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SILVER BULLET DATA SERVICES GROUP PLC
Earnings Release • Jun 1, 2022
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Earnings Release
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National Storage Mechanism | Additional information 
RNS Number : 4799N
Silver Bullet Data Services Grp PLC
01 June 2022
1 June 2022
Silver Bullet Data Services Group plc
("Silverbullet" or the "Company", or, together with its subsidiaries, the "Group")
Preliminary Results for the year ended 31 December 2021
Silverbullet (AIM: SBDS), a provider of digital transformation services and products, is pleased to announce its unaudited preliminary results for the year ended 31 December 2021.
Financial Highlights
| Year ended December 2021 | Year ended December 2020 | |
| Revenue | £3.81m | £2.79m |
| Gross Profit | £2.79m | £1.97m |
| Headline Loss before tax* | £6.10m | £4.58m |
| Reported Loss before tax | £8.57m | £5.37m |
| Earnings Per Share | (£0.73) | (£0.75) |
* Headline results are calculated before exceptional items and share option charges
Operational Highlights
| · | Successful admission to trading on AIM on 28 June 2021, raising gross proceeds of £9.5 million. |
| · | Revenue of £3.81 million, up 37 per cent. on 2020. |
| · | 26 new services client wins in the period, including ITV, Venture Crowd and Edyn. |
| · | Consolidation of existing services clients as a result of additional contract wins with Channel 4, Heineken and Dolce & Gabbana. |
| · | Significant technical development and enhancements of '4D', Silverbullet's contextual outcomes engine, including the delivery of a YouTube video solution. |
| · | 4D campaigns have been successfully delivered for several clients and global agencies, however 4D revenue has had a slower start than previously anticipated - largely due to the fact that Google has delayed its final phasing out of third party cookies by 12 months. |
| · | Further strengthening of strategic and technical teams with valuable new hires. The senior management team was bolstered by the addition of Kristen Kelly as Chief Operating Officer. |
| · | Expansion of our 4D-focused US office and offering. |
The Company intends to complete a fundraise imminently following the publication of these results in order to bolster its balance sheet and support the growth of Silverbullet's 4D product sales during 2022.
Ian James, Chief Executive Officer of Silverbullet, commented:
"2021 was a transformational year for Silverbullet, with the completion of our IPO in June 2021. The Company has delivered strong performance in marketing services and is continuing to gain traction with our 4D offering.
"We are operating in a very exciting and relevant space. The value of 1st party data to clients and benefits of 4D, our contextual outcomes engine designed for a world without third-party cookies, gives us confidence that our prospects are very encouraging.
"Trading for 2022 has started well, with new customer wins and extensions of existing contracts, as well as the new joint venture with Making Science which will create new improved solutions for the privacy-first era. I look forward to the remainder of 2022 with optimism and we will be updating the market on progress in due course."
For further information please contact:
| Silverbullet | via IFC | |
| Ian James (CEO) | ||
| Strand Hanson Limited - Financial and Nominated Adviser | 0207 409 3494 | |
| James Spinney / James Bellman | ||
| Oberon Capital - Broker | 0203 179 5344 | |
| Mike Seabrook | ||
| IFC Advisory | 020 3934 6630 | |
| Graham Herring / Tim Metcalfe / Florence Chandler | 07793 839 024 |
About Silverbullet
Silverbullet's proprietary 4D advertising solution is designed to help advertisers target consumers in a "post cookie world". The product is a natural extension to its existing services business which already serves a blue-chip client base such as Heineken, Channel 4, Amazon and ITV amongst many others. The removal of third-party cookies has already been implemented by web browsers such as Firefox and Safari, with Google expected to phase out the use of cookies in 2023.
Headquartered in London, the Group employs 74 employees across five regions across the globe, including, the UK, Italy, Germany, Australia and the US. The Group continues to look at other opportunities for expansion worldwide.
The Company has an established and growing services business with significant accumulated industry experience and a proven track record of delivering strategic projects and activation services to its clients. The majority of the Board have held senior positions at global software companies and have significant industry experience across data engineering, SAAS product development and marketing.
The Group has close technical and commercial partnerships with Salesforce, Oracle and Adobe, all of which have existing sales channels and are already delivering to clients.
The Group has established a strategic partnership and an entity with Local Planet, a scaled network of over 60 agencies across the globe. Local Planet Data Services Limited was established in December 2020 and presents a significant opportunity to provide data services and the 4D product to the Local Planet agency network.
CHAIRMAN'S STATEMENT
Silverbullet is a data and digital transformation company that seeks to deliver future-proofed solutions for the privacy-first, post-cookie era for marketing and advertising purposes. The Group's core services and products comprise:
| - | Data-driven transformational services: first-party data strategy and customer journey activation advisory services, technology implementation and integration engineering, alongside adtech and martech managed services. In short, our expert services help businesses deliver privacy-first, customer-centric marketing, powered by data. |
| - | '4D' - proprietary contextual data product: a contextual targeting solution designed to help clients face the challenges posed by the post-cookie era. 4D enables contextual solutions with a strong focus on online video. |
It is my pleasure to present the first annual results of Silver Bullet Data Services Group Plc as a quoted company. I am extremely pleased with how the Group has adapted to life as a public company and remained focused on delivering strong revenue growth and as well as significant development and results with 4D, our contextual outcomes product. I am delighted to act as Chairman at such an exciting stage in the Company's development.
Results
Revenue for the year was £3.81m (2020: £2.79m), driven primarily by growth in our data-driven transformation services business, providing data consultancy advice to numerous clients across the world. Loss before tax was £8.57m (2020: £5.37m) leading to a loss per share of 73p (2020: 75p). Net cash at 31 December 2021 was £3.69m (2020: £0.65m).
People
I am fortunate to work with an experienced and dedicated board of directors. Keith Sadler brings a wealth of corporate finance knowledge and leads the Audit and Remuneration committee, where he is joined by Steve Clarke. Martyn Rattle has significant experience in the Media and Technology space and provides excellent insights and challenges to the board. I am privileged to be working with our three Executive Directors, Ian James, Chief Executive Officer, Umberto Torrielli, Chief Strategy Officer and Darren Poynton, Chief Financial Officer. I would like to thank them for their focus and dedication
in leading the Company through the IPO this year and driving the company towards an exciting future.
The Company's true strength is its people, and I would like to thank all our employees across the globe for their loyalty, determination and skill in working together in challenging times as a result of the Covid 19 pandemic.
Overview
As a company, we are operating in a very exciting and relevant space. The value of 1st party data to clients and the benefits of 4D, our contextual outcomes engine in a world without cookies, gives us confidence that our prospects are very encouraging. The Board will continue to work with the executive and management teams in 2022 to deliver on our strategy and to create value for our shareholders.
Nigel Sharrocks
Non-Executive Chairman
CHIEF EXECUTIVE'S STATEMENT
Silverbullet's clear strategy of working with clients to accelerate their data-driven marketing transformation and providing a contextual product solution for digital advertising is driving strong growth and future opportunities for the business.
Marketing Data Transformation Services.
The services business has secured 26 new clients in 2021, and has extended contracts with several of its existing clients, underpinning the impressive growth. As well as increasing the number of clients that we work with, we are also significantly increasing the size of the assignments (average contract value) and the efficiency of the resource required to deliver success (improved margins).
A significant proportion of this year's client wins and renewals are with global blue chip clients who have local operations in multiple geographies and who operate a broad portfolio of brands. This provides the business with strong forward looking potential as we unlock these initial central master service agreements in multiple local operating companies and brand assignments.
Over the course of the year, the business has reaped the benefit of having strong strategic partnerships in place with key MarTech vendors including Salesforce, where Silverbullet works as a preferred services partner, and Treasure Data (a Softbank company), which works with Silverbullet as its Gold Partner. This enhances Silverbullet's appeal to potential and current clients and has opened a significant pipeline of new combined prospects where Silverbullet and the MarTech vendor will collaborate on new business pitches. The credibility these partnerships bring underpin Silverbullet's leadership status in the data-driven transformation space. Being an expert "plumber" of first party data management technology gives Silverbullet a foundational role to offer multiple data services to clients for the long term.
During 2021, Silverbullet has chosen to focus on delivering transformation data services to the Broadcast sector. Broadcasters are undergoing significant transformation from analogue to digital. Silverbullet has been successful in winning data technology services contracts with ITV (UK), RTE (Ireland), and SBS (Australia). The Company is now working with six major broadcasters across the globe to assist them in transforming their advertising product from linear to programmatic. As television swiftly moves to be digitally traded and data enabled, we are proud to be a key partner at the centre of this change.
4D - Proprietary Contextual Data Product
4D is Silverbullet's emerging proprietary contextual data product. After successful testing in 2021 4D is gaining traction in the market with multiple clients and agencies. Clients and agencies are using 4D in two key ways: insight generation on consumer online behaviour, and contextual targeting for video and display programmatic advertising, all executed in a consumer privacy first non-cookie based way.
Initial client advertising outcomes using 4D gives us great confidence that the product has stand-out competitive features and client benefit, however 4D revenue has had a slower start than previously anticipated. This is largely due to the fact that Google has delayed its final phasing out of third party cookies by 12 months, which created confusion and uncertainty in the market. This phasing out is a key driver in the adoption of alternative insight and targeting platforms such as 4D. Google has now confirmed that this will occur in the second half of 2023. The use of cookies has already been discontinued by Apple and Firefox, so the shift to an alternative market approach is now firmly in play.
4D has established three key routes to market; 1) Technology Partners such as Demand-side and Supply-side platforms (DSPs and SSPs); 2) an entity with Local Planet a global independent media agency network of over 60 agencies; and 3) Direct Sales to global network media agencies and global clients. These channels to market provide a solid foundation for scaling what is now a multi-geography and multi-language product which solves the key problem of consumer insight and targeting in the privacy-first, post-cookie era.
Investment in Talent
During the year, we have invested in our people, with a focus on expanding our 4D team, with new hires in key product, engineering, customer success and sales. Our data transformation services team has also expanded, with the addition of strategic and technical professionals. In 2022, we have launched our Graduate Scheme focused bringing through the next generation data and digital talent.
Our already experienced management team, which includes key professionals from the industry, has been recently enhanced by the arrival of Kristen Kelly as Chief Operating Officer. Kristen was formerly President of Precision, EMEA, at Publicis Media.
Outlook
Revenues in Q1 2022 were £0.98m, up 23 per cent. on the previous year. We have also won five new contracts for our Martech Services business in 2022, including a significant contract with Mars Inc as its global data services partner. These new contract wins, together with our expanded client remits from 2021, is driving growth in 2022. This momentum in the Silverbullet services division, as well as strong partnerships with Salesforce and Treasure Data, gives management great confidence for 2022.
The investment in 4D during 2021 has yielded positive client testing results, and the routes to market that have been established give management confidence in 4D playing a significant role in the post-cookie advertising ecosystem. As explained above, 4D revenues are currently behind expectations, due largely to the delayed implementation of the phase out of third-party cookies by Google, however this does not change our view that the product will deliver excellent long-term shareholder value.
It is noted that the Company intends to complete a fundraise imminently following the publication of these results in order to bolster its balance sheet and support the growth of Silverbullet's 4D product sales during 2022.
Whilst it is still relatively early in our financial year and the macro-economic climate is volatile, we are confident of achieving our expectations for the current financial year.
Ian James
Chief Executive Officer
FINANCIAL REVIEW
A year of great progress for the business in terms of performance, development and structurally.
| Year ended | Year ended | |
| December 2021 | December 2020 | |
| £ | £ | |
| Revenue | 3,809,255 | 2,788,978 |
| Cost of sales | (1,024,221) | (821,975) |
| Gross Profit | 2,785,034 | 1,967,003 |
| Other operating Income | 38,328 | 108,737 |
| Distribution costs | (522,306) | (431,027) |
| Administrative expenses | (9,988,875) | (6,576,740) |
| Exceptional Items | (861,085) | (416,615) |
| Operating Loss | (8,548,904) | (5,348,642) |
| Finance Expense | (18,928) | (25,319) |
| Loss before taxation | (8,567,832) | (5,373,961) |
| Tax | 57,150 | 255,637 |
| Loss after taxation | (8,510,682) | (5,118,324) |
| Currency translation differences | 36,495 | 8,002 |
| Total Comprehensive Loss for the year | (8,474,187) | (5,110,322) |
Revenue and Gross Profit
Overall revenue of £3.81m represents growth of 37 per cent. compared to 2020. During 2021, our marketing services division added 26 new clients and expanded or extended agreements with several existing clients. There was particular focus on data and strategic services, where revenue grew by 60 per cent. to £2.30m with strong growth in the UK and Australia. Activation services provides a key skillset and intelligence for the business, which is beneficial to both our 4D product and to our data and strategic services business. We continue to have a significant presence in Italy for activation services, but the continuing impact of Covid 19 on the local market resulted in activation services revenues reducing by 3 per cent. in the year.
Our 4D product has developed significantly in 2021. We commenced commercial trials in Q1 2021 and launched version 1.0 in Q2. In the second half of the year, we gained traction with agencies and clients in the UK and the US with further trials and initial bookings. We also provided contextual analysis and generated a new bookings with a number of Local Planet agencies coordinated from our joint venture Local Planet Data Services Limited. This generated revenues in the year of £0.2m. This is slightly slower than we anticipated, largely due to media agencies delaying testing as a result of Google's announcement delaying the cookie switch-off date and the impact of Covid 19 restrictions on the media agencies global workforce.
Gross profit of £2.79m represents growth of 42 per cent. compared to 2020. Gross profit margin has improved from 71 per cent. to 73 per cent.. This represents the improved gross margin generated from marketing services, which is predominately delivered by Silverbullet staff, although this is partly offset by increased 4D hosting costs.
Operating Expenditure
Total Adjusted Operating Expenditure (Adjusted to exclude depreciation, amortisation, share option expenses, exceptional items) was £8.36m, which represents an increase of 36 per cent. from 2020 (£6.14m). Our talented employees are one of our greatest assets and key to delivering our services and developing and selling 4D. Staff costs continue to make up the majority of the operating expenses, with a cost £5.42m (excluding share option expenses).
Opening up our US operation and listing on the AIM market has significantly increased our costs in 2021. Total IPO and funding costs in 2021 were £1.36m, £0.52m was included in operating expenses as an exceptional item and £0.84m has been allocated to the Share Premium account on the balance sheet.
In December 2021, we were the victim of a sophisticated cyber fraud which resulted in the company losing £0.36m. This is included within exceptional items. The bank's fraud team have managed to recover £0.02m and we are still pursuing options in trying to recover additional amounts. Whilst the Company has solid insurance policies in place around cyber, this crime was not covered. The Company immediately employed a third-party IT consultancy to review procedures and implement additional controls and protocols, and we have also implemented further finance controls and systems.
Taxation
As a loss-making group, we do not currently incur corporation tax. We do however benefit from a research and development tax relief related to the development of 4D. The total tax relief for the year was £0.36m.
Balance Sheet and cashflow
4D is a unique and valuable technical product. We have continued to recognise the development of 4D as an intangible asset, and during the year £1.44m has been added the development intangible asset account. Goodwill relates to the acquisition of Silver Bullet Data Services Limited and Videobeet Italia Srl. We have reviewed the carrying value of these investment and we are comfortable that no provision is required against these assets.
In preparation for the IPO, the Group's share structure was reorganised. In May 2021, in order to re-register as a PLC, the company issued a bonus issue of share capital and reduced the share premium account and resulting in credit against retained earnings.
Net cash flow used in operating activities was £7.22m (2020: £3.39m). The increase versus the prior year relates to the development of the 4D commercial and operational team, investment in martech services talent and an increase in corporate costs largely as a result of listing on the AIM market.
The Group's net cash balance increased by £3.03m to £3.69 million in 2021 (2020: £0.65m).
The Company intends to complete a fundraise imminently following the publication of these results in order to bolster its balance sheet and support the growth of Silverbullet's 4D product sales during 2022.
Darren Poynton
Chief Financial Officer
Consolidated statement of comprehensive income
| Group | |||
| Note | 2021 | 2020 | |
| Continuing operations | £ | £ | |
| Revenue | 3, 4 | 3,809,255 | 2,788,978 |
| Cost of sales | (1,024,221) | (821,975) | |
| Gross profit | 2,785,034 | 1,967,003 | |
| Other operating income | 5 | 38,328 | 108,737 |
| Distribution costs | (522,306) | (431,027) | |
| Administrative expenses | (9,988,875) | (6,576,740) | |
| Exceptional items | 6 | (861,085) | (416,615) |
| Operating (loss) | 7 | (8,548,904) | (5,348,642) |
| Finance expense | 10 | (18,928) | (25,319) |
| (Loss) before taxation | (8,567,832) | (5,373,961) | |
| Taxation | 11 | 57,150 | 255,637 |
| (Loss) after taxation attributable to the equity shareholders of the company | (8,510,682) | (5,118,324) | |
| Other comprehensive income / (loss) net of taxation | |||
| Currency translation differences | 36,495 | 8,022 | |
| Total comprehensive (loss) for the year | (8,474,187) | (5,110,302) | |
| Total comprehensive (loss) attributable to: | |||
| Equity shareholders of the company | (8,479,438) | (5,110,302) | |
| Non-controlling interest | 5,251 | - | |
| (8,474,187) | (5,110,302) | ||
| Earnings per share | |||
| Basic earnings | 25 | (0.73) | (0.75) |
| Diluted earnings | 25 | (0.73) | (0.75) |
Consolidated statement of financial position
| Group | Company | |||||
| 2021 | 2020 | 2021 | 2020 | |||
| Note | £ | £ | £ | £ | ||
| Non-current assets | ||||||
| Goodwill | 12 | 4,349,662 | 4,330,222 | - | - | |
| Intangible assets | 12 | 2,206,742 | 1,242,717 | - | - | |
| Investments | 13 | - | - | 6,872,911 | 5,270,836 | |
| Tangible assets | 14 | 42,115 | 36,940 | - | - | |
| Total non-current assets | 6,598,519 | 5,609,879 | 6,872,911 | 5,270,836 | ||
| Current assets | ||||||
| Trade and other receivables | 16 | 2,264,972 | 1,723,280 | 78,522 | - | |
| Cash and cash equivalents | 17 | 3,687,809 | 654,792 | 60 | - | |
| Total current assets | 5,952,781 | 2,378,072 | 78,582 | - | ||
| Total Assets | 12,551,300 | 7,987,951 | 6,951,493 | 5,270,836 | ||
| Current liabilities | ||||||
| Trade and other payables | 18 | 2,609,028 | 3,272,101 | 2,049,262 | 1,719,420 | |
| Loans and other borrowings | 19 | 16,061 | - | - | - | |
| Total current liabilities | 2,625,089 | 3,272,101 | 2,049,262 | 1,719,420 | ||
| Non-current liabilities | ||||||
| Loans and borrowings | 19 | 143,644 | 188,570 | - | - | |
| Deferred tax liability | 20 | 547,892 | 223,921 | - | - | |
| Total non-current liabilities | 691,536 | 412,491 | - | - | ||
| Total liabilities | 3,316,625 | 3,684,592 | 2,049,262 | 1,719,420 | ||
| Net assets | 9,234,675 | 4,303,359 | 4,902,231 | 3,551,416 | ||
| Equity | ||||||
| Share capital | 22 | 134,227 | 8,256 | 134,227 | 8,256 | |
| Share premium | 22 | 8,639,593 | 35,387,853 | 8,639,592 | 35,387,855 | |
| Share option reserve | 23 | 1,275,363 | 1,192,653 | 1,275,363 | 1,192,653 | |
| Retained Earnings | (811,354) | (32,240,404) | (5,147,001) | (33,037,348) | ||
| Capital redemption reserve | 50 | - | 50 | - | ||
| Foreign exchange reserve | (8,505) | (44,999) | - | - | ||
| Equity attributable to the equity shareholders of the company | 9,229,374 | 4,303,359 | 4,902,231 | 3,551,416 | ||
| Non-controlling interest | 5,301 | - | - | - | ||
| Total equity | 9,234,675 | 4,303,359 | 4,902,231 | 3,551,416 |
Consolidated statement of cash flows
| Group | Company | |||||
| 2021 | 2020 | 2021 | 2020 | |||
| Note | £ | £ | £ | £ | ||
| Cash flows from operating activities | ||||||
| (Loss) after tax from continuing operations | (8,510,682) | (5,118,324) | (12,054,638) | (7,261,201) | ||
| Adjustments for: | ||||||
| Depreciation | 14 | 36,255 | 16,704 | - | - | |
| Amortisation | 12 | 475,809 | 363,225 | - | - | |
| Impairments | 12 | - | 417,625 | 11,815,479 | 7,261,201 | |
| Foreign exchange | 36,495 | 8,022 | - | - | ||
| Net finance expense | 10 | 18,928 | 25,319 | - | - | |
| Taxation expense | 11 | (57,150) | (255,637) | - | - | |
| (Increase) in trade and other receivables | 16 | (541,692) | (413,022) | (78,522) | - | |
| (Decrease) / increase in trade and other payables | 18 | (841,335) | 812,042 | 317,741 | - | |
| Share option charge | 23 | 1,602,025 | 376,921 | - | - | |
| Increase in deferred tax liability | 20 | 323,971 | 122,580 | - | - | |
| Cash used in operations | (7,457,376) | (3,644,545) | 60 | - | ||
| Taxation (paid) / refunded | 235,412 | 256,548 | - | - | ||
| Net cash used in operating activities | (7,221,964) | (3,387,997) | 60 | - | ||
| Cash flows from investing activities | ||||||
| Purchase of tangible assets | 14 | (41,430) | (25,473) | - | - | |
| Purchase of intangible assets | 12 | (1,459,274) | (1,057,416) | - | - | |
| Acquisition of non-controlling interest | 50 | - | - | - | ||
| Net cash used in investing activities | (1,500,654) | (1,082,889) | - | - | ||
| Cash flows from financing activities | ||||||
| Proceeds from borrowings | 19 | - | 111,459 | - | - | |
| Repayment of borrowings | 19 | (28,865) | - | - | - | |
| Loans to directors | - | (150,000) | - | - | ||
| New equity issued (net of transaction costs) | 11,803,428 | 4,932,593 | - | - | ||
| Interest paid | (18,928) | (25,319) | - | - | ||
| Net cash from / (used in) financing activities | 11,755,635 | 4,868,733 | - | - | ||
| Net increase in cash and cash equivalents | 3,033,017 | 397,847 | 60 | - | ||
| Cash and cash equivalents at beginning of period | 654,792 | 256,945 | - | - | ||
| Cash and cash equivalents at end of period | 3,687,809 | 654,792 | 60 | - |
Consolidated statement of changes in equity attributable to the shareholders
| Group | |||||||||
| Share Capital | Share premium | Share Option Reserve | Retained earnings | Capital redemption reserve | Foreign exchange reserve | Total equity attributable to shareholders | Non-controlling interest | Total equity | |
| £ | £ | £ | £ | £ | £ | £ | £ | £ | |
| As at 1 January 2020 | 4,507 | 28,581,634 | 815,732 | (27,122,080) | - | (53,021) | 2,226,772 | - | 2,226,772 |
| Total comprehensive loss for the year | - | - | - | (5,118,324) | - | 8,022 | (5,110,302) | - | (5,110,302) |
| Shares issued during the year | 3,749 | 6,806,219 | - | - | - | - | 6,809,968 | - | 6,809,968 |
| Share option charge | - | - | 376,921 | - | - | - | 376,921 | - | 376,921 |
| As at 31 December 2020 | 8,256 | 35,387,853 | 1,192,653 | (32,240,404) | - | (44,999) | 4,303,359 | - | 4,303,359 |
| Total comprehensive loss for the year | - | - | - | (8,515,932) | - | 36,494 | (8,479,438) | 5,251 | (8,474,187) |
| Non-controlling interest in subsidiary share capital | - | - | - | - | - | - | - | 50 | 50 |
| Share buyback and cancellation | (50) | - | - | - | 50 | - | - | - | - |
| Bonus issue of shares | 87,255 | (87,255) | - | - | - | - | - | - | - |
| Capital reduction | - | (38,425,667) | - | 38,425,667 | - | - | - | - | - |
| Share option charge | - | - | 1,602,025 | - | - | - | 1,602,025 | - | 1,602,025 |
| Share options exercised | 312 | 19,111 | (469,533) | 469,533 | - | - | 19,423 | - | 19,423 |
| Share options forfeited/lapsed | - | - | (1,049,782) | 1,049,782 | - | - | - | - | - |
| Shares issued during period (net of transaction costs) | 38,454 | 11,745,551 | - | - | - | - | 11,784,005 | - | 11,784,005 |
| As at 31 December 2021 | 134,227 | 8,639,593 | 1,275,363 | (811,354) | 50 | (8,505) | 9,229,374 | 5,301 | 9,234,675 |
| Company | ||||||
| Called up Share Capital | Share premium | Share Option Reserve | Retained earnings | Capital redemption reserve | Total equity | |
| £ | £ | £ | £ | £ | £ | |
| As at 1 January 2020 | 4,507 | 28,577,139 | 815,732 | (25,776,147) | - | 3,621,231 |
| Total comprehensive loss for the year | - | - | - | (7,261,201) | - | (7,261,201) |
| Shares issued during the year | 3,749 | 6,810,716 | - | - | - | 6,814,465 |
| Share option charge | - | - | 376,921 | - | - | 376,921 |
| As at 31 December 2020 | 8,256 | 35,387,855 | 1,192,653 | (33,037,348) | - | 3,551,416 |
| Total comprehensive loss for the year | - | - | - | (12,054,638) | - | (12,054,638) |
| Share buyback and cancellation | (50) | - | - | - | 50 | - |
| Bonus issue of shares | 87,255 | (87,255) | - | - | - | - |
| Capital reduction | - | (38,425,667) | - | 38,425,667 | - | - |
| Share option charge | - | - | 1,602,025 | - | - | 1,602,025 |
| Share options exercised | 312 | 19,111 | (469,533) | 469,533 | - | 19,423 |
| Share options forfeited/lapsed | - | - | (1,049,782) | 1,049,782 | - | - |
| Shares issued during period (net of transaction costs) | 38,454 | 11,745,551 | - | - | - | 11,784,005 |
| As at 31 December 2021 | 134,227 | 8,639,595 | 1,275,363 | (5,147,004) | 50 | 4,902,231 |
Notes to the financial statements
1. Description of business, basis of preparation and going concern
GENERAL INFORMATION
Silver Bullet Data Services Group PLC ("SBDS") was incorporated on 13 May 2013. SBDS is a public limited company incorporated in England and Wales and domiciled in the UK. The address of the registered office is Studio 44 The Finsbury Business Centre, 40 Bowling Green Lane, London, EC1R 0NE.
SBDS is the ultimate parent company to the subsidiaries listed at Note 15, together referred to as "the Group". The principal activity of the SBDS Group is marketing services through the application of big data technologies to reduce friction.
Silver Bullet Data Services Group PLC is registered with Companies House (Company Number: 08525481).
BASIS OF PREPARATION
These financial statements have been prepared in accordance with UK-adopted International Accounting Standards, interpretations issued by the International Financial Reporting Standards Interpretations Committee ("IFRIC"), and the Companies Act 2006. The accounting policies have been applied consistently throughout the period.
The Company has taken advantage of the exemption under S408 of the Companies Act 2006 not to include a separate Statement of Comprehensive Income as group statements have been prepared.
The consolidated financial statements have been prepared under the historical cost convention. Historical cost is generally based on the fair value of the consideration given in exchange for assets.
The presentational currency of the Group is GBP with functional currencies of the subsidiaries disclosed at Note 15 being GBP, EUR, AUD, and USD.
GOING CONCERN
The directors have prepared detailed budgets and forecasts covering the period to 31 December 2024 which are based on the strategic business plan. These take into account all reasonably foreseeable circumstances and include consideration of trading results, cash flows and the level of facilities the group requires on a month-by-month basis.
Whilst the directors have plans in place to manage any reasonably foreseeable circumstances, there will be the need for additional funding in the short-term. The directors are confident that the Group will be able to raise any required funds to meet their strategic objectives however there remains uncertainty over how much funding may be raised when required.
Based on their enquiries and the information available to them and taking into account the other risks and uncertainties set out herein, the directors have a reasonable expectation that the company and the group has adequate resources to continue operating for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing this financial information.
2. Significant accounting policies
REVENUE RECOGNITION
IFRS 15 - Revenue from Contracts with Customers has been applied for all periods presented within the financial statements. The timing of all revenue recognised by the Group during the reporting period was satisfied over time in accordance with IFRS 15 recognition criteria. None of the Group's activities result in the transfer of control of a product at a point in time for revenue recognition purposes.
During the period under review the Group recognised revenue from the following activities:
Data and strategic services
Revenue relating to service contracts is invoiced according to milestones defined within each contract, the terms of which vary on a case-by-case basis. In all cases the revenue is recognised in line with the provision of the services or, where the quantum and timing of the services cannot be reliably predicted, rateable over the period of the agreement.
Invoices against services contracts are raised on a monthly basis with adjustments for accrued or deferred income where the agreed invoicing timescale does not match the valuation of provision of services.
Activation channels and brand intelligence
Amounts received or receivable for campaigns, typically invoiced on a monthly basis, recognise revenue in proportion to the quantum of advertising units delivered according to the contracted service. Units and metrics deliverable under each contracted services will vary on a case-by-case basis.
Contract liabilities
Contract liabilities are recognised when payment from a customer is received in advance of performance obligations being satisfied. Contract liabilities are recognised in trade and other payables.
BUSINESS COMBINATIONS
Silver Bullet Data Services Group PLC applies the acquisition method of accounting to account for business combinations in accordance with IFRS 3, 'Business Combinations'.
The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred and the equity interests issued by Silver Bullet Data Services Group PLC. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The excess of the consideration transferred over the fair value of Silver Bullet Data Services Group PLC's share of the identifiable net assets acquired is recorded as goodwill. All transaction-related costs are expensed in the period they are incurred as exceptional operating expenses.
TAXES
Corporation tax, where payable, is provided on taxable profits at the current rate.
Deferred tax is provided on all temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry-forward of unused tax assets and unused tax losses can be utilised. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities, and when the deferred tax assets and liabilities relate to taxes levied by the same taxation authority on either the taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date.
FOREIGN CURRENCY TRANSLATION
Transactions in currencies other than the functional currency (foreign currencies) are initially recorded at the exchange rate prevailing on the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the reporting date. Non-monetary assets and liabilities denominated in foreign currencies are translated at the rate ruling at the date of the transaction, or, if the asset or liability is measured at fair value, the rate when that fair value was determined.
All translation differences are taken to profit or loss, except to the extent that they relate to gains or losses on non-monetary items recognised in other comprehensive income, when the related translation gain or loss is also recognised in other comprehensive income.
INTANGIBLE ASSETS AND GOODWILL
Goodwill
Goodwill is initially measured at fair value, being the excess of the aggregate of the consideration transferred over the fair value of the net assets acquired, and any previous interest held over the net identifiable assets acquired and liabilities assumed. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. The goodwill is tested annually for impairment irrespective of whether there is an indication of impairment.
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
Intangible assets (other than goodwill)
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date if the fair value can be measured reliably.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
| Brand names | - | Reducing balance basis over 5 years |
| Development costs | - | Straight line basis over 5 years |
| Customer lists | - | Straight line basis over 4 years |
PROPERTY PLANT AND EQUIPMENT
Property, plant and equipment are stated at cost net of accumulated depreciation and accumulated impairment losses. Cost comprises purchase cost together with any incidental costs of acquisition.
Depreciation is provided to write down the cost less the estimated residual value of all tangible fixed assets by equal instalments over their estimated useful economic lives on a straight-line basis. The following rates are applied:
| Computer equipment | - | Straight line over 3 years |
| Fixtures, fittings and equipment | - | Reducing balance over 4 years |
IMPAIRMENT OF NON-CURRENT ASSETS
At each reporting period end date, the Group reviews the carrying amounts of its tangible and intangible assets 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 company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell 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 for which the estimates of future cash flows have not been adjusted.
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 the statement of comprehensive income.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. 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 (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.
RESEARCH AND DEVELOPMENT EXPENDITURE
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
Development costs relate to a number of platforms developed internally by the group which are expected to generate future revenue streams.
FINANCIAL INSTRUMENTS
Silver Bullet Data Services Group PLC classifies financial instruments, or their component parts, on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the substance of the contractual arrangement. Financial instruments are recognised on the date when the Group becomes a party to the contractual provisions of the instrument. Financial instruments are recognised initially at fair value plus, in the case of a financial instrument not a fair value through profit and loss, transaction costs that are directly attributable to the acquisition or issue of the financial instrument. Financial instruments are derecognised on the settlement date when the Group is no longer a party to the contractual provisions of the instrument.
Non-derivative financial instruments comprise trade and other receivables, cash and cash equivalents, loans and borrowings, and trade and other payables.
Trade and other receivables and trade and other payables
Trade and other receivables are recognised initially at transaction price less attributable transaction costs. Trade and other payables are recognised initially at transaction price plus attributable transaction costs. Subsequent to initial recognition they are measured at amortised cost using the effective interest method, less any expected credit losses in the case of trade receivables. If the arrangement constitutes a financing transaction, for example if payment is deferred beyond normal business terms, then it is measured at the present value of future payments discounted at a market rate of interest for a similar debt instrument.
Contract assets
Contract assets are recognised when revenue is recognised but payment is conditional on a basis other than the passage of time. Contract assets are included in trade and other receivables.
Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at the present value of future payments discounted at a market rate of interest. Subsequent to initial recognition, interest-bearing borrowings are stated at amortised costs using the effective interest method.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand form an integral part of the Group's cash management and are included as a component of cash and cash equivalents for the purpose only on the cash flow statement.
PROVISIONS
A provision is recognised in the statement of financial position when the Group has a present legal or constructive obligation as a result of a past event, that can be reliably measured and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects risks specific to the liability. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
EMPLOYEE BENEFITS
During the period the Group operated a defined contribution money purchase pension scheme under which it pays contributions based upon a percentage of the members' basic salary. The Group also paid other employee benefits including medical insurance.
All employee benefits are charged to the Statement of Comprehensive Income and differences between contributions payable in the year and contributions actually paid are shown as either accruals or prepayments.
LEASES
The Group leases a number of properties in various locations in Europe, Australia, USA, and the UK from which it operates.
All leases are accounted for by recognising a right-of-use asset and a lease liability except for:
- Leases of assets below £1,000; and
- Leases with a duration of twelve months or less.
All leases signed by the Group during the reporting period were for a period of less than twelve months so no right-of-use assets have been recognised.
GRANT INCOME
Grant income is recognised where there is reasonable assurance that the grant will be received, and all attached conditions will be complied with. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. When the grant relates to an asset, it is recognised as income in equal amounts over the expected useful life of the related asset.
SHARE-BASED PAYMENTS
The Group operates a share option programme which allows employees of the subsidiary companies to be granted options to purchase shares in this company. The fair value of options granted is recognised as an employment expense with a corresponding increase in equity.
The fair value of the options is measured at the grant date and spread over the vesting period. The fair value is measured based on an option pricing model taking into account the terms and conditions upon which the instruments were granted.
Vesting periods in each share option agreement vary from vesting immediately on grant date to vesting over a period of four years.
EXCEPTIONAL ITEMS
Where items of income and expense included in the statement of comprehensive income are considered to be material and exceptional in nature, separate disclosure of their nature and amount is provided in the financial statements. These items are classified as exceptional items. The Group considers the size and nature of an item both individually and when aggregated with similar items when considering whether it is material, for example impairment of intangible assets or restructuring costs.
FINANCE INCOME AND EXPENSES
Finance expenses comprise interest payable and leases liabilities recognised in the statement of comprehensive income using the effective interest method, and unwinding of the discount on provisions.
Interest income and interest payable are recognised in the statement of comprehensive income as they accrue, using the effective interest method.
ADOPTION OF NEW AND REVISED STANDARDS
The following standards and interpretations relevant to the Group are in issue but are not yet effective and have not been applied in the financial statements. In some cases these standards and guidance have not been endorsed for use in the United Kingdom.
| · | IAS 1 Presentation of liabilities as current or non-current |
| · | IAS 1 Disclosure of accounting policies |
| · | IAS 8 definition of accounting estimates |
| · | Interest rate benchmark reform - IFRSs 7,9 and 16 |
The above standards are not expected to materially impact the Group.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of these financial statements requires the Directors to make estimates and judgements that affect the reported amounts of assets, liabilities, costs and revenue in the financial statements. Actual results could differ from these estimates. The judgements, estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant.
Key sources of estimation uncertainty that could cause an adjustment to be required to the carrying amount of assets or liabilities within the next accounting period are:
Critical accounting estimates:
Depreciation and amortisation
The assessment of the useful economic lives, residual values and the method of depreciating or amortising tangible and intangible (excluding goodwill) fixed assets requires judgement. Depreciation and amortisation are charged to profit or loss based on the useful economic life selected, which requires an estimation of the period and profile over which the group expects to consume the future economic benefits embodied in the assets. Useful economic lives and residual values are re-assessed, and amended as necessary, when changes in their circumstances are identified.
Capitalised development costs
Development costs incurred in building the Group's key platform for future expansion have been capitalised in accordance with the requirements of IAS38. The majority of these costs consist of salary expenses to which an estimated proportion of development time has been applied.
Critical accounting judgements:
Impairment of trade receivables
The Group's policy on recognising an impairment of the trade receivables balance is based on a review of individual receivable balances, their ageing and management's assessment of realisation. This review and assessment is conducted on a continuing basis and any material change in management's assessment of trade receivable impairment is reflected in the carrying value of the asset.
Impairment of intangible and tangible fixed assets
Impairment tests have been undertaken in respect of goodwill, intangible and tangible fixed assets using an assessment of the value in use of the respective cash generating units (CGUs). This assessment requires a number of assumptions and estimates to be made including the allocation of assets of CGUs, the expected future cash flows from each CGU and also the selection of a suitable discount rate in order to calculate the present value of those cash flows. Impairments of intangible assets are explained in more detail at note 12.
Going concern
As discussed more fully in the Directors' Report these financial statements have been prepared on the going concern basis. This treatment is based on management's judgement that cashflow requirements for the continued development can be achieved through operating activities and through additional fundraising if required.
3. Operating segments
IFRS 8 requires that operating segments be identified on the basis of internal reporting and decision-making. The Group has three key business segments outlined below. The business analyses these streams by revenue and gross margin. Overheads, assets and liabilities are not separately allocated across the business streams.
The business monitors operating segment profitability using their Earnings (or Profit) Before Interest, Tax, Depreciation and Amortisation (EBITDA). This is used as a metric to represent operating cashflow generated by the business.
| 2021 | 2020 | ||||
| Revenue | Gross profit | Revenue | Gross profit | ||
| £ | £ | £ | £ | ||
| Data and Strategic services | 2,298,352 | 2,277,430 | 1,439,559 | 1,465,320 | |
| Activation services | 1,304,153 | 618,220 | 1,337,589 | 529,173 | |
| 4D outcomes engine | 206,750 | (110,616) | 11,830 | (27,490) | |
| Total | 3,809,255 | 2,785,034 | 2,788,978 | 1,967,003 | |
| EBITDA from continuing operations | |||||
| Operating (loss) | (8,548,903) | (5,348,642) | |||
| Depreciation and amortisation | 512,065 | 379,929 | |||
| Total | (8,036,838) | (4,968,713) |
4. Geographical analysis
Revenue analysed by geographical market:
| 2021 | 2020 | ||
| £ | £ | ||
| United Kingdom | 1,078,128 | 826,365 | |
| Rest of Europe | 1,901,162 | 1,611,819 | |
| Rest of the world | 829,965 | 350,794 | |
| 3,809,255 | 2,788,978 |
The timing of all revenue recognised by the Group during the reporting period was satisfied over time in accordance with IFRS 15 recognition criteria. None of the Group's activities result in the transfer of control of a product at a point in time for revenue recognition purposes.
One major customer is included within data strategic services revenues totalling £497,717 (2020: £338,879).
Non-current assets analysed by geographical market:
| 2021 | 2020 | ||
| £ | £ | ||
| United Kingdom | 6,586,473 | 5,609,879 | |
| Rest of Europe | 4,104 | 16,233 | |
| Rest of the world | 7,942 | 3,194 | |
| 6,598,519 | 5,629,306 |
5. Other operating income
| Group | ||
| 2021 | 2020 | |
| £ | £ | |
| Grant income | 38,328 | 108,737 |
| 38,328 | 108,737 |
6. Exceptional items
| Group | ||
| 2021 | 2020 | |
| £ | £ | |
| Professional fees on initial public offering | 520,180 | - |
| Losses incurred as a result of fraud | 340,905 | - |
| Goodwill and asset impairment | - | 398,186 |
| Business combination expenses | - | 18,429 |
| 861,085 | 416,615 |
7. Operating (loss)
The operating loss is arrived at after charging/(crediting):
| Group | ||
| 2021 | 2020 | |
| £ | £ | |
| Depreciation of property plant and equipment | 37,348 | 16,704 |
| Amortisation of intangible assets | 475,809 | 363,225 |
| Impairment of intangible assets | - | 417,625 |
| Transaction costs on acquisition | - | 18,429 |
| Auditor's remuneration in respect of: | ||
| - audit of the consolidated financial statements | 60,000 | - |
| - other audit related assurance services | 166,250 | - |
| 739,408 | 815,983 |
8. Staff costs
| Group | ||
| 2021 | 2020 | |
| £ | £ | |
| Wages and salaries | 4,523,434 | 3,275,550 |
| Share-based payments | 1,602,025 | 376,921 |
| Social security costs | 715,282 | 480,589 |
| Pension costs - defined contribution | 129,079 | 69,486 |
| Termination payments | 56,272 | - |
| 7,026,091 | 4,202,547 |
Average number of staff
| Group | Company | ||||
| 2021 | 2020 | 2021 | 2020 | ||
| Platforms | 34 | 13 | - | - | |
| Services | 23 | 20 | - | - | |
| Central | 12 | 8 | - | - | |
| 69 | 41 | - | - |
9. Directors' remuneration
Key management personnel are considered to be the directors and their remuneration, employer's national insurance, and pension contributions are disclosed below:
| Group | ||
| 2021 | 2020 | |
| £ | £ | |
| Directors' remuneration | 957,855 | 445,233 |
| Share-based payments | 376,994 | - |
| Social security costs | 97,494 | 46,585 |
| Pension costs - defined contribution | 19,589 | 7,711 |
| Invoiced services | 46,650 | 119,000 |
| 1,498,582 | 618,529 |
The directors are remunerated, in respect of their services to the Group, through subsidiary companies. During the year four directors (2020: three) were accruing benefits under the company defined contribution pension scheme.
Remuneration disclosed above includes the following amounts paid to the highest paid director:
| Group | ||
| 2021 | 2020 | |
| £ | £ | |
| Directors' remuneration | 273,375 | 170,208 |
| Share-based payments | 104,901 | - |
| Social security costs | 36,507 | 22,282 |
| Pension costs - defined contribution | 5,438 | 5,100 |
| Invoiced services | 30,000 | 110,000 |
10. Finance expenses
| Group | ||
| 2021 | 2020 | |
| £ | £ | |
| On bank overdrafts and loans | 16,926 | 12,591 |
| On other credit arrangements | 2,002 | 12,728 |
| 18,928 | 25,319 |
11. Income tax provision
A deferred tax asset in respect of the Group's losses to date has not been recognised due to the uncertainty of the timing of future loss relief.
| Group | ||
| 2021 | 2020 | |
| Current tax | £ | £ |
| UK corporation tax relief on losses from prior years | (21,121) | (212,773) |
| UK corporation tax relief on losses for current year | (360,000) | (165,536) |
| Foreign taxation | - | 92 |
| Total current tax | (381,121) | (378,217) |
| Deferred tax | 323,971 | 122,580 |
| Total tax (credit) / charge | (57,150) | (255,637) |
Reconciliation of tax expense
The tax assessed on the loss on ordinary activities for the year is lower than the standard rate of corporation tax in the UK of 19% (2020: 19%).
| Group | ||
| 2021 | 2020 | |
| £ | £ | |
| Loss on ordinary activities before taxation | (8,567,832) | (5,373,961) |
| Loss on ordinary activities by rate of tax | (1,627,888) | (1,021,053) |
| Non-allowable expenses | 139,632 | 3,174 |
| Enhanced R&D expenditure | (360,000) | (165,536) |
| Impairments not deductible for tax purposes | - | 70,988 |
| Change in deferred tax rate applied | 131,494 | - |
| Deferred tax movement on intangible assets | 323,971 | 122,580 |
| Movement in deferred tax not recognised | 1,356,762 | 946,891 |
| Adjustments in respect of prior periods | (21,121) | (212,773) |
| Foreign taxation | - | 92 |
| Tax on loss | (57,150) | (255,637) |
12. Goodwill and intangible assets
| Customer lists | Development Costs | Brand Names | Goodwill | Total | |
| £ | £ | £ | £ | £ | |
| COST | |||||
| At 1 January 2020 | 595,708 | 754 | 84,999 | 4,703,843 | 5,385,304 |
| Additions | - | 1,057,416 | - | - | 1,057,416 |
| Write off | - | - | (84,999) | (373,621) | (458,620) |
| At 31 December 2020 | 595,708 | 1,058,170 | - | 4,330,222 | 5,984,100 |
| At 1 January 2020 | 595,708 | 1,058,170 | - | 4,330,222 | 5,984,100 |
| Additions | - | 1,439,834 | - | 19,440 | 1,459,274 |
| At 31 December 2021 | 595,708 | 2,498,004 | - | 4,349,662 | 7,443,374 |
| AMORTISATION | |||||
| At 1 January 2020 | 64,936 | - | 23,995 | - | 88,931 |
| Amortisation charge | 148,927 | 197,298 | 17,000 | - | 363,225 |
| Write off | - | - | (40,995) | - | (40,995) |
| At 31 December 2020 | 213,863 | 197,298 | - | - | 411,161 |
| At 1 January 2020 | 213,863 | 197,298 | - | - | 411,161 |
| Amortisation charge | 148,927 | 326,882 | - | - | 475,809 |
| At 31 December 2021 | 362,790 | 524,180 | - | - | 886,970 |
| NET BOOK VALUE | |||||
| At 31 December 2020 | 381,845 | 860,872 | - | 4,330,222 | 5,572,939 |
| At 31 December 2021 | 232,918 | 1,973,824 | - | 4,349,662 | 6,556,404 |
Amortisation is charged within administrative expenses in the Statement of Comprehensive Income.
13. Investments
| Investments in subsidiary companies | Total | |
| £ | £ | |
| COST | ||
| At 1 January 2020 | 4,727,913 | 4,727,913 |
| Additions | 542,923 | 542,923 |
| At 31 December 2020 | 5,270,836 | 5,270,836 |
| At 1 January 2020 | 5,270,836 | 5,270,836 |
| Additions | 1,602,075 | 1,602,075 |
| At 31 December 2021 | 6,872,911 | 6,872,911 |
Impairment review of investments
Using the assumptions applied in reviewing intangible assets for impairment (see Note 12) the Company's investments in subsidiaries have also been compared to the discounted future cashflows expected from the subsidiary CGUs.
At the period end no impairment charges (2020: £nil) were necessary given the headroom below:
| Net Book Value | Recoverable Amount | Impairment Headroom | |
| As at 31 December 2020 | £ | £ | £ |
| Investments in subsidiaries | 5,270,836 | 11,917,340 | 6,646,504 |
| 5,270,836 | 11,917,340 | 6,646,504 | |
| As at 31 December 2021 | |||
| Investments in subsidiaries | 6,872,911 | 30,380,747 | 23,507,836 |
| 6,872,911 | 30,380,747 | 23,507,836 |
14. Tangible assets
| Fixtures, fittings and equipment | Computer equipment | Total | |
| £ | £ | £ | |
| COST | |||
| At 1 January 2020 | 10,066 | 81,197 | 91,263 |
| Acquisition of subsidiaries | 3,606 | 21,868 | 25,474 |
| At 31 December 2020 | 13,672 | 103,065 | 116,737 |
| At 1 January 2021 | 13,672 | 103,065 | 116,737 |
| Additions | 1,770 | 39,660 | 41,430 |
| Disposals | (7,145) | - | (7,145) |
| At 1 December 2021 | 8,297 | 142,725 | 151,022 |
| DEPRECIATION | |||
| At 1 January 2020 | 7,726 | 55,367 | 63,093 |
| Acquisition of subsidiaries | 2,958 | 13,746 | 16,704 |
| At 31 December 2020 | 10,684 | 69,113 | 79,797 |
| At 1 January 2021 | 10,684 | 69,113 | 79,797 |
| Charge for the period | 1,434 | 34,821 | 36,255 |
| Disposals | (7,145) | - | (7,145) |
| At 1 December 2021 | 4,973 | 103,934 | 108,907 |
| NET BOOK VALUE | |||
| At 31 December 2020 | 2,988 | 33,952 | 36,940 |
| At 31 December 2021 | 3,324 | 38,791 | 42,115 |
Depreciation is charged to administrative expenses within the Statement of Comprehensive Income.
15. Investments in subsidiaries
As at 31 December 2021 Silver Bullet Data Services Group PLC owned a controlling interest in the ordinary share capital of the companies below.
All subsidiaries are 100% subsidiaries with the sole exception of Local Planet Data Services Ltd which is 51% owned by the Group.
| Subsidiary undertaking | Country of incorporation | Registered office | Principal activity |
| Silver Bullet Media Services Limited | England and Wales | Studio 44 The Finsbury Business Centre, 40 Bowling Green Lane, London, EC1R 0NE | Marketing services and data technologies |
| IOTEC Native Limited | England and Wales | Studio 44 The Finsbury Business Centre, 40 Bowling Green Lane, London, EC1R 0NE | Dormant |
| Silver Bullet Data Services Limited | England and Wales | Studio 44 The Finsbury Business Centre, 40 Bowling Green Lane, London, EC1R 0NE | Marketing services and data technologies |
| Silver Bullet Data Services GmbH | Germany | Herzogspitalstraße 24, 80331, Munich | Marketing services and data technologies |
| Silver Bullet Data Services Pty Ltd | Australia | 452 Flinders St, Melbounre, 3000, Victoria | Marketing services and data technologies |
| Silver Bullet Data Services S.r.l | Italy | 20161, Via Gian Rinaldo, Carli n. 47, Milan | Marketing services and data technologies |
| Technobeet S.r.l. | Italy | 20161, Via Gian Rinaldo, Carli n. 47, Milan | Dormant |
| Silver Bullet USA Inc. | United States of America | 1250 Broadway, 36th Floor, New York, New York, 10001 | Marketing services and data technologies |
| Local Planet Data Services Ltd | England and Wales | Studio 44 The Finsbury Business Centre, 40 Bowling Green Lane, London, EC1R 0NE | Marketing services and data technologies |
16. Trade and other receivables
| Group | Company | ||||
| 2021 | 2020 | 2021 | 2020 | ||
| £ | £ | £ | £ | ||
| Trade receivables | 1,333,272 | 1,153,570 | - | - | |
| Other receivables | 202,623 | 179,716 | 75,965 | - | |
| Prepayments | 151,749 | 110,781 | 2,557 | - | |
| Contract assets | 217,328 | 113,677 | - | - | |
| Corporation tax receivable | 360,000 | 165,536 | - | - | |
| 2,264,972 | 1,723,280 | 78,522 | - |
In determining the recoverability of accounts receivable, the Group considers any changes in the credit quality of the accounts receivable from the date credit was initially granted up to the reporting date.
Those receivable balances that are passed due have been assessed by management on an individual basis and provisions for bad debts has been made as necessary.
Contract assets represent agreements with customers against which revenue has been recognised but not yet invoiced in accordance with the contract terms. All accrued revenue at each period end has been invoiced within a maximum of three months of the reporting period.
17. Cash and cash equivalents
| Group | Company | ||||
| 2021 | 2020 | 2021 | 2020 | ||
| £ | £ | £ | £ | ||
| Cash at bank | 3,687,809 | 654,792 | 60 | - | |
| 3,687,809 | 654,792 | 60 | - |
Cash at bank earns interest at floating rates based on daily bank deposit rates.
18. Trade and other payables
| Group | Company | ||||
| 2021 | 2020 | 2021 | 2020 | ||
| £ | £ | £ | £ | ||
| Trade payables | 525,267 | 900,809 | 35,129 | - | |
| Tax and social security | 558,799 | 884,844 | 20,613 | - | |
| Other payables | 317,013 | 472,773 | 50 | 18,517 | |
| Accruals | 1,007,845 | 570,357 | 10,468 | - | |
| Contract liabilities | 200,099 | 443,318 | - | - | |
| Amounts owed to group undertakings | - | - | 1,983,003 | 1,700,903 | |
| 2,609,023 | 3,272,101 | 2,049,261 | 1,719,420 |
The fair value of trade and other payables approximates to book value at each year-end. Trade payables are non-interest bearing and are normally settled monthly.
Contract liabilities represent agreements with customers against which revenue has not yet been recognised for invoices raised during the report period. All such deferred revenue at each period end has been released to the Statement of Comprehensive Income within a maximum of three months of the reporting period.
19. Loans and borrowings
| Group | Company | ||||
| 2021 | 2020 | 2021 | 2020 | ||
| £ | £ | £ | £ | ||
| Current liabilities | |||||
| Bank loans | 16,061 | - | - | - | |
| 16,061 | - | - | - | ||
| 2021 | 2020 | 2021 | 2020 | ||
| £ | £ | £ | £ | ||
| Non-current liabilities | |||||
| Bank loans | 143,644 | 188,570 | - | - | |
| 143,644 | 188,570 | - | - |
As at 31 December 2021 the Group had debt finance of £177,104 accruing interest at 1.95% repayable over six years to 2026, with repayments due from 31st August 2022.
20. Deferred tax liability
| Group | Company | ||||
| 2021 | 2020 | 2021 | 2020 | ||
| £ | £ | £ | £ | ||
| Movements in the year: | |||||
| Liability brought forward | 223,921 | 101,341 | - | - | |
| Charge / (credit) to profit or loss | 323,971 | 122,580 | - | - | |
| Liability carried forward | 547,892 | 223,921 | - | - |
All deferred tax liabilities are recognised in respect of intangible asset timing differences. No deferred tax assets have been recognised by the Group.
21. FINANCIAL INSTRUMENTS
Financial instruments and risk management
The Group's financial instruments may be analysed as follows:
| Group | Company | ||||
| 2021 | 2020 | 2021 | 2020 | ||
| £ | £ | £ | £ | ||
| Financial assets measured at amortised cost | |||||
| Cash and cash equivalents | 3,687,809 | 654,792 | 60 | - | |
| Trade receivables | 1,333,272 | 1,153,570 | - | - | |
| Other receivables | 202,623 | 293,393 | 75,965 | - | |
| 5,223,704 | 2,101,755 | 76,025 | - | ||
| Financial liabilities measured at amortised cost | |||||
| Trade payables | 525,267 | 900,809 | 35,129 | - | |
| Accruals | 1,007,845 | 570,357 | 10,468 | - | |
| Other payables | 875,812 | 1,014,217 | 2,014,133 | 1,719,420 | |
| Bank Loans | 159,705 | 188,570 | - | - | |
| 2,568,629 | 2,673,953 | 2,059,730 | 1,719,420 |
Financial assets measured at amortised cost comprise cash, trade receivables and other receivables.
Financial liabilities measured at amortised cost comprise bank loans and overdrafts, other loans, trade payables, other payables and lease liabilities.
The debt instruments were initially recognised at fair value, and subsequently they were measured at amortised cost using the effective interest rate method, whereby the fair value of the debt approximates their carrying value.
The Group is exposed to a variety of financial risks through its use of financial instruments which result from its operating activities. All of the Group's financial instruments are classified as loans and receivables.
The Group does not actively engage in the trading of financial assets for speculative purposes. The most significant financial risks to which the Group is exposed are described below:
Credit risk
Generally, the Group's maximum exposure to credit risk is limited to the carrying amount of the financial assets recognised at the reporting date, as summarised above.
Credit default risk is the financial risk to the Group if a counter party to a financial instrument fails to meet its contractual obligation. The nature of the Group's receivable balances, the time taken for payment by entities and the associated credit risk are dependent on the type of engagement.
Credit risk is minimised substantially by ensuring the credit worthiness of the entities with which it carries on business. Credit terms are provided on a case-by-case basis. The Group's trade and other receivables are actively monitored. The Group has not experienced any significant instances of non-payment from its customers.
Management assess that its exposure to credit risk during the reporting period has increased as a result of Brexit and the Coronavirus pandemic causing a high level of volatility at the end of the reporting period. This increase has had no significant impact on the Group's operating activities.
Unbilled revenue is recognised by the Group only when all conditions for revenue recognition have been met in line with IFRS 15.
Liquidity risk
Liquidity risk represents the contingency that the Group is unable to gather the funds required with respect to its financial obligations at the appropriate time and under reasonable conditions in order to meet their current obligations. The Group attempts to manage this risk so as to ensure that it has sufficient liquidity at all times to be able to honour its current and future financial obligations under normal conditions and in exceptional circumstances. Financing strategies to ensure the management of this risk include the issuance of equity or debt securities as deemed necessary.
All of the Group's financial liabilities mature within twelve months of both reporting periods, with the exception of non-current liabilities disclosed at note 18. In each of these cases, the financial liabilities matured within five years of the reporting date.
Foreign currency risk
The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily Australian Dollars, United States Dollars and Euros. The Group monitors exchange rate movements closely and ensures adequate funds are maintained in appropriate currencies to meet known liabilities.
The Group's exposure to foreign currency risk at the end of the respective reporting periods were as follows:
| 2021 | 2020 | ||||||
| AUD | USD | EUR | AUD | USD | EUR | ||
| Assets and liabilities* | (504,607) | (2,018,873) | (1,368,563) | (360,564) | 38,985 | (600,283) |
*Assets and liabilities include the monetary assets and liabilities of subsidiaries denominated in foreign currency.
The Group is exposed to foreign currency risk on the relationship between its functional currencies and other currencies in which the Group's material assets and liabilities are denominated. The table below summaries the effect on reserves had the functional currencies of the Group weakened or strengthened against these other currencies, with all other variables held constant.
| Group | Company | ||||
| 2021 | 2020 | 2021 | 2020 | ||
| £ | £ | £ | £ | ||
| 10% weakening of functional currency | (248,739) | (64,520) | - | - | |
| 10% strengthening of functional currency | 522,352 | 135,493 | - | - |
The impact of a change of 10% has been selected as this has been considered reasonable given the current level of exchange rates and the volatility observed both on a historical basis and market expectations for future movements.
22. Share capital and premium
During the reporting periods a number of investment rounds have been completed raising a total of £11,784,005 in equity finance (net of transaction costs). Movements in issued share capital and share premium accounts during these periods are summarised below:
| Ordinary share capital | Ordinary | Ordinary A | Ordinary B | Ordinary C |
| Issued and fully paid | No. | No. | No. | No. |
| As at 1 Jan 2021 | - | 1,546,797 | 35,448 | 10 |
| Shares issued | 3,727,656 | - | - | - |
| Change of designation | 9,695,031 | (1,546,797) | (35,448) | - |
| Purchase of own shares | - | - | - | (10) |
| Bonus share issue | 87,255,279 | - | - | - |
| Share consolidation | (87,255,279) | - | - | - |
| As at 31 Dec 2021 | 13,422,687 | - | - | - |
| Ordinary D | Ordinary G | Ordinary H | Total | |
| continued… | No. | No. | No. | No. |
| As at 1 Jan 2021 | 464,689 | 5,379,104 | 780,093 | 8,206,141 |
| Shares issued | - | 1,488,900 | - | 5,216,556 |
| Change of designation | (464,689) | (6,868,004) | (780,093) | - |
| Purchase of own shares | - | - | - | (10) |
| Bonus share issue | - | - | - | 87,255,279 |
| Share consolidation | - | - | - | (87,255,279) |
| As at 31 Dec 2021 | - | - | - | 13,422,687 |
On 1 April 2021 the Company filed a capital restructure which converted all issued A, B, D, G, and H shares into one class of Ordinary Share capital with equal voting rights participation in dividends.
On 7 May 2021 a 9:1 bonus issue was approved by shareholders with a simultaneous consolidation of share capital from a nominal value of £0.001 to a nominal value of £0.01.
On 7 May 2021 a capital reduction was also completed reducing the share premium account by £38,425,667 with the balance being credited to the profit and loss reserve.
On 19 May 2021 all C shares were repurchased by the company at nominal value.
Prior to the Group's capital restructure above, all classes of share in issue carried equal rights of participation in dividends. Voting rights were attributed equally to qualifying shareholders, defined as below:
| a. | each holder of H Ordinary Shares; and |
| b. | each Shareholder holding Voting Shares (other than H Ordinary Shares) equal to or greater than 1% of all of the Voting Shares in issue. |
23. Share Option Reserve
The Group operates a programme for employees of its subsidiaries to acquire shares in the company under an EMI scheme. All options are settled by the physical delivery of shares once the options have vested and are exercised.
The number and weighted average exercise price of share options during the year were as follows:
| 2021 | 2020 | |||
| Weighted average exercise price | Share options | Weighted average exercise price | Share options | |
| £ | # | £ | # | |
| Outstanding at start of period | 3.05 | 250,153 | 3.35 | 220,499 |
| Forfeited/expired during period | (1.27) | (244,767) | - | - |
| Granted during period | 1.27 | 1,705,682 | 0.79 | 29,654 |
| Exercised during period | (0.30) | (31,461) | - | - |
| Outstanding at end of period | 1.56 | 1,679,607 | 3.05 | 250,153 |
Share options have been valued at grant date based on the Black Scholes valuation model using an estimated volatility of 40%. Sensitivity analysis on this assumption shows that an increase in volatility to 60% increases the option pool valuation by 6.9%, and a decrease to 20% reduces this valuation by 7.1%.
All options expire after seven years and an expected take-up rate of 100% has been applied. A dividend yield of 0% has been applied to option valuation models as the Group focuses on capital growth through this period. Risk-free rates have been applied ranging from 0.26% to 1.28% based on UK 10-year gilt rates since 2014.
Other key inputs applied to Black Scholes valuation models are as follows:
| Tranche date | Options outstanding | Share price | Average exercise price |
| No. | £ | £ | |
| 01 October 2014 | 1,325 | 22.21 | 0.001 |
| 12 January 2015 | 94 | 22.21 | 0.001 |
| 15 July 2015 | 281 | 24.633 | 0.001 |
| 18 July 2016 | 2,703 | 24.633 | 0.001 |
| 12 October 2016 | 10,000 | 24.633 | 24.032 |
| 26 January 2018 | 9,099 | 8.55 | 12.901 |
| 21 May 2020 | 24,624 | 3.64 | 0.810 |
| 06 July 2020 | 4,360 | 1.96 | 0.810 |
| 09 July 2020 | 625 | 1.96 | 0.810 |
| 17 July 2020 | 1,500 | 1.96 | 0.810 |
| 24 July 2020 | 5,000 | 1.96 | 0.799 |
| 01 October 2020 | 2,500 | 1.96 | 0.810 |
| 02 June 2021 | 850,966 | 2.57 | 0.421 |
| 25 June 2021 | 766,530 | 2.57 | 2.314 |
| 1,679,607 |
The movement in option valuation during the year ended 31 December 2021 resulted in a staffing cost being recognised by the Group of £1,683,214 (2020: £376,921), with a corresponding increase in the Group's equity.
The valuation of options exercised, lapsed, and forfeited during the year totalled £1,533,555 (2020: £nil) which has been transferred to Retained Earnings.
The contractual life for outstanding options runs for a number of periods, the latest of which being to 25th June 2028.
The total number of exercisable options at the period end was 526,230 (2020: nil), with an average exercise price of £1.73 (2020: £nil).
24. Related party transactions
Key management personnel and directors' remuneration is detailed at note 9.
Local Planet International Limited: is a related party to the group by virtue of having Directors in common. Ian James, Martyn Rattle and Nigel Sharrocks are directors of both companies.
Recharges for shared services totalling £107,131 (2020: £12,389) are included in revenue for the year ended 31 December 2021. Amounts outstanding at the year end included in trade receivables totals £37,758 (2020: £2,949).
Recharges for direct costs incurred were processed during the year ended 31 December 2021 totalling £56,000 (2020: £548). Amounts outstanding at 31 December 2021 totalled £5,574 (2020: £657).
Fluency Media Limited: is a related party to the group by virtue of having Directors in common. Ian James is a director of both companies. Consultancy services were provided during the year ended 31 December 2021 totalling £90,000 (2020: £110,000). Amounts outstanding at 31 December 2021 totalled £nil (2020: £12,000). All of these services were provided prior to listing in June 2021.
Marmalade Consultants Limited: is a related party to the group by virtue of having Directors in common. Martyn Rattle is a director of both companies Consultancy services were provided during the year ended 31 December 2021 totalling £56,673 (2020: £11,667). Amounts outstanding at 31 December 2021 totalled £nil (2020: £nil).
Educated Solutions Limited: is a related party to the group by virtue of having Directors in common. Ian James and Martyn Rattle are directors of both companies. Revenue was recognised for services provided to the company during the year ended 31 December 2021 totalling £13,800 (2020: £nil). Amounts outstanding at 31 December 2021 totalled £16,560 (2020: £nil) and are included within trade receivables.
Made by Brittan Limited: is a related party to the group by virtue of having Directors in common, this relationship ceased in April 2021 following the related Director resignation from Silver Bullet Data Services Group Plc. Consultancy services were provided during the year ended 31 December 2021 totalling £nil (2020: £75,289). Amounts outstanding at 31 December 2021 totalled £nil (2020: £30,346).
Purple Lime Accountancy Limited: is a related party to the group by virtue of having Directors closely related to Key Management Personnel of the Group. This relationship ceased in April 2021 following the related Director resignation from Silver Bullet Data Services Group Plc. Accountancy and finance services were provided during the period ended April 2021 totalling £50,846 (year ended 2020: £104,203). Amounts outstanding at 31 December 2021 totalled £5,582 (2020: £20,271).
Hartham Group Limited: is a related party to the group by virtue of having a common Director. This relationship ceased in April 2021 following the related Director resignation from Silver Bullet Data Services Group Plc. Consultancy services were provided during the year ended 31 December 2021 totalling £nil (2020: £4,167).
Umberto Torrielli: A director of the Group company relocated to the USA in order to establish a new presence in this territory in 2020. For this purpose a loan was issued of £150,000 which is held within other debtors at the end of the reporting period (2020: £150,000).
Transactions with group companies
As holding company for the subsidiaries listed at Note 15, all funds raised are distributed to subsidiary companies as required. A summary of balances outstanding at the period end are provided below. All balances are repayable on demand and are lent without security or accruing any interest.
A provision for bad debts has been included in the Company financial statements for all amounts receivable from subsidiaries in both the current and previous year.
| Amounts owed from subsidiary companies | 2021 | 2020 |
| £ | £ | |
| Silver Bullet Media Services Limited | 36,553,023 | 24,177,392 |
| Iotec Native Limited | 802,131 | 519,982 |
| Silver Bullet Data Services Limited | 56,008 | 56,008 |
| Silver Bullet Data Services GmbH | 11,886 | 11,886 |
| 37,423,048 | 24,765,267 | |
| Amounts owed to subsidiary companies | 2021 | 2020 |
| £ | £ | |
| Silver Bullet Media Services Limited | 1,180,872 | 1,180,921 |
| Iotec Native Limited | 802,131 | 519,982 |
| 1,983,003 | 1,700,903 |
25. Earnings per share
Earnings per share (EPS) is calculated on the basis of profit attributable to equity shareholders divided by the weighted average number of shares in issue for the year. The diluted EPS is calculated on the treasury stock method and the assumption that the weighted average EMI share options outstanding during the period are exercised.
| 2021 | 2020 | |
| £ | £ | |
| Loss after taxation | (8,510,681) | (5,118,324) |
| Number of shares | ||
| Weighted average number of ordinary shares in issue | 11,684,142 | 6,855,439 |
| Dilutive effect of in-the-money share options | 792,028 | 213,030 |
| Diluted weighted average number of shares | 12,476,170 | 7,068,469 |
| Earnings per share | ||
| Basic earnings per share | (0.73) | (0.75) |
| Diluted earnings per share | (0.73) | (0.75) |
As options are not antidilutive, the diluted EPS is the same as the basic EPS in this situation.
26. Other financial commitments
The Company has provided a guarantee in respect of the outstanding liabilities of the subsidiary companies listed below in accordance with Sections 479A - 479C of the Companies Act 2006, as these subsidiary companies of the Group are exempt from the requirements of the Companies Act 2006 relating to the audit of the accounts by virtue of Section 479A of this Act.
Silver Bullet Media Services Limited (08235870)
IOTEC Native Limited (08286180)
Silver Bullet Data Services Limited (10081847)
Local Planet Data Services Ltd (13123941)
27. Ultimate controlling party
Management consider there is no ultimate controlling part of the Group as no individual shareholder owns more than 15% of the issued share capital.
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018, as amended.
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