TIDMBIRD
RNS Number : 3357L
Blackbird PLC
05 September 2023
5 September 2023
Blackbird plc
(the "Company")
Interim results
Blackbird plc (AIM: BIRD; OTCQX: BBRDF), the technology
licensor, developer and seller of the market-leading cloud video
editing platform, Blackbird(R) , announces its interim results for
the six months ended 30 June 2023.
Ian McDonough, CEO of Blackbird plc, commented:
"I am delighted to report that there is continued momentum
behind our strategic progression to scale the business and the
Company is well placed to execute on this with a strong balance
sheet. Since we raised funding in December 2021, we have
significantly progressed our Creator SaaS strategy and we see this
as an exciting route to expand our addressable market and
accelerate growth for the Company.
"Although revenue for the period was down 36% on the prior
period at GBP985k, the decrease can be predominantly explained by
two non-recurring items earned in H1 2022, being the EVS
development fees on our technology licensing deal and the revenues
from the global winter games.
"The recent cyclical and structural changes in the Media and
Entertainment industry (M&E) have been considerable and
impacted the professional Media and Entertainment part of our
business, most prominently our deal with A+E Networks, which, as
previously announced, was terminated at the end of June 2023. In
anticipation of market shifts, we successfully raised money in 2021
to build a product for the Creator space. Therefore, we have
reduced headcount in our UK sales and marketing team in order to
maximise return on resources by investing in software developers
and product specialists.
"Through our core streamlined Blackbird team, now physically
located closer to its target market, we are focusing on larger
deals and OEM partnerships. Following the delivery of our
technology licensing deal at the end of 2022, EVS announced strong
interest, at NAB, in their product "IPD VIA Create" which is
'Powered by Blackbird'. Through our deal structure, if this product
is successful, Blackbird will benefit from significantly increased
royalty payments.
"The development of the Creator SaaS platform, led by Chief
Product Officer, Sumit Rai, has made significant progress and will
launch in early 2024. The platform will align us closely with the
fast-growing Creator Economy via a self-service SaaS platform. We
have attracted world class talent to deliver on this strategy which
is underpinned by our proven core patented technology. We are well
funded to launch this platform.
"We are very excited about this product and are looking forward
to updating investors later this month at our Special Event for
investors on 13 September 2023.
Operational highlights (post period)
-- Special Event for investors scheduled for 13 September 2023
to update on the progress of our Creator SaaS platform
-- New deal signed with a football confederation for use on a
high profile regional tournament
-- Deal signed with Australian OTT provider for use at the US
Open on the back of successful deployments at other tennis majors
(see below)
Financial highlights (post period)
-- GBP1,813k* secured revenue for 2023 as at 31 August 2023,
down 32% vs prior year (2022 comparative: GBP2,684k)
-- Contracted but unrecognised revenues of GBP1,997k* as at 31
August 2023 (2022 comparative: GBP4,047k). GBP568k relates to 2023
and GBP815k revenue relates to 2024 and the remainder to 2025 and
beyond
* Subject to exchange rate fluctuations
Operational highlights (during the period)
-- Creator SaaS strategic validation through quantitative and
qualitative research undertaken by the Company
-- Direct annual cost savings of GBP0.5m from reduction of UK
based sales and marketing staff. Reinvestment of funds in software
development team and product specialists
-- Contract terminated by A+E Networks at end of June 2023
-- Deal signed with Argentinian station Telefe, part of the
Paramount Global group and introduced by the CBS sports team, for
football highlights
-- One year deal signed with a large Mexican broadcaster via our partner Simplemente
-- Deals signed with Australian OTT provider and subsequently
used at Roland Garros and then again at Wimbledon
-- Further successful renewals with Sky News Arabia, BT and Arsenal
-- Increased IP portfolio to 17 patents, with a further 12 pending
-- Guest exhibitor on Microsoft's stand at the NAB show in April 2023
Financial highlights (during the period)
-- Revenues of GBP985k for the 6 months to 30 June 2023, down
36% year on year (6 months to 30 June 2022: GBP1,547k). The
majority of the decrease arose from H1 2022 containing
non-recurring revenues, being: i) GBP426k from development services
for our first 'Powered by Blackbird' licensing deal; and ii) on the
global winter games
-- Contracted but unrecognised revenues down 36% year on year to
GBP2,120k as at 30 June 2023 (GBP3,331k as at 30
June 2022) due to the loss of A+E Networks contract and a year
less in the order book on the Company's larger deals
-- Increased operating costs, excluding LTIP charge, of
GBP2,422k (6 months to 30 June 2021: GBP2,113k), driven
predominantly by an increase in the team to work on our Creator
SaaS product, GBP142k non-recurring restructuring costs partially
offset by higher capitalised development costs
-- EBITDA loss of GBP1,523k (6 months to 30 June 2022: GBP385k)
due to lower revenues and higher operating costs, as described
above, and a GBP353k LTIP credit to the income statement in H1 2022
(2023: GBPnil) on finalisation of the last LTIP scheme partially
offset by a lower share option expense as a result of leavers in
the restructuring
-- Net loss before tax of GBP1,617k (6 months to 30 June 2021:
GBP604k) due to lower EBITDA partially offset by higher net
financial income
-- Cash burn, excluding proceeds from share issues and transfers
from short term investments, increased to GBP1,921k (6 months to 30
June 2022: GBP1,253k) due to lower revenues and higher staff costs
to work on our Creator SaaS product
-- Cash and short-term investments of GBP8,177k (30 June 2022: GBP11,586k) and no debt
Enquiries:
Blackbird plc Tel: +44 (0)20 8879
7245
Ian McDonough, Chief Executive Officer
Stephen White, Chief Operating and Financial
Officer
Allenby Capital Limited (Nominated Adviser Tel: +44 (0)20 3328
and Broker) 5656
Nick Naylor/ Piers Shimwell (Corporate Finance)
Amrit Nahal (Sales and Corporate Broking)
About Blackbird plc
Blackbird plc operates in the fast-growing SaaS and cloud video
market. It has created Blackbird(R) , the world's most advanced
suite of cloud-native computing applications for video, all
underpinned by its lightning-fast codec. Blackbird plc's patented
technology allows for frame accurate navigation, playback, viewing
and editing in the cloud. Blackbird(R) underpins multiple
applications, which are used by rights holders, broadcasters,
sports and news video specialists, esports, live events and content
owners, post-production houses, other mass market digital video
channels and corporations.
Since it is cloud-native, Blackbird(R) removes the need for
costly, high-end workstations and can be used from almost anywhere
on almost any device. It also allows full visibility on
multi-location digital content, improves time to market for live
content such as video clips and highlights for digital
distribution, and ultimately results in much more effective
monetisation.
Blackbird plc is a licensor of its core video technology under
its "Powered by Blackbird" licensing model, enabling video
companies to accelerate their path to true cloud business models.
Licensees benefit from power and carbon reductions, cost and time
savings, lower hardware and bandwidth requirements and easy
scalability.
Blackbird(R) is a registered trademark of Blackbird plc.
Websites
www.blackbird.video
Social media
www.linkedin.com/company/blackbird-cloud
www.twitter.com/blackbirdcloud
www.facebook.com/blackbirdplc
Operational review
The Company started 2023 with momentum, specifically:
-- 2022 saw record revenues for the 5th consecutive year, up 38% on the previous year;
-- a strong balance sheet as a result of a successful
fundraising in December 2021, resulting in a 2023 opening cash
position of GBP10.1million;
-- successfully execution of the EVS contract with the jointly
created product, "IPD VIA Create", being rolled out to a US
broadcaster and used at a global sporting event at the end of
2022;
-- expansion of our addressable market to prosumers and
professional teams with a significant refocussing of the team and
key hires in Product, Engineering and Product Marketing to build
our Creator SaaS platform; and
-- being crowned 'IABM Broadcast / Media Company of the Year' for 2022.
During the period, we reduced headcount in the UK sales and
marketing areas in order to focus our resources on product
development and maximise the return on investment from our
technology. This was also partly driven by the continuing cyclical
and structural changes in the M&E industries. These led to
major media corporations seeking cost savings which has impacted
this part of our business, most prominently our deal with A+E
Networks, which, as we announced on 12 May 2023, terminated at the
end of June 2023. Through our streamlined team, now located closer
to this market, we are focusing on larger deals and OEM
partnerships.
The development of the Creator SaaS platform, led by our Chief
Product Officer, Sumit Rai, is progressing well. Early access is
scheduled for Q4 2023.
Commercial activity during the 6 months under review
included:
In OEM:
-- EVS announced strong interest in "IPD VIA Create", which is
'Powered by Blackbird', at NAB. As previously explained, our
commercial relationship lasts for five years where the Company will
financially benefit on the back of the success of the deployment of
the product, with the financials underpinned by minimum guarantees;
and
-- Blackbird was present on Microsoft's stand at NAB, which
highlights the pedigree and perception of the Company's brand and
product.
In direct deals:
-- deal signed with Argentinian station Telefe, part of the
Paramount Global group and introduced by the CBS sports team, for
football highlights;
-- one year deal signed with a large Mexican broadcaster via our partner Simplemente;
-- deal signed with Australian OTT platform for use on Roland
Garros. They also used us again at Wimbledon and the US Open (post
period); and
-- successful renewals with Sky News Arabia, BT and Arsenal.
Financial review
Revenue decreased by 36% to GBP985k for the six-month period
compared to the corresponding period last year (six months to 30
June 2022 GBP1,547k). The majority of the decrease can be explained
by two non-recurring items earned in H1 2022 - firstly GBP426k from
development services for our technology licensing deal with EVS,
and secondly the licence fees earned from the global winter games.
As described above, t he cyclical and structural changes within the
M&E industries have impacted growth in this area of the
business.
Contracted but unrecognised revenue was GBP2,130k at 30 June
2023, a decrease of 36% compared to 30 June 2022 due to the A+E
Networks termination and one year less in the order book on our
larger deals.
Operating costs, excluding LTIP charges, for the period grew to
GBP2,424k versus GBP2,113k in the corresponding period last year
reflecting an increase in: i) GBP965k costs associated with our
Creator SaaS platform (2021: GBP183k); and ii) non-recurring
restructuring costs of GBP142k offset by higher development costs
being capitalised during the period (GBP734 vs GBP176k in the prior
period) with the increase being predominantly driven by the
additional work on Creator SaaS compared to prior period. As
previously announced, the restructuring of the business that
occurred in the period will lead to annual savings of
c.GBP500k.
Adjusted EBITDA loss, excluding share option costs and LTIP
provision movement, of GBP1,513k (6 months to 30 June 2022:
GBP637k) from lower revenues and higher operating costs.
EBITDA loss of GBP1,523k (6 months to 30 June 2022: GBP385k) due
to the movement in Adjusted EBITDA loss, excluding share option
costs and no LTIP movement in the period (6 months to 30 June 2022:
LTIP credit of GBP353k on closure of the last LTIP period) and
GBP88k lower share option expense in the period compared to prior
year driven by the restructuring of the business.
The net loss for the period was GBP1,617k (2022: GBP603k). Lower
EBITDA was partially offset by increased net financial income from
higher interest rates compared to the prior period.
Cash burn in the period, excluding proceeds from share issues
and transfers from short-term investments, was GBP1,921k versus
GBP1,253k in the same period in 2022 driven by lower revenues and
higher staff costs including for Creator SaaS, as explained
above.
Outlook
There is continued momentum behind our strategic progression to
scale the business and the Company's balance sheet is strong with
GBP8,177k of cash and short-term investments and no debt at the end
of June 2023.
The Company continues to focus on large scale deals for the
Blackbird platform and 'Powered by Blackbird' with the aim of
producing a positive net contribution from this division.
Additionally, the demands of our existing and new customers will
continue to drive innovations in our technology.
Significant progress continues on our Creator SaaS platform, led
by a world class team. This builds on our core technology and will
expand our addressable market. This product represents an exciting
future for the Company and our strong balance sheet will enable us
to launch it. Regular updates will be provided to shareholders,
including a special event on 13 September 2023, ahead of an
expected launch in early 2024.
UNAUDITED AND CONDENSED STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHSED 30 JUNE 2023
Unaudited Unaudited Audited
Half year Half year to Year to
to
30 June 30 June 31 December
2023 2022 2022
GBP GBP GBP
CONTINUING OPERATIONS
Revenue 985,115 1,546,544 2,847,202
Cost of Sales (76,268) (70,886) (143,149)
--------------------------------- ------------- ------------- ------------
GROSS PROFIT 908,847 1,475,658 2,704,053
Operating costs excluding
LTIP provision (2,421,622) (2,112,728) (4,509,938)
--------------------------------- ------------- ------------- ------------
ADJUSTED EARNINGS BEFORE
INTEREST, TAXATION,
DEPRECIATION, AMORTISATION,
EMPLOYEE SHARE OPTION
COSTS AND LTIP PROVISION
(Adjusted EBITDA pre
LTIP) (1,512,775) (637,070) (1,805,885)
Decrease in LTIP provision - 350,431 350,431
Employee share option
costs(1) (10,028) (98,356) (168,981)
--------------------------------- ------------- ------------- ------------
EARNINGS BEFORE INTEREST,
TAXATION, DEPRECIATION,
AMORTISATION (EBITDA) (1,522,803) (384,995) (1,624,435)
Depreciation (87,358) (68,169) (144,677)
Amortisation (163,564) (192,542) (383,330)
------------- ------------- ------------
(250,922) (260,711) (528,007)
-------------------------------- ------------- ------------- ------------
OPERATING LOSS (1,773,725) (645,706) (2,152,442)
Net Finance income 156,275 42,015 141,414
LOSS BEFORE INCOME
TAX (1,617,450) (603,691) (2,011,028)
Income Tax - - 94,178
--------------------------------- ------------- ------------- ------------
LOSS FOR THE PERIOD (1,617,450) (603,691) (1,916,850)
TOTAL COMPREHENSIVE
LOSS FOR THE PERIOD (1,617,450) (603,691) (1,916,850)
================================= ============= ============= ============
Earnings per share
expressed
in pence per share:
Basic and diluted -
continuing and total
operations (0.44p) (0.16p) (0.52p)
UNAUDITED AND CONDENSED STATEMENT OF FINANCIAL POSITION AT 30
JUNE 2023
Unaudited Unaudited Audited
30 June 30 June 31 December
2023 2022 2022
ASSETS GBP GBP GBP
NON-CURRENT
ASSETS
Other intangible
assets 1,904,198 1,178,891 1,270,231
Property, plant
and equipment 149,128 221,589 202,204
2,053,326 1,400,480 1,472,435
---------------------- ------------- ------------- -------------
CURRENT ASSETS
Trade and other
receivables 415,339 639,497 863,211
Current tax
assets 0 32,167 94,178
Short-term
investments 2,653,780 6,684,825 4,366,342
Cash and bank
balances 5,523,638 4,901,435 5,732,350
8,592,757 12,257,924 11,056,081
---------------------- ------------- ------------- -------------
TOTAL ASSETS 10,646,083 13,658,404 12,528,516
======================= ============= ============= =============
EQUITY
Issued share
capital 2,941,044 2,940,524 2,941,044
Share premium 34,038,746 34,034,228 34,038,746
Capital contribution
reserve 125,000 125,000 125,000
Retained earnings (27,512,196) (24,662,240) (25,904,774)
9,592,594 12,437,512 11,200,016
---------------------- ------------- ------------- -------------
NON-CURRENT
LIABILITIES
Lease & License - 85,543 29,783
- 85,543 29,783
---------------------- ------------- ------------- -------------
CURRENT LIABILITIES
Lease 77,100 91,572 106,162
Trade and other
payables 976,389 1,043,777 1,192,555
1,053,489 1,135,349 1,298,717
---------------------- ------------- ------------- -------------
TOTAL LIABILITIES 1,053,489 1,220,892 1,328,500
----------------------- ------------- ------------- -------------
TOTAL EQUITY
AND LIABILITIES 10,646,083 13,658,404 12,528,516
======================= ============= ============= =============
UNAUDITED AND CONDENSED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2023
Called Share premium Capital Retained earnings Total equity
up share contribution
capital reserve
GBP GBP GBP GBP GBP
Balance
at 1 January
2022 2,940,524 34,034,228 125,000 (24,156,905) 12,942,847
Issue of - -
share capital
Share based
payment - - - 98,356 98,356
Total comprehensive
income - - - (603,691) (603,691)
---------------------- ---------- -------------- -------------- ================== =============
Balance
at 30 June
2022 2,940,524 34,034,228 125,000 (24,662,240) 12,437,512
---------------------- ---------- -------------- -------------- ------------------ -------------
Changes
in equity
Issue of
share capital
(net of expenses) 520 4,518 - - 5,038
Share based
payment - - - 70,625 70,625
Total comprehensive
income - - - (1,313,159) (1,313,159)
====================== ========== ============== ============== ================== =============
Balance
at 31 December
2022 2,941,044 34,038,746 125,000 (25,904,774) 11,200,016
====================== ========== ============== ============== ================== =============
Changes
in equity
Issue of - - - - -
share capital
Share based
payment - - - 10,028 10,028
Total comprehensive
income - - - (1,617,450) (1,617,450)
====================== ========== ============== ============== ================== =============
Balance
at 30 June
2023 2,941,044 34,038,746 125,000 (27,512,196) 9,592,594
====================== ========== ============== ============== ================== =============
UNAUDITED AND CONDENSED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 2023
Unaudited Unaudited Audited
Half year
Half year to to Year to 31
30 June 30 June December
2023 2022 2022
GBP GBP GBP
EBITDA (1,522,803) (384,995) ( 1,624,435 )
Decrease in LTIP provision - (350,431) (350,431)
Employee share option costs 10,028 98,356 168,981
(Increase) / Decrease in
working capital 290,204 (360,824) (388,841)
------------------------------------- ------------- ------------ ----------------
Cash used in operations (1,222,571) (997,894) (2,194,726)
------------------------------------- ------------- ------------ ----------------
Interest paid on lease liabilities (2,158) (4,363) (7,692)
Tax received 94,178 - 32,166
Net cash outflow from operating
activities (1,130,551) (1,002,257) (2,170,252)
------------------------------------- ------------- ------------ ----------------
Cash flows from investing
activities
Payments for intangible fixed
assets (809,906) (183,947) (470,200)
Payments for property, plant
and equipment (34,280) (33,103) (90,226)
Transfer from / (to) short-term
investments 1,712,562 (2,515,639) (197,156)
Interest received 102,089 14,651 82,041
Net cash inflow / (outflow)
from investing activities 970,465 (2,718,038) (675,541)
------------------------------------- ------------- ------------ ----------------
Cash flows from financing
activities
Share issue (net of expenses) - - 5,038
Payment of lease liabilities (48,626) (48,544) (97,169)
Net cash (outflow)/ inflow
from financing activities (48,626) (48,544) (92,131)
------------------------------------- ------------- ------------ ----------------
Decrease in cash and cash
equivalents (208,712) (3,768,839) (2,937,924)
Cash and cash equivalents
at beginning of period 5,732,350 8,670,274 8,670,274
Cash and cash equivalents
at end of period 5,523,638 4,901,435 5,732,350
===================================== ============= ============ ================
NOTES TO THE UNAUDITED AND CONDENSED CONSOLIDATED INTERIM
ACCOUNTS
FOR THE SIX MONTHS ENDED 30 JUNE 2023
1. Basis of preparation and accounting policies
These interim statements have been prepared on a basis
consistent with International Financial Reporting Standards (IFRS).
They do not contain all of the information required for full
financial statements and should be read in conjunction with the
financial statements of the Company as at and for the year ended 31
December 2022. These interim financial statements do not constitute
statutory accounts within the meaning of the Companies Act.
The interim financial information has not been audited. The
interim financial information was approved by the Board of
Directors on 4 September 2023. The information for the year ended
31 December 2022 is extracted from the statutory financial
statements for that year which have been reported on by the
Company's auditors and delivered to the Registrar of Companies. The
audit report was unqualified and did not contain a statement under
s498 (2) or 498(3) of the Companies Act 2006.
The accounting policies applied by the Company in these interim
financial statements are the same as those applied by the Company
in its financial statements for the year ended 31 December
2022.
2. Divisional breakdown
Enterprise Corporate Creator Total
SaaS
Unaudited Unaudited Unaudited Unaudited
Half year to Half year Half year Half year
to to to
30 June 2023 30 June 30 June 30 June 2023
2023 2023
GBP GBP GBP GBP
CONTINUING OPERATIONS
Revenue 985,115 - - 985,115
Cost of Sales (76,268) - - (76,268)
--------------------------- ------------- ----------- ---------- -------------
GROSS PROFIT 908,847 - - 908,847
Operating costs
excluding LTIP
provision (1,351,015) (566,219) (504,388) (2,421,622)
--------------------------- ------------- ----------- ---------- -------------
Adjusted EARNINGS
BEFORE INTEREST,
TAXATION, DEPRECIATION,
AMORTISATION,
EMPLOYEE SHARE
OPTION COSTS
AND LTIP PROVISION
(Adjusted EBITDA
before LTIP and
share option
costs) (442,168) (566,219) (504,388) (1,512,775)
LTIP Provision - - - -
Employee share
option costs - (10,028) - (10,028)
EARNINGS BEFORE
INTEREST, TAXATION,
DEPRECIATION,
AMORTISATION
(EBITDA) (442,168) (576,247) (504,388) (1,522,803)
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