiday award for our creative campaign
content. We have also launched two new cross-platform channels,
expanded our APAC office, undertaken business in China and Japan
and been featured in the London Stock Exchange's 1,000 Companies to
Inspire Britain report.
With revenue at GBP21.2 million we have achieved a 19% year on
year revenue growth, a 31% gross margin, up from 27% in 2017 and a
positive adjusted EBITDA of GBP0.8 million. This demonstrates the
positive impact that our refined and expanding offering, revolving
around the three pillars of Strategy, Origination and Distribution,
has delivered.
All that said, there is still a lot to do; for instance, the
skew of advertising revenue to fee-based services revenue is higher
than I would like and it is my intention to address that in the
year ahead. But in the fifteen months from me joining Brave Bison
and the close of 2018 we have achieved a lot. Looking ahead, there
are the challenges of running a digital media business but also a
lot more opportunity to capitalise on, in a world dominated by
social media and video content.
The Market Opportunity
As a social video studio which creates value through finding,
building and engaging on-line audiences globally, digital
penetration is of huge importance. In 2019 57% of the world's
population are using the internet, 45% of the world's population
are using social media, 67% have mobile phones and 42% are using
social media on their mobile phone*. These numbers are all up on
2018.
According to Cisco, Smartphones will account for 44% of total
internet traffic by 2022, up from 18% in 2017 and video will
account for 80% of all web traffic by 2019, up from 64% in 2014.
And wherever eye-balls go - ad revenue follows.
According to WARC, global ad growth will ease to 4.3% in 2019,
compared to a 5.4% rise in 2018 (the strongest since 2011). This
will push the value of global ad trade to over US$616 billion in
2019.
The Internet is the driving force in global advertising growth,
with the vast majority of online trade now automated. Ancillary
research by Zenith shows that programmatic buys will rise to
account for almost two-thirds of online display ad-spend this year.
This is in addition to paid search and social media, which are
programmatic by design.
The ease of ad buying is, in part, a driver for an expected
12.1% rise in internet ad-spend in 2019, to $287.4 billion
worldwide. This would give internet a 46.7% share of media spend
globally, but in the US - the world's largest ad market - internet
is expected to account for over half of all media spend for the
first time.
Facebook and Google's ad income is forecast to rise 22.0% to
US$176.5 billion in 2019, or 61.4% of global internet ad spend;
it's gratifying to know we have built our audiences in the right
place and our investment (cited in last year's report) in Facebook
was correct.
*Hootsuite - Digital Media Report 2019
Our Business
Think Digital first. Social first. Video first. Audience first.
That is our sweet spot.
As a social video studio, we find, build and engage audiences,
making them opt-in to watching, sharing and discussing content in a
world where we are saturated by it and opting out is all too
easy.
Our model is part creative and production agency, part media
owner, part strategic consultant. We are a distributed content
business, building brands and creating content that travel across
platforms and channels. This gives our business model and pipeline
fault tolerance and a diverse revenue stream.
We have two main revenue streams, advertising and fee-based
services:
Advertising revenue
-- Advertising revenue from our own portfolio of channels and
owned and operated web sites and across third party channels we
manage for our clients
Fee-based services
-- Fees for consultancy services around social media strategy,
content creation and audience development
-- Fees for content creation, be that from brands or other
clients for social video content or from platforms for more
narratively driven content
-- Licence fees from licensing our own and third-party content
to publishers, broadcast services, production companies and
advertising agencies
Moving forward, we plan to further diversify our revenue streams
by charging distribution fees to clients who wish to utilise our
powerful owned and operated ("O+O") distribution network and by
selling merchandise and products direct to consumers.
Rebel FC
It was a fascinating first full year for our You Tube football
team Rebel FC, in which we own a 30% stake. Brave Bison represents
the commercial rights in Rebel FC and we closed deals with Under
Armour for kit and Utilita for front of shirt sponsorship.
Post period end, Rebel FC has announced a Rebel FC e-sports
venture, signing top players Tom Stokes and Tom Painter. They've
also hosted their first Rebel football skills academy for young
players. Rebel FC has strong brand equity and we will be leveraging
this and selling Rebel FC merchandise in the near future. I look
forward to providing further updates on this.
The creator football space is still in its infancy and we shall
wait to see how it progresses, but we are pleased to have our
foothold in the market with a quality offering like Rebel FC
together with Calfreezy (Callum Airey).
APAC
APAC continues to be an exciting region for Brave Bison; a
region where we can find exponential growth largely from our
creative production services but also more generally from our
social video services. In last year's statement I said we would
invest in APAC and that investment is paying off.
In February 2018, we brought in a new General Manager, Caroline
Troman, who has a background in digital sales and digital media,
having worked at Yahoo and AOL. Her challenge was both to diversify
the revenue streams for the APAC office and to extend our customer
base as we had become overly dependent on a number of large
clients, which had a tendency to make our revenue 'lumpy'.
Not only has our APAC office succeeded in finding new revenue
streams, having signed distribution deals with Tencent in China and
Oona in Indonesia, but they have also successfully won new retained
clients in LEGO and others and doubled down on existing clients
like P&G's luxury beauty brand SK-II and Japanese airline All
Nippon Airlines. The team have also won new clients such as Accor
Hotels, Jaguar Landrover and Hewlett Packard.
In order to service these clients to the required standard and
take advantage of the opportunities, we have significantly
increased the size of the team here, putting people on the ground
in Indonesia and South Korea. For 2019 we are looking at new
territories: Japan, China, Thailand - all fascinating growth
opportunities.
Our one P&L approach enables us to work across territories
and exercise flexibility and agility in servicing clients who have
needs in multiple regions; as their businesses change, so can we.
APAC continues to be an advertising hot spot.
At Ad Week Asia in May 2018, we announced a partnership with
News Corp-owned Unruly, a data driven video marketplace. We can now
offer clients a strategic end-to-end service in the APAC region
covering both social media distribution and publisher distribution.
Both Brave Bison and Unruly share a vision for advocating
audience-first brand storytelling via engaging creative video
content that users choose to watch and share. This partnership has
already borne fruit in Singapore and is soon to be tested in the
South Korean market.
Developing greater in-house production capability is a 2019
priority for our APAC business.
UK Operations
Social Platforms and Owned & Operated
The UK branded content or social video space is crowded and
competitive. We firmly believe it will be won by those who can
balance data-driven, audience-first creativity with strategic
distribution.
Our channels provide a targeted, quality and brand-safe audience
for advertisers. New channel launches are never straightforward and
we were particularly ambitious in launching Mutha and Perk across
multiple platforms (Instagram, You Tube, Facebook and
Snapchat).
The reception from brands and agencies has been positive and our
partnership with the United Nations on Mutha is a strong
endorsement of our mission. It will take a while longer to build an
audience that is material enough to interest brands and that was
always part of the business plan. However, we also believe in
smaller but highly engaged communities built around passion points;
brand loyalty from these audiences is highly valuable.
Brave Bison prides itself in being audience experts and our
increasing success is testament to our focus on putting the
audience first, rather than the concept. Our belief is that blindly
placing paid media behind social video campaigns is ineffective.
Brave Bison's sell is around organic views - building an audience
which watches and shares content because it is genuinely engaged by
it, on channels where they want to be part of the community.
Having built some huge channels on Facebook, we now need to
develop and hone our portfolio to ensure that each of them have a
strong base of fans and followers which are engaged and passionate
enough to matter to brands. This is a major project for us and will
be key to securing more branded content sales in 2019 and beyond.
We have started with Viral Trnd, which we are re-branding to V Trnd
and we are launching a website to complement the brand. Pushing to
a website enables us to take that huge audience to a platform where
we actually own the audience and the data on that audience as well
as the ad inventory, so we will be able to serve that audience
products and services that might interest them. Other channel
re-brands will follow and this O&O portfolio will be at the
centre of our offering to brands, agencies and platforms, as well
as being a gateway to direct to consumer sales.
We have made personnel investments in research, strategy and
insights in 2018 and that has added real depth and value to our
brand offering. In 2019 we will be investing more in data analysis,
using the rich audience data we have access to and the data we will
create via our web sites.
Our Commercial Director left half way through 2018 and we hired
a new one at the start of January 2019. Undoubtedly this has
adversely affected our growth in this area but our new hire, Brian
Murnin, is already making an impact on our business and I have
faith in his ability to contribute meaningfully to Brave Bison's
business going forward.
YouTube
Our YouTube network, though much smaller than when we were a
multi-channel network ("MCN"), is now building nicely. This is due
to our advanced skills in developing audiences and our business
outreach to sign new channels. Both these initiatives are key parts
of our YouTube growth plan. Our reputation as YouTube channel
growth experts is building and as we are able to circulate
successful case studies, such as the PGA Tour, we are able to reach
out to new clients.
Sports federations have been particularly successful for us; PGA
Tour was renewed post period end, with services extended into
Facebook and a two year contract. We also signed the European Tour
during the period and have helped drive increases in views and
followers. Significant channel signings in 2018 include specialist
sports reporting agency Hayters Teamwork and World Chase Tag.
Alongside these new signings, Brave Bison has helped build the
biggest Grime You Tube network in the world with the combined
numbers of Link Up TV, Press Play and P110. Other clients include
Alofoke Play, the leading Latino Urban Music group created to
target young latino diaspora throughout the U.S., Caribbean, South
America & Europe and Ethiopian movie and TV channel Sodere.
Facebook
In last year's report I referenced our burgeoning Facebook
network and the new revenue stream offered to us by Facebook 'Ad
Breaks' monetisation. The strategy of building this network of
channels and optimising them to benefit from Ad Breaks has proved
fruitful and in December 2018 we sat as the biggest publisher on
Facebook in terms of views at 5.4 billion, beating the newly
combined LadBible and Unilad at 4.8 billion views (source: Tubular
Labs - Media and Entertainment properties).
We also have the single biggest Facebook page in the world in
Viral Trnd, the home of trending content on-line. Our portfolio of
owned and operated channels has increased from 11 pages in my
report this time last year to 20 today. Those channels span DIY,
entertainment, food, arts, to our newly launched Mutha (Fashion,
Food, Travel, Fitness, Lifestyle and Beauty through the lense of
sustainable and conscious living) and Perk (work and careers for
Gen Z). As I have referenced elsewhere, we will continue to grow
our Facebook network and build on the audiences we have established
and are engaging and the communities we have built in 2018. Ad
Breaks have been and will continue to be a hugely important source
of revenue and cash generation for us.
We will be launching new channels in 2019 and growing our
existing channels. We will also be diversifying our revenue from
the audiences we have built on Facebook by developing a Viral Trnd
website where we will direct traffic from many of our sites. That
will be a truly owned audience where we can collect and analyse
data, own 100% of the ad revenue and potentially create other
commercial opportunities for that audience; selling products,
events, even podcasts and other media services.
Reports about Facebook's demise are inaccurate; Facebook is
still the biggest and most valuable social network on the planet
and that isn't changing any time soon. But of course, recent events
will have some impact on the Company's operations and direction of
travel. However, as a material partner we are in a position to know
and understand any changes before they impact our business and we
are constantly changing and developing to meet the demands of our
partners. Should Facebook's business model change, we will adapt to
change with it. The key to our success in this market is
understanding and being close to platforms, understanding the
audiences that inhabit those platforms and seeing the commercial
opportunities ahead of time.
Additionally, we are now offering our Facebook monetisation and
growth building services to third parties. Growing the biggest
Facebook network in the world in less than 12 months is a big
achievement and one the market is hard pushed to ignore. Thus, we
have signed legendary YouTuber KSI as a Facebook partner and have
extended our channel management service offering to the PGA to
encompass Facebook as well. Some of these relationships will be fee
based and some will be on a shared advertising revenue model but
all offer additional pipeline revenue opportunities.
Other platform growth
Brave Bison's platform growth has always been driven by
monetisation opportunities. As those opportunities materialise and
develop so we strategically grow our presence. Snapchat was a new
venture for us in 2018; we launched Mutha and Perk Shows on
Snapchat's 'Discover' page, part of Snapchat's strategy to bring
more UK creators and UK content to the site. As a platform
entertaining 90% of UK social network users aged 18-24, it was
important for us to have a presence to showcase the Mutha and Perk
brands.
Instagram will be a focus for us in 2019. We have a burgeoning
presence on the platform but we will be super-charging this, moving
our bigger brands on to the Instagram platform and growing
audiences around them. The opportunity here is both around our
brand work and distribution of branded content campaigns but also
advertising revenue, which we expect to launch in some form on the
platform this year. Additionally, as an expert in engaging and
marketing to Gen Z and Millennial audiences, Instagram is a prime
platform.
Needless to say we are in conversations with numerous other
platforms and it's always our intention to be a leader in the
industry in this regard.
Licensing, Distribution & Production
With a background in intellectual property ("IP") production and
exploitation I was always going to push the agenda for distribution
of our owned IP and media brands. Developing our owned and operated
brand portfolio will also drive our distribution business, giving
us known consumer brands under which to distribute our content to
new platforms and services. Our policy of owning the IP in the
content we produce has really paid off and enables us flexibility
with our licensing and distribution as well as an ability to fully
leverage our brand deals. Our deal with Tencent was ground breaking
and our relationship with them continues to expand into interesting
territory. Distribution globally is a rich source of revenue and
relationships for us going forward and we will continue to
challenge ourselves in this regard.
We will also continue to grow our investment in our licensing
business. I referred in last year's statement to the historical
Viral Spiral licensing business. It's now re branded Viral Vault
and performed as forecast this year. We believe that with further
investment we can unlock new partners and markets with this
business, at a time when so many platforms are dependent on and
driven by video content. This is particularly interesting at time
when producing original content is outside the budget and business
model of many digital publishers and brands.
Two years ago we were a company who aspired to create content.
We are now a fully-fledged IP owning production and distribution
studio which can provide an end-to-end data driven strategic
solution for a brand or platform. We are in some interesting
commissioned production conversations currently and we will
continue to develop this area of the business. Moving up the value
chain by creating premium content which drives audiences is a key
part of our evolution and our understanding of younger audiences
(how, when and why they consume content for instance) gives us a
head start in this regard. Most linear TV networks have given up on
the younger audiences but we know where to find them and how to
engage them in discussion and move them around digital
platforms.
Marketing & PR
Marketing and PR have been a major emphasis for Brave Bison in
2018 and will continue to be so through 2019 and beyond. With a
name change (from Rightster to Brave Bison) such recent history, we
were having difficulty with brand awareness and in such a crowded
market, visibility and brand equity are key. Last year saw us
sponsoring Ad Week Europe and Ad Week Asia, Spikes in Asia, Futur
in Singapore, and speaking at IBC in Amsterdam, and Luxe in London
among others. We've also been building our LinkedIn network and now
stand at almost 18,000 followers; LinkedIn is an effective
communication method for us both with our shareholders and with the
trade marketplace. It is also increasingly effective for
recruitment. In 2019 we'll be building on these efforts with more
conferences and more investment in video for our corporate social
pages and more thought pieces to talk as much about how we do
things and what we believe in, as what we do.
The Future/What's next
Rightster was a company built on bespoke technology. That
technology became outmoded and investment and development were
unable to keep up with market demand or competition. However, we
still have an understanding of where technology can give us an edge
at our core. In the Uploader (our bespoke and unique You Tube
upload software) we have a piece of software that offers utility to
our clients; it cuts the time they will need to spend uploading
content to You Tube. We are now building tools that will
automatically sift through content at scale and advise on
optimisation, firstly on You Tube, but latterly on other platforms.
This will enable us to deliver huge value to our existing and
future clients at scale and almost instantaneously.
As we move toward an owned audience model, we will have more
access to more meaningful data about our audiences. In 2019 we will
be investing more in analysing this data, both in order to inform
our investment and creative production decisions but also in order
to inform our clients' spending decisions. With data comes insight
and performance is another important aspect to add to our existing
focus on Strategy - Origination - Distribution; we must constantly
be measuring performance and iterating strategy and insight to
optimise our. work.
As a player in the distributed media space we must develop and
brand our portfolio of owned and operated channels to ensure that
they represent engaging consumer facing brands fit for a digital
world. We will be investing in new channels, across platforms in
new verticals. This extends our reach from social platforms to
owned websites and gives us real ownership of audiences and is
central to most of our products and strategy moving forwards;
branded content, distribution, channel management services,
commissioned content production, licensing and ecommerce and
merchandising.
We will be experimenting further with our direct-to-consumer
offering; this could be ecommerce, podcasting and/or merchandising.
Whichever it is, we are certain that we must take full advantage of
our huge reach with consumers; six billion views a month is a good
starting point for a direct-to-consumer marketing campaign.
Our media inventory is gaining scale and becoming more
interesting to advertisers, especially with the launch of our web
sites. This allows us the opportunity to re-think this part of our
business which we stopped selling ourselves a couple of years ago.
We are strategically reviewing our media and inventory sales
potential with expert advice but, as Facebook begins to open up ad
sales to partners, this must be an opportunity.
Summary of strategy
In conclusion, as a distributed media company we must develop
and brand our portfolio of owned and operated channels to ensure
that they represent engaging consumer facing brands fit for a
digital world. This expertise in building and engaging audiences is
at the centre of everything we do, the service we offer clients and
the way we drive revenue. As well as honing existing brands we will
be investing in new channels, across platforms in new verticals.
This extends our reach from social platforms to owned websites and
gives us real ownership of audiences, IP and ad inventory and is
central to most of our products and strategy moving forwards;
creative & production services, branded content, distribution,
channel management services, commissioned content production,
licensing, distribution, media/inventory, ecommerce and
merchandising. Layered over this we will be looking at growth in
the APAC region and other territories where we see organic growth
opportunities. I've always said that in order to find material
growth in this market we will need to look at acquisitions or joint
ventures or partnerships and this also is firmly on the road map
for 2019.
CSR
We will continue to pursue our 'content with purpose' mission.
It is important to Brave Bison, our employees, our shareholders and
stakeholders that we take our obligation to contribute something
positive to the world and to society seriously. Our CSR work, our
signature of the UN Global Compact, our work with and for the UN,
our channels Perk, Mutha and Slash Football, all show our
commitment in this regard.
I also wanted to take this opportunity to update you on my
commitment to more gender equality across the Company, as
referenced in last year's CEO statement. I'm happy to report that
our gender balance has improved significantly which is pleasing and
I have no doubt we will see the benefit of such balance in our
company performance. I would like to thank the team for their hard
work in delivering the performance we have delivered this year.
A remarkable year, but there is lots still to achieve; the team
and I are looking forward to the tackling the challenges and
exploiting the opportunities ahead of us.
Claire Hungate
Chief Executive Officer, Brave Bison Group plc
CFO's Report
Trading Results
Revenue increased by 19% to GBP21.2 million (2017: GBP17.8
million), the growth driven by platform advertising from its owned
and operated channels. 2017 revenues have been restated as a result
of the adoption of IFRS15 "Revenues from Contracts with Customers",
(see Note 2.3). This adjustment is a gross up of revenue and cost
of sales and does not impact operating profit or taxation.
The Group continues to carry out, as its primary activity, the
monetisation of online video content which, can be sub-divided into
two main underlying revenue streams, namely Advertising and Fee
Based Services.
Advertising revenue increased by GBP5.3 million to GBP17.8
million (2017: GBP12.5 million). This is despite a GBP1.6 million
decline due to ceasing a low margin revenue product in the first
quarter of 2017. The advertising growth has primarily been from
Facebook platform advertising as a result of a significant increase
in views across our portfolio of 20 owned and operated social media
communities. Brave Bison's properties, including Slash Football,
Viral Vault, Rebel FC, Canvas, Viral Trnd and Superviral TV, reach
over 1 billion people a week. According to the global leaderboard
of "Most Views by Media and Entertainment Properties" produced by
Tubular Labs, the leading global video measurement and analytics
platform, Brave Bison was in the Top 10 of Global Media Publishers
in 2018. Facebook continues to experiment with video content
resulting in algorithm changes and Brave Bison will adapt to
experiment alongside them. We are continually reviewing
monetisation opportunities and invest accordingly.
Fee Based Services revenue decreased by GBP1.9 million to GBP3.4
million (2017: GBP5.3 million). This is partly due the loss of a
significant contract with a major Hollywood movie studio that ended
in Q1 2017. Branded content revenues were also down year-on-year in
APAC and UK, although the APAC business has performed well since Q3
2018 following the recruitment of a new General Manager and has a
strong sales pipeline for 2019. These fee based revenue declines
have been partly offset by growth in consultancy fees for audience
development and rights management services from clients such as
Shell and Hewlett Packard.
Gross profit has increased in absolute terms, by 33% or GBP1.6
million to GBP6.5 million (2017: GBP4.9 million) as a result of the
increase in revenue and margin mix. Advertising gross profit
increased by GBP2.2 million to GBP4.7 million (2017: GBP2.5
million) primarily due to growth in Facebook revenue with a 2018
gross margin of 26% (2017: 20%). Fee based services gross profit
decreased by GBP0.6 million to GBP1.8 million (2017: GBP2.3
million) as result of the revenue reduction with a 2018 gross
margin of 53% (2017: 44%). This increase in gross margin
percentages is due to growth in our owned and operating channels
leading to an increased share of advertising revenues and providing
higher value fee based services such as consulting to brands around
social media strategy and audience development.
Operating loss has improved significantly having been reduced to
GBP0.1 million in 2018 from GBP4.9 million in 2017. This is due to
a GBP1.6 million increase in gross profit, a GBP2.1 million
decrease in administrative expenses to GBP6.6 million (2017: GBP8.7
million) and a GBP1.1 million reduction in restructuring costs to
GBP28,000 credit (2017: GBP1.0 million). The GBP2.1 million
decrease in administrative expenses was primarily due to a
reduction in amortisation of intangible assets.
Headcount at year-end including contractors has increased by 13%
to 62 (2017: 55). This is as a result of investment in our owned
and operated channels, business development in the UK and expansion
in our APAC office.
The Group has offices in London (to service the EMEA region) and
Singapore (to service the APAC region) and has a dedicated studio
space, Yellowstone Studios in London, enabling us to create more
content, more quickly and much more cost-effectively.
The Group stock option charge for the year was GBP0.2 million
(2017: GBP0.2 million credit). The 2017 credit was due to the
number of senior management leavers. The Group will continue to use
stock options as a means of incentivising and retaining key talent
going forward. In November 2017 a new long-term share incentive
plan was adopted in replacement of the Company's existing share
option scheme.
Restructuring costs associated with headcount decreases,
departure of senior management, closure of foreign offices and
associated legal costs is GBPnil (2017: GBP1.0 million charge).
Adjusted EBITDA (excluding restructuring costs and share-based
payments) increased by GBP1.7 million to GBP0.8 million (2017:
GBP0.9 million loss).
The Loss before tax for the year was GBP0.1 million versus a
GBP17.2 million loss for the prior year. This consists of the
following main items:
2018 2017
GBP000's GBP000's
Adjusted EBITDA 802 (907)
Restructuring costs - (1,049)
Equity settled share based payments (204) 209
-------- --------
EBITDA 598 (1,747)
Finance costs - (38)
Finance income 28 -
Impairment charge - (12,181)
Depreciation (80) (121)
Amortisation (649) (3,070)
-------- --------
Loss before tax (103) (17,157)
Impairment charge of GBPnil million (2017: GBP12.2 million) is
from the impairment of technology and customer relationship
intangible assets. The technology software assets were deemed to be
obsolete and so had no value resulting in a GBP1.6 million
impairment charge. Customer relationship intangible assets were
impaired due to declining licensing revenues (from Viral Management
Ltd acquisition) and a continuing decrease in platform revenues
(from Base 79 Ltd acquisition) resulting in a GBP10.6 million
impairment charge.
Acquisitions
The Group made no acquisitions in 2018 but will be actively
seeking out acquisitions and other partnership opportunities in
2019.
Statement of Financial Position
The Group ended the year with GBP5.4 million in cash and cash
equivalents (2017: GBP4.8 million) and no overdraft or other
borrowings. The Group generated GBP0.5 million in cash and cash
equivalents in 2018 (2017: GBP2.2 million outflow) as result of
GBP0.9 million cash inflow from operating activities (2017: GBP1.5
million outflow). The increase in operating cashflows was primarily
due to higher platform advertising revenues. The Group forecasts to
remain cashflow positive in 2019 despite further investment in
strategic initiatives.
The Group is carrying Intangible Assets of GBP1.9 million (2017:
GBP2.3 million). The Group capitalised R&D spend of GBP0.3
million (2017: GBP0.5 million) on the development of owned and
operated intellectual property in 2018. The 2018 spend is on the
new multiplatform channels Mutha and Perk. The Intangibles continue
to be amortised over their useful lives.
Key performance indicators
2018 2017
GBP000's GBP000's
Revenue 21,171 17,792
Adjusted EBITDA 802 (907)
Cash and cash equivalents 5,362 4,821
Non-financial KPIs include headcount numbers and multi-platform
views (ie Facebook, YouTube).
Environmental matters
As far as the directors of the Group are aware the Group's
business does not cause a disproportionately adverse impact on the
environment.
Employees
At 31 December 2018, the Group had 62 FTE's (including
contractors) of whom 36 were male and 26 were female. Of the senior
members of management, 5 were male and 2 were female.
Paul Campbell-White
Chief Financial Officer, Brave Bison Group plc
CONSOLIDATED INCOME STATEMENT AND CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
For the year ended 31 December 2018
Restated
31 31
December December
Note 2018 2017
GBP000's GBP000's
Revenue 6 21,171 17,792
Cost of sales (14,709) (12,934)
-------- ---------
Gross profit 6,462 4,858
Administration expenses (6,574) (8,747)
Restructuring costs 8 - (1,049)
-------- ---------
Operating loss 7 (112) (4,938)
Share of loss from equity accounted investment 15 (19) -
Impairment charge 13 - (12,181)
Finance income 28 -
Finance costs 9 - (38)
-------- ---------
Loss before tax 7 (103) (17,157)
Analysed as
Operating profit/(loss) before tax adjusted for
restructuring costs and share based payments
(Adjusted EBITDA) 802 (907)
Restructuring costs 8 - (1,049)
Equity settled share based payments 21 (204) 209
-------- ---------
EBITDA 598 (1,747)
Finance costs - (38)
Finance income 28 -
Impairment charge - (12,181)
Depreciation 14 (80) (121)
Amortisation 13 (649) (3,070)
-------- ---------
Loss before tax (103) (17,157)
--------------------------------------------------- ---- -------- ---------
Income tax credit 10 33 2,308
-------- ---------
Loss attributable to equity holders of
the parent (70) (14,849)
======== =========
Statement of Comprehensive Income
Loss for the year (70) (14,849)
Items that may be reclassified subsequently
to profit or loss
Exchange loss on translation of foreign
subsidiaries (1) (26)
-------- ---------
Total comprehensive loss for the year attributable
to owners of the parent (71) (14,875)
======== =========
Loss per share (basic and diluted)
Basic and diluted loss per ordinary share
(pence) 11 (0.01p) (2.59p)
All transactions arise from continuing operations.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2018
At 31 At 31
December December
Note 2018 2017
GBP000's GBP000's
Non-current assets
Intangible assets 13 1,928 2,268
Property, plant and equipment 14 60 88
Investment in associates 15 56 75
--------- ---------
2,044 2,431
Current assets
Trade and other receivables 17 5,766 4,345
Cash and cash equivalents 5,362 4,821
--------- ---------
11,128 9,166
Current liabilities
Trade and other payables 18 (7,684) (6,201)
Non-current Liabilities
Deferred tax 16 (183) (226)
Net Assets 5,305 5,170
--------- ---------
Equity
Share capital 19 576 574
Share premium 78,762 78,762
Capital redemption reserve 6,660 6,660
Merger reserve (24,060) (24,060)
Merger relief reserve 62,624 62,624
Retained deficit (118,507) (118,641)
Translation reserve (750) (749)
--------- ---------
Total equity 5,305 5,170
--------- ---------
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2018
2018 2017
GBP000's GBP000's
Operating activities
Loss before tax (103) (17,157)
Adjustments:
Depreciation, amortisation and impairment 729 15,372
Finance income (28) -
Finance costs - 38
Share based payment charges/(credit) 204 (209)
(Increase)/decrease in trade and other receivables (1,373) 2,111
Increase/(decrease) in trade and other payables 1,439 (1,673)
Tax paid (10) (10)
-------- --------
Cash inflow/(outflow) from operating activities 858 (1,528)
Investing activities
Purchase of property plant and equipment (52) (86)
Purchase of intangible assets (309) (500)
Investments - (75)
Interest received 28 -
-------- --------
Cash outflow from investing activities (333) (661)
Cash flows from financing activities
Issue of share capital 2 2
Interest paid - (38)
Cash inflow/(outflow) from financing activities 2 (36)
Net change in cash and cash equivalents 527 (2,225)
======== ========
Movement in net cash
Cash and cash equivalents, beginning of year 4,821 7,051
Increase/(decrease) in cash and cash equivalents 527 (2,225)
Movement in foreign exchange 14 (5)
Cash and cash equivalents, end of year 5,362 4,821
======== ========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2018
Capital Convertible Merger
Share Share redemption Loan Merger relief Translation Retained Total
Capital premium Reserve Note Reserve Reserve Reserve deficit Equity
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's
At 1 January 2017 572 78,312 6,660 68 (24,060) 62,624 (723) (103,583) (19,870)
-------- -------- ----------- ------------ -------- -------- ------------ --------- --------
Equity settled
share based
payments - - - - - - - (209) (209)
Conversion of loan
note 2 450 - (68) - - - - 384
Transactions with
owners 2 450 - (68) - - - (209) 175
-------- -------- ----------- ------------ -------- -------- ------------ --------- --------
Other Comprehensive
income
Loss and total
comprehensive
income
for the year - - - - - (26) (14,849) (14,875)
At 31 December
2017 574 78,762 6,660 - (24,060) 62,624 (749) (118,641) 5,170
-------- -------- ----------- ------------ -------- -------- ------------ --------- --------
Shares issued
during
the year 2 - - - - - - - 2
Equity settled
share based
payments - - - - - - - 204 204
Transactions with
owners 2 - - - - - - 204 206
-------- -------- ----------- ------------ -------- -------- ------------ --------- --------
Other Comprehensive
income
Loss and total
comprehensive
income
for the year - - - - - (1) (70) (71)
At 31 December
2018 576 78,762 6,660 - (24,060) 62,624 (750) (118,507) 5,305
-------- -------- ----------- ------------ -------- -------- ------------ --------- --------
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2018
1. Brave Bison
BRAVE BISON GROUP PLC ("the Company") (formerly Rightster Group
plc) was incorporated in England and Wales on 30 October 2013 under
the Companies Act 2006 (registration number 08754680) and its
registered address is 3(rd) Floor, 1 Neal Street, London, WC2H 9QL.
On 12 November 2013 the Company entered into share exchange
agreements to acquire 100% of the issued share capital of Brave
Bison Limited, a company incorporated in England and Wales on 16
May 2011 and registered at the same address. On 12 November 2013
the Company was admitted to the Alternative Investment Market (AIM)
where its ordinary shares are traded.
The consolidated financial statements of the Group for the year
ended 31 December 2018 comprise the Company and its subsidiaries
(together referred to as the "Group"). The Group provides an online
video distribution and marketing network, providing rights holders,
online publishers and advertisers with the tools and expertise
required to engage audiences and optimise digital revenues. The
Group's business activities, together with the factors likely to
affect its future development, performance and position are set out
in the CFO's Report on page 12 and Risks and Uncertainties in page
15. In addition, Note 23 to the financial statements includes the
Group's objectives, policies and processes for managing its
capital; its financial risk management objectives; details of its
financial instruments and its exposure to credit risk and liquidity
risk.
The Board of Brave Bison Group plc approved the release of this
preliminary announcement on 26 March 2019.
The preliminary financial information does not constitute
statutory financial statements for the year ended 31 December 2018
within the meaning of section 435 of the Companies Act 2006, but is
extracted from those Financial Statements. Statutory accounts for
Brave Bison Group plc for the year ended 31 December 2017 have been
delivered to the Registrar of Companies. Statutory accounts for the
year ended 31 December 2018 will be delivered to the Registrar of
Companies following the Group's Annual General Meeting. The
auditors have reported on those accounts; their reports were (i)
unqualified, (ii) did not include references to any matters to
which the auditors drew attention by way of emphasis without
qualifying their reports and (iii) did not contain statements under
section 498(2) or (3) of the Companies Act 2006.
2. Basis of preparation
2.1 Going Concern
The financial statements have been prepared on a going concern
basis, which assumes that the Group will be able to meet its
liabilities as they fall due 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 31 December 2018 were GBP5.4 million
(2017: GBP4.8 million).
The Group made a loss before tax of GBP0.1 million for the year
ended 31 December 2018 (2017: GBP17.2 million), however generated
an increase in cash and cash equivalents in 2018 of GBP0.5 million
(2017: GBP2.2 million decrease).
The Directors have prepared detailed cash flow projections ("the
Projections") which are based on their current expectations of
trading prospects. The board forecasts that the Group will continue
to achieve positive cash inflows in 2019 and has sufficient cash on
hand to reach that goal. 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. Accordingly the going concern basis of accounting
has been adopted in preparing these consolidated financial
statements.
In February 2018 the Group cancelled its GBP2.0 million
overdraft facility with Barclays Bank as it had not been drawn down
since it was taken out in 2016 and cash flow forecasts indicated
that it will not be required.
2.2 Basis of consolidation
The consolidated financial statements consolidate the financial
statements of Brave Bison Group plc and all its subsidiary
undertakings up to 31 December 2018, with comparative information
presented for the year ended 31 December 2017. No profit and loss
account is presented for Brave Bison Group plc as permitted by
section 408 of the Companies Act 2006.
Subsidiaries are all entities over which the Group has the power
to control the financial and operating policies and is exposed to
or has rights over variable returns from its involvements with the
investee and has the power to affect returns. Brave Bison Group plc
obtains and exercises control through more than half of the voting
rights for all its subsidiaries. All subsidiaries have a reporting
date of 31 December and are consolidated from the acquisition date,
which is the date from which control passes to Brave Bison Group
plc.
Entities other than subsidiaries or joint ventures, in which the
Group has a participating interest and over whose operating and
financial policies the Group exercises significant influence, are
treated as associates. The results of associate undertakings are
consolidated under the equity method of accounting. The Group
applies uniform accounting policies and all intra-group
transactions, balances, income and expenses are eliminated on
consolidation.
Unrealised gains and losses on transactions between Group
companies are eliminated. Where recognised losses on intra-group
asset sales are reversed on consolidation, the underlying asset is
also tested for impairment from a Group perspective.
Business combinations are dealt with by the acquisition method.
The acquisition method involves the recognition at fair value of
all identifiable assets and liabilities, including contingent
liabilities of the subsidiary, at the acquisition date, regardless
of whether or not they were recorded in the financial statements of
the subsidiary prior to acquisition. On initial recognition, the
assets and liabilities of the subsidiary are included in the
consolidated statement of financial position at their fair values,
which are also used as the basis for subsequent measurement in
accordance with the Group accounting policies. Goodwill is stated
after separating out identifiable intangible assets. Goodwill
represents the excess of acquisition cost over the fair value of
the Group's share of the identifiable net assets of the acquired
subsidiary at the date of acquisition.
Profit or loss and other comprehensive income of subsidiaries
acquired or disposed of during the year are recognised from the
effective date of acquisition, or up to the effective date of
disposal, as applicable.
2.3 Adoption of new and revised standards
The only new and amended standard issued in the year that had a
significant impact on the financial statements is IFRS 15 'Revenue
from Contracts with Customers'. At the date of authorisation of
these financial statements, certain new standards, amendments and
interpretations to existing standards have been published by the
IASB and adopted by the EU but are not yet effective, and have not
been adopted early by the Group. Management anticipates that all of
the relevant pronouncements will be adopted in the Group's
accounting policies for the first period beginning after the
effective date of the pronouncement. Information on new standards,
amendments and interpretations that are expected to be relevant to
the Group's financial statements is provided below. Certain other
new standards and interpretations have been issued but are not
expected to have a material impact on the Group's financial
statements.
The Group has adopted the new accounting pronouncements which
have become effective this year, and are as follows:
IFRS 15 "Revenue from Contracts with Customers" and the related
"Clarifications to IFRS 15 Revenue from Contracts with Customers"
(hereinafter referred to as "IFRS 15") replaces IAS 18 "Revenue",
IAS 11 "Construction Contracts" and several revenue-related
Interpretations. The new standard has been applied retrospectively
and with restatement to aid comparability.
The adoption of IFRS 15 has resulted in the change in
determination of certain revenues streams from a net to a gross
basis as the Group is now deemed to be acting as the principal in
the transaction. The determination of whether the Group is acting
as a principal or an agent in a transaction involves judgment and
is based on an evaluation of the terms of an arrangement. Due to
the change of the principal versus agent indicators within IFRS 15
versus IAS 18, the judgment of principal versus agent for the
Group's contracts changed as a result of the implementation of the
new standard. This adjustment is a gross up of revenue and costs of
sales and does not impact operating profit or taxation. The table
below sets out the impact on revenue and cost of sales on 2017.
2017
GBP000's
Revenue per financial statements 9,140
Gross up for content costs 8,652
Restated revenue 17,792
========
2017
GBP000's
Cost of sales per financial statements 4,282
Gross up for content costs 8,652
Restated cost of sales 12,934
========
IFRS 9, 'Financial Instruments' (effective 1 January 2018). This
standard is based on the concept that financial assets should be
classified and measured at fair value, with changes in fair value
recognised in the profit and loss account as they arise ("FVPL"),
unless restrictive criteria are met for classifying and measuring
the asset at either Amortised Cost or Fair Value through Other
Comprehensive Income ("FVOCI"). The financial assets which the
Group holds are loan and other receivables for which changes to the
fair value are posted to the income statements. The introduction of
the 'expected credit loss' model has not significantly impacted the
Group's accounting as it does not have any complex financial
instruments or material credit risks.
IFRS 16, 'Leases' (effective 1 January 2019). This standard will
change lease accounting for lessees under operating leases. Based
on the Group's current lease structure (see Note 24) it is not
expected that this new standard will have a significant impact on
the presentation of the Group's assets and liabilities. None of the
leases are over 12 months so the Group is able to apply the
recognition exemption for short-term leases.
3. Statement of compliance
The financial statements have been prepared in accordance with
the accounting policies and presentation required by International
Financial Reporting Standards (IFRS), and International Financial
Reporting Interpretations Committee ("IFRIC") Interpretations as
endorsed by the European Union. They are presented in pounds
sterling. The financial statements have also been prepared in
accordance with those parts of the Companies Act 2006 that are
relevant to companies that prepare financial statements in
accordance with IFRS.
4. Summary of accounting policies
The Group's presentation and functional currency is GBP
(Sterling). The financial statements are presented in thousands of
pounds (GBP000's) unless otherwise stated.
4.1 Revenue
Revenue is measured at the fair value of the consideration
received or receivable and represents amounts receivable for
services provided in the normal course of business, net of
discounts and sales related taxes.
Revenue is recognised when the amount of revenue can be measured
reliably, it is probable that the economic benefits associated with
the transaction will flow to the entity, the costs incurred or to
be incurred can be measured reliably, and when the criteria for
each of the Group's different activities has been met.
The determination of whether the Group is acting as a principal
or an agent in a transaction involves judgment and is based on an
assessment of who controls a specified good or service before it is
transferred to a customer. Significant contracts are reviewed for
the indicators of control. The Group is deemed to be acting as a
principal in all significant contracts.
Where the Group's contractual performance obligations have been
satisfied in advance of invoicing the client then unbilled income
is recognised on the balance sheet. Where the Group's contractual
performance obligations have been satisfied less than amounts
invoiced then a contract liability is recognised.
The accounting policies specific to the Group's key operating
revenue categories are outlined below:
Advertising revenue:
-- Platform Advertising. Monetisation of the Group's and third
party content owners' videos via platforms such as Facebook and
YouTube. Revenue is recognised at the point in time when the
performance obligation of delivering monetised views occurs;
Fee Based Service revenue:
-- Branded Content. Managing the creation of commissioned
content and being responsible for procuring the talent and the
associated production costs. The Group recognises revenue in line
with the contractual obligation to deliver a completed episode.
Revenue is recognised at the point in time when each completed
episode is delivered. Production costs are deferred on the balance
sheet as contract assets until each completed episode is
delivered;
-- Managing customer content on platforms such as Facebook and
YouTube including rights management and audience development.
Revenue from providing these services is recognised over the time
that the performance obligation to provide services are
satisfied;
-- License fee revenues for the Group's own content and third
parties' content are recognised at the point in time when the
performance obligation of delivering the content is satisfied.
4.2 Interest and dividend income
Interest income and expenses are reported on an accrual basis
using the effective interest method. Dividend income, other than
from investments in associates, is recognised at the time the right
to receive payment is established.
4.3 Foreign currency translation
Transactions in foreign currencies are translated at the
exchange rate ruling at the date of the transaction. Monetary
assets and liabilities in foreign currencies are translated at the
rates of exchange ruling at the balance sheet date. Non-monetary
items that are measured at historical cost in a foreign currency
are translated at the exchange rate at the date of the transaction.
Non-monetary items that are measured at fair value in a foreign
currency are translated using the exchange rates at the date when
the fair value was determined.
Any exchange differences arising on the settlement of monetary
items or on translating monetary items at rates different from
those at which they were initially recorded are recognised in the
profit or loss in the period in which they arise.
The assets and liabilities in the financial statements of
foreign subsidiaries and related goodwill are translated at the
rate of exchange ruling at the balance sheet date. Income and
expenses are translated at the actual rate on the date of
transaction. The exchange differences arising from the
retranslation of the opening net investment in subsidiaries and on
income and expenses during the year are recognised in other
comprehensive income and taken to the "translation reserve" in
equity. On disposal of a foreign operation the cumulative
translation differences (including, if applicable, gains and losses
on related hedges) are transferred to the income statement as part
of the gain or loss on disposal.
4.4 Segment reporting
IFRS 8 Operating Segments requires operating segments to be
identified on the same basis as is used internally for the review
of performance and allocation of resources by the Group Chief
Executive (chief operating decision maker - CODM).
The board has reviewed the Group and all revenues are functional
activities of monetising online video content and these activities
take place on an integrated basis. The senior executive team review
the financial information on an integrated basis for the Group as a
whole, with respective heads of business who are geographically
located and in accordance with IFRS 8 Operating Segments, the Group
will be providing only a geographical split as it considers that
all activities fall within one segment of business which is
monetising online video content. Segmental information is presented
in accordance with IFRS 8 for all periods presented within Note
6.
4.5 Leasing
Rentals payable under operating leases are charged to the income
statement on a straight-line basis over the term of the relevant
lease. Benefits received and receivable as an incentive to enter
into an operating lease are also spread on a straight-line basis
over the lease term.
4.6 Property, plant and equipment
Property, plant and equipment are stated at historical cost less
accumulated depreciation and impairment. Depreciation is calculated
to write down the cost less estimated residual value of all
property, plant and equipment by equal annual instalments over
their expected useful lives less estimated residual values, using
the straight line method. The rates generally applicable are:
-- Fixtures & Fittings - 3 years or over remaining lease term
-- Computer Equipment - 3 years
The gain or loss arising on the disposal or retirement of an
item of property, plant and equipment is determined as the
difference between the sales proceeds and the carrying amount of
the asset and is recognised in profit or loss.
The assets' residual value and useful lives are reviewed, and
adjusted if required, at each balance sheet date. The carrying
amount of an asset is written down immediately to its recoverable
amount if the carrying amount is greater than its estimated
recoverable amount.
4.7 Impairment of property, plant and equipment
At each balance sheet date, the Group reviews the carrying
amounts of its property, plant and equipment to determine whether
there is any indication that those assets have suffered an
impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent
of the impairment loss (if any). Where it is not possible to
estimate the recoverable amount of an individual asset, the Group
estimates the recoverable amount of the cash-generating unit to
which the asset belongs. Recoverable amount is the higher of fair
value less costs of disposal and value in use. In assessing value
in use, the estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks
specific to the asset.
If the recoverable amount of an asset (or cash-generating unit)
is estimated to be less than its carrying amount, the carrying
amount of the asset (or cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognised immediately in
profit or loss.
Where an impairment loss subsequently reverses, the carrying
amount of the asset (or cash-generating unit) is increased to the
revised estimate of its recoverable amount, but so that the
increased carrying amount does not exceed the carrying amount that
would have been determined had no impairment loss been recognised
for the asset (cash-generating unit) in prior years. A reversal of
an impairment loss is recognised immediately in profit or loss.
4.8 Intangible assets
An intangible asset, which is an identifiable non-monetary asset
without physical substance, is recognised to the extent that it is
probable that the expected future economic benefits attributable to
the asset will flow to the Group and that its cost can be measured
reliably. The asset is deemed to be identifiable when it is
separable or when it arises from contractual or other legal
rights.
Intangible assets acquired as part of a business combination,
are shown at fair value at the date of the acquisition less
accumulated amortisation. Amortisation is charged on a straight
line basis through the profit or loss. The rates applicable, which
represent the Directors' best estimate of the useful economic life,
are:
-- Customer relationships - 5 to 10 years
-- Online channel content - 3 years
-- Brands - 3 years
-- Technology - 1 to 5 years
4.9 Impairment of intangible assets
At each balance sheet date, the Group reviews the carrying
amounts of its intangible assets and goodwill to determine whether
there is any indication that those assets have suffered an
impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent
of the impairment loss (if any). Where it is not possible to
estimate the recoverable amount of an individual asset, the Group
estimates the recoverable amount of the cash-generating unit to
which the asset belongs.
Recoverable amount is the higher of fair value less costs of
disposal and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset.
If the recoverable amount of an asset is estimated to be less
than its carrying amount, the carrying amount of the asset is
reduced to its recoverable amount. An impairment loss is recognised
immediately in profit or loss.
4.10 Development costs
Expenditure on the research phase of an internal project is
recognised as an expense in the period in which it is incurred.
Development costs incurred on specific projects are capitalised
when all the following conditions are satisfied:
-- Completion of the asset is technically feasible so that it
will be available for use or sale;
-- The Group intends to complete the asset and use or sell it;
-- The Group has the ability to use or sell the asset and the
asset will generate probable future economic benefits (over and
above cost);
-- There are adequate technical, financial and other resources
to complete the development and to use or sell the asset; and
-- The expenditure attributable to the asset during its development can be measured reliably.
Development costs not meeting the criteria for capitalisation
are expensed as incurred. The cost of an internally generated asset
comprises all directly attributable costs necessary to create,
produce and prepare the asset to be capable of operating in the
manner intended by management. Directly attributable costs include
employee (other than Director) costs incurred along with third
party costs.
Judgement by the Directors is applied when deciding whether the
recognition requirements for development costs have been met.
Judgements are based on the information available at the time when
costs are incurred. In addition, all internal activities related to
the research and development of new projects is continuously
monitored by the Directors.
4.11 Investments in associates and joint ventures
Investments in associates and joint ventures are accounted for
using the equity method. The carrying amount of the investment in
associates and joint ventures is increased or decreased to
recognise the Group's share of the profit or loss and other
comprehensive income of the associate or joint venture, adjusted
where necessary to ensure consistency with the accounting policies
of the Group.
4.12 Taxation
Tax expenses recognised in profit or loss comprise the sum of
the tax currently payable and deferred tax not recognised in other
comprehensive income or directly in equity.
Current tax
The tax currently payable is based on taxable profit for the
year. Taxable profit differs from profit as reported in the
statement of comprehensive income because it excludes items of
income or expense that are taxable or deductible in other years and
it further excludes items that are never taxable or deductible. The
Group's liability for current tax is calculated using tax rates
that have been enacted or substantively enacted by the balance
sheet date.
Deferred tax
Deferred tax is recognised on differences between the carrying
amounts of assets and liabilities in the financial statements and
the corresponding tax bases used in the computation of taxable
profit, and are accounted for using the liability method. Deferred
tax liabilities are generally recognised for all taxable temporary
differences, and deferred tax assets are generally recognised for
all deductible temporary differences to the extent that it is
probable that taxable profits will be available against which those
deductible temporary differences can be recognised. Such assets and
liabilities are not recognised if the temporary difference arises
from goodwill or from the initial recognition (other than in a
business combination) of other assets and liabilities in a
transaction that affects neither the taxable profit nor the
accounting profit. Deferred tax liabilities are recognised for
taxable temporary differences associated with investments in
subsidiaries except where the Group is able to control the reversal
of the temporary difference and it is probable that the temporary
difference will not reverse in the foreseeable future. Deferred tax
assets arising from deductible temporary differences associated
with such investments are only recognised to the extent that it is
probable that there will be sufficient taxable profits against
which to recognise the benefits of the temporary differences and
they are expected to reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each
reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow
all or part of the asset to be recovered. Deferred tax assets and
liabilities are measured at the tax rates that are expected to
apply in the period in which the liability is settled or the asset
recognised based on tax rates (and tax laws) that have been enacted
or substantively enacted by the balance sheet date. The measurement
of deferred tax liabilities and assets reflects the tax
consequences that would follow from the manner in which the Group
expects, at the reporting date, to recover or settle the carrying
amount of its assets and liabilities. Deferred tax assets and
liabilities are offset when there is a legally enforceable right to
set off current tax assets against current tax liabilities and when
they relate to income taxes levied by the same taxation authority
and the Group intends to settle its current tax assets and
liabilities on a net basis.
4.13 Financial Instruments
Recognition and derecognition
Financial assets and financial liabilities are recognised with
the Group becomes a party to the contractual provisions of the
financial instrument. Financial assets are derecognised when the
contractual rights to the cash flows from the financial asset
expire, or when the financial asset and substantially all the risks
and rewards are transferred. A financial liability is deregognised
when it is extinguished, discharged, cancelled or expires.
Loan and other receivables
The Group accounts for loan and other receivables by recording
the loss allowance as lifetime expected credit losses. These are
shortfalls in contractual cash flows, considering the potential for
default at any point during the life of the financial instrument.
The Group uses its historical experience, external indicators and
forward-looking information to calculate expected credit
losses.
Trade and other payables
Trade and other payables are initially measured at fair value,
and are subsequently measured at amortised cost, using the
effective interest method.
4.14 Equity, reserves and dividend payments
Share capital
Share capital represents the nominal value of shares that have
been issued.
Share premium
Share premium includes any premiums received on issue of share
capital. Any transaction costs associated with the issuing of
shares are deducted from share premium arising on those shares, net
of any related income tax benefits.
Retained deficits
Retained deficits include all current and prior period retained
profits or losses. It also includes credits arising from share
based payment charges.
Translation reserve
Translation reserve represents the differences arising from
translation of investments in overseas subsidiaries.
Merger reserve
The merger reserve is utilised when group reconstruction
accounting is applied. The difference between the cost of
investment and the nominal value of the share capital acquired is
recognised in a merger reserve.
Merger relief reserve
Where the following conditions are met, any excess consideration
received over the nominal value of the shares issued is recognised
in the merger relief reserve:
-- the consideration for shares in another company includes issued shares;
-- on completion of the transaction, the company issuing the
shares will have secured at least a 90% equity holding in the other
company.
Capital redemption reserve
Where the Company purchases its own equity share capital, on
cancellation, the nominal value of the shares cancelled is deducted
from share capital and the amount is transferred to the capital
redemption reserve.
Dividend distributions payable to equity shareholders are
included in 'other liabilities' when the dividends have been
approved in a general meeting prior to the reporting date.
4.15 Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at
call with banks, together with other short-term highly liquid
investments that are readily convertible into known amounts of cash
having maturities of 3 months or less from inception and which are
subject to an insignificant risk of change in value, and bank
overdrafts.
4.16 Employee benefits
The Group operates two schemes on behalf of its employees,
private healthcare and a defined contribution pension plan and
amounts due are expensed as they fall due.
4.17 Share based payments
Employees (including Directors) of the Group received
remuneration in the form of share-based payment transactions,
whereby employees render services in exchange for rights over
shares ('equity-settled transactions'). The Group has applied the
requirements of IFRS 2 share-based payments to all grants of equity
instruments. The transactions have been treated as equity
settled.
The cost of equity settled transactions with employees is
measured by reference to the fair value at the grant date of the
equity instrument granted. The fair value is determined by using
the Black-Scholes method. The cost of equity-settled transactions
are recognised, together with a corresponding charge to equity,
over the period between the date of grant and the end of a vesting
period, where relevant employees become fully entitled to the
award. The total value of the options has been pro-rated and
allocated on a weighted average basis.
4.18 Restructuring Costs
Restructuring costs relate to corporate re-organisation
activities previously undertaken or announced.
5. Critical accounting judgements and key sources of estimation uncertainty
The preparation of financial statements under IFRS requires the
Group to make estimates and assumptions that affect the application
of policies and reported amounts. Estimates and judgements are
continually evaluated and are based on historical experience and
other factors including expectations of future events that are
believed to be reasonable under the circumstances. Actual results
may differ from these estimates. The estimates and assumptions
which have a risk of causing a material adjustment to the carrying
amount of assets and liabilities are discussed below.
5.1 Critical accounting judgements
Intangible assets and impairment
The Group recognises the intangible assets acquired as part of
business combinations at fair value at the date of acquisition. The
determination of these fair values is determined by experts engaged
by management and based upon management's and the Directors'
judgement and includes assumptions on the timing and amount of
future incremental cash flows generated by the assets and selection
of an appropriate discount rate. Furthermore management must
estimate the expected useful lives of intangible assets and charge
amortisation on these assets accordingly.
Included within intangible assets are capitalised customer
relationships. These were acquired as part of the acquisitions of
Viral Management Limited and Base79 Limited. The Group continues to
recognise revenue from these customer relationships through revenue
share and licensing agreements. These assets are amortised over a
period between 5 to 10 years on a straight line basis and were
deemed to be impaired during the year (see Note 13).
Also included within intangible assets are capitalised costs for
online channel content associated with the development of Slash
Football, Mutha and Perk. These assets are amortised over a 3 year
period on a straight line basis.
Development of Online Channel Content
Costs associated with the development of Slash Football, Mutha
and Perk, networks of social media channels and content that is
owned and operated by Brave Bison, that are directly attributable
to the design and building of the channels controlled by the Group
are recognised as intangible assets when the following criteria are
met:
-- It is technically feasible to complete the online channel
content so that it will be available for use;
-- Management intends to complete the online channel content and use or sell it;
-- There is an ability to use or sell the online channel content;
-- It can be demonstrated how the online channel content will
generate probable future economic benefits;
-- Adequate technical, financial and other resources to complete
the development and to use or sell the online channel content are
available;
-- The expenditure attributable to the online channel content
during its development can be reliably measured.
Furthermore management must estimate the expected useful lives
of intangible assets and charge amortisation on these assets
accordingly. Judgement is exercised as to when the channels are
deemed to be ready to be monetized and hence the assets start to be
amortised. This is when the audience is at a significant enough
scale to be attractive to brands.
Developing new social media channels involves a variety of
risks. These include the risk that the content will not be engaging
enough to attract sufficient views and that these views are not
monetized to their full potential by revenues such as platform
advertising, branded content, licensing and distribution.
Treatment of revenue as agent or principal
The determination of whether the Group is acting as a principal
or an agent in a transaction involves judgment and is based on an
assessment of who controls a specified good or service before it is
transferred to a customer. Significant contracts are reviewed for
the indicators of control. These include if the Group is primarily
responsible for fulfilling the promise to provide the good or
service, if the Group has inventory risk before the good or
services has been transferred to the customer and if the Group has
discretion in establishing the price for the good or service.
Deferred taxation
Deferred tax assets and liabilities have been recognised which
are contingent and dependent upon future trading performance.
5.2 Estimates
Share based payment charges
The Group is required to measure the fair value of its share
based payments. The fair value is determined using the
Black-Scholes method which requires assumptions regarding exchange
rate volatility, the risk free rate, share price volatility and the
expected life of the share based payment. Exchange rate volatility
is calculated using historic data over the past three years. The
volatility of the Group's share price has been calculated as the
average of similar listed companies over the preceding periods. The
risk-free rate range used is between 0.82% to 1.10% and management,
including the Directors, have estimated the expected life of most
share based payments to be 4 years.
Bad debt provision
Recoverability of some receivables may be doubtful although not
definitely irrecoverable. Where management feel recoverability is
in doubt an appropriate provision is made for the possibility that
the amounts may not be recovered in full. Provisions are made using
past experience however subjectivity is involved when assessing the
level of provision required.
6. Segment Reporting
As explained in the summary of Accounting Policies, management
identify only one operating segment in the business, being
monetising online video content. This single operating segment is
monitored and strategic decisions are made on the basis of this
segment alone.
As a result only the geographic reporting of revenue analysis
has been included in this note. Two customers in 2018 (2017: Four)
represented over 10% of the Group's total revenue.
Geographic reporting
Brave Bison 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.
Restated
2018 2017
Revenue GBP000's GBP000's
United Kingdom & Europe 18,910 14,391
Asia Pacific 1,956 2,739
Rest of the world 305 662
-------- --------
Total revenue 21,171 17,792
======== ========
The Group identifies two revenue streams, Advertising and Fee
based services. The analysis of revenue by each stream is detailed
below, a detailed overview can be found in the Strategic
Report.
Restated
Revenue 2018 2017
GBP000's GBP000's
Advertising 17,800 12,456
Fee based services 3,371 5,336
Total revenue 21,171 17,792
======== ========
Gross profit 2018 2017
GBP000's GBP000's
Advertising 4,705 2,517
Fee based services 1,757 2,341
Total gross profit 6,462 4,858
========= ========
Timing of revenue recognition
The following table includes revenue from contracts disaggregated
by the timing of recognition.
2018 2017
GBP000's GBP000's
Products and services transferred at a point
in time 20,312 16,549
Products and services transferred over time 859 1,243
--------- --------
Total revenue 21,171 17,792
========= ========
7. Operating loss and loss before taxation
The operating loss and the loss before taxation are stated
after:
2018 2017
GBP000's GBP000's
Auditor's remuneration:
* Audit services 70 83
* Audit related services 10 10
* Tax advisory 17 -
* Tax compliance 11 16
Operating lease rentals - land and buildings 449 461
Depreciation: property, plant and equipment 80 121
Impairment of intangible assets - 12,181
Amortisation 649 3,070
Foreign exchange (gain)/loss (114) 394
8. Restructuring
2018 2017
GBP000's GBP000's
Restructuring costs - 1,049
======== =========
Restructuring costs relate to corporate re-organisation
activities previously undertaken or announced.
9. Finance cost
2018 2017
GBP000's GBP000's
Interest payable - 38
======== =========
Interest payable is from a convertible loan note which converted
to equity on 21 September 2017.
10. Tax expense
Major components of tax credit:
2018 2017
GBP000's GBP000's
Current tax:
UK corporation tax at 19.00% (2017: 19.25%) - -
Overseas tax 10 10
Total current tax 10 10
---------- -----------
Deferred Tax:
Originations and reversal of temporary differences
(Note 16) (43) (2,318)
---------- -----------
Tax credit on loss on ordinary activities (33) (2,308)
========== ===========
UK corporation tax is calculated at 19.00% (2017: 19.25%) of the
estimated assessable loss for the year. Taxation for other
jurisdictions is calculated at the rates prevailing in those
jurisdictions.
The credit for the year can be reconciled to the loss per the
income statement as follows:
Reconciliation of effective tax rate:
2018 2017
GBP000's GBP000's
Loss on ordinary activities before tax (103) (17,157)
---------- ----------
Income tax using the Company's domestic
tax rate 19.00% (2017: 19.25%) (20) (3,303)
Effect of:
Expenses not deductible for tax purposes 65 18
Deferred tax asset not recognised on timing
differences 62 86
Unutilised tax losses carried forward - 891
Other movements (140) -
---------- ----------
Total tax credit for period (33) (2,308)
========== ==========
11. Loss per share
Both the basic and diluted loss per share have been calculated
using the loss after tax attributable to shareholders of Brave
Bison Group plc as the numerator, i.e. no adjustments to losses
were necessary in 2017 or 2018. The calculation of the basic loss
per share is based on the loss attributable to ordinary
shareholders divided by the weighted average number of shares in
issue during the year. All share options have been excluded when
calculating the basic diluted EPS as they were antidilutive.
2018 2017
GBP000's GBP000's
Loss for the year attributable to ordinary
shareholders (70) (14,849)
Equity settled share based payments 204 (209)
Amortisation, depreciation and impairment 729 15,372
Adjusted profit for the period attributable
to the equity shareholders 863 314
=========== ===========
Weighted average number of ordinary shares 574,794,591 572,349,420
Dilution due to share options 75,035,564 -
----------- -----------
Total weighted average number of ordinary
shares 649,830,155 572,349,420
=========== ===========
Basic and diluted (loss) per ordinary share
(pence) (0.01p) (2.59p)
=========== ===========
Adjusted basic profit per ordinary share
(pence) 0.15p 0.05p
=========== ===========
Adjusted diluted profit per ordinary share
(pence) 0.13p 0.05p
=========== ===========
12. Directors and employees
The average number of persons (including Director's) employed by
the Group during the year was:
2018 2017
Number Number
Sales, production and operations 48 45
Support services and senior executives 12 16
------ ------
60 61
====== ======
The aggregate cost of these employees was:
2018 2017
GBP000's GBP000's
Wages and salaries 3,644 3,005
Payroll taxes 338 364
Pension contributions 105 72
4,087 3,441
======== ========
Director's emoluments paid during the period and included in the
above figures were:
2018 2017
GBP000's GBP000's
Emoluments (including compensation for loss
of office) 763 737
======== ========
The highest paid Director received emoluments totalling GBP0.4
million (2017: GBP0.2 million). The amount of share based payments
charge (see Note 21) which relates to the Directors was GBP0.1
million charge (2017: GBP0.1 million credit). The key management of
the Group are the executive members of Brave Bison Group plc's
Board of Directors. Key management personnel remuneration includes
the following expenses:
2018 2017
GBP000's GBP000's
Salaries including bonuses 650 617
Social security costs 90 86
-------- --------
Total Emoluments 740 703
======== ========
13. Intangible assets
Online Channel Customer
Goodwill Content Technology Brands Relation-ships Total
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's
Cost
At 31 December
2016 35,075 793 5,213 273 19,332 60,686
Additions - 500 - - - 500
-------- -------------- ---------- -------- --------------- --------
At 31 December
2017 35,075 1,293 5,213 273 19,332 61,186
-------- -------------- ---------- -------- --------------- --------
Additions - 309 - - - 309
-------- -------------- ---------- -------- --------------- --------
At 31 December
2018 35,075 1,602 5,213 273 19,332 61,495
-------- -------------- ---------- -------- --------------- --------
Amortisation and impairment
At 31 December
2016 35,075 - 2,759 228 5,605 43,667
Charge for the
year - 287 843 45 1,895 3,070
Impairment charge - - 1,611 - 10,570 12,181
At 31 December
2017 35,075 287 5,213 273 18,070 58,918
-------- -------------- ---------- -------- --------------- --------
Charge for the
year - 431 - - 218 649
-------- -------------- ---------- -------- --------------- --------
At 31 December
2018 35,075 718 5,213 273 18,288 59,567
-------- -------------- ---------- -------- --------------- --------
Net Book Value
At 31 December
2016 - 793 2,454 45 13,727 17,019
======== ============== ========== ======== =============== ========
At 31 December
2017 - 1,006 - - 1,262 2,268
======== ============== ========== ======== =============== ========
At 31 December
2018 - 884 - - 1,044 1,928
======== ============== ========== ======== =============== ========
During the year Brave Bison had capitalised costs of GBPnil
(2017: GBP0.5 million) relating to the development of Slash
Football, a network of social media channels and content that is
owned and operated by Brave Bison. The Company capitalised further
costs of GBP0.3 million relating to the development of Mutha and
Perk, two new social media channels and content that are owned and
operated by Brave Bison.
Brave Bison considers that the capitalised costs fall under IAS
38 as the Company intends to retain all intellectual property
relating to the channel and has no intention to sell the content.
The Directors consider that the capitalised costs meet the
requirements of IAS 38 in that Brave Bison has the intention and
the technical knowledge to complete the Mutha and Perk online
channels and that they demonstrate the potential to derive future
economic benefits.
Goodwill is not amortised, but tested annually for impairment
with the recoverable amount being determined from value in use
calculations.
The recoverable amount of the intangible asset has been
determined based on value in use. Value in use has been determined
based on future cash flows after considering current economic
conditions and trends, estimated future operating results, growth
rates and anticipated future economic conditions.
As at 31 December 2018, the intangible assets were assessed for
impairment. The impairment charge was nil (2017: GBP12.2 million).
As at 31 December 2017, the intangible assets were assessed for
impairment. The newly appointed management team have adopted a new
strategy and have re-assessed projected cash flows relating to
technology and customer relationship intangible assets. The
technology software assets are now deemed to be obsolete and so
have no value in use nor any fair value (less cost of sale).
Customer relationship intangible assets have been impaired due to
declining licensing revenues (from Viral Management Ltd
acquisition) and a decrease in platform revenues (from Base 79 Ltd
acquisition).
The estimated cash flows for a period of 5 years were developed
using internal forecasts, and a pre-tax discount rate of 15%. The
cash flows beyond 5 years have been extrapolated assuming nil
growth rates. The key assumptions are based on growth of existing
and new customers and forecasts, which are determined through a
combination of management's views, market estimates and forecasts
and other sector information.
14. Property, plant and equipment
Fixtures &
Computer Equipment Fittings Total
GBP000's GBP000's GBP000's
At 31 December 2016 863 112 975
Additions 35 51 86
At 31 December 2017 898 163 1,061
Additions 4 48 52
------------------ ---------- --------
At 31 December 2018 902 211 1,113
------------------ ---------- --------
Depreciation and impairment
At 31 December 2016 805 47 852
Charge for the year 41 80 121
At 31 December 2017 846 127 973
Charge for the year 28 52 80
At 31 December 2018 874 179 1,053
Net Book Value
At 31 December 2016 58 65 123
================== ========== ========
At 31 December 2017 52 36 88
================== ========== ========
At 31 December 2018 28 32 60
================== ========== ========
15. Investment in associates
2018 2017
GBP000's GBP000's
Investment in associates 56 75
======== ========
During 2018 the Group continued to hold a 30% stake in Rebel FC
Limited. The Company made a loss in 2018 of GBP62,777 (2017:
GBP,1,195). This investment has been accounted for as an associate
as the Group has significant control over this entity.
16. Deferred taxation assets and liabilities
Deferred tax recognised:
2018 2017
GBP000's GBP000's
Deferred tax liabilities
Deferred tax on intangible assets (183) (226)
(183) (226)
======== ========
Unutilised tax losses carried forward which have not been
recognised as a deferred tax asset at 31 December 2018 were GBP49.1
million (2017: GBP54.0 million).
Reconciliation of movement in deferred tax
Deferred tax on intangible
assets
GBP000's
As at 31 December 2016 (2,554)
Recognised in the income statement 2,319
-------------------------------------------------------------------
As at 31 December 2017 (226)
Recognised in the income statement 43
As at 31 December 2018 (183)
===================================================================
The increase in the amount of deferred tax recognised during
2017 was due to the GBP12.2 million intangible asset
impairment.
17. Trade and other receivables
2018 2017
GBP000's GBP000's
Trade receivables 4,819 3,497
Less allowance for credit losses (139) (211)
-------- --------
Net trade receivables 4,680 3,286
Unbilled income 379 556
Contract assets 405 122
Other receivables 302 381
5,766 4,345
======== ========
The contractual value of trade receivables is GBP4.8 million
(2017: GBP3.5 million). Their carrying value is assessed to be
GBP4.7 million (2017: GBP3.3 million) after assessing
recoverability. The contractual value and the carrying value of
other receivables are considered to be the same. The Group's
management considers that all financial assets that are not
impaired or past due are of good credit quality.
The aging analysis of these trade receivables showing fully
performing and past due but not impaired is as follows:
2018 2017
GBP000's GBP000's
Not overdue 3,678 2,261
Not more than three
months 207 313
More than three months but not more than
six months 34 4
More than six months but not more than one
year 37 175
More than one year 724 533
4,680 3,286
======== ========
The movement in provision for impairment of trade receivables
can be reconciled as follows:
2018 2017
GBP000's GBP000's
Opening provision (211) (393)
Receivables provided for during period (10) (132)
Reversal of previous provisions 82 314
(139) (211)
======== ========
Provisions are created and released on a specific customer level
on a monthly basis when management assesses for possible
impairment. At each half year and year end, management will assess
for further impairment based upon expected credit loss over and
above the specific impairments noted throughout the year.
The other classes within trade and other receivables do not
contain impaired assets.
Contract assets are utilised upon satisfaction of the associated
contract performance obligations. The 2018 contract asset of
GBP405,000 is expected to be utilised in the next reporting periods
upon satisfaction of the associated performance obligation. The
2017 contract asset of GBP122,000 was recognised within cost of
sales during 2018 upon satisfaction of the associated performance
obligation.
18. Trade and other payables
2018 2017
GBP000's GBP000's
Trade payables 836 993
Other payables 76 90
Other taxation and social security 174 90
Contract liabilities 1,098 343
Accruals 5,500 4,685
7,684 6,201
======== ========
All amounts are short term and the Directors consider that the
carrying value of trade and other payables are considered to be a
reasonable approximation of fair value.
The average credit period taken for trade purchases was 21 days
(2017: 28 days).
Contract liabilities are utilised upon satisfaction of the
associated contract performance obligations. The 2018 contract
liability of GBP1,098,000 is expected to be utilised in the next
reporting periods upon satisfaction of the associated performance
obligation. The 2017 contract liability of GBP343,000 was
recognised within revenue during 2018 upon satisfaction of the
associated performance obligation.
19. Share capital
1 Ordinary share
capital At 31 December 2018 At 31 December 2017
Number GBP000's Number GBP000's
Ordinary shares of GBP0.001 576,140,030 576 573,909,229 574
Total ordinary share capital
of the Company 576 574
======== ========
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.
A reconciliation of the movement in share capital during the
year is detailed in Note 20.
20. Reconciliation of share capital
2018 2017
Ordinary Ordinary Share Ordinary Ordinary Share
Shares Capital Shares Capital
Number GBP000's Number GBP000's
GBP0.0000001 GBP0.0000001
Opening balance 573,909,229 574 571,628,125 572
Issue of ordinary
shares 2,230,801 2 2,281,104 2
Closing balance 576,140,030 576 573,909,229 574
============ ============== ============ ==============
21. Share options
In September 2013 Brave Bison Limited introduced an approved EMI
share option scheme for employees. The first options were granted
in September and October 2013, where options were issued in
replacement for options issued under the original Brave Bison
Limited unapproved scheme, vesting periods were deemed to have
commenced from 30 May 2013. The replacement share options issued by
Brave Bison Group plc were treated as modification of the original
scheme, in accordance with IFRS 2.
Options vest as follows:
-- 25% 12 months from grant date
-- 2.08% each month commencing 13 months from grant date until
the options are fully vested at the end of the four year vesting
period.
In November 2017 Brave Bison Limited introduced a new Restricted
Share Unit ("RSU") plan under the existing EMI share option scheme.
RSUs were granted at nominal value in 2017 which vest monthly on a
straight-line basis between 2 and 3 years. During 2018 RSU's were
granted which vest annually over a 3 years period.
The options were valued using the Black-Scholes valuation model,
using the following assumptions.
2018 2017 and prior
Expected option life 4 years 4 years
Expected volatility 50% 50%
Weighted average volatility 50% 50%
Risk-free interest rate 0.82% - 1.10% 0.73% - 2.74%
Expected dividend yield 0% 0%
Within the assumptions above, a 50% share price volatility has
been used, the assumption is based on the average volatility of
similar listed companies over the preceding periods.
The charge included within the financial statements for share
options for the year to 31 December 2018 is GBP0.2 million (2017:
GBP0.2 million credit). The credit for 2017 is due to the number of
senior management leavers.
Details of the options issued under Weighted average
the approved scheme are as follows: Number exercise price
Outstanding at the beginning of the
year 62,142,488 5.5p
Granted during the year 34,437,589 0.1p
Exercised during the year (2,230,802) (0.1)p
Cancelled during the year (18,120,852) (3.9)p
Outstanding at the end of the year 76,228,423 2.1p
Exercisable at the end of the year 47,432,084 3.4p
The weighted average share price on the date options were
exercised was 1.56p.
Share options expire after 10 years, the options above expiring
between August 2024 and June 2028.
22. Undertakings included in the financial statements
The consolidated financial statements include:
Class
of
share Country of Proportion
held incorporation held Nature of business
Subsidiaries
Brave Bison Limited Ordinary UK 100% Online video distribution
Rightster Inc. Ordinary USA 100% Non-trading
Rightster India LLP Ordinary India 100% Non-trading
Viral Management
Limited Ordinary UK 100% Non-trading
Base 79 Limited Ordinary UK 100% Non-trading
Base 79 Inc. Ordinary USA 100% Non-trading
Base 79 SL Ordinary Spain 100% Non-trading
Base 79 GMBH Ordinary Germany 100% Non-trading
Brave Bison Asia
Pacific Pte Ordinary Singapore 100% Online video distribution
Associates
Influencer football
Rebel FC Limited Ordinary UK 30% team
23. Financial Instruments
Categories of financial instruments As at 31 As at 31
December December
2018 2017
GBP000's GBP000's
Financial assets
Loans and other receivables 5,766 4,345
Cash and bank balances 5,362 4,821
---------- ---------
11,128 9,166
Financial liabilities at amortised cost
Trade and other payables (7,684) (6,201)
---------- ---------
(7,684) (6,201)
Financial risk management
The Group's financial instruments comprise cash and liquid
resources and various items, such as trade receivables and trade
payables that arise directly from its operations. The main purpose
of these financial instruments is to raise finance for the Group's
operations. The principal financial risks faced by the Group are
liquidity, foreign currency and credit risks. The policies and
strategies for managing these risks are summarised as follows:
Foreign currency risk
Transactional foreign currency exposures arise from both the
export of services from the UK to overseas clients, and from the
import of services directly sourced from overseas suppliers. The
Group is primarily exposed to foreign exchange in relation to
movements in sterling against the US Dollar, the Euro and the
Singapore Dollar.
The Group does not use derivatives to hedge translation
exposures. All gains and losses are recognised in profit or loss on
translation at the reporting date. The Group's current exposures in
respect of currency risk are as follows:
Sterling US Dollar Singapore Euro Other Total
Dollar
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's
Financial assets 24,906 1 5 63 208 25,183
Financial liabilities (8,281) - (12) (56) (118) (8,467)
Total exposure
at
31 December 2017 16,625 1 (7) 7 90 16,716
======== ========= ========= ======== ======== ========
Financial assets 4,455 6,407 142 72 52 11,128
Financial liabilities (3,853) (3,716) (134) 20 (1) (7,684)
Total exposure
at
31 December 2018 602 2,691 8 92 51 3,444
======== ========= ========= ======== ======== ========
Sensitivity analysis
The table below illustrates the estimated impact on profit or
loss as a result of market movements in the Indian Rupee, US
Dollar, Euro and Sterling exchange rate.
10% 10% 10% 10% 10% 10%
Increase Decrease Increase Decrease Increase Decrease
US Dollars US Dollars Singapore Singapore Euro Euro
Impact on loss and equity Dollars Dollars
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's
For the year to 31 December
2017 10 (10) 2 (2) 5 (5)
=========== =========== ========== ========== ======== ========
For the year to 31 December
2018 269 (269) 1 (1) 9 (9)
=========== =========== ========== ========== ======== ========
Credit risk
The Group's principal financial assets are cash and cash
equivalents and trade and other receivables. The Group has no
significant concentration of credit risk. The maximum exposure to
credit risk is that shown within the balance sheet. All amounts are
short term and management consider the amounts to be of good credit
quality.
Liquidity/funding risk
The Group's funding strategy is to ensure a mix of funding
sources offering flexibility and cost effectiveness to match the
requirements of the Group. Operating subsidiaries are financed by
retained profits.
Contractual maturities
The Group manages liquidity risk by maintaining adequate
reserves.
Interest rate risk
The Group holds the majority of its cash and cash equivalents in
corporate current accounts. These accounts offer a competitive
interest rate with the advantage of quick access to the funds.
Capital policy
The Group's objectives when managing capital are to safeguard
the Group's ability to continue as a going concern in order to
provide returns for shareholders and benefits for other
stakeholders and to maintain a capital structure that optimises the
cost of capital.
The Group manages its capital to ensure that entities in the
Group will be able to continue as a going concern while maximising
the return to stakeholders through the optimisation of the debt and
equity balance. The capital structure of the Group consists of cash
and cash equivalents as disclosed in the statement of financial
position and equity attributable to equity holders of the parent,
comprising issued capital, reserves and retained earnings as
disclosed in the consolidated statement of changes in equity.
Debt is defined as long and short-term borrowings (excluding
derivatives). Equity includes all capital and reserves of the Group
that are managed as capital.
Financial instruments measured at fair value
Financial assets and financial liabilities measured at fair
value in the statement of financial position are grouped into three
levels of fair value hierarchy. This grouping is determined based
on the lowest level of significant inputs used in fair value
measurement, as follows:
-- level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities
-- level 2 - inputs other than quoted prices included within
level 1 that are observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived from
prices)
-- level 3 - inputs for the asset or liability that are not
based on observable market data (unobservable inputs).
Brave Bison categorises all financial assets and liabilities as
level 1.
Maturity analysis
Set out below is a maturity analysis for non-derivative
financial liabilities. The amounts disclosed are based on
contractual undiscounted cash flows. The table includes both
interest and principal cash flows. The Group had no derivative
financial liabilities at either reporting date.
Less than 1-3 3-5
Total 1 Year Years Years
GBP000's GBP000's GBP000's GBP000's
As at 31 December 2017
Trade and other payables 6,201 6,201 - -
As at 31 December 2018
Trade and other payables 7,684 7,684 - -
24. Financial commitments
The present value of future minimum rentals payable under
non-cancellable operating leases is as follows:
At 31 At 31
December December
2018 2017
GBP000's GBP000's
Less than 1 year 305 333
Between 1 and 5 years 40 47
More than 5 years - -
345 380
========= =========
The Group entered into a new 12 month rental lease agreement
commencing on 1 March 2019.
25. Transactions with Directors and other related parties
Transactions with associates during the year were:
2018 2017
GBP000's GBP000's
Associates revenue share 77 67
At 31 At 31
December December
2018 2017
GBP000's GBP000's
Amounts owed to associates 31 52
26. Post balance sheet events
No adjusting or significant events have occurred between the
reporting date and the date of authorisation
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR CKADPBBKBPNB
(END) Dow Jones Newswires
March 27, 2019 03:01 ET (07:01 GMT)
Brave Bison (LSE:BBSN)
Historical Stock Chart
From Apr 2024 to May 2024
Brave Bison (LSE:BBSN)
Historical Stock Chart
From May 2023 to May 2024