Trading update for six months to 30 June 2021

This announcement contains inside information as defined in Article 7 of the Market Abuse Regulation 596/2014 and is disclosed in accordance with the Company's obligations under Article 17 of those Regulations

29 July 2021

TRADING UPDATE FOR THE SIX MONTHS TO 30 JUNE 2021

Mirriad Advertising plc

("Mirriad" or the "Company")

Mirriad, the leading in-content advertising company, today announces the following trading update for the six months ended 30th June 2021.

H1 Highlights

-      Total revenue increased by 27% to £1.14m, primarily driven by the US market

-      US revenue up by 333% year-on-year from £62k to £266k and up 468% to £220k in Q2 2021 compared with £47k in Q2 2020

-      Mirriad now contracted with 22 broadcast/digital content partners in total

-      New agreements signed during the period with Crown Media (Hallmark) and Up Entertainment in the US and UK-based tier-one television production company

-      Renewal of the Tencent contract with expanded scope of opportunity in China

-      Two new deals signed with demand side agencies in the US and Europe who are incentivised to work with Mirriad

-      Hire of new chief technology officer (CTO), Philip Mattimoe and chief revenue officer (CRO), Miles Lewis

-      Significant technical progress in live, server-side ad integrations and CPM pricing

-      Closing cash at the end of June 2021 of £29.8m (June 2020: £14.4m)

Stephan Beringer, CEO of Mirriad, said: "We are effectively delivering our twin-track strategy by developing a robust global supply and demand pipeline to drive global adoption, while simultaneously moving the platform towards full integration with the media buying and ad delivery ecosystem. The exciting growth achieved in the US, which is an important market for Mirriad, both in terms of revenue and new major brand advertisers and partners, is particularly encouraging. Alongside this, our updated agreement with Tencent in China will help support our push to becoming a market-leading in-content advertising platform.

"The long shadow of the Covid-19 pandemic still hangs over the global creative and content industries with Europe particularly badly affected. Media and marketing budgets have been hit hard, but returning US investment transformed our revenue picture towards the end of Q2 and we are in a strong position to further capitalise on this."

 Diversified pipeline activity

The Company expanded and diversified its partners in the period as part of its strategy to accelerate growth via a robust and varied demand pipeline. This is designed to counter a longer sales conversion cycle, which is expected to continue for the remainder of the current financial year.

New agreements include a first demand-side deal with a tier-one US food and drink company, a partnership with a leading US media company and an agreement with an independent tech-enabled communications agency in Europe. Both offer new routes to market by incentivising partners to spend with Mirriad, and first campaigns have already run, acting as a template for further deals of this type.

Mirriad has also signed a non-exclusive agreement with Tencent in China on an audience-based sale model, instead of the previous show-by-show sales approach. This will allow access to significantly more inventory, including 'evergreen' content available on the Tencent platform, alongside the newer high-end drama content previously used as the basis for sales. It also represents a key step into the programmatic era of the company's business model.

At the end of June, the Company had 17 new sales in negotiation with leading advertisers in the US and is responding to a further 17 proposals or RFPs. Overall, activity of this type has risen by 567% and the largest H1 2021 deal was 360% larger than the largest deal in H1 2020.

Technology development

The Company is prepared to meet demand created by these new agreements thanks to further technology development and increased inventory availability. Progress of note in H1 includes:

·    For live content, significant strides have been made in ensuring advertising insertions are continually transformed to maintain perspective-adjusted experiences and the next step is to test with broadcasters this summer

·    Mirriad can now leverage server-side ad insertions to insert segments of in-content advertising,

·    Mirriad has developed the capability to deliver in-content advertising based on a cost per mille (CPM) pricing model to align with industry standards, with planned customer implementation in China from next month.  

Outlook

In line with Mirriad's stated strategy, the business has rapidly grown its available inventory base to ensure adequate supply, increased the number and breadth of signed partnerships, and further developed the platform's capabilities in terms of automation, integration and data intelligence. 

In the May 2021 announcement of the full year results to 31 December 2020, the Board noted that the macroeconomic outlook was still uncertain. Since then the effects of the Covid-19 pandemic have continued to impact media spend in the global advertising market, exacerbated by a slower than expected recovery, especially in Europe.

On this basis, the Board now believes that converted sales will remain lower than previous expectations for the remainder of 2021, despite the first signs of improving market conditions in May and June.

It is difficult to forecast the future expected revenues under the current framework agreement structures, and reduced media spend as a result of the Covid-19 pandemic will have a short-term impact on the business. The Board now expects revenues for H2 2021 to be between 70% and 90% higher than H1 2021 revenues and year end cash to be between £23 million and £24 million.  The Board anticipates that the business should achieve an annualised revenue run rate of £6m around the end of the year.

The Board remains of the firm view that growing number of partnerships with advertisers, agencies and entertainment content companies are critical building blocks for long-term market leadership. It is particularly notable that the sales pipeline in the key US market is well aligned to previous guidance, with a sharp uptick against the comparable period in 2020.  A further update will be provided in the fourth quarter.

ENDS

About Mirriad

Mirriad's market-first solution seamlessly integrates with existing subscription and advertising models, improving the viewer experience by limiting commercial interruptions whilst delivering dramatically increased reach and impact for advertisers.

Mirriad currently operates in the US, Europe and China. 

Enquiries:

For further information please visit www.mirriad.com or contact:

Mirriad Advertising plc

Stephan Beringer, Chief Executive Officer

David Dorans, Chief Financial Officer            

Tel: +44 (0)207 884 2530

Nominated Adviser & Broker:

Canaccord Genuity Limited

Simon Bridges

Richard Andrews

Thomas Diehl

Tel: +44 (0)20 7523 8000

Financial Communications:

Charlotte Street Partners   

Tom Gillingham Tel: +44 (0) 7741 659021

Andrew Wilson Tel: +44 (0) 7810 636995