TIDMBBSN
RNS Number : 6125X
Brave Bison Group PLC
27 April 2023
This announcement contains inside information for the purposes
of Article 7 of the UK version of Regulation (EU) No 596/2014 which
is part of UK law by virtue of the European Union (Withdrawal) Act
2018, as amended ("MAR"). Upon the publication of this announcement
via a Regulatory Information Service, this inside information is
now considered to be in the public domain.
27 April 2023
Brave Bison Group plc
("Brave Bison" or the "Company", together with its subsidiaries
"the Group")
Annual Results
Growth ahead of expectations; well-positioned in a challenging
environment
Brave Bison, the social and digital media company, today reports
its audited results for the year ended 31 December 2022.
Summary
Brave Bison is pleased to report a year of growth that exceeded
the Board's expectations, despite a challenging macroeconomic
environment that impacted core markets.
All acquired businesses have now been integrated under the Brave
Bison brand and trade through one of four business units:
-- Brave Bison Performance, a digital media advertising
practice
-- Brave Bison Commerce, a digital commerce practice
-- Social Chain (previously Brave Bison Social &
Influencer), a social media advertising and influencer marketing
practice
-- Brave Bison Media, a network of 650 social and digital media
channels across YouTube, Meta, TikTok and Snapchat
Financial Highlights
FY22 FY21 Change
---------------------------- --------- --------- -------
Revenue GBP31.7m GBP21.7m +46%
Gross Profit GBP16.9m GBP7.8m +117%
Adj. EBITDA (1) GBP3.0m GBP1.8m +71%
---------------------------- --------- --------- -------
Adj. Profit Before Tax (2) GBP2.6m GBP1.4m +86%
---------------------------- --------- --------- -------
Adj. Earnings Per Share 0.24p 0.18p +33%
Profit Before Tax GBP1.5m GBP0.5m +218%
Cash GBP6.5m GBP5.9m +10%
Net Cash GBP6.2m GBP4.7m +32%
============================ ========= ========= =======
(1) Adj. EBITDA is defined as earnings before interest,
taxation, depreciation and amortisation, and after adding back
acquisition costs, restructuring costs and share-based payments.
Under IFRS16 most of the costs associated with the Company's
property leases are classified as depreciation and interest,
therefore Adj. EBITDA is stated before deducting these costs.
(2) Adj. Profit Before Tax is stated after adding back
acquisition costs, restructuring costs, impairments, amortisation
of acquired intangibles and share-based payments, and is after the
deduction of costs associated with property leases.
-- Revenue growth of 46% to GBP31.7m, ahead of market
expectations and the second successive year of 40%+ revenue
growth
-- Gross profit / net revenue growth of 117% to GBP16.9m, ahead of market expectations
-- Underlying organic net revenue / gross profit growth of 12%
-- Adjusted EBITDA of GBP3.0m (FY21: GBP1.8m), an increase of
67%, and Adjusted Profit Before Tax of GBP2.6m (FY21: GBP1.4m), an
increase of 86% and ahead of market expectations
-- Adjusted Earnings per share of 0.24p (FY21: 0.18p), an
increase of 33%. No shares were issued in respect of fundraisings
or acquisitions during the year
-- Cash resources of GBP6.5m and net cash of GBP6.2m. GBP3m
revolving credit facility agreed with Barclays Bank in November
2022. The facility lasts for three years with an interest margin of
2.75% over base rate. The facility was undrawn at the period
end
Strategic Highlights
-- Acquisition & Integration strategy progressed with the
acquisition of Best Response Media (April 2022), integrated into
Brave Bison Commerce, and Social Chain (after the period end),
integrated with Brave Bison Social & Influencer
-- Total headcount of 162 (2021: 146), rising to approximately
280 after the acquisition of Social Chain, completed post-period
end. Our staff work remotely from eleven countries, with hubs in
London, Manchester and New York, as well as Bulgaria and Egypt
-- Gordon Brough appointed as independent non-executive
director, bringing extensive public company, governance and
acquisitions experience to the Board
-- Number of Snapchat shows has increased to 16 (2021: 5), with
the launch of StrEAT Food, Suit Up!, Sweet Tooth and Hidden Gaming
Details among others
-- New customer wins including Rapyd, ILX Group, Feefo, Viking
Direct, Laver Cup and WWF, and expanded engagements with New
Balance, Curry's and MKM Building Supplies
Post-Period End & Outlook
-- Social Chain, acquired in February 2023, is currently being
integrated into the Brave Bison operating platform. Progress to
date is in line with expectations. The Board expects IT, HR,
finance, marketing and operations departments to be materially
integrated by the end of H1 2023
-- The Board is comfortable with current market expectations but
notes that trading has become more challenging in the first half of
2023 as customer budgets have come under pressure
-- Brave Bison remains well capitalised with flexibility to
pursue further opportunities in line with the Company's Acquisition
& Integration strategy
Oliver Green, Chairman, commented:
"We integrated four businesses in 2022 and are pleased with the
outcome: a profitable and cash generative social and digital media
company that operates from trend to spend for our customers. Our
value proposition is now well-defined, and we are delighted to
welcome a number of new enterprise customers to Brave Bison."
For further information please contact:
Brave Bison Group plc
Oliver Green, Chairman via Cenkos
Theo Green, Chief Growth Officer
Philippa Norridge, Chief Financial Officer
Cenkos Securities plc Tel: +44 (0)20 7397 8900
Nominated Adviser & Broker
Nicholas Wells
Ben Jeynes
Dan Hodkinson
About Brave Bison
Brave Bison (AIM: BBSN) is a social and digital media company,
headquartered in London with a globally distributed workforce in
over ten countries.
Brave Bison is unique in that it is both a digital media owner,
as well as a digital media agency. The Company owns and operates
its own channels, and the communities attached to them, as well as
offering customers a suite of advertising and technology services
to help reach digital audiences.
Brave Bison has two core lines of business. Firstly, the
publishing of content on social media channels to generate
advertising revenue. Brave Bison operates over 650 channels
including PGA Tour and US Open on YouTube, Cooking Wild and DIY
& Crafts on Facebook and Slick and VSatisfying on Snap
Discover. The Brave Bison media network generates approximately 1
billion average monthly views.
The second line of business involves the provision digital
advertising and technology services for global, blue-chip brands
such as Panasonic, New Balance, Primark and Samsung. These
customers are serviced through three divisions: Social Chain
(previously Brave Bison Social & Influencer), a social media
advertising practice, Brave Bison Commerce, a digital commerce
practice, and Brave Bison Performance, a paid and organic digital
media practice.
CHAIRMAN'S REVIEW
Brave Bison competes in a growing and exciting marketplace at
the intersection of social media, technology, data science and
ecommerce.
We operate from trend to spend for our customers; promoting
products, selling advertising on our channels and building
transactional websites and apps to enable check out. Our vision is
to build a company for the new era and the past twelve months have
seen us consolidate and integrate across what has become our
foundational platform.
Brave Bison operates across four business pillars:
Brave Bison Performance is a digital media advertising practice.
We plan and buy media on platforms such as Google, Meta, TikTok,
Amazon and YouTube. All of our work is focused on helping our
customers drive conversion metrics such as sales, downloads and
subscriptions. Customers include New Balance, Curry's and Asus.
Brave Bison Commerce is a digital commerce practice. We provide
technology services to help customers design and build next
generation ecommerce platforms. Our teams use the latest MACH
technology from partners such as Salesforce, Adobe, SAP and
BigCommerce to design, launch, upgrade and support best-in-class
ecommerce systems. Customers include Viking Direct, MKM Building
Supplies and Muller.
Brave Bison Social & Influencer (re-branded to Social Chain
as of February 2023) is a social media advertising practice. We
create content for customers on social media platforms and work
with influencers to make and distribute content. This creative
approach ensures that content is native to the platform, leading to
higher engagements from audiences. Customers include Panasonic,
Vodafone, WWF and Rapyd.
Brave Bison Media Network is a portfolio of channels across
YouTube, Facebook, Snapchat, TikTok and Instagram. These channels
generate over 1 billion monthly views, and the advertising
inventory from each channel is sold through online advertising
exchanges. Popular channels include The Hook, PGA Tour, US Open and
Link Up TV.
Whilst each of our business pillars is led by a Managing
Director and supported by department heads, the Brave Bison
platform is one of connection and collaboration. We have worked
hard over the past year to ensure that, despite our four centres of
excellence, we operate as one company, with a shared vision that
aligns across each of our business pillars.
Year in Review
2022 was a strong year for Brave Bison. During the period
revenue grew by 46% to almost GBP32m, gross profit more than
doubled to just under GBP17m and the company generated adjusted
EBITDA of over GBP3m, a YoY increase of 71%. At year end our
balance sheet remained strong with net cash of over GBP6m, after
having completed our third acquisition since Theo, Philippa and I
joined the company mid 2020.
During the period the Leadership Team maintained a sharp
operational focus. We completed the integration of four businesses,
made our third acquisition, and relaunched an enhanced value and
service proposition under a refreshed Brave Bison brand. This
integrated and connected approach has already proven its ability to
attract new customers and allow for effective cross selling across
our four business units.
Best Response Media (BRM) was acquired during the period and
integrated into Brave Bison Commerce. Until the acquisition, our
efforts at Brave Bison Commerce were focused on three major
enterprise ecommerce platforms: SAP, Salesforce and BigCommerce.
Through the acquisition of BRM, we are now able to offer services
on Adobe Commerce Cloud, a ubiquitous platform that has grown from
strength-to-strength in recent years. Furthermore, we acquired a
highly experienced and flexible resource base in Mansoura, Egypt,
as well as Tier 1 customers including NatWest.
Brave Bison is headquartered in London, but the business
operates across the world. We have staff in 11 countries and almost
a quarter of our team works remotely. Furthermore, over 50% of our
staff work on a hybrid basis, often choosing to come into the
office between one and three days per week. This new way of working
is an important part of our strategy moving forward and is telling
of the digital age we are leaning into as a business. Our hybrid
and remote workforce enables us to hire more quickly, cheaply
and
often from a more diverse pool of talent. This approach also
means that, as we scale and grow our teams, we can keep property
costs low whilst maintaining a strong culture through a mixture of
virtual team events and quarterly in person socials.
Theo and I are committed to developing Brave Bison's board in a
thoughtful and measured way, in line with modern standards of
governance. The appointment of Gordon Brough as non-executive
director during the period is a further indication of this
commitment. Gordon has extensive experience in UK public companies
having been General Counsel at Aberdeen Asset Management plc
(subsequently the asset management arm of Abrdn) for almost 10
years. Gordon's legal experience, as well as his expertise in
acquisitions will be crucial to the business as we look to further
bolster our corporate profile.
Outlook
We are mindful of macroeconomic challenges over the next 12-18
months, but have confidence in the prevailing trend that continues
to shift marketing budgets away from traditional advertising and
into digital channels. Furthermore, our position in this expanding
marketplace is differentiated and growing from
strength-to-strength. This organic growth will be compounded by our
carefully considered Acquisition & Integration strategy that
has proven successful to date. Our Leadership Team is both capable
and focussed, and we anticipate that the acquisition of Social
Chain (completed in February 2023) will have a transformative
impact on our ability to win and deliver for customers in the
social media advertising space.
Oliver Green
Executive Chairman
26 April 2023
CFO'S REVIEW
2022 was a year of healthy growth at Brave Bison. Revenue
increased by 46% to GBP31.7 million (2021: GBP21.7 million), gross
profit increased by 117% to GBP16.9 million (2021: GBP7.8 million)
and adjusted profit before tax, a measure of underlying
profitability, increased by 86% to GBP2.6 million (2021: GBP1.4
million).
Organic growth of gross profit, removing the impact of
businesses acquired during the period, was GBP1.8 million, or
approximately 12%.
Principal Activities
Brave Bison has two business models. Firstly, the provision of
digital advertising and technology
services to global blue-chip companies. Services provided
include social media advertising, influencer marketing, paid media
services, search engine optimisation services, ecommerce software
integration, ecommerce system design and others. Customers include
New Balance, Muller, Primark and Asus. This
operation is referred to as "fee based services" in the Group
segmental reporting.
The digital advertising and technology services business unit
showed good growth during the year. Revenues increased by 169% to
GBP19.7 million (2021: GBP7.3 million) and the gross profit
approximately tripled to GBP14.0 million (2021: GBP4.8 million). In
line with our acquisition and integration strategy, Greenlight
Digital was integrated into Brave Bison Performance, and Greenlight
Commerce and Best Response Media were integrated into Brave Bison
Commerce.
Secondly, Brave Bison owns and operates a network of social and
digital media channels. These channels principally exist on
platforms such as YouTube, Snapchat, Facebook, TikTok and
Instagram. Brave Bison publishes content on these channels which
attract views and serve advertising which can be bought
programmatically through digital advertising platforms. This
operation is referred to as "advertising" in Group segmental
reporting.
The advertising business unit generated revenue of GBP11.9
million (2021: GBP14.3 million) and approximately 1.3 billion views
(2021: 1.7 billion). This decrease year-on-year largely relates to
channels that are operated but not owned by Brave Bison on a
revenue share basis, therefore the underlying gross profit
remained
broadly flat at GBP2.9 million (2021: GBP3.0 million). The small
drop in gross profit was largely due to a softening of CPMs (cost
per mille) in the second half of the year in response to
macroeconomic
conditions. As we saw during the pandemic, this part of our
business can be sensitive to such conditions, but tends to recover
swiftly.
Margins & Operations
Brave Bison tracks adjusted profit margin (adjusted profit
before tax as a percentage of gross profit) as a key performance
indicator to measure the Group's financial performance.
The adjusted profit margin for the period was 15.4% (2021:
17.9%) a decrease year-on-year. This decrease was driven by the
tripling of digital advertising and technology services net
revenues which operates at a lower adjusted profit margin than
advertising generated on the media network.
Despite the decrease in adjusted profit margin, Brave Bison has
completed a number of initiatives to reduce the underlying
operating costs of the business. These include a reduction in
property costs through sub-letting excess office space, reduction
in IT costs as business units are merged and careful
resource management to reduce the staff cost to net revenue
ratio for billable customers.
Exceptional Costs & Adjustments
During the year Brave Bison incurred restructuring costs of
GBP0.1 million (2021:GBP0.2 million), relating to the restructuring
and expansion of the Group's operations in Bulgaria, and
acquisition costs of GBP0.1 million (2021: GBP0.7 million) relating
to the costs associated with acquiring Best Response Media.
Brave Bison carried out a purchase price allocation exercise
during the year in relation to the Greenlight acquisitions which
completed in 2021, which resulted in identification of intangible
assets relating to the acquired brands and customer relationships.
As a result of the rebranding, and retirement of the Greenlight
trade brand during the year, the amounts relating to this were
impaired in full during the year, resulting in an impairment charge
of GBP0.5 million (2021: GBPnil). The customer relationships are
being amortised over a period of 10 years, resulting in a charge of
GBP0.2 million (2021: GBPnil). As we deliver on our acquisition and
integration strategy it is likely that both the amortisation of
acquired intangibles, and impairment of acquired brands retired
post-integration will continue to impact our financial
statements.
Equity settled share-based payments relate to the value of share
awards that have been granted to employees of the Group. GBP0.3
million of this amount relates to the directors' LTIP, which can
only be redeemed in accordance with the terms outlined in the
Directors' Remuneration Report. The earliest possible redemption
date is December 2024, and redemption is contingent on the share
price exceeding 3.0 pence.
Adjusted EBITDA is a non-IFRS measure that the Group uses to
measure its performance and is defined as earnings before interest,
taxation, depreciation and amortisation and after add back of costs
related to restructuring, acquisitions and share based payments. It
should be noted that a portion of the property costs in both 2022
and 2021 fall into the finance costs and depreciation lines as a
result of the introduction of IFRS 16 'Leases'. As a result, the
Group also uses Adjusted profit before tax as a measure of
performance, which is stated after add back of costs related to
restructuring, acquisitions, share based payments, impairments and
amortisation of acquired intangibles, but which is after the
deduction of costs associated with property leases.
2022 2021
GBP000's GBP000's
Adjusted EBITDA 3,020 1,762
Finance costs (86) (67)
Finance income 80 -
Depreciation (382) (279)
-------- --------
Adjusted Profit before tax 2,632 1,416
Restructuring costs (62) (176)
Acquisition costs (56) (686)
Impairment charge (456) -
Amortisation of acquired intangibles (215) (34)
Equity settled share based payments * (387) (62)
-------- --------
Profit before tax 1,456 458
-------------------------------------- -------- --------
* GBP0.3 million of the equity settled share based payments is a
non-cash charge related to the director's LTIP, which can only be
redeemed in accordance with the terms outlined in the Directors'
Remuneration
Report.
Financial Position
Brave Bison ended the period with cash resources of GBP6.5
million (2021: GBP5.9 million) and net cash after deducting
outstanding bank loans of GBP6.2 million (2021: GBP4.7 million).
The bank loan relates to a Government-backed CBIL that is repayable
over six years from drawdown.
In addition to the CBIL, Brave Bison has a revolving credit
facility with Barclays Bank for a total of GBP3 million, with an
interest margin of 2.75% over Base Rate. This was agreed during the
period but was undrawn at the period end.
The Group had cash inflow of GBP0.6 million during the period
(2021: GBP3.2 million inflow), and expects to maintain positive
cashflow throughout 2023. The decrease in cash inflow is largely
due to a large customer prepayment received at the end of 2021,
which subsequently unwound during the period.
In addition to this, the cashflow generated from operating
activities was used to fund the acquisition of Best Response Media
(GBP0.3 million) and the payment of deferred consideration in
respect of the Greenlight acquisition made in 2021 (GBP0.8
million).
The Group is carrying intangible assets of GBP6.3 million (2021:
GBP6.3 million). Based on an interim fair value exercise the Group
capitalised goodwill of GBP0.2 million (2021: GBP6.2 million) on
the purchase of Best Response Media (2021: Greenlight). The Group
does not capitalise any wages.
Key Performance Indicators
2021 2020
GBP000's GBP000's
Revenue 31,652 21,660
Gross Profit 16,948 7,806
Adjusted EBITDA 3,020 1,762
Adjusted Profit Before Tax 2,631 1,416
Adjusted Earnings per ordinary share (pence) 0.24 0.18
Profit before tax 1,456 458
Gross Cash 6,485 5,906
Net Cash 6,177 4,740
The movements in these key performance indicators are discussed
above, and in the Chairman's report.
Philippa Norridge
Chief Financial Officer
26 April 2023
CONSOLIDATED INCOME STATEMENT AND CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
31 31
December December
Note 2022 2021
GBP000's GBP000's
Revenue 6 31,652 21,660
Cost of sales (14,704) (13,854)
-------- --------
Gross profit 16,948 7,806
Administration expenses (15,486) (7,281)
Operating profit 7 1,462 525
Finance income 9 80 -
Finance costs 9 (86) (67)
-------- --------
Profit before tax 7 1,456 458
Analysed as
Adjusted EBITDA 3,020 1,762
Finance costs 9 (86) (67)
Finance income 9 80 -
Depreciation 14 (382) (279)
-------- --------
Adjusted Profit before tax 2,631 1,416
Restructuring costs 8 (62) (176)
Acquisition costs 29 (56) (686)
Impairment charge 15 (456) -
Amortisation of acquired intangibles 13 (215) (34)
Equity settled share based payments 24 (387) (62)
-------- --------
Profit before tax 1,456 458
-------------------------------------------- ---- -------- --------
Income tax credit 10 624 -
-------- --------
Profit attributable to equity holders
of the parent 2,080 458
======== ========
Statement of Comprehensive Income
Profit for the year 2,080 458
Items that may be reclassified subsequently
to profit or loss
Exchange gain/(loss) on translation of
foreign subsidiaries 25 (7)
-------- --------
Total comprehensive profit for the year
attributable to owners of the parent 2,105 451
======== ========
Earnings per share (basic and diluted)
Basic earnings per ordinary share (pence) 11 0.19p 0.06p
Diluted earnings per ordinary share (pence) 11 0.18p 0.06p
All transactions arise from continuing operations.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 31 At 31
December December
Note 2022 2021
GBP000's GBP000's
Non-current assets
Intangible assets 13 6,270 6,265
Property, plant and equipment 14 372 672
Deferred tax asset 16 48 135
--------- ---------
6,690 7,072
Current assets
Trade and other receivables 17 7,426 6,636
Cash and cash equivalents 6,485 5,906
--------- ---------
13,911 12,542
Current liabilities
Trade and other payables 18 (9,310) (10,528)
Bank Loans <1 year 20 (109) (108)
Lease Liabilities 19 (393) (629)
--------- ---------
(9,812) (11,265)
Non-current liabilities
Lease Liabilities 19 - (393)
Deferred tax liability 16 (283) -
Bank loans >1 year 20 (199) (308)
Provisions 21 (285) (118)
--------- ---------
(767) (819)
Net Assets 10,022 7,530
--------- ---------
Equity
Share capital 22 1,081 1,081
Share premium 84,551 84,551
Capital redemption reserve 6,660 6,660
Merger reserve (24,060) (24,060)
Merger relief reserve 62,624 62,624
Retained deficit (121,001) (123,468)
Translation reserve 167 142
--------- ---------
Total equity 10,022 7,530
--------- ---------
The financial statements were authorised for issue by the Board
of Directors on 26 April 2023 and were signed on its behalf by
Philippa Norridge
Chief Financial Officer
CONSOLIDATED STATEMENT OF CASH FLOWS 2022 2021
GBP000's GBP000's
Operating activities
Profit before tax 1,456 458
Adjustments:
Depreciation, amortisation and impairment 1,053 57
Finance income (80) -
Finance costs 86 67
Share based payment charges 387 62
(Increase)/decrease in trade and other
receivables (553) 1,314
(Decrease)/increase in trade and other
payables (721) 2,033
Tax received 84 -
-------- --------
Cash inflow from operating activities 1,712 3,991
Investing activities
Acquisition of subsidiaries (1,174) (7,735)
Net cash acquired on acquisition 840 1,451
Purchase of property plant and equipment (81) (34)
Purchase of intangible assets - -
Interest received 80 -
-------- --------
Cash outflow from investing activities (335) (6,318)
Cash flows from financing activities
Issue of share capital - 6,257
Interest paid (86) (5)
Repayment of borrowings (108) (36)
Repayment of lease liability (629) (730)
-------- --------
Cash (outflow)/inflow from financing activities (823) 5,486
Net increase in cash and cash equivalents 554 3,159
======== ========
Movement in net cash
Cash and cash equivalents, beginning of
year 5,906 2,754
Increase in cash and cash equivalents 554 3,159
Movement in foreign exchange 25 (7)
-------- --------
Cash and cash equivalents, end of year 6,485 5,906
======== ========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Capital
redemption Merger Merger Translation
Reserve Reserve relief Reserve Retained Total
Share Capital Share premium Reserve deficit Equity
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's
At 1 January
2021 613 78,762 6,660 (24,060) 62,624 149 (123,988) 760
Shares issued
during the year 468 5,789 - - - - - 6,257
Equity settled
share based
payments - - - - - - 62 62
Transactions
with owners 468 5,789 - - - - 62 6,319
------------- ------------- ------------ --------- --------- ------------- --------- --------
Other
comprehensive
income
Profit and total
comprehensive
income for the
year - - - - - (7) 458 451
At 31 December
2021 1,081 84,551 6,660 (24,060) 62,624 142 (123,468) 7,530
------------- ------------- ------------ --------- --------- ------------- --------- --------
Shares issued
during the year - - - - - - - -
Equity settled
share based
payments - - - - - - 387 387
Transactions
with owners - - - - - - 387 387
------------- ------------- ------------ --------- --------- ------------- --------- --------
Other
Comprehensive
income
Profit and total
comprehensive
income for the
year - - - - - 25 2,080 2,105
At 31 December
2022 1,081 84,551 6,660 (24,060) 62,624 167 (121,001) 10,022
------------- ------------- ------------ --------- --------- ------------- --------- --------
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2022
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 The Varnish Works, 3 Bravingtons Walk,
London, N1 9AJ. 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 2022 comprise the Company and its subsidiaries
(together referred to as the "Group"). 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
Review on pages 6-7, and Principal Risks and Uncertainties on page
9. In addition, Note 26 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.
2 Basis of preparation
2.1. Going Concern
The consolidated 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,
and at least for 12 months from the date of approval of the
consolidated financial statements. The Group is dependent for its
working capital requirements on cash generated from operations, and
cash holdings. The cash holdings of the Group at 31 December 2022
were GBP6.5 million (2021: GBP5.9 million). The Group made a profit
before tax of GBP1.5 million for the year ended 31 December 2022
(2021: GBP0.5 million), and generated an increase in cash and cash
equivalents in 2022 of GBP0.6 million (2021: GBP3.2 million). The
Group has net assets of GBP10.0 million (2021: GBP7.5 million).
The Directors have prepared detailed cash flow projections for
the period to 31 December 2023 and for the following 6 month period
to 30 June 2024 which are based on their current expectations of
trading prospects. The Group achieved positive cashflow of GBP1.1
million in H2 2022, and the Board forecasts that the Group will
continue to achieve positive cash inflows in 2023.
The Directors are confident that the Group's cash flow
projections are achievable, and are committed to taking any actions
available to them to ensure that any shortfall in forecast revenue
receipts is mitigated by cost savings.
The Directors continue to maintain rolling forecasts which are
regularly updated.
The Directors remain confident that the Group has sufficient
cash resources for a period of at least twelve months from the date
of approval of these consolidated financial statements and
accordingly, the Directors have concluded that it is appropriate to
continue to adopt the going concern basis in preparing these
consolidated financial statements.
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 2022, with comparative information
presented for the year ended 31 December 2021. 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 accounted for using 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.
2.2. Adoption of new and revised standards
The Group has applied the following amendments:
-- IFRS 3 - Reference to the Conceptual Framework;
-- IAS 16 - Property, Plant and Equipment: Proceeds before intended use ;
-- IAS 37 - Onerous Contracts: Cost of Fulfilling a Contract; and
-- Annual Improvements to IFRS Standards 2018 - 2020 Cycle.
Other Standards and amendments that are not yet effective and
have not been adopted early by the Company include:
-- Amendments to IAS 1 and IFRS Practice Statement 2 - Disclosure of Accounting Policies;
-- Amendments to IAS 8 - Definition of Accounting Estimates;
-- Amendments to IAS 12 - Deferred Tax related to Assets and
Liabilities arising from a Single Transaction;
-- Amendments to IAS 1 - Classification of Liabilities as Current or Non-current;
-- Amendments to IAS 1 - Non-current Liabilities with Covenants; and
-- Amendments to IFRS 16 - Lease Liability in a Sale and Leaseback.
The directors have assessed the standards above and they will
not have a material impact in future periods.
3 Statement of compliance
The financial statements have been prepared in accordance with
the accounting policies and presentation required by UK adopted
International Accounting Standards, and International Financial
Reporting Interpretations Committee ("IFRIC") Interpretations as
endorsed for use in the UK. The financial statements have also been
prepared under the historical cost convention and in accordance
with those parts of the Companies Act 2006 that are relevant to
companies that prepare financial statements in accordance with UK
adopted International Accounting Standards.
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 judgement 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 Statement of Financial Position. 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:
-- Ad-funded YouTube channel management of third party content
owners' videos. Revenue is recognised at the point in time when the
performance obligation of delivering monetised views occurs;
and
-- Monetisation of the Group's owned and operated brands and
videos via platforms such as Facebook and Snapchat. Revenue is
recognised at the point in time when the performance obligation of
delivering monetised views occurs.
Fee Based Service revenue:
-- Social Media and Influencer services. Providing social media
consultancy and strategy services, and providing creative and
influencer management services. Revenue from providing these
services is recognised over the time that the performance
obligations 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;
-- Performance marketing services. Revenue from providing these
services is recognised over the time that the performance
obligations to provide services are satisfied; and
-- Technology services. Revenue from providing these services is
recognised over the time that the performance obligations to
provide services are 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. Government grants
Government grants are recognised at the fair value of the asset
received or receivable when there is reasonable assurance that the
grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in
income when the performance conditions are met. Where a grant does
not specify performance conditions it is recognised in income when
the proceeds are received or receivable. A grant received before
the recognition criteria are satisfied is recognised as a
liability. Government grants are presented as a deduction from the
related expense.
4.4. 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.
4.5. 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 a digital media and marketing group, 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, but view the business as having 2 key
pillars, being the Media Network and the Digital Advertising and
Technology Services. The Group will provide a split between these
two pillars, as well as a split by geographical location. Segmental
information is presented in accordance with IFRS 8 for all periods
presented within Note 6.
4.6. Leasing
For any new contracts entered into on or after 1 January 2019,
the Group considers whether a contract is, or contains a lease. A
lease is defined as 'a contract, or part of a contract, that
conveys the right to use an assed (the underlying asset) for a
period of time in exchange for consideration'. To apply this
definition the Group assesses whether the contract meets three key
evaluations which are whether:
-- The contract contains an identified asset, which is either
explicitly identified in the contract or implicitly specified by
being identified at the time the asset is made available to the
Group;
-- The Group has the right to obtain substantially all of the
economic benefits from use of the identified asset throughout the
period of use, considering its rights within the defined scope of
the contract; and
-- The Group has the right to direct the use of the identified
asset throughout the period of use. The Group assess whether it has
the right to direct 'how and for what purpose' the asset is used
throughout the period of use.
At lease commencement date, the Group recognises a right-of-use
asset and a lease liability on the balance sheet. The right-of-use
asset is measured at cost, which is made up of the initial
measurement of the lease liability, any initial direct costs
incurred by the Group, an estimate of any costs to dismantle and
remove the asset at the end of the lease, and any lease payments
made in advance of the lease commencement date (net of any
incentives received).
The Group depreciates the right-of-use assets on a straight-line
basis from the lease commencement date to the earlier of the end of
the useful life of the right-of-use asset or the end of the lease
term. The Group also assesses the right-of-use asset for impairment
when such indicators exist.
At the commencement date, the Group measures the lease liability
at the present value of the lease payments unpaid at that date,
discounted using the interest rate implicit in the lease if that
rate is readily available or the Group's incremental borrowing
rate.
Lease payments included in the measurement of the lease
liability are made up of fixed payments (including in substance
fixed), variable payments based on an index or rate, amounts
expected to be payable under a residual value guarantee and
payments arising from options reasonably certain to be
exercised.
Subsequent to initial measurement, the liability will be reduced
for payments made and increased for interest. It is remeasured to
reflect any reassessment or modification, or if there are changes
in in-substance fixed payments.
When the lease liability is remeasured, the corresponding
adjustment is reflected in the right-of-use asset, or profit and
loss if the right-of-use is already reduced to zero.
The Group has elected to account for short-term leases and
leases of low-value assets using the practical expedients. Instead
of recognising a right-of-use asset and lease liability, the
payments in relation to these are recognised as an expense in the
profit or loss on a straight-line basis over the lease term.
On the statement of financial position, right-of-use assets have
been included in property, plant and equipment and lease
liabilities have been included in trade and other payables.
4.7. 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.
The Group depreciates the right-of-use assets on a straight-line
basis from the lease commencement date to the earlier of the end of
the useful life of the right-of-use asset or the end of the lease
term. The Group also assesses the right-of-use asset for impairment
when such indicators exist.
4.8. 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.
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 to 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 to 5 years
-- Brands - 3 years
-- Technology - 1 to 5 years
Goodwill is not amortised but is instead reviewed for impairment
on an annual basis as outlined below.
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 derecognised
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.
Contract assets and liabilities
The Group does not adjust the promised amount of consideration
for the effects of a significant financing component if the entity
expects, at contract inception, that the period between when the
entity transfers a promised good or service to a customer and when
the customer pays for that good or service will be one year or
less.
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 created 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; and
-- 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
is 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, as detailed in note
8.
4.19. Provisions
The Group has recognised a provision for the costs to restore
leased property to its original condition, as required by the terms
and conditions of the lease. This is recognised when the obligation
is incurred, either at the commencement date or as a consequence of
having used the underlying asset during a particular period of the
lease, at the directors' best estimate of the expenditure that
would be required to restore the assets. Estimates are regularly
reviewed and adjusted as appropriate for new circumstances.
5 Critical accounting judgements and key sources of estimation uncertainty
The preparation of financial statements under UK adopted
International Accounting Standards 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.
Trade receivables' recovery
Within trade debtors there is a balance of GBP0.7 million (2021:
GBP0.7 million) which is over one year in age which the Group has
judged it not necessary to provide for. This is because it believes
it is recoverable, since there is a trade payable balance of GBP0.8
million (2021: GBP0.8 million) with the same company, and the Group
is anticipating reaching agreement that these balances may be set
off against each other.
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 are recognised in respect of tax loss carry
forwards only to the extent that the realisation of the related tax
benefit through future taxable profits is probable.
Greenlight acquisition and purchase price allocation
The purchase price allocation of the Greenlight acquisition was
fully assessed in the year, within the one year IFRS 3 measurement
period from the date of acquisition, and acquired intangibles were
identified and a full valuation exercise carried out in relation to
the Greenlight trade name and the customer relationships. The
purchase price has been reallocated accordingly.
Best Response Media acquisition and purchase price
allocation
The purchase price allocation of the Best Response Media
acquisition was provisionally assessed, and the Group judged that
at the interim valuation stage it was not able to reliably estimate
the fair value of acquired intangibles and therefore the excess of
consideration over fair value of other assets and liabilities has
been allocated to goodwill. A full valuation exercise will be
completed within the one year IFRS3 measurement period from the
date of acquisition which may recognise additional intangible
assets separately from goodwill.
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% and 1.25% 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
Geographic reporting
The Group has identified three geographic areas (United Kingdom
& Europe, Asia Pacific and Rest of the world) and the
information is presented based on the customers' location.
2022 2021
Revenue GBP000's GBP000's
United Kingdom & Europe 28,493 17,548
Asia Pacific 311 894
Rest of the world 2,848 3,218
-------- --------
Total revenue 31,652 21,660
======== ========
The Group identifies two revenue streams, advertising and fee
based services, which correspond to the Media Network and Digital
Advertising and Technology Services pillars respectively. The
analysis of revenue by each stream is detailed below, a detailed
overview can be found in the Strategic Report.
Revenue 2022 2021
GBP000's GBP000's
Advertising 11,905 14,329
Fee based services 19,747 7,331
Total revenue 31,652 21,660
======== ========
Gross profit 2022 2021
GBP000's GBP000's
Advertising 2,945 3,044
Fee based services 14,003 4,762
Total gross profit 16,948 7,806
========= ========
Timing of revenue recognition
The following table includes revenue from contracts disaggregated
by the timing of recognition.
2022 2021
GBP000's GBP000's
Products and services transferred at a point
in time 11,968 14,432
Products and services transferred over time 19,684 7,228
--------- --------
Total revenue 31,652 21,660
========= ========
7 Operating Profit and Profit before taxation
The operating profit and the profit before taxation are stated
after:
2022 2021
GBP000's GBP000's
Auditor's remuneration:
* Audit services 178 80
* Audit related services 10 5
* Tax compliance 49 8
Operating lease rentals - land and buildings
on short term leases - 56
Depreciation: property, plant and equipment 382 279
Impairment of intangible assets 456 -
Amortisation of intangible assets 215 34
Foreign exchange loss 23 28
8 Restructuring costs
2022 2021
GBP000's GBP000's
Restructuring costs 62 176
======== =========
Restructuring costs in 2021 and 2022 relate to corporate
reorganisation activities as a result of the acquisition of
Greenlight, and costs associated with setting up a Bulgarian
subsidiary and transferring employees into this entity.
9 Finance income and costs
2022 2021
GBP000's GBP000's
-------- ---------
Bank interest 80 -
-------- ---------
2022 2021
GBP000's GBP000's
Interest expense for leasing arrangements 71 62
Interest on bank loans 15 5
-------- ---------
86 67
-------- ---------
10 Income tax credit
Major components of tax credit:
2022 2021
GBP000's GBP000's
Current tax:
UK corporation tax at 19.00% (2021: 19.00%) (36) -
Overseas tax 1 -
Prior year adjustment (522)
---------- ----------
Total current tax (557) -
---------- ----------
Deferred Tax:
Originations and reversal of temporary differences
(Note 16) (148) -
Adjustments to tax charge in respect of previous
periods - deferred tax 78
Effect of tax rate change on opening balances 3 -
-----
Tax credit on profit/loss on ordinary activities (67) -
=====
UK corporation tax is calculated at 19.00% (2021: 19.00%) 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:
2022 2021
GBP000's GBP000's
Profit on ordinary activities before tax 1,456 458
---------- ----------
Income tax using the Company's domestic tax
rate 19.00% (2021: 19.00%) 277 87
Effect of:
Property, plant and equipment differences (3) (39)
Intangible asset differences (154)
Expenses not deductible for tax purposes 185 175
Other permanent differences (11) (55)
R&D tax credit claim in respect of previous
periods - current tax (522) (17)
Adjustments to tax charge in respect of previous
periods - deferred tax 78 -
Remeasurement of deferred tax for changes
in tax rates 3 -
Difference in tax rates (3) -
Unutilised tax losses carried forward (474) (151)
Total tax credit for the year (624) -
========== ==========
11 Earnings per share
Both the basic and diluted earnings per share have been
calculated using the profit after tax attributable to shareholders
of Brave Bison Group plc as the numerator, i.e. no adjustments to
profits were necessary in 2021 or 2022. The calculation of the
basic earnings per share is based on the profit attributable to
ordinary shareholders divided by the weighted average number of
shares in issue during the year.
2022 2021
Weighted average number of ordinary shares 1,080,816,000 768,367,147
Dilution due to share options 62,176,266 57,637,981
------------- -----------
Total weighted average number of ordinary
shares 1,142,992,266 826,005,128
============= ===========
Basic earnings per ordinary share (pence) 0.19p 0.06p
============= ===========
Diluted earnings per ordinary share (pence) 0.18p 0.06p
============= ===========
Adjusted basic earnings per ordinary share
(pence) 0.27p 0.18p
============= ===========
Adjusted diluted earnings per ordinary share
(pence) 0.26p 0.17p
============= ===========
2022 2021
GBP000's GBP000's
Profit for the year attributable to ordinary shareholders 2,080 458
Equity settled share based payments 387 62
Restructuring costs 62 176
Acquisition costs 56 686
Impairment charge 456 -
Amortisation of acquired intangibles 215 34
Tax credit (624) -
Adjusted earnings for the year attributable to the
equity shareholders 2,632 1,416
======== ========
12 Directors and employees
The average number of persons (including Directors) employed by
the Group during the year was:
2022 2021
Number Number
Sales, production and operations 137 60
Support services and senior executives 25 15
------ ------
162 75
====== ======
The aggregate cost of these employees was:
2022 2021
GBP000's GBP000's
Wages and salaries 5,610 3,558
Payroll taxes 718 341
Pension contributions 333 183
6,661 4,082
======== ========
Directors emoluments paid during the period and included in the
above figures were:
2022 2021
GBP000's GBP000's
Emoluments 446 304
-------- --------
446 304
======== ========
The highest paid Director received emoluments totalling GBP0.2
million (2021: GBP0.2 million). The amount of share based payments
charge (see Note 24) which relates to the Directors was GBP0.3
million. (2021: GBP0.1 million charge). 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:
2022 2021
GBP000's GBP000's
Salaries including bonuses 391 273
Social security costs 54 38
-------- --------
Total Emoluments 445 311
======== ========
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 1 January 2021 35,075 2,034 5,213 273 19,332 61,927
Additions 6,155 - - - - 6,155
---------------- -------- ---------- -------- --------------- ---------
At 31 December 2021 41,230 2,034 5,213 273 19,332 68,082
---------------- -------- ---------- -------- --------------- ---------
Reallocation of
Goodwill (1,379) - - 456 1,360 437
Additions 239 - - - - 239
---------------- -------- ---------- -------- --------------- ---------
At 31 December 2022 40,090 2,034 5,213 729 20,692 68,758
---------------- -------- ---------- -------- --------------- ---------
Amortisation and impairment
At 1 January 2021 35,075 1,890 5,213 273 19,332 61,783
Charge for the year - 34 - - - 34
---------------- -------- ---------- -------- --------------- ---------
At 31 December 2021 35,075 1,924 5,213 273 19,332 61,817
---------------- -------- ---------- -------- --------------- ---------
Charge for the year - 34 - - 181 215
Impairment charge - - - 456 - 456
---------------- -------- ---------- -------- --------------- ---------
At 31 December 2022 35,075 1,958 5,213 729 19,513 62,486
---------------- -------- ---------- -------- --------------- ---------
Net Book Value
At 31 December 2020 - 144 - - - 144
================ ======== ========== ======== =============== =========
At 31 December 2021 6,155 110 - - - 6,265
================ ======== ========== ======== =============== =========
At 31 December 2022 5,015 76 - - 1,179 6,270
================ ======== ========== ======== =============== =========
During the year the Group acquired Best Response Media Limited
and capitalised goodwill of GBP0.2 million.
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 assets 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.
During the year, within the one year IFRS 3 measurement period
from the date of acquisition, the Group carried out a full fair
value adjustment exercise in relation to the acquisition of
Greenlight Digital and Greenlight Commerce on 1 September 2021. As
a result intangible assets have been identified in relation to the
Greenlight trade name and the customer relationships, and amounts
allocated to goodwill at the interim valuation have been
reallocated to these intangible assets. An amount has also been
reallocated to deferred tax liabilities resulting in an overall
increase of intangible assets related to the Greenlight acquisition
of GBP0.4 million.
As at 31 December 2022, the intangible assets were assessed for
impairment. The Greenlight trade names were fully impaired as they
are no longer in use following a re-branding during the year. The
impairment charge was GBP0.5million (2021: GBPnil). The customer
relationships acquired as part of the Greenlight acquisitions are
being amortised over 10 years.
The estimated cash flows for a period of 5 years were developed
using internal forecasts, and a pre-tax discount rate of 10%. 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
Right of Use Leasehold Fixtures &
asset Improvements Computer Equipment Fittings Total
GBP000's GBP000's GBP000's GBP000's GBP000's
Cost
At 1 January 2021 1,035 - 902 220 2,157
Additions - - 34 - 34
Acquisition of
subsidiary 719 11 36 - 766
At 31 December
2021 1,754 11 972 220 2,957
Additions - - 54 27 81
Acquisition of
subsidiary - - 1 - 1
Disposals - - (904) (220) (1,124)
------------ ------------- ------------------ ---------- --------
At 31 December
2022 1,754 11 123 27 1,915
------------ ------------- ------------------ ---------- --------
Depreciation and
impairment
At 1 January 2021 889 - 899 218 2,006
Charge for the
year 256 2 19 2 279
At 31 December
2021 1,145 2 918 220 2,285
Charge for the
year 333 6 41 2 382
Disposals - - (904) (220) (1,124)
At 31 December
2022 1,478 8 55 2 1,543
Net Book Value
At 31 December
2020 146 - 3 2 151
============ ============= ================== ========== ========
At 31 December
2021 609 9 54 - 672
============ ============= ================== ========== ========
At 31 December
2022 276 3 68 25 372
============ ============= ================== ========== ========
15 Impairment charge
2022 2021
GBP000's GBP000's
Impairment of intangible assets 456 -
Total impairment charge 456 -
======== ========
During the year the Group assessed the value in use of the
Greenlight Digital and Greenlight Commerce brand names. As a result
of the rebranding of Greenlight Digital to Brave Bison Performance
and Greenlight Commerce to Brave Bison Commerce, the value in use
of the brands was assessed to be zero.
16 Deferred taxation assets and liabilities
Deferred tax recognised:
2022 2021
GBP000's GBP000's
Deferred tax
Deferred tax asset 48 135
Deferred tax liability (283) -
(235) 135
======== ========
Unutilised tax losses carried forward which have not been
recognised as a deferred tax asset at 31 December 2022 were GBP49.9
million (2021: GBP52.4 million). These have not been recognised due
to uncertainty about future consistent taxable profits. Deferred
tax has been calculated at a rate of 25% given the change in rate
which has been substantively enacted at the statement of financial
position date.
Reconciliation of movement in deferred tax
Deferred
tax on intangible
assets
GBP000's
As at December 2020 -
Addition due to acquisition of Greenlight 135
------------------
Recognised in the income statement -
------------------
As at 31 December 2021 135
Recognised in the income statement 67
Balance arising as a result of the PPA
exercise in relation to Greenlight (437)
------------------
As at 31 December 2022 (235)
==================
This deferred tax asset relates to short term timing differences
and has therefore been recognised.
17 Trade and other receivables
2022 2021
GBP000's GBP000's
Trade receivables 5,613 4,258
Less allowance for credit losses (587) (559)
-------- --------
Net trade receivables 5,026 3,699
Unbilled income 1,737 1,964
Other receivables 663 973
7,426 6,636
======== ========
The contractual value of trade receivables is GBP5.6 million
(2021: GBP4.3 million). Their carrying value is assessed to be
GBP5.0 million (2021: GBP3.7 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 ageing analysis of these trade receivables showing fully
performing and past due but not impaired is as follows:
2022 2021
GBP000's GBP000's
Not overdue 3,357 1,814
Not more than three months 817 786
More than three months but not more than
six months 93 53
More than six months but not more than
one year 34 -
More than one year 725 1,046
5,026 3,699
======== ========
The movement in provision for impairment of trade receivables
can be reconciled as follows:
2022 2021
GBP000's GBP000's
Opening provision (559) (40)
Provisions from acquisition of Greenlight - (500)
Provisions from acquisition of Best Response
Media (70) -
Receivables provided for during period (359) (40)
Reversal of previous provisions 401 21
(587) (559)
======== ========
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. Within
trade debtors there is a balance of GBP0.7 million which is over
one year in age which the Group has judged it not necessary to
provide for. This is because it believes it is recoverable, since
there is a similar trade creditor balance with the same company,
and the Group is anticipating reaching agreement that these
balances may be set off against each other.
The other classes within trade and other receivables do not
contain impaired assets.
18 Trade and other payables
2022 2021
GBP000's GBP000's
Trade payables 1,366 2,030
Other taxation and social security 945 1,161
Contract liabilities 1,873 1,277
Deferred consideration - 750
Accruals and deferred income 5,126 5,310
9,310 10,528
======== ========
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 34 days
(2021: 53 days).
Contract liabilities are utilised upon satisfaction of the
associated contract performance obligations. The 2022 contract
liability of GBP1.9 million is expected to be utilised in the next
reporting periods upon satisfaction of the associated performance
obligation. The 2021 contract liability of GBP1.3 million was
recognised within revenue during 2022 upon satisfaction of the
associated performance obligation.
19 Lease Liabilities
Lease liabilities are presented in the statement of financial
position as follows:
2022 2021
GBP000's GBP000's
Current 393 629
Non-current - 393
-------- --------
393 1,022
======== ========
The Group acquired two office leases with the acquisition of
Greenlight which expire in November 2023. Each lease is reflected
on the statement of financial position as a right-of-use asset and
a corresponding lease liability.
The table below describes the nature of the Group's leasing
activities by type of right-of-use asset recognised in the
statement of financial position:
No. of right-of-use Range of remaining Average remaining No. of leases No. of leases
assets leased term lease term with extension with termination
options options
Office building 2 1 years 1 years - -
The lease liabilities are secured by the related underlying
assets. Future minimum lease payments at 31 December 2022 were as
follows:
Within one One to two Total
year years
GBP000's GBP000's GBP000's
Lease payments 408 - 408
Finance charges (15) - (15)
---------- ---------- --------
Net present values 393 - 393
========== ========== ========
The Group has elected not to recognise a lease liability for
short term leases (leases with an expected term of 12 months or
less). Payments made under such leases are expensed on a
straight-line basis.
The Group received a COVID-19 related rent concession during the
period of GBPnil (2021: GBP0.1 million). It has applied the
exemption granted by the COVID-19 Related Rent Concessions
(Amendment to IFRS 16) and has therefore not assessed this as a
lease modification but has included it within administration
expenses.
At 31 December 2022 the Group had not committed to any leases
which had not yet commenced excluding those recognised as a lease
liability.
Further information in relation to the right-of-use assets can
be found in note 14.
20 Bank loans
2022 2021
GBP000's GBP000's
Loan <1 year 109 108
Loan >1 year 199 308
-------- --------
308 416
======== ========
The Group has a Bounce Back Loan Agreement which is due to be
fully repaid in 2026. The repayment amount and timing of each
instalment is based on a fixed interest rate of 2.5% payable on the
outstanding principal amount of the loan and applicable until the
final repayment date. This loan is unsecured. The Group also has a
Coronavirus Business Interruption Loan ("CBIL") which was acquired
as part of the Greenlight acquisition which is due to be fully
repaid in 2026. The repayment amount and timing of each instalment
is based on a fixed interest rate of 4.35% per annum payable on the
outstanding principal amount of the loan and applicable until the
final repayment date. The CBIL is secured by a fixed and floating
charge over the assets of Greenlight Digital Limited, together with
a cross guarantee with Brave Bison Group Plc, Brave Bison Limited
and Greenlight Commerce Limited in favour of Barclays Bank, dated 1
September 2021. During the year the Group agreed a GBP3mn revolving
credit facility (RCF) with Barclays Bank plc. The RCF is a 3 year
facility with an interest margin of 2.75% over Base Rate. At the
end of 2022 the RCF remained undrawn.
21 Provisions for liabilities
2022 2021
GBP000's GBP000's
Dilapidations provision 285 118
-------- --------
285 118
======== ========
Dilapidation
provision
GBP000's
As at 31 December 2021 118
Additional provision in the year 167
------------
As at 31 December 2022 285
============
The dilapidations provision represents management's best
estimate of the Group's liability relating to the restoration of
the leased property to its original condition at the end of the
lease.
22 Share capital
Ordinary share capital At 31 December 2022 At 31 December 2021
Number GBP000's Number GBP000's
Ordinary shares of
GBP0.001 1,080,816,000 1,081 1,080,816,000 1,081
Total ordinary share capital
of the Company 1,081 1,081
========= ===========
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 23.
23 Reconciliation of share capital
2022 2021
Ordinary Ordinary Share Ordinary Ordinary Share
Shares Capital Shares Capital
Number GBP000's Number GBP000's
GBP0.0000001 GBP0.0000001
Opening balance 1,080,816,000 1,081 612,821,228 613
Issue of ordinary
shares - - 467,994,772 468
Closing balance 1,080,816,000 1,081 1,080,816,000 1,081
============= ============== ============= ==============
24 Share options
During 2022 Brave Bison Limited granted 9,050,000 RSUs, which
vest annually over a 3 year period to senior employees in the
business at an exercise price of 1.75 pence (2021: 26,500,000).
The options were valued using the Black-Scholes valuation model,
using the following assumptions.
2022 2021
Expected option life 4 years 4 years
Expected volatility 50% 50%
Weighted average volatility 50% 50%
Risk-free interest rate 0 - 1.25% 0.75%
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 and reviewed
against the actual volatility of the Group during the year.
The charge included within the financial statements for share
options for the year to 31 December 2022 is a GBP0.1 million (2021:
GBP0.1 million). There is a further charge of GBP0.3 million within
share based payments which relates to an LTIP, which is detailed in
the Directors Remuneration Report.
Details of the options issued under Weighted average
the approved scheme are as follows: Number exercise price
For the year ended 31 December 2021
Outstanding at the beginning of the
year 42,560,773 0.7p
Granted during the year 26,500,000 1.4p
Exercised during the year (5,838,212) (0.3)p
Cancelled during the year (4,391,721) (0.8)p
Outstanding at the end of the year 58,830,840 0.8p
Exercisable at the end of the year 6,671,999 1.2p
Details of the options issued under Weighted average
the approved scheme are as follows: Number exercise price
For the year ended 31 December 2022
Outstanding at the beginning of the
year 58,830,840 0.8p
Granted during the year 9,050,000 1.8p
Exercised during the year - -
Cancelled during the year (4,511,715) (1.1)p
Outstanding at the end of the year 63,369,125 1.0p
Exercisable at the end of the year 19,874,140 1.0p
Share options expire after 10 years, the options above expiring
between August 2024 and December 2032.
25 Undertakings included in the financial statements
The consolidated financial statements include:
Class of Country of Proportion
share held incorporation held Nature of business
Direct subsidiary
Brave Bison 2021 Limited Ordinary UK 100% Non-trading
Indirect subsidiaries
Brave Bison Limited Ordinary UK 100% Online video distribution
Greenlight Digital
Limited Ordinary UK 100% Performance marketing
Greenlight Commerce
Limited Ordinary UK 100% Commerce agency
Best Response Media
Limited Ordinary UK 100% Commerce agency
Brave Bison Bulgaria
EOOD Ordinary Bulgaria 100% Web development
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 Iberia SL Ordinary Spain 100% Non-trading
Brave Bison Asia Pacific
Pte Ordinary Singapore 100% Online video distribution
All subsidiaries are exempt from an audit with the exception of
Brave Bison Limited, Brave Bison Asia Pacific Pte and Greenlight
Digital Limited. Greenlight Commerce Limited is taking the s479A
exemption from audit.
During the year, 100% of the ordinary share capital of Brave
Bison Limited, Greenlight Digital Limited and Greenlight Commerce
Limited was transferred to Brave Bison 2021 Limited.
26 Financial Instruments
Categories of financial instruments As at 31 As at 31
December December
2022 2021
GBP000's GBP000's
Financial assets at amortised cost
Trade and other receivables 6,167 6,285
Cash and bank balances 6,485 5,906
---------- ----------
12,652 12,191
Financial liabilities at amortised cost
Trade and other payables 8,067 9,811
Lease liabilities 393 1,022
---------- ----------
8,460 10,833
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 9,297 2,606 22 266 - 12,191
Financial liabilities (8,095) (2,347) (178) (141) (72) (10,833)
Total exposure
at
31 December 2021 1,202 259 (156) 125 (72) 1,358
======== ========= ========= ======== ======== ========
Financial assets 11,106 888 19 600 40 12,653
Financial liabilities (6,654) (1,595) (59) (52) (100) (8,460)
Total exposure
at
31 December 2022 4,452 (707) (40) 548 (60) 4,193
======== ========= ========= ======== ======== ========
Sensitivity analysis
The table below illustrates the estimated impact on profit or
loss as a result of market movements in the US Dollar, Singapore
Dollar, Euro and Sterling exchange rate.
10% 10% 10% 10% 10% 10%
Increase Decrease Increase Decrease Increase Decrease
Impact on loss and US Dollars US Dollars Singapore Singapore Euro Euro
equity Dollars Dollars
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's
For the year to 31 December
2021 (26) 26 16 (16) (13) 13
=========== =========== ========== ========== ======== ========
For the year to 31 December
2022 71 (71) 4 (4) (55) 55
=========== =========== ========== ========== ======== ========
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 and manages this by
running quarterly credit checks and setting appropriate credit
limits. The maximum exposure to credit risk is that shown within
the balance sheet. Management has assessed the exposure to credit
risk and has provided against any items which is considered to be
high risk.
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.
Interest rate risk
The Group holds the majority of its cash and cash equivalents in
corporate current accounts and interest bearing money market
accounts. These accounts offer a competitive interest rate with the
advantage of quick access to the funds. The Group is in a net cash
positive position and management consider there to be a low level
of risk.
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);
and
-- level 3 - inputs for the asset or liability that are not
based on observable market data (unobservable inputs).
The Group 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 2021
Trade and other payables 9,811 9,811 - -
Leases liabilities 1,022 629 393 -
As at 31 December 2022
Trade and other payables 8,068 8,068 - -
Lease liabilities 393 393 - -
27 Transactions with Directors and other related parties
Transactions with associates and related parties during the year
were:
2022 2021
GBP000's GBP000's
Amounts charged to Tangent Marketing Services
Limited by Brave Bison
Recharge for HR related salary 36 24
Recharge for IT related salary 33 -
Recharge for support staff salary 13 -
Charge for property related costs 107 32
Charge for client related work 43 6
Recharge of other staff costs 8 -
--------- ---------
240 62
--------- ---------
2022 2021
GBP000's GBP000's
Amounts charged to Brave Bison by Tangent
Marketing Services Limited
Recharge for IT related salary 3 13
Charge for marketing related services - 27
Charge for client related work 9 4
--------- ---------
12 44
--------- ---------
2022 2021
GBP000's GBP000's
Amounts charged to Printed Group Limited
by Brave Bison
Recharge for property related costs 50 -
--------- ---------
50 -
--------- ---------
At 31 At 31
December December
2022 2021
GBP000's GBP000's
Amounts owed to Tangent Marketing Services
Limited 17 5
Amounts owed by Tangent Marketing Services
Limited 68 4
Amounts owed by Printed Group Limited 20 4
Tangent Marketing Services Limited is a related party by virtue
of its common ownership with Greenspan Investments Limited, which
has a shareholding in Brave Bison Group. Printed Group Limited is a
related party due to Oliver Green and Theodore Green being
Directors of both companies. All of the above transactions were
conducted at arms length, and in accordance with the Group's
related party policy, which requires approval by the Independent
Directors.
There are no related party transactions with any family members
of the Directors.
28 Reconciliation of liabilities arising from financing activities
Bank loans Bank loans
Lease Liabilities > 1 year < 1 year Total
GBP000's GBP000's GBP000's GBP000's
At 31 December
2021 1,022 308 108 1,438
Cashflows (629) (109) 1 (737)
At 31 December
2022 393 199 109 701
29 Acquisitions
During the year, the Group carried out a full fair value
adjustment exercise in relation to the acquisition of Greenlight
Digital on 1 September 2021. As a result intangible assets have
been identified in relation to the Greenlight trade name and the
customer relationships, and amounts allocated to goodwill at the
interim valuation have been reallocated to these intangible
assets.
The revised fair value of the assets acquired and liabilities
assumed was as follows:
Interim Fair value
valuation adjustments Fair value
GBP000's GBP000's GBP000's
Goodwill 5,686 (1,140) 4,546
Brands - 346 346
Customer relationships - 1,155 1,155
Tangible Assets 755 - 755
Trade and other receivables 3,576 - 3,576
Cash and cash equivalents 785 - 785
Current Liabilities (3,679) - (3,679)
Non-current liabilities (722) - (722)
Deferred tax 133 (361) (228)
---------- ------------ ----------
6,534 - 6,534
========== ============ ==========
During the year, the Group carried out a full fair value
adjustment exercise in relation to the acquisition of Greenlight
Commerce on 1 September 2021. As a result intangible assets have
been identified in relation to the Greenlight trade name and the
customer relationships, and amounts allocated to goodwill at the
interim valuation have been reallocated to these intangible
assets.
The revised fair value of the assets acquired and liabilities
assumed was as follows:
Interim Fair value
valuation adjustments Fair value
GBP000's GBP000's GBP000's
Goodwill 469 (239) 230
Brands - 110 110
Customer relationships - 205 205
Trade and other receivables 1,338 - 1,338
Cash and cash equivalents 666 - 666
Current Liabilities (524) - (524)
Deferred tax 2 (76) (74)
---------- ------------ ----------
1,951 - 1,951
========== ============ ==========
On the 28 April 2022, the Group acquired the entire issued share
capital of Best Response Media Limited. The consideration was
financed by existing cash balances. Best Response Media Limited is
a specialist ecommerce and mobile development company focused
exclusively on the Adobe Commerce Platform.
The provisional fair value of the assets acquired and
liabilities assumed were as follows:
Fair value
Book value adjustments Fair value
GBP000's GBP000's GBP000's
Goodwill 239 - 239
Tangible Assets 1 - 1
Trade and other receivables 237 - 237
Cash and cash equivalents 840 - 840
Current Liabilities (143) - (143)
---------- ------------ ----------
1,174 - 1,174
========== ============ ==========
The consideration for the acquisition was as follows:
GBP000's
Initial cash consideration - paid 962
Completion accounts adjustment - paid 37
Deferred cash consideration - paid 175
--------
1,174
========
The consolidated Statement of Comprehensive Income includes
GBP0.1 million of acquisition costs in relation to Best Response
Media Limited.
The fair value of the financial assets includes trade and other
receivables with a fair value of GBP0.2 million and a gross
contractual value of GBP0.3 million. The best estimate at
acquisition date of the contractual cash flows not to be collected
is GBP0.1 million. The goodwill represents the acquired accumulated
workforce and the synergies expected from integrating Best Response
Media into the Group's existing business. The Group has carried out
an interim fair value adjustment exercise and will be completing a
full exercise within the one year measurement period from the date
of the acquisition in accordance with IFRS3. At the interim
valuation stage the Group has not been able to reliably estimate
the fair value of acquired intangibles and therefore the excess of
consideration over fair value of other identifiable assets and
liabilities has been allocated to goodwill. Once the full valuation
exercise has been completed additional intangible assets may be
recognised separately from goodwill.
Best Response Media Limited contributed GBP0.5 million revenue
and GBP0.2 million loss to the Group's profit for the period
between the date of acquisition and the reporting date.
If the acquisition of Best Response Media Limited had been
completed on the first day of the financial year, Group revenues
for the year would have been GBP32 million and Group profit would
have been GBP1.9 million.
29 Post balance sheet events
On the 3(rd) February 2023 the Group announced the purchase of
100% of the issued share capital of Social Chain Limited. The
initial consideration for the acquisition consisted of a payment of
GBP7.7m. This was partially funded by way of an oversubscribed
vendor placing to raise GBP4.75 million. Social Chain is one of the
UK's leading social media and influencer marketing agencies. The
completion balance sheet in relation to the acquisition is still
being prepared, and therefore a breakdown of the assets and
liabilities acquired has not been disclosed.
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END
FR NKABDCBKDCQB
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April 27, 2023 02:00 ET (06:00 GMT)
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