TIDMELEG
RNS Number : 5206U
Electric Guitar PLC
23 November 2023
23 November 2023
Electric Guitar PLC
("Electric Guitar" or the "Company")
Notification of availability of Annual Report and Financial
Statements 2022 and AGM notice
The Board of Electric Guitar PLC (LSE: ELEG), the Special
Purpose Acquisition Company seeking acquisitions in the digital
marketing and advertising industry as a provider of first-party
data solutions, provides confirmation of the availability of annual
reports and AGM notices that were not previously announced.
The annual report and financial statements for the year ended 31
March 2022 were published on 2 December 2022 and copies were sent
to shareholders and are available on the Company's website at
https://www.electricguitarplc.com/wp-content/uploads/2023/10/Annual-report-and-financial-statements-31-Mar-22.pdf.
Key elements from the 2022 annual report have been extracted and
set out in Appendix A below.
The Company announced the publication of the annual report and
financial statements for the year ended 31 March 2023 on 1 August
2023 and copies were sent to shareholders and are available on the
Company's website at
https://www.electricguitarplc.com/investor-documents/electric-guitar-plc-annual-report-and-financial-statements-for-the-period-ended-31-march-2023.pdf.
Key elements from the 2023 annual report have been extracted and
set out in Appendix B below.
This year's Annual General Meeting of the Company ("AGM") was
held at One, Bartholomew Close, London, England, EC1A 7BL at 10.00
a.m. on Thursday, 7 September 2023 and copies of the Notice of AGM
were posted to shareholders and are available on the Company's
website at
https://www.electricguitarplc.com/wp-content/uploads/2023/10/Electric-Guitar-plc-2023-AGM-FINAL86.pdf
. All resolutions were passed at the AGM, as announced on 7
September 2023.
The 2023 AGM notice and the annual reports for 2022 and 2023
referred to above are also available on the National Storage
Mechanism:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
For further information:
Electric Guitar PLC
John Hutchinson
Chair 01189 570 444
Axis Capital Markets 020 3026 0320
(Corporate Broker) rh@axcap247.com
Richard Hutchison
Yellow Jersey PR 020 3004 9512
Sarah Hollins electric@yellowjerseypr.com
Annabelle Wills
Bessie Elliot
Appendix A
Extracts from the annual report and financial statements for the
year ended 31 March 2022.
Chairman's Statement
I have pleasure in presenting the annual report and financial
statements for the year ended 31 March 2022.
In January 2022, the company successfully listed its shares for
trading on the London Stock Exchange Main Market, and at the same
time secured a placing of additional ordinary shares for
GBP1,200,000 (before expenses). This has enabled the company to
research suitable targets for acquisition in line with its stated
corporate strategy. As at the time of issuing this report, the
company has not yet identified a suitable target for
acquisition.
The Company was formed to undertake an acquisition of a
controlling interest in a company or business (an "Acquisition") in
the digital media and advertising sectors. Since its listing, the
Company has pursued this aim. Any Acquisition is expected to
constitute a reverse takeover transaction and consideration for the
Acquisition may be in part or in whole in the form of sharebased
consideration or funded from the Company's existing cash resources
or the raising of additional funds.
The business environment has changed significantly since the
Company's successful listing in January this year.
In early spring, there were already nascent signs of the now
very evident global inflationary pressures. These increased
enormously with Russia's attempted invasion of Ukraine in late
February. A broad range of energy, industrial and agricultural
commodities saw significant price increases. These have, in turn,
fed into the consumer sector, making central banks' task of
managing inflation more problematical and increasing fears of an
extended period of higher interest rates.
In the Company's chosen sphere of interest, digital media and
advertising, the structural changes identified in our Admission
Document became evident. These structural changes have continued to
be driven by the increasing importance of data privacy. As
expected, this year has seen legislation start to be implemented
with digital companies responding by implementing privacy
technology.
Legislation
In February 2022 a landmark ruling against the IAB found that
the majority of cookie based digital advertising practices are
'illegal'. The IAB has since responded with a series of appeals,
however the implications of this judgement are expected to be far
reaching.
Privacy Technology
Other large technology companies have implemented privacy
technology that has impacted digital revenues. As well as this, the
reduction in the use of cookies in the future (timetable for H2 of
2024) is likely to several impact data collection on over 80% of
internet users.
Structural shift
Privacy is now an increasing disadvantage for the incumbents and
newcomers are capitalising on this as advertisers seek new ways of
reaching digital audiences.
Whilst advertising overall has been subject to macro-economic
headwinds, digital media businesses with a focus on first party
data and privacy continue to prosper. This is the shift which the
strategy of the business is designed to capitalise on.
The challenge for the Directors is to find a suitable
acquisition upon which to base the Company's future at a time when
assets in the media sector are becoming increasingly hard to value
correctly. However, given the opportunities from privacy driven
disruption which are increasingly evident, the directors remain
confident in their ability to achieve this.
As summer progressed, it became clear that 'transitory'
inflation was, in fact, more embedded, than first thought. Central
banks, including the Bank of England, started to increase interest
rates from historically low levels. UK base rates have risen from
1/4 % in January of this year to 3% currently.
Meanwhile, the current and forecast increase in energy prices,
combined with a wider rise in the cost of living has, and continues
to dampen consumer activities and expectations. With consumer
activity representing over 60% of UK nominal GDP, this anticipated
slowdown has led businesses to review their own expectations.
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIODED 31 MARCH 2022
Period
ended
31 March
2022
GBP
Administrative expenses (245,387)
Operating (loss)/profit (245,387)
Income tax expense -
(Loss)/profit and total comprehensive income
for the period (245,387)
STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2022
2022
GBP
Current assets
Trade and other receivables 31,787
Cash and cash equivalents 996,331
1,028,118
Current liabilities
Trade and other payables 35,562
Net current assets 992,556
Net assets 992,556
Equity
Called up share capital 289,314
Share premium account 948,629
Retained earnings (245,387)
Total equity 992,556
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIODED 31 MARCH 2022
Share capital Share Retained Total
premium earnings
account
GBP GBP GBP GBP
Balance at 24 March 2021
Period ended 31 March 2022: - - - -
Loss and total comprehensive
income for the period - - (245,387) (245,387)
Transactions with owners in their
capacity as owners:
Issue of share capital 210,485 1,027,458 - 1,237,943
Bonus issue 78,829 (78,829) - -
Balance at 31 March 2022 289,314 948,629 (245,387) 992,556
STATEMENT OF CASH FLOWS
FOR THE PERIODED 31 MARCH 2022
2022
GBP GBP
Cash flows from operating activities
Cash absorbed by operations (241,559)
Net cash outflow from operating activities (241,559)
Investing activities
Receipts arising from loans made (53)
Net cash used in investing activities (53)
Financing activities
Proceeds from issue of shares 1,346,152
Share issue costs (108,209)
Net cash generated from/(used in) financing
activities 1,237,943
Net increase in cash and cash equivalents 996,331
Cash and cash equivalents at beginning -
of year
Cash and cash equivalents at end of
year 996,331
Appendix B
Extracts from the annual report and financial statements for the
year ended 31 March 2023.
Chairman's Statement
I have pleasure in presenting the annual report and financial
statements for the year ended 31 March 2023.
In January 2022, the company successfully listed its shares for
trading on the London Stock Exchange Main Market, and at the same
time secured a placing of additional ordinary shares for
GBP1,200,000 (before expenses). This has enabled the company to
research suitable targets for acquisition in line with its stated
corporate strategy.
Proposed 3radical RTO
I am pleased to announce that on 6 July 2023 the Company entered
into a non-binding heads of terms to acquire (through a reverse
takeover subject to regulatory and shareholder approval and due
diligence) all the outstanding shares in 3radical Limited
("3radical") in an all-share transaction ("Transaction").
The Transaction is in line with the Company's strategy set out
at the time of its IPO last year. On completion of the Transaction,
the Company's intention is to cancel its listing on the Standard
List and seek admission of its ordinary share capital, as enlarged
following completion of the Transaction, to trading on the AIM
Market of the London Stock Exchange ("Admission").
The heads of terms place an initial valuation on 3radical of
GBP3 million, subject to adjustments.
Macro-economic climate
The business environment has changed significantly since the
Company's successful listing in January 2022. Global inflationary
pressures, which first became apparent in spring 2022, have
continued and whilst pressures on energy and food have abated,
central banks' task of managing inflation remains challenging and
it is likely that higher interest rates will continue for the time
being. With bond yields rising as a result, equity investors can be
expected to focus more on growth stocks.
Generative AI
The use and capabilities of generative AI, such as ChatGPT, are
rapidly expanding. The ability to automate content creation,
generate and implement media plans autonomously, and replace
traditionally people-oriented services like campaign account
management, is already hastening the shift to data-driven,
personalised marketing. Brands will have to deliver much more
varied content driven by exponentially more data points, and they
will have to make sense of it in ways never seen before. Technology
like 3radical's is therefore becoming increasingly important to
marketers.
The shift towards privacy first marketing.
In the Company's chosen sphere of interest, digital media and
advertising, the structural changes identified last year have
become evident. These structural changes have continued to be
driven by the increasing importance of data privacy.
1. Audiences are shifting their interest from platforms based
around sharing and socialising such as Facebook, towards platforms
designed for broadcasting like Instagram and TikTok. As a result,
user-generated content has an increasing impact on advertising
Return on Investment ("ROI").
2. Companies traditionally interacting indirectly with consumers
are now increasingly bypassing retail and media partners to engage
and conduct transactions directly with customers.
3. Chief Marketing Officers ("CMOs") are increasingly focussed
on preserving and improving consumer relationships by using
consented data-driven insights to enhance customers' experience and
optimise their marketing journeys from exploration to sales.
Legislation
As expected, in the last year privacy legislation has continued
to evolve in line with the growing privacy-centric environment.
February 2022 saw a landmark European ruling against the
Internet Advertising Bureau ("IAB") (the industry body for digital
advertising), which declared that the majority of cookie-based
digital advertising practices are 'illegal'. The IAB has since
responded with a series of appeals, but the implications of this
judgement are expected to be far reaching. Discussion around this
judgement is ongoing. However, privacy legislation has continued to
evolve towards a new privacy-centric data environment in the last
year. Highlights are:
-- In January 2023, the American Data Privacy and Protection Act
(ADPPA) was proposed in the US Senate and is still under review. If
enacted, it could homogenize data protection regulations throughout
the US, thereby simplifying the present system of varying State
laws.
-- March 2023 marked the introduction of the UK Data Protection
and Digital Information Bill (No. 2) to the House of Commons as a
replacement for the European GDPR legislation. If passed in its
current form, the new Bill will allow UK businesses to obtain
consent in a more flexible way, including through implied
consent.
-- By June 2023, the EU parliament reached an agreement on the
Data Act which, amongst other initiatives, creates a
privacy-centric framework to allow businesses to share data. This
will potentially increase opportunities for innovative privacy
businesses in the marketing space.
Privacy Technology
Google's depreciation of cookies is now scheduled for the end of
2024, and privacy measures continue to be a high priority for
providers of advertising networks and devices. As a result, these
providers are gaining greater control of consumer data and
therefore of pricing, and so related advertising costs are rising
just as marketers are increasingly seeking efficiencies to offset
adverse macro-economic conditions.
Structural shift
As the advertising market adjusts to the privacy-centric
environment, business leaders, particularly CEOs and CMOs, are
evolving their marketing to reflect a 'people first' focus on
valued customers, rather than relying on commoditised data to
continually attract new audiences.
Digital advertising spend is increasing, but the challenging
macroeconomic environment, coupled with the dynamic landscape of
consumer behaviour, the evolving regulatory environment, and the
transformative power of new technologies, means that innovation and
adaptation are critical to success. The marketing environment is
becoming more complicated for large incumbent service providers,
favouring nimbler, technology-oriented businesses.
The Company's strategy therefore continues to be to capitalise
on this structural disruption in the marketing industry. This
approach is coupled with relatively high interest rates leaving
many growth-oriented technology companies with less access to the
capital they need, resulting in more realistic valuations by their
founders and seed investors, and creating more opportunities for
the Company to acquire complementary technology businesses at
attractive valuations.
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIODED 31 MARCH 2023
31 March 24 March
2023 2021 to 31
GBP March 2022
GBP
Administration expenses (544,420) (245,387)
------------------------------------ ---------------------------------------
Operating loss (544,420) (245,387)
Finance income 6,730 -
------------------------------------ ---------------------------------------
Loss before income tax (537,690) (245,387)
Income tax
Loss and other comprehensive - -
income (537,690) (245,387)
Earnings per share
Basic (pence) (0.93) (1.18)
Diluted (pence) (0.93) (1.18)
STATEMENT OF FINANCIAL POSITION
for the year ended 31 March 2023
2023 2022
GBP GBP
ASSETS
CURRENT ASSETS
Trade and other receivables 29,533 31,787
Cash and cash equivalents 491,635 996,331
521,168 1,028,118
TOTAL ASSETS 521,168 1,028,118
----------------
EQUITY
SHAREHOLDERS' EQUITY
Share capital 289,314 289,314
Share premium 948,629 948,629
Accumulated losses (783,077) (245,387)
---------------- --------------------
TOTAL EQUITY 454,866 992,556
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 66,302 35,562
---------------- --------------------
TOTAL LIABILITIES 66,302 35,562
================ ====================
TOTAL EQUITY AND LIABILITIES 521,168 1,028,118
STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March
2023
Share Share premium Retained Total
capital earnings
At 24 March 2021 GBP GBP GBP GBP
- - - -
Comprehensive income for the year
Loss for the year - - (245,387) (245,387)
--------------- --------------------- ------------- ----------
Total comprehensive income for the
year - - (245,387) (245,387)
Contributions by and distributions
to owners
Shares issued during the year 210,485 1,027,458 - 1,237,943
Issue of bonus shares 78,829 (78,829) - -
--------------- --------------------- ------------- ----------
Total transactions with owners 289,314 948,629 - 1,237,943
--------------- --------------------- ------------- ----------
At 1 April 2022 289,314 948,629 (245,387) 992,556
Comprehensive income for the year
Loss for the year - - (537,690) (537,690)
--------------- --------------------- ------------- ----------
Total comprehensive income for the
year - - (537,690) (537,690)
--------------- --------------------- ------------- ----------
At 31 March 2023 289,314 948,629 (783,077) 454,866
=============== ===================== ============= ==========
STATEMENT OF CASH FLOWS
for the year ended 31 March 2023
24 March
31 March 2021 to 31
2023 March 2022
GBP GBP
Cash flow from operating activities
Loss for the year/period (537,690) (245,387)
Adjustments for:
Finance income (6,730) -
Decrease/(increase) in trade and other receivables 2,254 (31,734)
Increase in trade and other payables 30,740 35,562
Net cash used in operating activities (511,426) (241,559)
Cash flow from investing activities
Finance income 6,730 -
Other payments - (53)
Net cash from / (used in) investing activities 6,730 (53)
Cash flow from financing activities
Proceeds from issue of shares - 1,346,152
Share issue costs - (108,209)
Net cash from investing activities - 1,237,943
Net (decrease)/increase in cash and cash equivalents (504,696) 996,331
Cash and cash equivalents at the beginning
of the
year/period 996,331 -
------------------------- ------------------------------
Cash and cash equivalents at the end of the
year/period 491,635 996,331
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